Document:

exv10w2

 

Exhibit 10.2

***** PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE OMISSIONS HAVE BEEN INDICATED BY
ASTERISKS (“*****”), AND THE OMITTED TEXT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

Standard Form of Agreement Between

Owner and Design-Builder — Lump Sum

This document has important legal consequences. Consultation with

an attorney is recommended with respect to its completion or modification.

          This AGREEMENT is made as of the 26th day of August in the year of 2005,
by and between the following parties, for services in connection with the Project identified below.

OWNER:

(Name and address)

US Bio Albert City, LLC

2356 510 Street

Albert City, IA 50510

DESIGN-BUILDER:

(Name and address)

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

PROJECT:

(Include Project name and location

as it will appear in the Contract

Documents)

100 MGY Dry Grind Ethanol Plant

 

 

In consideration of the mutual covenants and obligations contained herein, Owner and Design-Builder
agree as set forth herein.

Article 1

Scope of Work

1.1 Design-Builder shall perform all design and construction services, and provide all
material, equipment, tools and labor, necessary to complete the Work described in and reasonably
inferable from the Contract Documents.

Article 2

Contract Documents

2.1 The Contract Documents are comprised of the following:

	 	.1	 	All written modifications, amendments and change orders to this Agreement
issued in accordance with DBIA Document No. 535, Standard Form of General Conditions of
Contract Between Owner and Design-Builder (1998 Edition) (“General Conditions of
Contract”);
	 
	 	.2	 	This Agreement, including all exhibits and attachments, executed by Owner and
Design-Builder, said Exhibits being:

Exhibit A
– Performance Guarantee Criteria – (2) Pages;

Exhibit B – General Project Scope – (3) Pages;

Exhibit C –Owner’s Responsibilities – (6) Pages;

Exhibit D – License Agreement. – (6) Pages;

Exhibit E – Start-up Services to be Provided to Owner – (1) Page.

	 	.3	 	Written Supplementary Conditions, consisting of three pages, to the General
Conditions of Contract;
	 
	 	.4	 	The General Conditions of Contract; and
	 
	 	.5	 	Preliminary Construction Documents prepared by Design-Builder.

Article 3

Interpretation and Intent

3.1 The Contract Documents are intended to permit the parties to complete the Work and all
obligations required by the Contract Documents within the Contract Time(s) for the Contract Price.
The Contract Documents are intended to be complementary and interpreted in harmony so as to avoid
conflict, with words and phrases interpreted in a manner consistent with construction and design
industry standards. In the event of any inconsistency, conflict, or ambiguity between or among the
Contract Documents, the Contract Documents shall take precedence in the order in which they are
listed in Section 2.1 hereof.

3.2 Terms, words and phrases used in the Contract Documents, including this Agreement, shall have
the meanings given them in the Supplementary Conditions and General Conditions of Contract.

			
	 	 	 
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3.3 The Contract Documents form the entire agreement between Owner and Design-Builder and by
incorporation herein are as fully binding on the parties as if repeated herein. The Contract
Documents supercede any prior letters of intent between the parties, and such letters of intent are
now null and void. No oral representations or other agreements have been made by the parties
except as specifically stated in the Contract Documents.

Article 4

Ownership of Work Product

4.1 Work Product. All drawings, specifications and other documents and electronic data
furnished by Design-Builder to Owner under this Agreement (“Work Product”) are deemed to be
instruments of service and Design-Builder shall retain the ownership and property interests
therein, including the copyrights thereto.

4.2 Owner’s Limited License Upon Payment in Full. Upon Owner’s payment in full for all Work
performed under the Contract Documents, Design-Builder shall vest in Owner a limited license to use
the Work Product in connection with Owner’s occupancy and repair of the Project and Design-Builder
shall provide Owner with a copy of the “as built” plans, conditioned on Owner’s express
understanding that its use of the Work Product and its acceptance of the “as built” plans is at
Owner’s sole risk and without liability or legal exposure to Design-Builder or anyone working by or
through Design-Builder, including Design Consultants of any tier (collectively the “Indemnified
Parties”), provided, however, that any performance guarantees and warranties (of equipment or
otherwise) shall remain in effect according to the terms of this Agreement. Owner shall be
entitled to use the Work Product for the purpose relating to this Project, but shall not be
entitled to use the Work Product on any other projects, including expansion of this Project. The
limited license to use the Work Product granted herein by Design-Builder to Owner shall be governed
by and construed in accordance with the same terms and provisions contained in the License
Agreement between Owner and ICM, attached hereto as Exhibit D and incorporated herein by reference
thereto, except (i) references in such License Agreement to ICM and Proprietary Property shall
refer to Design-Builder and Work Product, respectively, (ii) the laws of the State of Minnesota
shall govern such limited license, and (iii) the arbitration provisions contained in Article 10 of
the General Conditions shall apply to any breach or threatened breach of Owner’s duties or
obligations under such limited license other than Design-Builder shall have the right to seek
injunctive relief in a court of competent jurisdiction against Owner or its Representatives for any
such breach or threatened breach. Design-Builder is utilizing certain proprietary property and
information of ICM, Inc., a Kansas corporation (“ICM”), in the design and construction of the
Project, and Design-Builder may incorporate proprietary property and information of ICM into the
Work Product. Owner’s use of the proprietary property and information of ICM shall be governed by
the terms and provisions of the License Agreement between Owner and ICM, attached hereto as Exhibit
D, to be executed by such parties in connection with the execution of this Agreement. The
preceding last three sentences of this paragraph also apply to Articles 4.3 and 4.4 below.

4.3 Owner’s Limited License Upon Owner’s Termination for Convenience or Design-Builder’s Election
to Terminate. If Owner terminates the Project for its convenience as set forth in Article 8
hereof, or if Design-Builder elects to terminate this Agreement in accordance with Section 11.4 of
the General Conditions of Contract, Design-Builder shall, then upon Owner’s payment in full of the
amounts due Design-Builder under the Contract Documents, vest in Owner a limited license to use the
Work Product to complete the Project and subsequently occupy and repair the Project, subject to the
following:

	 	.1	 	Use of the Work Product is at Owner’s sole risk without liability or legal
exposure to any Indemnified Party; provided, however, that any “pass through”
warranties regarding equipment or express warranties regarding equipment provided by
this Agreement shall remain in effect according to their terms; and
	 
	 	.2	 	If the termination for convenience is by Owner or if Design-Builder elects to
terminate this Agreement in accordance with Section 11.4 of the General Conditions of
Contract, then Owner agrees to pay Design-Builder the additional sum of One Million
Dollars

			
	 	 	 
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	 	 	 	($1,000,000.00) as
compensation for the limited right to use the Work Product (completed “as is” on the
date of termination) in accordance with this Article 4.

4.4 Owner’s Limited License Upon Design-Builder’s Default. If this Agreement is terminated due to
Design-Builder’s default pursuant to Section 11.2 of the General Conditions of Contract and (i) it
is determined that Design-Builder was in default and (ii) Owner has fully satisfied all of its
obligations under the Contract Documents through the time of Design-Builder’s default, then
Design-Builder shall grant Owner a limited license to use the Work Product in connection with
Owner’s completion and occupancy and repair of the Project. This limited license is conditioned on
Owner’s express understanding that its use of the Work Product is at Owner’s sole risk and without
liability or legal exposure to any Indemnified Party; provided, however, that 0any “pass through”
warranties regarding equipment or express warranties regarding equipment provided by this Agreement
shall remain in effect according to their terms. This limited license would grant Owner the
ability to repair the Project at Owner’s discretion.

4.5 Owner’s Indemnification for Use of Work Product. If Owner uses the Work Product under any of
the circumstances identified in this Article 4, Owner shall defend, indemnify and hold harmless the
Indemnified Parties from and against any and all claims, damages, liabilities, losses and expenses,
including attorneys’ fees, arising out of or resulting from the use of the Work Product; provided,
however, that any “pass through” warranties regarding equipment or express warranties regarding
equipment provided by this Agreement shall remain in effect according to their terms.

Article 5

Contract Time

5.1 Date of Commencement. The Work shall commence within five (5) days of Design-Builder’s
receipt of Owner’s written Notice to Proceed (“Date of Commencement”) unless the parties mutually
agree otherwise in writing. The parties agree that a valid Owner’s Notice to Proceed cannot be
given until: ***** In accordance with the above section 5.1(3), Design-Builder acknowledges that a
valid Notice to Proceed was accepted on July 26, 2005. Notwithstanding the previous sentence,
Design-Builder does not waive its right to enforce compliance with the foregoing provisions.

5.2 Substantial Completion and Final Completion

5.2.1 Substantial Completion of the entire Work shall be achieved no later than four hundred
eighty-five (485) calendar days after the Date of Commencement.

5.2.2 Interim milestones and/or Substantial Completion of identified portions of the Work shall be
achieved as follows: Owner shall provide the following within 90 days of Design-Builder’s receipt
of Owner’s Notice to Proceed, as described in Section 5.1 of this Agreement:

     • Owner shall determine its water source and provide Design-Builder an independent
analysis of the water source, and

     • Owner shall provide the name of its property/all risk insurance carrier and the specific
requirements for fire protection.

The two bulleted requirements referred to above are further detailed in Exhibit C. The Scheduled
Substantial Completion date will likewise be extended a corresponding amount of days for each day
Owner exceeds the 90-day timeframe referred to above in Section 5.2.2.

5.2.3 Final Completion of the Work or identified portions of the Work shall be achieved as
expeditiously as reasonably practicable.

			
	 	 	 
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5.2.4 All of the dates set forth in this Article 5 (“Contract Time(s)”) shall be subject to
adjustment in accordance with the General Conditions of Contract. Specifically, if delays in the
Contract Time occur because of delay in the delivery of materials or equipment that is beyond the
control of Design-Builder, the Contract Time will be adjusted, without penalty to Design-Builder,
pursuant to Sections 8.2.1 and 8.2.2 of the General Conditions of Contract.

5.3 Time is of the Essence. Owner and Design-Builder mutually agree that time is of the essence
with respect to the dates and times set forth in the Contract Documents.

Article 6

Contract Price

6.1 Contract Price. Owner shall pay Design-Builder in accordance with Article 6 of the
General Conditions of Contract the sum of Ninety-seven million, two hundred fifty thousand and
00/100 Dollars ($97,250,000.00) (“Contract Price”), subject to adjustments made in accordance with
the General Conditions of Contract. The Contract Price is calculated on the basis of the use of
non-union labor for construction of the Project, and the Contract Price may be subject to a price
escalation if union labor is used for construction of the Project. Unless otherwise provided in
the Contract Documents, the Contract Price is deemed to include all sales, use, consumer and other
taxes mandated by applicable Legal Requirements.

6.2 Markups for Changes. The parties agree that changes shall not occur pursuant to Sections
9.4.1.3 or 9.4.1.4 of the General Conditions of Contract, but may occur pursuant to the other
provisions therein.

Article 7

Procedure for Payment

7.0 Payment at Financial Close. As part of the Contract Price, Owner shall pay Design-Builder
***** as soon as allowed by its organizational documents, the Escrow Agreement and any other
relevant agreements or laws (such payment to possibly occur prior to Financial Close) as a
mobilization fee. Provided, however, that said payment, if not made earlier, shall be paid at
Financial Close. Financial Close is defined as Owner executing final loan documents obtaining all
necessary financing to construct the project and funds are available to pay disbursements. Said
***** Dollar payment shall be subject to the retainage as provided by Article 7.2.1.

7.1 Progress Payments

7.1.1 Design-Builder shall submit to Owner on the twenty-fifth ( 25th ) day of each
month, beginning with the first month after the Date of Commencement, Design-Builder’s Application
for Payment in accordance with Article 6 of the General Conditions of Contract.

7.1.2 Owner shall make payment within ten (10) days after Owner’s receipt of each properly
submitted and accurate Application for Payment in accordance with Article 6 of the General
Conditions of Contract, but in each case less the total of payments previously made, and less
amounts properly withheld under Section 6.3 of the General Conditions of Contract.

7.2 Retainage on Progress Payments

7.2.1 Owner will retain ten percent ( 10%) of each payment provided, however, that when fifty
percent (50%) of the Work ($48,625,000.00 aggregate payment) has been completed by Design-Builder,
Owner will not retain any additional amounts from Design-Builder’s subsequent payments, unless
there is less than $4,862,500.00 total retainage. Owner will also reasonably consider reducing
retainage for Subcontractors completing their work early in the Project.

			
	 	 	 
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7.2.2 Upon Substantial Completion of the entire Work or, if applicable, any portion of the Work,
pursuant to Section 6.6 of the General Conditions of Contract, Owner shall release to
Design-Builder all retained amounts relating, as applicable, to the entire Work or completed
portion of the Work, less an amount equal to the reasonable value of all remaining or incomplete
items of Work as noted in the Certificate of Substantial Completion, provided that such payment
shall only be made if Design-Builder has met the Performance Guarantee Criteria listed in Exhibit
A.

7.3 Final Payment. Design-Builder shall submit its Final Application for Payment to Owner
in accordance with Section 6.7 of the General Conditions of Contract. Owner shall make payment on
Design-Builder’s properly submitted and accurate Final Application for Payment within thirty (30)
days after Owner’s receipt of the Final Application for Payment, provided that Design-Builder has
satisfied the requirements for final payment set forth in Section 6.7.2 of the General Conditions
of Contract and Design-Builder has met the Performance Guarantee Criteria listed in Exhibit A.

7.4 Interest. Payments which are due and unpaid by Owner to Design-Builder, whether progress
payments or final payment, shall bear interest commencing five (5) days after payment is due at the
rate of eighteen percent (18%) per annum.

7.5 Record Keeping and Finance Controls. With respect to changes in the Work performed on a cost
basis by Design-Builder pursuant to the Contract Documents, Design-Builder shall keep full and
detailed accounts and exercise such controls as may be necessary for proper financial management,
using accounting and control systems in accordance with generally accepted accounting principles
and as may be provided in the Contract Documents. During the performance of the Work and for a
period of three (3) years after Final Payment, Owner and Owner’s accountants shall be afforded
access from time to time, upon reasonable notice, to Design-Builder’s records, books,
correspondence, receipts, subcontracts, purchase orders, vouchers, memoranda and other data
relating to changes in the Work performed on a cost basis in accordance with the Contract
Documents, all of which Design-Builder shall preserve for a period of three (3) years after Final
Payment.

Article 8

Termination for Convenience

8.1 Upon ten (10) days’ written notice to Design-Builder, Owner may, for its convenience and
without cause, elect to terminate this Agreement. In such event, Owner shall pay Design-Builder
for the following:

	 	.1	 	All Work executed, and for proven loss, cost or expense in connection with the
Work;
	 
	 	.2	 	The reasonable costs and expenses attributable to such termination, including
demobilization costs and amounts due in settlement of terminated contracts with
Subcontractors and Design Consultants; and
	 
	 	.3	 	Overhead and profit margin in the amount of fifteen percent ( 15 %) on the sum
of items .1 and .2 above, except that overhead and profit shall not be due regarding
amounts due in settlement of terminated contracts with subcontractors and design
consultants.

8.2 In addition to the amounts set forth in Section 8.1 above, Design-Builder shall be entitled to
receive all retainage withheld by Owner.

8.3 If Owner terminates this Agreement pursuant to Section 8.1 above and proceeds to design
and construct the Project through its employees, agents or third parties, Owner’s rights to use the
Work Product shall be as set forth in Section 4.3 hereof.

			
	 	 	 
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	© 1998 Design-Build Institute of America	 	 

 

 

Article 9

Representatives of the Parties

9.1 Owner’s Representatives

9.1.1 Owner designates the individual listed below as its Senior Representative (“Owner’s Senior
Representative”), which individual has the authority and responsibility for avoiding and resolving
disputes under Section 10.2.3 of the General Conditions of Contract: (Identify individual’s
name, title, address and telephone numbers)

Steve Myers

Director and Vice President

US BioEnergy Corporation

111 Main Avenue, Suite 200

Brookings, SD 57006

(605) 696-3150

9.1.2 Owner designates the individual listed below as its Owner’s Representative, which individual
has the authority and responsibility set forth in Section 3.4 of the General Conditions of
Contract: (Identify individual’s name, title, address and telephone numbers)

Mike Malecha

Sr. Vice President

United Bio Energy (“UBE”)

2868 N. Ridge Road

Wichita, KS 67205

(316) 616-3530

9.2 Design-Builder’s Representatives

9.2.1 Design-Builder designates the individual listed below as its Senior Representative
(“Design-Builder’s Senior Representative”), which individual has the authority and responsibility
for avoiding and resolving disputes under Section 10.2.3 of the General Conditions of Contract:
(Identify individual’s name, title, address and telephone numbers)

Roland “Ron” Fagen, CEO and President

501 W. Highway 212

P.O. Box 159

Granite Falls, MN 56241

Telephone: (320) 564-3324

9.2.2 Design-Builder designates the individual listed below as its Design-Builder’s
Representative, which individual has the authority and responsibility set forth in Section 2.1.1 of the General
Conditions of Contract: (Identify individual’s name, title, address and telephone numbers)

Aaron Fagen

Chief Operating Officer

501 W. Highway 212

P.O. Box 159

Granite Falls, MN 56241

Telephone: (320) 564-3324

			
	 	 	 
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Article 10

Bonds and Insurance

	10.1	 	Insurance. Design-Builder shall procure in accordance with Article 5 of the General
Conditions of Contract the following insurance coverage: A certificate of insurance will be
provided prior to starting construction. Policy limits shall be as follows:

	 	 	 	 	 
	Commercial General Liability:
	 	 	 	 
	 
	 	 	 	 
	General Aggregate
	 	$	2,000,000	 
	Products-Comp/Op AGG
	 	$	2,000,000	 
	Personal & Adv Injury
	 	$	1,000,000	 
	Each Occurrence
	 	$	1,000,000	 
	Fire Damage (Any one fire)
	 	$	50,000	 
	Med Exp (Any one person)
	 	$	5,000	 
	 
	 	 	 	 
	Automobile Liability:
	 	 	 	 
	Combined Single Limit
	 	$	1,000,000	 
	 
	 	 	 	 
	Excess Liability – Umbrella Form
	 	 	 	 
	Each Occurrence
	 	$	20,000,000	 
	Aggregate
	 	$	20,000,000	 
	 
	 	 	 	 
	Workers Compensation and
	 	 	 	 
	Employers’ Liability:
	 	 	 	 
	Statutory Limits:
	 	 	 	 
	Each Accident
	 	$	1,000,000	 
	Disease-Policy Limit
	 	$	1,000,000	 
	Disease-Each Employee
	 	$	1,000,000	 
	 
	 	 	 	 
	Contractor’s Professional Liability Coverage:
	 	 	 	 
	Per Claim
	 	$	5,000,000	 
	Aggregate
	 	$	5,000,000	 

Owner shall provide the following within 10 days of Design-Builder’s receipt of Owner’s
Notice to Proceed, or at Financial Close, whichever occurs first:

• Owner shall obtain a builder’s risk policy naming Owner as the insured, with
Design-Builder as additional insured, in an amount not less than the Contract Price.

• Owner shall also obtain Boiler and Machinery Insurance protecting Owner,
Design-Builder, Design Consultants, Subcontracts and Subcontractors.

• In addition, Owner shall obtain terrorism coverage as described by the Terrorism
Risk Insurance Act of 2002.

Article 11

Other Provisions

11.1 Other provisions, if any, are as follows:

			
	 	 	 
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	 	•	 	Performance Guarantee: The Design-Builder guarantees the Criteria listed in Exhibit
A. If there is a performance shortfall, Design-Builder will pay all design,
engineering, equipment, and
construction costs associated with making the necessary corrections. Design-Builder
retains the right to use its sole discretion in determining the method to remedy any
performance related issues.
	 
	 	•	 	If Owner, for whatever reason, prevents Design-Builder from demonstrating the
Performance Guarantee Criteria within 30 days of Design-Builder’s notice that the Project is
ready for Performance Testing, Design-Builder is thereby deemed to have fulfilled all of its
Performance Guarantee obligations listed in Exhibit A.
	 
	 	•	 	Price Guarantee: The Design-Builder guarantees the Contract Price for the Work
delineated by the Contract Documents. Any and all price increases would require, in
addition to Owner’s approval, the approval of Owner’s senior lender.
	 
	 	•	 	Winter Construction: Owner shall have no responsibility for any winter construction
related activities including, but not limited to, special material costs, sheltering,
heating, and equipment rental, except that Owner shall pay all the reasonable costs
incurred for frost removal including, but not limited to, equipment costs, equipment
rental costs, and associated labor costs so that winter construction can proceed.
	 
	 	•	 	Design-Builder shall obtain or cooperate in obtaining a performance bond if such a
bond is requested by Owner. If the bond is obtained by Design-Builder, Owner shall pay
Design-Builder for the cost of the bond, plus pay Design-Builder a fee of 7.5%, said
fee calculated by multiplying 7.5% on the cost of the bond. If purchased by Owner,
Owner shall pay all costs of obtaining the bond.

In executing this Agreement, Design-Builder represents that it has the necessary financial
resources to fulfill its obligations under this Agreement and has the necessary corporate approvals
to execute this Agreement and perform the services described herein. Owner represents that it has
the necessary organizational approvals to execute this Agreement; that Owner is seeking financing
for the project and that Owner agrees to keep Design-Builder informed of Owner’s progress in
obtaining commitments for and closing on such financing.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	OWNER:

	 	 	 	DESIGN-BUILDER:	 	 
	 
	 	 	 	 	 	 
	US Bio Albert City, LLC

	 	 	 	Fagen, Inc.	 	 
	 

	 	 	 	 	 	 
	(Name of Owner)

	 	 	 	(Name of Design-Builder)	 	 
	 
	 	 	 	 	 	 
	/s/ CHAD D. HATCH

	 	 	 	/s/ RON FAGEN	 	 
	 

	 	 	 	 	 	 
	(Signature)

	 	 	 	(Signature)	 	 
	 
	 	 	 	 	 	 
	Chad D. Hatch

	 	 	 	Roland “Ron” Fagen	 	 
	 

	 	 	 	 	 	 
	(Printed Name)

	 	 	 	(Printed Name)	 	 
	 
	 	 	 	 	 	 
	Vice President and Chief Financial Officer

	 	 	 	CEO and President	 	 
	 

	 	 	 	 	 	 
	(Title)

	 	 	 	(Title)	 	 
	Date: 08/26/05

	 	 	 	Date: 09/30/05	 	 

			
	 	 	 
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Design Build Contract

US Bio Albert City, LLC

August 26, 2005

EXHIBIT A

Performance Guarantee Criteria

	 	 	 	 	 	 	 
	Criteria	 	Specification	 	Testing Statement	 	Documentation
	Plant Capacity –

fuel grade ethanol

	 	Operate at a rate
of 100 million
gallons per year of
denatured fuel
grade ethanol
meeting the
specifications of
ASTM 4806 based on
353 days of
operation per
calendar year and
4.76% denaturant.
	 	Seven day

performance test
	 	Production records
and a written
report by
Design-Builder.
	 
	 	 	 	 	 	 
	Dried Distillers 

Grains with 

Solubles (DDGS)

	 	Dry all DDGS to
produce 11%
moisture DDGS
	 	Seven day

performance test
	 	Production records
and written
analysis by
Design-Builder.
	 
	 	 	 	 	 	 
	Corn to Ethanol
Conversion ratio;
*****

	 	Not be less
than 2.80 denatured
gallons of ethanol
per bushel (56#) of
ground corn
	 	As determined by
meter readings
during a seven day
performance test.
	 	Production records
and written
analysis by
Design-Builder.
	 
	 	 	 	 	 	 
	Electrical Energy

	 	0.75 kWh per
denatured gallon of
fuel grade ethanol.
*****
	 	As determined
by meter readings
during a seven day
performance test.
	 	Production records
and written
analysis by
Design-Builder.
	 
	 	 	 	 	 	 
	Natural Gas

	 	Shall not exceed
34,000 Btu per
denatured gallon of
fuel grade ethanol
and 100% of all DDG
with syrup to 11%
moisture.
(This Performance
Criteria relates to
production of
ethanol and
	 	As determined by
meter readings
during a seven day
performance test.
	 	Production records
and written
analysis by
Design-Builder.

10

 

Design Build Contract

US Bio Albert City, LLC

August 26, 2005

	 	 	 	 	 	 	 
	Criteria	 	Specification	 	Testing Statement	 	Documentation
	 

	 	excludes any
natural gas usage
that may occur for
drying corn).	 	 	 	 
	 
	 	 	 	 	 	 
	Process Water 

Discharge

	 	Zero gallons under

normal operations
	 	Process discharge

meter
	 	Control System

reports
	 
	 	 	 	 	 	 
	Air Emissions

	 	Must meet the
requirements
prescribed as of
the date hereof by
the State of Iowa
Department of
Natural Resources,
Air Quality Bureau
for a synthetic
minor source.
	 	As required by
State agency and
performed by
Owner’s Air
Emission Tester.
	 	Written report by
Owner’s Air
Emission Tester.

DISCLAIMER: Owner’s failure to materially comply with the operating procedures issued by ICM,
Inc./Fagen, Inc. shall void all performance guaranties and warranties set forth in this
Design-Build Agreement.

Owner understands that the startup of the plant requires resources and cooperation of the Owner,
vendors and other suppliers to the project. Design-Builder disclaims any liability and Owner
indemnifies Design-Builder for non-attainment of the Performance Guarantee Criteria directly or
indirectly caused by material non-performance or negligence of third parties not retained by
Design-Builder.

11

 

Design Build Contract

US Bio Albert City, LLC

August 26, 2005

EXHIBIT B

General Project Scope

Construct a 100 million-gallon per year (MGY) dry mill fuel ethanol plant near Albert City, Iowa.
The plant will grind approximately 35.8 million bushels of corn per year to produce approximately
100 MGY of denatured fuel ethanol. The plant will also produce approximately 321,000 tons per year
of 11% moisture dried distillers grains with solubles (DDGS), and approximately 285,700 tons per
year of raw carbon dioxide (CO2) gas.

Delivered corn will be dumped in the receiving building. The receiving building will have two
truck grain receiving bays and a rail receiving bay, including an underground conveyor from the
rail pit to the second truck receiving bay both of which share a common receiving leg. The truck
driver will drive onto the pitless scale located near the administration building, be weighed and
sampled, then drive to the receiving building, dump the grain, then proceed back to the pitless
scale and obtain a final weight ticket from the scale operator. Two independent 15,000-bushel legs
will lift the corn to one of two 500,000 – bushel concrete storage bins. A dust collection system
will be installed on the grain receiving system to limit particulate emissions as described in the
Air Quality Permit application.

Ground corn will be mixed in a slurry tank, routed through a pressure vessel and steam flashed off
in a flash vessel. Cooked mash will continue through liquefaction tanks and into one of the
fermenters. Simultaneously, propagated yeast will be added to the mash as the fermenter is
filling. After batch fermentation is complete, the beer will be pumped to the beer well and then
to the beer column to vaporize the alcohol from the mash.

Alcohol streams are dehydrated in the rectifier column, the side stripper and the molecular sieve
system. Two hundred proof alcohol is pumped to the tank farm day tank and blended with five
percent natural gasoline as the product is being pumped into one of two 1,500,000 gallon final
storage tanks. Loading facilities for truck and rail cars will be provided. Tank farm tanks
include: one tank for 190 proof storage, one tank for 200 proof storage, one tank for denaturant
storage and two 1,500,000 gallon tanks for denatured ethanol storage.

Corn mash from the beer stripper is dewatered in the centrifuge(s). Wet cake from the
centrifuge(s) is conveyed to the DDGS dryer system. Wet cake is conveyed from the centrifuges to
the dryer(s) where the water is removed from the cake and the product is dried to 11% moisture. A
modified wet or wet cake pad is located along side the DDGS dryer building to divert modified wet
or wet cake to the pad when necessary or for limited production of modified wet or wet cake for
sales. Water in the thin stillage is evaporated and
recycled by the Bio-Methanation system. Syrup is added to the wet cake entering the

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dryer(s).
DDGS is cooled in a drum and conveyed to flat storage in the DDGS storage building. Shipping is
accomplished by scooping and pushing the product

with a front-end loader into an in-floor conveyor system. The DDGS load out pit has capacity for
approximately one semi-trailer load. DDGS is weighed as it is loaded for shipment through a
bulk-weigh system.

Fresh water for the boilers, cooking, cooling tower and other processes will be obtained from the
Owner supplied water pretreatment system. Boiler water conditioned in regenerative softeners will
be pumped through a deaerator scrubber and into a deaerator tank. Appropriate boiler chemicals
will be added as preheated water is sent to the boiler.

Steam energy will be provided by one Thermal Oxidizer (TO) driven boiler system utilizing a high
percentage of condensate return to a condensate receiver tank.

The TO/Heat Recovery Steam Generator is a process used to thermally oxidize the exhaust gasses from
the Dryers. This process will be used to reduce VOCs and particulates that are in the dryer
exhaust and ensure compliance with environmental regulations. The energy required to complete
thermal oxidization will then be ducted to a waste heat boiler that will produce 100% of the steam
requirements of the ethanol plant. The exhaust gasses from the waste heat boiler will be ducted
through stack gas economizer(s) to recover the maximum amount of energy possible from the exhaust
gas stream. After the economizer(s), the gas stream will be vented to atmosphere through a stack.

The process will be cooled by circulating water through heat exchangers, a chiller, and a cooling
tower.

The design includes a compressed air system consisting of air compressor(s), a receiver tank,
pre-filter, coalescing filter, and double air
dryer(s).

The design also incorporates the use of a clean-in-place (CIP) system for cleaning cook,
fermentation, distillation, evaporation, centrifuges, and other systems. Fifty percent caustic
soda is received by truck and stored in a tank.

Under normal operating circumstances, the plant will not have any wastewater discharges that have
been in contact with corn, corn mash, cleaning system, or contact process water. An ICM/Phoenix
Bio-Methanator will reduce the BOD in process water allowing complete reuse within the plant. The
plant will have blowdown discharges from the cooling tower and may
have water discharge from any water pre-treatment processes. Owner shall provide on-site
connection to sanitary sewer or septic system.

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Most plant processes are computer controlled by a Siemens/Moore APACS distributed control system
with graphical user interface and three workstations. The control room control console will have
dual monitors to facilitate operator interface between two graphics screens at the same time.
Additional programmable logic controllers (PLCs) will control certain process equipment. Design
Builder provides lab equipment.

The cooking system requires the use of anhydrous ammonia, and other systems require the use of
sulfuric acid. Therefore, a storage tank for ammonia and a storage tank for acid will be on site
to provide the quantities necessary. The ammonia storage requires that plant management implement
and enforce a Process Safety Management (PSM) program. The plant design may require additional
programs to ensure safety and to satisfy regulatory authorities.

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EXHIBIT C

Owner’s Responsibilities

The Owner shall perform and provide the permits, authorizations, services and construction as
specifically described hereafter:

	1)	 	Land and Grading – Owner shall provide a site near or in Albert City, Iowa. Owner shall
obtain all legal authority to use the site for its intended purpose and perform technical due
diligence to allow Design-Builder to perform including, but not limited to, proper zoning
approvals, building permits, elevation restrictions, soil tests, and water tests. The site
shall be rough graded per Design-Builder specifications and be +/- three inches of final grade
including the rough grading for Site roadways. The site soils shall be modified as required
to provide a minimum allowable soil bearing pressure as described in Table 1.
	 
	 	 	Other items to be provided by the Owner include, but are not limited to, the following: initial
site survey (boundary and topographic) as required by the Design-Builder, layout of the
property corners including two construction benchmarks, Soil Borings and subsequent
Geotechnical Report describing recommendation for Roads, foundations and if required, soil
stabilization/remediation, land disturbance permit, erosion control permit, site grading as
described above with minimum soil standards, placement of erosion control measures, plant
access road from a county, state or federal road designed to meet local county road standards,
plant storm and sanitary sewers, fire water system with hydrants and plant water main branches
taken from the system to be within five feet of the designated building locations, all tanks,
motors and other equipment associated with or necessary to operate the fire water loop and
associated systems, plant roads as specified and designed for the permanent elevations and
effective depth, “construction” grading plan as drawn (including site retention pond), plant
water well and associated permit(s). Owner shall also provide the final grading, seeding and
mulching, and site fencing at the site.
	 
	 	 	Owner is encouraged to obtain preliminary designs/information and estimates of the cost of
performing all Owner required permits and services as stated in this Exhibit C. Specifically,
the cost of the fire water systems (including associated fire water pumps, required tank,
building (if required), sprinklers, and all other equipment and materials associated with the
fire water delivery systems) is estimated being in excess of $1,000,000. The requirements of
each state and the decisions of each Owner will increase or decrease the actual cost.

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	 	 	The Owner’s required activities related to site preparation for construction are to be divided
into Phase I and Phase II activities as described below:

Deliverables by Owner prior to start of Phase 1 Civil Design:

Procure Boundary & Topographic Survey (to one foot contours)

Procure
Soil Borings and Geotechnical Report with recommendations (at Design-Builder’s requested locations and depth)

Phase 1 (Deliverable Site):

Design-Builder provides engineering services to develop these items:

	 	1.	 	Final Plant Layout with FFE and Top of Road
Elevations
	 
	 	2.	 	Final Cut/Fill Quantity Calculations
	 
	 	3.	 	Grading and Erosion Control Plan
	 
	 	4.	 	Clear & Grubbing Plan — graded to +/- 3” of subgrade
	 	 	 	Subgrade is defined as 1’ below proposed Building FFE and Administration
Building FFE and 20” to 30” (based on rail designer input) below top of
rail for the rail spurs. Subgrade for the in-plant roads will be
determined upon recommendations from the geotechnical engineer (12” to 24”
below final top of road)

*Owner shall prepare site according to Design-Builder’s engineering plans for the above
items.

Plant Access Road and all in-plant roads (which will act as base for final roadway
system)

Soil Stabilization

Site Grading

Replacement Fill

Construction Layout (parking and laydown with minimum Geo Text 220 fabric and 3” roadstone
placement, access areas, temp. drainage)

Storm Water Drainage & Detention

Phase 2 Site Work (Final Civil Design Plans):

Design-Builder provides engineering services to develop these items:

Site Utilities (Within Property Line):

	 	1.	 	Sanitary Sewer System
	 
	 	2.	 	Potable Water Supply and Distribution
	 
	 	3.	 	Process Water Supply and Distribution

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	 	4.	 	Gas Supply and Distribution
	 
	 	5.	 	Fire Loop and Fire Protection System
	 
	 	6.	 	Site Electric
	 
	 	7.	 	Site Natural Gas

Wells and Well Pumps (supply of sufficient quantity for construction activities)
Minimum 3 Phase, 480 Volt, 1,000 KVA Electrical Power Available for Construction at two
locations (at Design-Builder’s requested location)

Design/Builder shall be reimbursed on a “Time & Material” basis for any management of these
Owner requirements and any design engineering requested by the Owner not otherwise
required to be provided by Design-Builder pursuant to this Agreement.

	2)	 	Permits – Owner shall obtain all Operating Permits including, but not limited to, air quality
permits, in a timely manner to allow startup of the plant as designed by Design-Builder.
Owner shall obtain all testing and site inspections required to secure the necessary operating
permits.
	 
	3)	 	Storm Water Runoff Permit – Owner shall obtain the construction storm – water runoff permit,
permanent storm-water runoff permit, and the erosion control/land disturbance permit.
	 
	4)	 	Iowa Pollutant Elimination Discharge Permit – Owner shall obtain a permit to discharge
cooling tower water and reverse osmosis (“R.O.”) reject water and any other waste water
directly to a designated waterway or other location Owner shall supply the discharge piping to
transport to the designated waterway or other location.
	 
	5)	 	Natural Gas Supply and Service Agreement – Owner shall procure and supply a continuous supply
of natural gas of at least 3.2 billion cubic feet per year, at a minimum rate of 450-500 MCF
per hour and at a pressure of at least 200 psig at the plant site, then reduced to 60 psig for
distribution to the use points. Pressure reducing stations must be located so as to provide
stable pressure and temperature at the point of use. Owner shall provide all gas piping to
the use points and supply meters and regulators to provide burner tip pressures as specified
by Design-Builder. Owner shall also supply a digital flowmeter on-site with appropriate
output for monitoring by the plant’s computer control system.
	 
	6)	 	Electrical Service – (1) The Owner is responsible to secure continuous service from an energy
supplier to serve the facility. The service from the energy supplier shall be of
sufficient size to provide at a minimum 12.5 MW of electrical capacity to the site. (2) 

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	 	 	The Owner is responsible for procurement, installation and maintenance of the site distribution
system, including but not limited to the required substation and all associated distribution
lines, switchgear, sectional cabinets, distribution transformers, transformer pads, etc. An
on-site primary digital meter is also to be supplied for monitoring of electrical usage and
demand. This meter must have the capability to be monitored via a telephone line or other
electrical signal. (3) The responsibility of the Design-Builder starts at the secondary
electrical terminals of the site distribution system transformers that have been installed by
Owner (i.e., the 480 volt terminals for the process building transformers; the 480 volt
terminals for the energy center transformers; the 480 volt terminals for the grains
transformer; the 480 volt terminals for the pumphouse transformer; and the 4160 volt terminals
for the chiller transformer; and the 4160 volt terminals of the thermal oxidizer transformer).
(4) The site distribution system requirements, layout, and meters are to be determined jointly
by the Owner, the Design-Builder and the energy supplier.
	 
	 	 	Design-Builder will be providing soft start motor controllers for all motors greater than 150
horsepower and where demanded by process requirements. Owner is encouraged to discuss with its
electrical service supplier whether additional soft start motor controllers are advisable for
this facility and such can be added, with any increased cost being an Owner’s cost.
	 
	 	 	Design-Builder will provide power factor correction to 0.92 lagging at plant nameplate
capacity. Owner is encouraged to discuss with its electrical service supplier any requirements
for power factor correction above 0.92 lagging. Additional power factor correction can be
added with any increased cost being an Owner’s cost.
	 
	7)	 	Water Supply and Service Agreement – Owner shall supply on-site process wells or other water
source capable of providing a quantity of water which includes process water, R.O. feed water,
cooling tower make-up water, of a quality which will allow discharges to comply with NPDES
limits. Owner should consider providing a redundant supply source. Design-Builder shall
provide the standard zeolite water softener system. Any increased costs incurred for another
water treatment system if water does not meet the quality requirements shall be the
responsibility of the Owner. Owner will supply one process fresh water supply line
terminating within five (5) feet of the point of entry designated by Design-Builder, one
potable supply line terminating within five (5) feet of the process building at a point of
entry designated by Design-Builder, and one potable supply line to the administration building
at a point of entry designated by administration building contractor.
	 
	 	 	Owner is advised that most projects require a reverse osmosis system. Such system is an
Owner’s cost and Owner is advised that the purchase and installation cost of such a

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	 	 	reverse osmosis system may exceed $1,000,000. Owner is also advised that such systems may be leased if
Owner desires to avoid the costs of owning such a system. 
	 
	8)	 	Wastewater Discharge System, Permits and/or Service Agreement – Owner shall provide the
discharge piping, septic tank and drainfield system or connect to municipal system as required
for the sanitary sewer requirements of the Plant. These provisions shall comply with all
federal, state, and local regulations, including any permitting issues.
	 
	9)	 	Roads and Utilities – Owner shall provide and maintain the ditches and permanent roads,
including the gravel, pavement or concrete, with the roads passing standard compaction tests.
(Design-Builder will maintain aggregate construction roads during construction of the Plant
and will return to original pre-construction condition prior to Owner completing final grade
and surfacing.)
	 
	 	 	Except as otherwise specifically stated herein the Owner shall install all utilities so that
they are within five (5) feet of the designated building/structure locations.
	 
	10)	 	Administration Building – The administration building – one story free standing, office
computer system, telephone system, office copier and fax machine and office furniture and any
other office equipment and personal property for the administration building shall be the sole
and absolute cost and responsibility of Owner and Design-Builder shall have no responsibility
in regards thereto.
	 
	11)	 	Maintenance and Power Equipment – The maintenance and power equipment as described in Table 2
and any other maintenance and power equipment as required by the plant or desired by Owner
shall be the sole and absolute cost and responsibility of Owner and Design-Builder shall have
no responsibility in regards thereto.
	 
	12)	 	Railroads – Owner is responsible for any costs associated with the railroads including, but
not limited to, all rail design and engineering and construction and Design-Builder shall have
no responsibility in regards thereto.
	 
	13)	 	Drawings – Owner shall supply drawings to Design-Builder of items supplied under items 10)
and 12) and also supply Phase II redline drawings.
	 
	14)	 	Fire Protection System – Fire protection system requirements vary by governmental
requirements per location and by insurance carrier requirements. Owner is responsible to
provide the required fire protection system for the Plant. This may include storage 

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	 	 	tanks, pumps, underground fire water mains, fire hydrants, foam or water monitor valves, sprinkler
systems, smoke and heat detection, deluge systems, or other provisions as required by
governmental codes or Owner’s insurance carrier’s fire protection criteria. Design-Builder
will provide assistance to the Owner on a “Time & Material” basis for design and/or
construction of the Fire Protection Systems required for the plant.

Table 1 Minimum Soil Bearing Pressure – Responsibility of Owner

	 	 	 	 	 
	 	 	Required Allowable Soil Bearing Pressure
	Description	 	(pounds per square foot)
	Grain Storage Silos
	 	 	8,000	 
	DDGS Storage Silo(s)
	 	 	6,000	 
	Cook Water Tank
	 	 	3,500	 
	Methanator Feed Tank
	 	 	3,500	 
	Liquifaction Tank #1
	 	 	3,500	 
	Liquifaction Tank #2
	 	 	3,500	 
	Fermentation Tank #1
	 	 	4,000	 
	Fermentation Tank #2
	 	 	4,000	 
	Fermentation Tank #3
	 	 	4,000	 
	Fermentation Tank #4
	 	 	4,000	 
	Fermentation Tank #5
	 	 	4,000	 
	Fermentation Tank #6
	 	 	4,000	 
	Fermentation Tank #7
	 	 	4,000	 
	Beerwell
	 	 	4,000	 
	Whole Stillage Tank
	 	 	3,500	 
	Thin Stillage Tank
	 	 	3,500	 
	Syrup Tank
	 	 	3,500	 
	190 Proof Day Tank
	 	 	3,000	 
	200 Proof Day Tank
	 	 	3,000	 
	Denaturant Tank
	 	 	3,000	 
	Fire Water Tank
	 	 	3,000	 
	Denatured Ethanol Tank #1
	 	 	4,000	 
	Denatured Ethanol Tank #2
	 	 	4,000	 
	All Other Areas
	 	 	3,000	 

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Table 2 Maintenance and Power Equipment – Responsibility of Owner

	 	 	 
	Description	 	Additional Description
	Spare Parts

	 	Spare parts

Parts bins

Misc. materials, supplies and equipment
	 
	 	 
	Shop supplies and equipment

	 	One shop welder

One portable gas welder

One plasma torch

One acetylene torch

One set of power tools

Two sets of hand tools with tool boxes

Carts and dollies

Hoists (except centrifuge overhead crane)

Shop tables

Maintenance office furnishings & supplies

Fire Extinguishers

Reference books

Safety manuals

Safety cabinets & supplies, etc.
	 
	 	 
	Rolling stock

	 	Used 1 1/2 yard front end loader

New Skid loader

Used Fork lift

Used Scissors lift, 30 foot

Used Pickup truck

Track Mobile

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EXHIBIT D

LICENSE AGREEMENT

THIS LICENSE AGREEMENT (this “License Agreement”) is entered into and made effective as of the 26th
day of August, 2005 (“Effective Date”) by and between US Bio Albert City, LLC, a limited liability
company (“OWNER”), and ICM, Inc., a Kansas corporation (“ICM”).

          WHEREAS, OWNER has entered into that certain Design-Build Lump Sum Contract dated August 26,
2005 (the “Contract”) with Fagen, Inc., a Minnesota corporation (“Fagen”), under which Fagen is to
design and construct a 100 million gallon per year ethanol plant for OWNER to be located in or near
Albert City, Iowa (the “Plant”);

          WHEREAS, ICM has granted Fagen the right to use certain proprietary technology and information
of ICM in the design and construction of the Plant; and

          WHEREAS, OWNER desires from ICM, and ICM desires to grant to OWNER, a license to use such
proprietary technology and information in connection with OWNER’s ownership and operation of the
Plant, all upon the terms and conditions set forth herein;

          NOW, THEREFORE, the parties, in consideration of the foregoing premises and the mutual
promises contained herein and for other good and valuable consideration, receipt of which is hereby
acknowledged, agree as follows:

1. ICM grants to OWNER a limited license to use the Proprietary Property (hereinafter defined)
solely in connection with the design, construction, operation, maintenance and repair of the
Plant, subject to the limitations provided herein (the “Purpose”). In the event OWNER fails to
pay to Fagen all amounts due and owing Fagen under the Contract or the Contract is terminated
for any reason prior to the substantial completion of the Plant, ICM may terminate the limited
license granted to OWNER herein upon written notice to OWNER.

2. The “Proprietary Property” means, without limitation, documents, Operating Procedures
(hereinafter defined), materials and other information that are furnished by ICM to OWNER,
whether directly or indirectly through Fagen, in connection with the Purpose including, without
limitation, the design, arrangement, configuration, and specifications of (i) the combinations
of distillation, evaporation, and alcohol dehydration equipment (including, but not limited to,
pumps, vessels, tanks, heat exchangers, piping, valves and associated electronic control
equipment) and all documents supporting those combinations; (ii) the combination of the
distillers grain drying (DGD), and heat recovery steam generation (HRSG) equipment (including,
but not limited to, pumps, vessels, tanks, heat exchangers, piping and associated electronic
control equipment) and all documents supporting those combinations; and (iii) the computer
system, known as the distributed
control system (DCS and/or PLC) (including, but not limited to,

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the software configuration,
programming, parameters, set points, alarm points, ranges, graphical interface, and system
hardware connections) and all documents supporting that system. The “Operating Procedures”
means, without limitation, the process equipment and specifications manuals, standards of
quality, service protocols, data collection methods, construction specifications, training
methods, engineering standards and any other information prescribed by ICM from time to time
concerning the Purpose. Proprietary Property shall not include any information or materials
that OWNER can demonstrate by written documentation: (i) was lawfully in the possession of
OWNER prior to disclosure by ICM; (ii) was in the public domain prior to disclosure by ICM;
(iii) was disclosed to OWNER by a third party other than Fagen having the legal right to
possess and disclose such information or materials; or (iv) after disclosure by ICM comes into
the public domain through no fault of OWNER or its directors, officers, employees, agents,
contractors, consultants or other representatives (hereinafter collectively referred to as
“Representatives”). Information and materials shall not be deemed to be in the public domain
merely because such information is embraced by more general disclosures in the public domain,
and any combination of features shall not be deemed to be within the foregoing exceptions
merely because individual features are in the public domain if the combination itself and its
principles of operation are not in the public domain.

3. OWNER shall not use the Proprietary Property for any purpose other than the Purpose. OWNER
shall not use the Proprietary Property in connection with any expansion or enlargement of the
Plant.

4. OWNER’s failure to materially comply with the Operating Procedures shall void all
guarantees, representations and warranties, whether expressed or implied, if any, that were
given by ICM to OWNER, directly or indirectly through Fagen, concerning the performance of the
Plant that ICM reasonably determines are materially affected by OWNER’s failure to materially
comply with such Operating Procedures. OWNER agrees to indemnify, defend and hold harmless
ICM, Fagen and their respective Representatives from any and all losses, damages and expenses
including, without limitation, reasonable attorneys’ fees resulting from, relating to or
arising out of (a) Owner’s or its Representatives’ failure to materially comply with the
Operating Procedures or (b) negligent or unauthorized use of the Proprietary Property.

5. Any and all modifications to the Proprietary Property by OWNER or its Representatives shall
be the property of ICM. OWNER shall promptly notify ICM of any such modification and OWNER
agrees to assign all right, title and interest in such modification to ICM; provided, however,
OWNER shall retain the right, at no cost, to use such modification in connection with the
Purpose.

6. ICM has the exclusive right and interest in and to the Proprietary Property and the
goodwill associated therewith. OWNER will not, directly or indirectly, contest ICM’s ownership
of the Proprietary Property. OWNER’s use of the Proprietary Property does not give OWNER any
ownership interest or other interest in or to the Proprietary Property except for the limited
license granted to OWNER herein.

7. OWNER shall pay no license fee or royalty to ICM for OWNER’s use of the Proprietary

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Property pursuant to the limited license granted to OWNER, the consideration for this limited
license is included in the amounts payable by OWNER to Fagen for the construction of the Plant
under the Contract.

8. OWNER may not assign the limited license granted herein, in whole or in part,
without the prior written consent of ICM, which will not be unreasonably withheld or delayed.
Prior to any assignment, OWNER shall obtain from such assignee a written instrument, in form
and substance reasonably acceptable to ICM, agreeing to be bound by all the terms and
provisions of this License Agreement. Any assignment of this License Agreement shall not
release OWNER from (i) its duties and obligations hereunder concerning the disclosure and use
of the Proprietary Property by OWNER or its Representatives, or (ii) damages to ICM resulting
from, or arising out of, a breach of such duties or obligations by OWNER or its
Representatives. ICM may assign its right, title and interest in the Proprietary Property, in
whole or part, subject to the limited license granted herein.

9. The Proprietary Property is confidential and proprietary. OWNER shall keep the Proprietary
Property confidential and shall use all reasonable efforts to maintain the Proprietary Property
as secret and confidential for the sole use of OWNER and its Representatives for the Purpose.
OWNER shall retain all Proprietary Property at its principal place of business and/or the
Plant. OWNER shall not at any time without ICM’s prior written consent, copy, duplicate,
record, or otherwise reproduce the Proprietary Property, in whole or in part, or otherwise make
the same available to any unauthorized person provided, OWNER shall be permitted to copy,
duplicate or otherwise reproduce the Proprietary Property in whole or in part in connection
with the Purpose so long as all such copies, duplicates or reproductions are kept at its
principal place of business and/or the Plant and are treated the same as any other Proprietary
Property. OWNER shall not disclose the Proprietary Property except to its Representatives who
are directly involved with the Purpose, and even then only to such extent as is necessary and
essential for such Representative’s involvement. OWNER shall inform such Representatives of
the confidential and proprietary nature of such information and, if requested by ICM, OWNER
shall obtain from such Representative a written instrument, in form and substance reasonably
acceptable to ICM, agreeing to be bound by all of the terms and provisions of this License
Agreement relating to the disclosure and use of the Proprietary Property. OWNER shall make all
reasonable efforts to safeguard the Proprietary Property from disclosure by its Representatives
to anyone other than permitted hereby. In the event that OWNER or its Representatives are
required by law to disclose the Proprietary Property, OWNER shall provide ICM with prompt
written notice of same so that ICM may seek a protective order or other appropriate remedy. In
the event that such protective order or other appropriate remedy is not obtained, OWNER or its
Representatives will furnish only that portion of the Proprietary Property which in the
reasonable opinion of its or their legal counsel is legally required and will exercise its
reasonable efforts to obtain reliable assurance that the Proprietary Property so disclosed will
be accorded confidential treatment.

10. OWNER agrees to indemnify ICM for any and all damages (including, without limitation,
reasonable attorneys’ fees) arising out of or resulting from any unauthorized disclosure or use
of the Proprietary Property by OWNER or its Representatives. OWNER agrees that ICM

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would be irreparably damaged by reason of a violation of the provisions contained herein and
that any remedy at law for a breach of such provisions would be inadequate. Therefore, ICM
shall be entitled to seek injunctive or other equitable relief in a court of competent
jurisdiction against OWNER or its Representatives for any unauthorized disclosure or use of the
Proprietary Property without the necessity of proving actual monetary loss or posting any bond.
It is expressly understood that the remedy described herein shall not be the exclusive remedy
of ICM for any breach of such covenants, and ICM shall be entitled to seek such other relief or
remedy, at law or in equity, to which it may be entitled as a consequence of any breach of such
duties or obligations.

11. The duties and obligations of OWNER under this License Agreement, and all provisions
relating to the enforcement of such duties and obligations shall survive and remain in full
force and effect notwithstanding any termination or expiration of the Contract or the license
granted herein under paragraph 1 or 12.

12. ICM may terminate the limited license granted to OWNER herein upon written notice to OWNER
if OWNER willfully or wantonly (a) uses the Proprietary Property for any purpose, or (b)
discloses the Proprietary Property to anyone, in each case other than permitted herein. Upon
termination of the license under paragraph 1 or this paragraph 12, OWNER shall cease using the
Proprietary Property for any purpose (including the Purpose) and, upon request by ICM, shall
promptly return to ICM all documents or other materials in OWNER’s or its Representatives’
possession that contain Proprietary Property.

13. The laws of the State of Kansas, United States of America, shall govern the validity
of the provisions contained herein, the construction of such provisions, and the interpretation
of the rights and duties of the parties. Any legal action brought to enforce or construe the
provisions of this License Agreement shall be brought in the federal or state courts located in
Wichita, Kansas, and the parties agree to and hereby submit to the exclusive jurisdiction of
such courts and agree that they will not invoke the doctrine of forum non conveniens or other
similar defenses in any such action brought in such courts. In the event the Plant is located
in, or OWNER is organized under the laws of, a country other than the United States of America,
OWNER hereby specifically agrees that any injunctive or other equitable relief granted by a
court located in the State of Kansas, United States of America, or any award by a court located
in the State of Kansas, shall be specifically enforceable as a foreign judgment in the country
in which the Plant is located, OWNER is organized or both, as the case may be, and agrees not
to contest the validity of such relief or award in such foreign jurisdiction, regardless of
whether the laws of such foreign jurisdiction would otherwise authorize such injunctive or
other equitable relief, or award. OWNER agrees that the aggregate recovery of OWNER (and
everyone claiming by or through OWNER), as a whole, under this License Agreement and the
Contract against ICM and ICM’s Representatives, collectively, shall not exceed the amount paid
by Fagen to ICM for the issuance of this License Agreement in connection with the Contract.

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     14. OWNER hereby agrees to waive all claims against ICM and ICM’s Representatives for any
consequential damages that may arise out of or relate to this License Agreement, the Contract
or the Proprietary Property whether arising in contract, warranty, tort (including negligence),
strict liability or otherwise, including but not limited to losses of use, profits, business,
reputation or financing. OWNER further agrees that the aggregate recovery of OWNER and Fagen
(and everyone claiming by or through OWNER and Fagen), as a whole, against ICM and ICM’s
Representatives, collectively, for any and all claims that arise out of, relate to or result
from this License Agreement, the Proprietary Property or the Contract, whether arising in
contract, warranty, tort (including negligence), strict liability or otherwise, shall
not exceed the amount paid by Fagen to ICM in connection with the OWNER’s project under the
Contract.

15. The terms and conditions of this License Agreement constitute the entire agreement between
the parties with respect to the subject matter hereof and supersede any prior understandings,
agreements or representations by or between the parties, written or oral. Any rule of
construction to the effect that any ambiguity is to be resolved against the drafting party
shall not be applicable in the interpretation of this License Agreement. This License
Agreement may not be modified or amended at any time without the written consent of the
parties.

16. All notices, requests, demands, reports, statements or other communications (herein
referred to collectively as “Notices”) required to be given hereunder or relating to this
License Agreement shall be in writing and shall be deemed to have been duly given if
transmitted by personal delivery or mailed by certified mail, return receipt requested, postage
prepaid, to the address of the party as set forth below. Any such Notice shall be deemed to be
delivered and received as of the date so delivered, if delivered personally, or as of the third
business day following the day sent, if sent by certified mail. Any party may, at any time,
designate a different address to which Notices shall be directed by providing written notice in
the manner set forth in this paragraph.

17. In the event that any of the terms, conditions, covenants or agreements contained in this
License Agreement, or the application of any thereof, shall be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable, such term, condition, covenant or
agreement shall be deemed void ab initio and shall be deemed severed from this License
Agreement. In such event, and except if such determination by a court of competent
jurisdiction materially changes the rights, benefits and obligations of the parties under this
License Agreement, the remaining provisions of this License Agreement shall remain unchanged
unaffected and unimpaired thereby and, to the extent possible, such remaining provisions shall
be construed such that the purpose of this License Agreement and the intent of the parties can
be achieved in a lawful manner.

18. The duties and obligations herein contained shall bind, and the benefits and advantages
shall inure to, the respective successors and permitted assigns of the parties hereto.

19. The waiver by any party hereto of the breach of any term, covenant, agreement or condition
herein contained shall not be deemed a waiver of any subsequent breach of the same or any other
term, covenant, agreement or condition herein, nor shall any custom, practice or course of

15

 

Design Build Contract

US Bio Albert City, LLC

August 26, 2005

dealings
arising among the parties hereto in the administration hereof be construed as a waiver or
diminution of the right of any party hereto to insist upon the strict performance by any other
party of the terms, covenants, agreement and conditions herein contained.

20. In this License Agreement, where applicable, (i) references to the singular shall include
the plural and references to the plural shall include the singular, and (ii) references to the
male, female, or neuter gender shall include references to all other such genders where the
context so requires.

IN WITNESS WHEREOF, the parties hereto have executed this License Agreement, the Effective Date of
which is indicated on page 1 of this License Agreement.

	 	 	 
	OWNER:

	 	ICM:
	 
	 	 
	US Bio Albert City, LLC

	 	ICM, Inc.
	 
	 	 
	By: /s/ CHAD D. HATCH

	 	By: /s/ DAVE VANDER GRIEND
	 
	 	 
	Title: Vice President and Chief Financial
Officer

	 	Title: President
	 
	 	 
	Date Signed: 08/26/05

	 	Date Signed: 10/03/05
	 
	 	 
	Address for giving notices:

	 	Address for giving notices:
	 
	 	 
	111 Main Avenue

	 	301 N First Street
	Brookings, SD 57006

	 	Colwich, KS 67030

16

 

Design Build Contract

US Bio Albert City, LLC

August 26, 2005

EXHIBIT E

START-UP SERVICES TO BE PROVIDED TO OWNER

          Start-up services will be provided to Owner as follows: Electrical and instrumentation
checkout, and approximately two (2) weeks of on-site training at the US Energy Partners Plant
(USEP) in Russell, Kansas, or other location, such to be provided for project Owner employees,
including operators, laboratory personnel, general, plant and maintenance managers. (Other
personnel of the project Owner can be provided such on-site training by separate agreement and as
time is available.) All trainer and costs associated with the trainer, including labor and all
training materials will be provided to Owner without cost. The Owner will be responsible for all
travel and related expenses of its employees and the project Owner will pay all wages for its
personnel during the training and will cover all other expenses related to the on-site training.
Said training services will include training on computers, lab procedures, field operating
procedures, and overall plant section performance expectations. Two persons shall be provided to
lead the Owner during the initialization and start-up of the plant. The Owner will provide all
other personnel and pay all other costs related to start-up of the plant. Personnel will be
maintained on-site by Design-Builder or a subcontractor until all performance testing is complete
and accepted by the Owner, unless the Owner fails to execute or allow performance testing within 30
days after receiving a written request from Design-Builder or its subcontractor to begin
performance testing or the work on the project work is substantially stopped for any reason for a
period of 30 days or more. Design-Builder or its subcontractor will provide an additional one
month on-site support after Substantial Completion start-up of the plant and from date of
Substantial Completion start-up will provide six (6) months of off-site technical and operating
procedure support by telephone, computer modem, the Internet and email.

          Design-Builder shall deliver to Owner all manuals, instructions or other written materials
that it receives from equipment manufacturers and suppliers/vendors of equipment.

17

 

Standard Form of General Conditions

of Contract Between Owner and Design-Builder

This document has important legal consequences. Consultation with

an attorney is recommended with respect to its completion or modification.

Table of Contents

	 	 	 	 	 
	General
	 	 	1	 
	 
	 	 	 	 
	Design-Builder’s Services and Responsibilities
	 	 	1	 
	 
	 	 	 	 
	Owner’s Services and Responsibilities
	 	 	5	 
	 
	 	 	 	 
	Hazardous Conditions and Differing Site Conditions
	 	 	6	 
	 
	 	 	 	 
	Insurance and Bonds
	 	 	7	 
	 
	 	 	 	 
	Payment
	 	 	9	 
	 
	 	 	 	 
	Indemnification
	 	 	11	 
	 
	 	 	 	 
	Time
	 	 	12	 
	 
	 	 	 	 
	Changes to the Contract Price and Time
	 	 	12	 
	 
	 	 	 	 
	Contract Adjustments and Disputes
	 	 	14	 
	 
	 	 	 	 
	Stop Work and Termination for Cause
	 	 	15	 
	 
	 	 	 	 
	Miscellaneous
	 	 	17	 

			
	 	 	 
	DBIA Document No. 535 • Standard Form of General Conditions
	 	 
	of Contract Between Owner and Design — Builder	 	 
	© 1998 Design-Build Institute of America	 	 

 

 

Article 1

General

1.1 Mutual Obligations

1.1.1 Owner and Design-Builder commit at all times to cooperate fully with each other, and proceed
on the basis of trust and good faith, to permit each party to realize the benefits afforded under
the Contract Documents.

1.2 Basic Definitions

1.2.1 Agreement refers to the executed contract between Owner and Design-Builder under either DBIA
Document No. 525, Standard Form of Agreement Between Owner and Design-Builder C Lump Sum
(1998 Edition) or DBIA Document No. 530, Standard Form of Agreement Between Owner and
Design-Builder C Cost Plus Fee with an Option for a Guaranteed Maximum Price (1998 Edition).

1.2.2 Day or Days shall mean calendar days unless otherwise specifically noted in the Contract
Documents.

1.2.3 Design Consultant is a qualified, licensed design professional who is not an employee of
Design-Builder, but is retained by Design-Builder, or employed or retained by anyone under contract
with Design-Builder or Subcontractor, to furnish design services required under the Contract
Documents.

1.2.4 Hazardous Conditions are any materials, wastes, substances and chemicals deemed to be
hazardous under applicable Legal Requirements, or the handling, storage, remediation, or disposal
of which are regulated by applicable Legal Requirements.

1.2.5 General Conditions of Contract refer to this DBIA Document No. 535, Standard Form of General
Conditions of Contract Between Owner and Design-Builder (1998 Edition).

1.2.6 Legal Requirements are all applicable federal, state and local laws, codes, ordinances,
rules, regulations, orders and decrees of any government or quasi-government entity having
jurisdiction over the Project or Site, the practices involved in the Project or Site, or any Work.

1.2.7 Owner’s Project Criteria are developed by or for Owner to describe Owner’s program
requirements and objectives for the Project, including use, space, price, time, site and
expandability requirements, as well as submittal requirements and other requirements governing
Design-Builder’s performance of the Work. Owner’s Project Criteria may include conceptual
documents, design criteria, performance requirements and other Project-specific technical materials
and requirements.

1.2.8 Site is the land or premises on which the Project is located.

1.2.9 Subcontractor is any person or entity retained by Design-Builder as an independent contractor
to perform a portion of the Work and shall include materialmen and suppliers.

1.2.10 Sub-Subcontractor is any person or entity retained by a Subcontractor as an independent
contractor to perform any portion of a Subcontractor’s Work and shall include materialmen and
suppliers.

1.2.11 Substantial Completion is the date on which the Work, or an agreed upon portion of the Work,
is sufficiently complete so that Owner can occupy and use the Project or a portion thereof for its
intended purposes.

1.2.12 Work is comprised of all Design-Builder’s design, construction and other services required
by the Contract Documents, including procuring and furnishing all materials, equipment, services
and labor reasonably inferable from the Contract Documents.

Article 2

Design-Builder’s Services and Responsibilities

2.1 General Services

2.1.1 Design-Builder’s Representative shall be reasonably available to Owner and shall have the
necessary expertise and experience required to supervise the Work. Design-Builder’s Representative
shall communicate regularly with Owner and shall be vested with the authority to act on behalf of
Design-Builder. Design-Builder’s

			
	 	 	 
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Representative may be replaced only with the mutual agreement of Owner and Design-Builder.

2.1.2 Design-Builder shall provide Owner with a monthly status report detailing the progress of the
Work, including whether (i) the Work is proceeding according to schedule, (ii) discrepancies,
conflicts, or ambiguities exist in the Contract Documents that require resolution, (iii) health and
safety issues exist in connection with the Work, and (iv) other items require resolution so as not
to jeopardize Design-Builder’s ability to complete the Work for the Contract Price and within the
Contract Time(s).

2.1.3 Design-Builder shall prepare and submit, at least three (3) days prior to the meeting
contemplated by Section 2.1.4 hereof, a schedule for the execution of the Work for Owner’s review
and response. The schedule shall indicate the dates for the start and completion of the various
stages of Work, including the dates when Owner information and approvals are required to enable
Design-Builder to achieve the Contract Time(s). The schedule shall be revised as required by
conditions and progress of the Work, but such revisions shall not relieve Design-Builder of its
obligations to complete the Work within the Contract Time(s), as such dates may be adjusted in
accordance with the Contract Documents. Owner’s review of and response to the schedule shall not
be construed as relieving Design-Builder of its complete and exclusive control over the means,
methods, sequences and techniques for executing the Work.

2.1.4 The parties will meet within seven (7) days after execution of the Agreement to discuss
issues affecting the administration of the Work and to implement the necessary procedures,
including those relating to submittals and payment, to facilitate the ability of the parties to
perform their obligations under the Contract Documents.

2.2 Design Professional Services

2.2.1 Design-Builder shall, consistent with applicable state licensing laws, provide through
qualified, licensed design professionals employed by Design-Builder, or procured from qualified,
independent licensed Design Consultants, the necessary design services, including architectural,
engineering and other design professional services, for the preparation of the required drawings,
specifications and other design submittals to permit Design-Builder to complete the Work consistent
with the Contract Documents. Nothing in the Contract Documents is intended or deemed to create any
legal or contractual relationship between Owner and any Design Consultant.

2.3 Standard of Care for Design Professional Services

2.3.1 The standard of care for all design professional services performed to execute the Work shall
be the care and skill ordinarily used by members of the design profession practicing under similar
conditions at the same time and locality of the Project. Notwithstanding the preceding sentence,
if the parties agree upon specific performance standards for any aspect of the Work, which
standards are to be set forth in an exhibit to the Agreement entitled “Performance Standard
Requirements,” the design professional services shall be performed to achieve such standards.

2.4 Design Development Services

2.4.1 Design-Builder and Owner shall, consistent with any applicable provision of the Contract
Documents, agree upon any interim design submissions that Owner may wish to review, which interim
design submissions may include design criteria, drawings, diagrams and specifications setting forth
the Project requirements. On or about the time of the scheduled submissions, Design-Builder and
Owner shall meet and confer about the submissions, with Design-Builder identifying during such
meetings, among other things, the evolution of the design and any significant changes or deviations
from the Contract Documents, or, if applicable, previously submitted design submissions. Minutes
of the meetings will be maintained by Design-Builder and provided to all attendees for review.
Following the design review meeting, Owner shall review and approve the interim design submissions
in a time that is consistent with the turnaround times set forth in Design-Builder’s schedule.

2.4.2 Design-Builder shall submit to Owner Construction Documents setting forth in detail drawings
and specifications describing the requirements for construction of the Work. The Construction
Documents shall be consistent with the latest set of interim design submissions, as such
submissions may have been modified in a design review meeting. The parties shall have a design

			
	 	 	 
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review meeting to discuss, and Owner shall review and approve, the Construction Documents in
accordance with the procedures set forth Section 2.4.1 above. Design-Builder shall proceed with
construction in accordance with the approved Construction Documents and shall submit one set of
approved Construction Documents to Owner prior to commencement of construction.

2.4.3 Owner’s review and approval of interim design submissions and the Construction Documents is
for the purpose of mutually establishing a conformed set of Contract Documents compatible with the
requirements of the Work. Neither Owner’s review nor approval of any interim design submissions
and Construction Documents shall be deemed to transfer any design liability from Design-Builder to
Owner.

2.4.4 To the extent not prohibited by the Contract Documents or Legal Requirements, Design-Builder
may prepare interim design submissions and Construction Documents for a portion of the Work to
permit construction to proceed on that portion of the Work prior to completion of the Construction
Documents for the entire Work.

2.5 Legal Requirements

2.5.1 Design-Builder shall perform the Work in accordance with all Legal Requirements and shall
provide all notices applicable to the Work as required by the Legal Requirements.

2.5.2 The Contract Price and/or Contract Time(s) shall be adjusted to compensate Design-Builder for
the effects of any changes in the Legal Requirements enacted after the date of the Agreement
affecting the performance of the Work, or if a Guaranteed Maximum Price is established after the
date of the Agreement, the date the parties agree upon the Guaranteed Maximum Price. Such effects
may include, without limitation, revisions Design-Builder is required to make to the Construction
Documents because of changes in Legal Requirements.

2.6 Government Approvals and Permits

2.6.1 Except as identified in an Owner’s Permit List attached as an exhibit to the Agreement,
Design-Builder shall obtain and pay for all necessary permits, approvals, licenses, government
charges and inspection fees required for the prosecution of the Work by any government or
quasi-government entity having jurisdiction over the Project.

2.6.2 Design-Builder shall provide reasonable assistance to Owner in obtaining those permits,
approvals and licenses that are Owner’s responsibility.

2.7 Design-Builder’s Construction Phase Services

2.7.1 Unless otherwise provided in the Contract Documents to be the responsibility of Owner or a
separate contractor, Design-Builder shall provide through itself or Subcontractors the necessary
supervision, labor, inspection, testing, start-up, material, equipment, machinery, temporary
utilities and other temporary facilities to permit Design-Builder to complete construction of the
Project consistent with the Contract Documents.

2.7.2 Design-Builder shall perform all construction activities efficiently and with the requisite
expertise, skill and competence to satisfy the requirements of the Contract Documents.
Design-Builder shall at all times exercise complete and exclusive control over the means, methods,
sequences and techniques of construction.

2.7.3 Design-Builder shall employ only Subcontractors who are duly licensed and qualified to
perform the Work consistent with the Contract Documents. Owner may reasonably object to
Design-Builder’s selection of any Subcontractor, provided that the Contract Price and/or Contract
Time(s) shall be adjusted to the extent that Owner’s decision impacts Design-Builder’s cost and/or
time of performance.

2.7.4 Design-Builder assumes responsibility to Owner for the proper performance of the Work of
Subcontractors and any acts and omissions in connection with such performance. Nothing in the
Contract Documents is intended or deemed to create any legal or contractual relationship between
Owner and any Subcontractor or Sub-Subcontractor, including but not limited to any third-party
beneficiary rights.

2.7.5 Design-Builder shall coordinate the activities of all Subcontractors. If Owner performs
other work on the Project or at the Site with separate

			
	 	 	 
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contractors under Owner’s control, Design-Builder agrees to reasonably cooperate and coordinate its
activities with those of such separate contractors so that the Project can be completed in an
orderly and coordinated manner without unreasonable disruption.

2.7.6 Design-Builder shall keep the Site reasonably free from debris, trash and construction wastes
to permit Design-Builder to perform its construction services efficiently, safely and without
interfering with the use of adjacent land areas. Upon Substantial Completion of the Work, or a
portion of the Work, Design-Builder shall remove all debris, trash, construction wastes, materials,
equipment, machinery and tools arising from the Work or applicable portions thereof to permit Owner
to occupy the Project or a portion of the Project for its intended use.

2.8 Design-Builder’s Responsibility for Project Safety

2.8.1 Design-Builder recognizes the importance of performing the Work in a safe manner so as to
prevent damage, injury or loss to (i) all individuals at the Site, whether working or visiting,
(ii) the Work, including materials and equipment incorporated into the Work or stored on-Site or
off-Site, and (iii) all other property at the Site or adjacent thereto. Design-Builder assumes
responsibility for implementing and monitoring all safety precautions and programs related to the
performance of the Work. Design-Builder shall, prior to commencing construction, designate a
Safety Representative with the necessary qualifications and experience to supervise the
implementation and monitoring of all safety precautions and programs related to the Work. Unless
otherwise required by the Contract Documents, Design-Builder’s Safety Representative shall be an
individual stationed at the Site who may have responsibilities on the Project in addition to
safety. The Safety Representative shall make routine daily inspections of the Site and shall hold
weekly safety meetings with Design-Builder’s personnel, Subcontractors and others as applicable.

2.8.2 Design-Builder and Subcontractors shall comply with all Legal Requirements relating to
safety, as well as any Owner-specific safety requirements set forth in the Contract Documents,
provided that such Owner-specific requirements do not violate any applicable Legal Requirement.
Design-Builder will immediately report in writing any safety-related injury, loss, damage or
accident arising from the Work to Owner’s Representative and, to the extent mandated by Legal
Requirements, to all government or quasi-government authorities having jurisdiction over
safety-related matters involving the Project or the Work.

2.8.3 Design-Builder’s responsibility for safety under this Section 2.8 is not intended in any way
to relieve Subcontractors and Sub-Subcontractors of their own contractual and legal obligations and
responsibility for (i) complying with all Legal Requirements, including those related to health and
safety matters, and (ii) taking all necessary measures to implement and monitor all safety
precautions and programs to guard against injury, losses, damages or accidents resulting from their
performance of the Work.

2.9 Design-Builder’s Warranty

2.9.1 Design-Builder warrants to Owner that the construction, including all materials and equipment
furnished as part of the construction, shall be new unless otherwise specified in the Contract
Documents, of good quality, in conformance with the Contract Documents and free of defects in
materials and workmanship. Design-Builder’s warranty obligation excludes defects caused by abuse,
alterations, or failure to maintain the Work by persons other than Design-Builder or anyone for
whose acts Design-Builder may be liable. Nothing in this warranty is intended to limit any
manufacturer’s warranty which provides Owner with greater warranty rights than set forth in this
Section 2.9 or the Contract Documents. Design-Builder will provide Owner with all manufacturers’
warranties upon Substantial Completion.

2.10 Correction of Defective Work

2.10.1 Design-Builder agrees to correct any Work that is found to not be in conformance with the
Contract Documents, including that part of the Work subject to Section 2.9 hereof, within a period
of one year from the date of Substantial Completion of the Work or any portion of the Work, or
within such longer period to the extent required by the Contract Documents.

2.10.2 Design-Builder shall, within seven (7) days of receipt of written notice from Owner that the
Work

			
	 	 	 
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is not in conformance with the Contract Documents, take meaningful steps to commence correction of
such nonconforming Work, including the correction, removal or replacement of the nonconforming Work
and any damage caused to other parts of the Work affected by the nonconforming Work. If
Design-Builder fails to commence the necessary steps within such seven (7) day period, Owner, in
addition to any other remedies provided under the Contract Documents, may provide Design-Builder
with written notice that Owner will commence correction of such nonconforming Work with its own
forces. If Owner does perform such corrective Work, Design-Builder shall be responsible for all
reasonable costs incurred by Owner in performing such correction. If the nonconforming Work
creates an emergency requiring an immediate response, the seven (7) day periods identified herein
shall be deemed inapplicable.

2.10.3 The one year period referenced in Section 2.10.1 above applies only to Design-Builder’s
obligation to correct nonconforming Work and is not intended to constitute a period of limitations
for any other rights or remedies Owner may have regarding Design-Builder’s other obligations under
the Contract Documents.

Article 3

Owner’s Services and Responsibilities

3.1 Duty to Cooperate

3.1.1 Owner shall, throughout the performance of the Work, cooperate with Design-Builder and
perform its responsibilities, obligations and services in a timely manner to facilitate
Design-Builder’s timely and efficient performance of the Work and so as not to delay or interfere
with Design-Builder’s performance of its obligations under the Contract Documents.

3.1.2 Owner shall provide timely reviews and approvals of interim design submissions and
Construction Documents consistent with the turnaround times set forth in Design-Builder’s schedule.

3.2 Furnishing of Services and Information

3.2.1 Unless expressly stated to the contrary in the Contract Documents, Owner shall provide, at
its own cost and expense, for Design-Builder’s information and use the following, all of which
Design-Builder is entitled to rely upon in performing the Work:

	 	.1	 	Surveys describing the property, boundaries, topography and reference points
for use during construction, including existing service and utility lines;
	 
	 	.2	 	Geotechnical studies describing subsurface conditions, and other surveys
describing other latent or concealed physical conditions at the Site;
	 
	 	.3	 	Temporary and permanent easements, zoning and other requirements and
encumbrances affecting land use, or necessary to permit the proper design and
construction of the Project and enable Design-Builder to perform the Work;
	 
	 	.4	 	A legal description of the Site;
	 
	 	.5	 	To the extent available, as-built and record drawings of any existing
structures at the Site; and
	 
	 	.6	 	To the extent available, environmental studies, reports and impact statements
describing the environmental conditions, including Hazardous Conditions, in existence
at the Site.

3.2.2 Owner is responsible for securing and executing all necessary agreements with adjacent land
or property owners that are necessary to enable Design-Builder to perform the Work. Owner is
further responsible for all costs, including attorneys’ fees, incurred in securing these necessary
agreements.

3.3 Financial Information

3.3.1 At Design-Builder’s request, Owner shall promptly furnish reasonable evidence satisfactory to
Design-Builder that Owner has adequate funds available and committed to fulfill all of Owner’s
contractual obligations under the Contract Documents. If Owner fails to furnish such financial
information in a timely manner, Design-Builder may

			
	 	 	 
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stop Work under Section 11.3 hereof or exercise
any other right permitted under the Contract Documents.

3.3.2 Design-Builder shall cooperate with the reasonable requirements of Owner’s lenders or
other financial sources. Notwithstanding the preceding sentence, after execution of the Agreement
Design-Builder shall have no obligation to execute for Owner or Owner’s lenders or other financial
sources any documents or agreements that require Design-Builder to assume obligations or
responsibilities greater than those existing obligations Design-Builder has under the Contract
Documents.

3.4 Owner’s Representative

3.4.1 Owner’s Representative shall be responsible for providing Owner-supplied information and
approvals in a timely manner to permit Design-Builder to fulfill its obligations under the Contract
Documents. Owner’s Representative shall also provide Design-Builder with prompt notice if it
observes any failure on the part of Design-Builder to fulfill its contractual obligations,
including any errors, omissions or defects in the performance of the Work.

3.5 Government Approvals and Permits

3.5.1 Owner shall obtain and pay for all necessary permits, approvals, licenses, government charges
and inspection fees set forth in the Owner’s Permit List attached as an exhibit to the Agreement.

3.5.2 Owner shall provide reasonable assistance to Design-Builder in obtaining those permits,
approvals and licenses that are Design-Builder’s responsibility.

3.6 Owner’s Separate Contractors

3.6.1 Owner is responsible for all work performed on the Project or at the Site by separate
contractors under Owner’s control. Owner shall contractually require its separate contractors to
cooperate with, and coordinate their activities so as not to interfere with, Design-Builder in
order to enable Design-Builder to timely complete the Work consistent with the Contract Documents.

Article 4

Hazardous Conditions and Differing Site Conditions

4.1 Hazardous Conditions

4.1.1 Unless otherwise expressly provided in the Contract Documents to be part of the Work,
Design-Builder is not responsible for any Hazardous Conditions encountered at the Site. Upon
encountering any Hazardous Conditions, Design-Builder will stop Work immediately in the affected
area and duly notify Owner and, if required by Legal Requirements, all government or
quasi-government entities with jurisdiction over the Project or Site.

4.1.2 Upon receiving notice of the presence of suspected Hazardous Conditions, Owner shall take the
necessary measures required to ensure that the Hazardous Conditions are remediated or rendered
harmless. Such necessary measures shall include Owner retaining qualified independent experts to
(i) ascertain whether Hazardous Conditions have actually been encountered, and, if they have been
encountered, (ii) prescribe the remedial measures that Owner must take either to remove the
Hazardous Conditions or render the Hazardous Conditions harmless.

4.1.3 Design-Builder shall be obligated to resume Work at the affected area of the Project only
after Owner’s expert provides it with written certification that (i) the Hazardous Conditions have
been removed or rendered harmless and (ii) all necessary approvals have been obtained from all
government and quasi-government entities having jurisdiction over the Project or Site.

4.1.4 Design-Builder will be entitled, in accordance with these General Conditions of Contract, to
an adjustment in its Contract Price and/or Contract Time(s) to the extent Design-Builder’s cost
and/or time of performance have been adversely impacted by the presence of Hazardous Conditions.

			
	 	 	 
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4.1.5 To the fullest extent permitted by law, Owner shall indemnify, defend and hold
harmless Design-Builder, Design Consultants, Subcontractors, anyone employed directly or indirectly
for any of them, and their officers, directors, employees and agents, from and against any and all
claims, losses, damages, liabilities and expenses, including attorneys’ fees and expenses, arising
out of or resulting from the presence, removal or remediation of Hazardous Conditions at the Site.

4.1.6 Notwithstanding the preceding provisions of this Section 4.1, Owner is not responsible for
Hazardous Conditions introduced to the Site by Design-Builder, Subcontractors or anyone for whose
acts they may be liable. Design-Builder 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 introduced to the Site by Design-Builder, Subcontractors or anyone for
whose acts they may be liable.

4.2 Differing Site Conditions

4.2.1 Concealed or latent physical conditions or subsurface conditions at the Site that (i)
materially differ from the conditions indicated in the Contract Documents or (ii) are of an unusual
nature, differing materially from the conditions ordinarily encountered and generally recognized as
inherent in the Work are collectively referred to herein as “Differing Site Conditions.” If
Design-Builder encounters a Differing Site Condition, Design-Builder will be entitled to an
adjustment in the Contract Price and/or Contract Time(s) to the extent Design-Builder’s cost and/or
time of performance are adversely impacted by the Differing Site Condition.

4.2.2 Upon encountering a Differing Site Condition, Design-Builder shall provide prompt written
notice to Owner of such condition, which notice shall not be later than fourteen (14) days after
such condition has been encountered. Design-Builder shall, to the extent reasonably possible,
provide such notice before the Differing Site Condition has been substantially disturbed or
altered.

Article 5

Insurance and Bonds

5.1 Design-Builder’s Insurance Requirements

5.1.1 Design-Builder is responsible for procuring and maintaining from insurance companies
authorized to do business in the state in which the Project is located, and with a minimum rating
set forth in the Agreement, the following insurance coverages for certain claims which may arise
from or out of the performance of the Work and obligations under the Contract Documents:

	 	.1	 	Coverage for claims arising under workers’ compensation, disability and other
similar employee benefit laws applicable to the Work;
	 
	 	.2	 	Coverage for claims by Design-Builder’s employees for bodily injury, sickness,
disease, or death;
	 
	 	.3	 	Coverage for claims by any person other than Design-Builder’s employees for
bodily injury, sickness, disease, or death;
	 
	 	.4	 	Coverage for usual personal injury liability claims for damages sustained by a
person as a direct or indirect result of Design-Builder’s employment of the person, or
sustained by any other person;
	 
	 	.5	 	Coverage for claims for damages (other than to the Work) because of injury to
or destruction of tangible property, including loss of use;
	 
	 	.6	 	Coverage for claims of damages because of personal injury or death, or property
damage resulting from ownership, use and maintenance of any motor vehicle; and

			
	 	 	 
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	 	.7	 	Coverage for contractual liability claims arising out of Design-Builder’s
obligations under Section 7.4.1 hereof.

5.1.2 Design-Builder’s liability insurance required by Section 5.1.1 above shall be written
for the coverage amounts set forth in the Agreement and shall include completed operations
insurance for the period of time set forth in the Agreement.

5.1.3 Design-Builder’s liability insurance set forth in Sections 5.1.1.1 through 5.1.1.7 above
shall specifically delete any design-build or similar exclusions that could compromise coverages
because of the design-build delivery of the Project.

5.1.4 To the extent Owner requires Design-Builder or any Design Consultant to provide professional
liability insurance for claims arising from the negligent performance of design services by
Design-Builder or the Design Consultant, the coverage limits, duration and other specifics of such
insurance shall be as set forth in the Agreement. Any professional liability shall specifically
delete any design-build or similar exclusions that could compromise coverages because of the
design-build delivery of the Project. Such policies shall be provided prior to the commencement of
any design services hereunder.

5.1.5 Prior to commencing any construction services hereunder, Design-Builder shall provide Owner
with certificates evidencing that (i) all insurance obligations required by the Contract Documents
are in full force and in effect and will remain in effect for the duration required by the Contract
Documents and (ii) no insurance coverage will be canceled, renewal refused, or materially changed
unless at least thirty (30) days prior written notice is given to Owner.

5.2 Owner’s Liability Insurance

5.2.1 Owner shall procure and maintain from insurance companies authorized to do business in the
state in which the Project is located such liability insurance to protect Owner from claims which
may arise from the performance of Owner’s obligations under the Contract Documents or Owner’s
conduct during the course of the Project.

5.3 Owner’s Property Insurance

5.3.1 Unless otherwise provided in the Contract Documents, Owner shall procure and maintain from
insurance companies authorized to do business in the state in which the Project is located property
insurance upon the entire Project to the full insurable value of the Project, including
professional fees, overtime premiums and all other expenses incurred to replace or repair the
insured property. The property insurance obtained by Owner shall include as additional insureds
the interests of Owner, Design-Builder, Design Consultants, Subcontractors and Sub-Subcontractors,
and shall insure against the perils of fire and extended coverage, theft, vandalism, malicious
mischief, collapse, flood, earthquake, debris removal and other perils or causes of loss as called
for in the Contract Documents. The property insurance shall include physical loss or damage to the
Work, including materials and equipment in transit, at the Site or at another location as may be
indicated in Design-Builder’s Application for Payment and approved by Owner.

5.3.2 Unless the Contract Documents provide otherwise, Owner shall procure and maintain boiler and
machinery insurance that will include the interests of Owner, Design-Builder, Design Consultants,
Subcontractors and Sub-Subcontractors.

5.3.3 Prior to Design-Builder commencing any Work, Owner shall provide Design-Builder with
certificates evidencing that (i) all Owner’s insurance obligations required by the Contract
Documents are in full force and in effect and will remain in effect until Design-Builder has
completed all of the Work and has received final payment from Owner and (ii) no insurance coverage
will be canceled, renewal refused, or materially changed unless at least thirty (30) days prior
written notice is given to Design-Builder. Owner’s property insurance shall not lapse or be
canceled if Owner occupies a portion of the Work pursuant to Section 6.6.3 hereof. Owner shall
provide Design-Builder with the necessary endorsements from the insurance company prior to
occupying a portion of the Work.

5.3.4 Any loss covered under Owner’s property insurance shall be adjusted with Owner and
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trustees for the insureds as their interests may
appear, subject to any applicable mortgage clause. All insurance proceeds received as a result of
any loss will be placed in a separate account and distributed in accordance with such agreement as
the interested parties may reach. Any disagreement
concerning the distribution of any proceeds will be resolved in accordance with Article 10 hereof.

5.3.5 Owner and Design-Builder waive against each other and Owner’s separate contractors,
Design Consultants, Subcontractors, agents and employees of each and all of them, all damages
covered by property insurance provided herein, except such rights as they may have to the proceeds
of such insurance. Design-Builder and Owner shall, where appropriate, require similar waivers of
subrogation from Owner’s separate contractors, Design Consultants and Subcontractors and shall
require each of them to include similar waivers in their contracts.

5.4 Bonds and Other Performance Security

5.4.1 If Owner requires Design-Builder to obtain performance and labor and material payment bonds,
or other forms of performance security, the amount, form and other conditions of such security
shall be as set forth in the Agreement.

Article 6

Payment

6.1 Schedule of Values

6.1.1 Within ten (10) days of execution of the Agreement, Design-Builder shall submit for Owner’s
review and approval a schedule of values for all of the Work. The Schedule of Values will (i)
subdivide the Work into its respective parts, (ii) include values for all items comprising the Work
and (iii) serve as the basis for monthly progress payments made to Design-Builder throughout the
Work.

6.2 Monthly Progress Payments

6.2.1 On or before the date established in the Agreement, Design-Builder shall submit for Owner’s
review and approval its Application for Payment requesting payment for all Work performed as of the
date of the Application for Payment. The Application for Payment shall be accompanied by all
supporting documentation required by the Contract Documents and/or established at the meeting
required by Section 2.1.4 hereof.

6.2.2 The Application for Payment may request payment for equipment and materials not yet
incorporated into the Project, provided that (i) Owner is satisfied that the equipment and
materials are

suitably stored at either the Site or another acceptable location, (ii) the equipment and materials
are protected by suitable insurance and (iii) upon payment, Owner will receive the equipment and
materials free and clear of all liens and encumbrances.

6.2.3 The Application for Payment shall constitute Design-Builder’s representation that the Work
has been performed consistent with the Contract Documents, has progressed to the point indicated in
the Application for Payment, and that title to all Work will pass to Owner free and clear of all
claims, liens, encumbrances, and security interests upon the incorporation of the Work into the
Project, or upon Design-Builder’s receipt of payment, whichever occurs earlier.

6.3 Withholding of Payments

6.3.1 On or before the date established in the Agreement, Owner shall pay Design-Builder all
amounts properly due. If Owner determines that Design-Builder is not entitled to all or part of an
Application for Payment, it will notify Design-Builder in writing at least five (5) days prior to
the date payment is due. The notice shall indicate the specific amounts Owner intends to withhold,
the reasons and contractual basis for the withholding, and the specific measures Design-Builder
must take to rectify Owner’s concerns. Design-Builder and Owner will attempt to resolve Owner’s
concerns prior to the date payment is due. If the parties cannot resolve such concerns,
Design-Builder may pursue its rights under the Contract Documents, including those under Article 10
hereof.

6.3.2 Notwithstanding anything to the contrary in the Contract Documents, Owner shall pay
Design-Builder all undisputed amounts in an Application for Payment within the times required by
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6.4 Right to Stop Work and Interest

6.4.1 If Owner fails to pay Design-Builder any amount that becomes due, Design-Builder, in addition
to all other remedies provided in the Contract Documents, may stop Work pursuant to
Section 11.3 hereof. All payments due and unpaid shall bear interest at the rate set forth in the
Agreement.

6.5 Design-Builder’s Payment Obligations

6.5.1 Design-Builder will pay Design Consultants and Subcontractors, in accordance with its
contractual obligations to such parties, all the amounts Design-Builder has received from Owner on
account of their work. Design-Builder will impose similar requirements on Design Consultants and
Subcontractors to pay those parties with whom they have contracted. Design-Builder will indemnify
and defend Owner against any claims for payment and mechanic’s liens as set forth in Section 7.3
hereof.

6.6 Substantial Completion

6.6.1 Design-Builder shall notify Owner when it believes the Work, or to the extent permitted in
the Contract Documents, a portion of the Work, is substantially complete. Within five (5) days of
Owner’s receipt of Design-Builder’s notice, Owner and Design-Builder will jointly inspect such Work
to verify that it is substantially complete in accordance with the requirements of the Contract
Documents. If such Work is substantially complete, Owner shall prepare and issue a Certificate of
Substantial Completion that will set forth (i) the date of Substantial Completion of the Work or
portion thereof, (ii) the remaining items of Work that have to be completed before final payment,
(iii) provisions (to the extent not already provided in the Contract Documents) establishing
Owner’s and Design-Builder’s responsibility for the Project’s security, maintenance, utilities and
insurance pending final payment and (iv) an acknowledgment that warranties commence to run on the
date of Substantial Completion, except as may otherwise be noted in the Certificate of Substantial
Completion.

6.6.2 Upon Substantial Completion of the entire Work or, if applicable, any portion of the Work,
Owner shall release to Design-Builder all retained amounts relating, as applicable, to the entire
Work or completed portion of the Work, less an amount equal to the reasonable value of all
remaining or incomplete items of Work as noted in the Certificate of Substantial Completion.

6.6.3 Owner, at its option, may use a portion of the Work which has been determined to be
substantially complete, provided, however, that (i) a Certificate of Substantial Completion has
been issued for the portion of Work addressing the items set forth in Section 6.6.1 above, (ii)
Design-Builder and Owner have obtained the consent of their sureties and insurers, and to the
extent applicable, the appropriate government authorities having jurisdiction over the Project, and
(iii) Owner and Design-Builder agree that Owner’s use or occupancy will not interfere with
Design-Builder’s completion of the remaining Work.

6.7 Final Payment

6.7.1 After receipt of a Final Application for Payment from Design-Builder, Owner shall make final
payment by the time required in the Agreement, provided that Design-Builder has completed all of
the Work in conformance with the Contract Documents.

6.7.2 At the time of submission of its Final Application for Payment, Design-Builder shall provide
the following information:

	 	.1	 	an affidavit that there are no claims, obligations or liens outstanding or
unsatisfied for labor, services, material, equipment, taxes or other items performed,
furnished or incurred for or in connection with the Work which will in any way affect
Owner’s interests;
	 
	 	.2	 	a general release executed by Design-Builder waiving, upon receipt of final
payment by Design-Builder, all claims, except those claims previously made in writing
to Owner and remaining unsettled at the time of final payment;
	 
	 	.3	 	consent of Design-Builder’s surety, if any, to final payment;
	 
	 	.4	 	all operating manuals, warranties and other deliverables required by the
Contract Documents; and

			
	 	 	 
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	 	.5	 	certificates of insurance confirming that required coverages will remain in
effect consistent with the requirements of the Contract Documents.

6.7.3 Upon making final payment, Owner waives all claims against Design-Builder except claims
relating to (i) Design-Builder’s failure to satisfy its
payment obligations, if such failure affects Owner’s interests, (ii) Design-Builder’s failure to
complete the Work consistent with the Contract Documents, including defects appearing after
Substantial Completion and (iii) the terms of any special warranties required by the Contract
Documents.

Article 7

Indemnification

7.1 Patent and Copyright Infringement

7.1.1 Design-Builder shall defend any action or proceeding brought against Owner based on any claim
that the Work, or any part thereof, or the operation or use of the Work or any part thereof,
constitutes infringement of any United States patent or copyright, now or hereafter issued. Owner
shall give prompt written notice to Design-Builder of any such action or proceeding and will
reasonably provide authority, information and assistance in the defense of same. Design-Builder
shall indemnify and hold harmless Owner from and against all damages and costs, including but not
limited to attorneys’ fees and expenses awarded against Owner or Design-Builder in any such action
or proceeding. Design-Builder agrees to keep Owner informed of all developments in the defense of
such actions.

7.1.2 If Owner is enjoined from the operation or use of the Work, or any part thereof, as the
result of any patent or copyright suit, claim, or proceeding, Design-Builder shall at its sole
expense take reasonable steps to procure the right to operate or use the Work. If Design-Builder
cannot so procure such right within a reasonable time, Design-Builder shall promptly, at
Design-Builder’s option and at Design-Builder’s expense, (i) modify the Work so as to avoid
infringement of any such patent or copyright or (ii) replace said Work with Work that does not
infringe or violate any such patent or copyright.

7.1.3 Sections 7.1.1 and 7.1.2 above shall not be applicable to any suit, claim or proceeding based
on infringement or violation of a patent or copyright (i) relating solely to a particular process
or product of a particular manufacturer specified by Owner and not offered or recommended by
Design-Builder to Owner or (ii) arising from modifications to the Work by Owner or its agents after
acceptance of the Work. If the suit, claim or proceeding is based upon events set forth in the
preceding sentence, Owner shall defend, indemnify and hold harmless Design-Builder to the same
extent Design-Builder is obligated to defend, indemnify and hold harmless Owner in Section 7.1.1
above.

7.1.4 The obligations set forth in this Section 7.1 shall constitute the sole agreement between the
parties relating to liability for infringement of violation of any patent or copyright.

7.2 Tax Claim Indemnification

7.2.1 If, in accordance with Owner’s direction, an exemption for all or part of the Work is claimed
for taxes, Owner shall indemnify, defend and hold harmless Design-Builder from and against any
liability, penalty, interest, fine, tax assessment, attorneys’ fees or other expenses or costs
incurred by Design-Builder as a result of any action taken by Design-Builder in accordance with
Owner’s directive.

7.3 Payment Claim Indemnification

	7.3.1	 	Providing that Owner is not in breach of its contractual obligation to make payments to
Design-Builder for the Work, Design-Builder shall indemnify, defend and hold harmless Owner
from any claims or mechanic’s liens brought against Owner or against the Project as a result
of the failure of Design-Builder, 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 or in connection with the Work. Within three (3) days of receiving written
notice from Owner that such a claim or mechanic’s lien has been filed, Design-Builder shall
commence to take the steps necessary to discharge said claim or lien, including, if necessary,
the furnishing of a mechanic’s lien bond. If Design-Builder fails to do so,

			
	 	 	 
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	 	 	Owner will have
the right to discharge the claim or lien and hold Design-Builder liable for costs and expenses
incurred, including attorneys’ fees.

7.4 Design-Builder’s General Indemnification

7.4.1 Design-Builder, to the fullest extent permitted by law, shall indemnify, hold harmless and
defend Owner, its officers, directors, employees and agents
from and against claims, losses, damages, liabilities, including attorneys’ fees and expenses, for
bodily injury, sickness or death, and property damage or destruction (other than to the Work
itself) to the extent resulting from the negligent acts or omissions of Design-Builder, Design
Consultants, Subcontractors, anyone employed directly or indirectly by any of them or anyone for
whose acts any of them may be liable.

7.4.2 If an employee of Design-Builder, Design Consultants, Subcontractors, anyone employed
directly or indirectly by any of them or anyone for whose acts any of them may be liable has a
claim against Owner, its officers, directors, employees, or agents, Design-Builder’s indemnity
obligation set forth in Section 7.4.1 above shall not be limited by any limitation on the amount of
damages, compensation or benefits payable by or for Design-Builder, Design Consultants,
Subcontractors, or other entity under any employee benefit acts, including workers’ compensation or
disability acts.

7.5 Owner’s General Indemnification

7.5.1 Owner, to the fullest extent permitted by law, shall indemnify, hold harmless and defend
Design-Builder and any of Design-Builder’s officers, directors, employees, or agents from and
against claims, losses, damages, liabilities, including attorneys’ fees and expenses, for bodily
injury, sickness or death, and property damage or destruction (other than to the Work itself) to
the extent resulting from the negligent acts or omissions of Owner, it’s officers, directors,
employees, agents, and Owner’s separate contractors or anyone for whose acts any of them may be
liable.

Article 8

Time

8.1 Obligation to Achieve the Contract Times

8.1.1 Design-Builder agrees that it will commence performance of the Work and achieve the Contract
Time(s) in accordance with Article 5 of the Agreement.

8.2 Delays to the Work

8.2.1 If Design-Builder is delayed in the performance of the Work due to acts, omissions,
conditions, events, or circumstances beyond its control and due to no fault of its own or those for
whom Design-Builder is responsible, the Contract Time(s) for performance shall be reasonably
extended by Change Order. By way of example, events that will entitle Design-Builder to an
extension of the Contract Time(s) include acts or omissions of Owner or anyone under Owner’s
control (including separate contractors), changes in the Work, Differing Site Conditions, Hazardous
Conditions, wars, floods, labor disputes, unusual delay in transportation, epidemics abroad,
earthquakes, adverse weather conditions not reasonably anticipated, and other acts of God.

8.2.2 In addition to Design-Builder’s right to a time extension for those events set forth in
Section 8.2.1 above, Design-Builder shall also be entitled to an appropriate adjustment of the
Contract Price provided, however, that the Contract Price shall not be adjusted for those events
set forth in Section 8.2.1 above that are beyond the control of both Design-Builder and Owner,
including the events of war, floods, labor disputes, earthquakes, epidemics, adverse weather
conditions not reasonably anticipated, and other acts of God.

Article 9

Changes to the Contract Price and Time

9.1 Change Orders

9.1.1 A Change Order is a written instrument issued after execution of the Agreement signed by
Owner and Design-Builder, stating their agreement upon all of the following:

	 	.1	 	The scope of the change in the Work;

			
	 	 	 
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	 	.2	 	The amount of the adjustment to the Contract Price; and
	 
	 	.3	 	The extent of the adjustment to the Contract Time(s).

9.1.2 All changes in the Work authorized by applicable Change Order shall be performed under the
applicable conditions of the Contract Documents. Owner and Design-Builder shall negotiate in good
faith and as expeditiously as possible the appropriate adjustments for such changes.

9.1.3 If Owner requests a proposal for a change in the Work from Design-Builder and subsequently
elects not to proceed with the change, a Change Order shall be issued to reimburse Design-Builder
for reasonable costs incurred for estimating services, design
services and services involved in the preparation of proposed revisions to the Contract Documents.

9.2 Work Change Directives

9.2.1 A Work Change Directive is a written order prepared and signed by Owner, directing a change
in the Work prior to agreement on an adjustment in the Contract Price and/or the Contract Time(s).

9.2.2 Owner and Design-Builder shall negotiate in good faith and as expeditiously as possible the
appropriate adjustments for the Work Change Directive. Upon reaching an agreement, the parties
shall prepare and execute an appropriate Change Order reflecting the terms of the agreement.

9.3 Minor Changes in the Work

9.3.1 Minor changes in the Work do not involve an adjustment in the Contract Price and/or Contract
Time(s) and do not materially and adversely affect the Work, including the design, quality,
performance and workmanship required by the Contract Documents. Design-Builder may make minor
changes in the Work consistent with the intent of the Contract Documents, provided, however that
Design-Builder shall promptly inform Owner, in writing, of any such changes and record such changes
on the documents maintained by Design-Builder.

9.4 Contract Price Adjustments

9.4.1 The increase or decrease in 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 the Agreement or as subsequently agreed to between the
parties;
	 
	 	.2	 	A mutually accepted, lump sum, properly itemized and supported by sufficient
substantiating data to permit evaluation by Owner;
	 
	 	.3	 	Costs, fees and any other markups set forth in the Agreement; and
	 
	 	.4	 	If an increase or decrease cannot be agreed to as set forth
in items .1 through .3 above and Owner issues a Work Change Directive, the cost of the change of the Work
shall be determined by the reasonable expense and savings in the performance of the
Work resulting from the change, including a reasonable overhead and profit, as may be
set forth in the Agreement. If the net result of both additions and deletions to the
Work is an increase in the Contract Price, overhead and profit shall be calculated on
the basis of the net increase to the Contract Price. If the net result of both
additions and deletions to the Work is a decrease in the Contract Price, there shall be
no overhead or profit adjustment to the Contract Price. Design-Builder shall maintain
a documented, itemized accounting evidencing the expenses and savings associated with
such changes.

9.4.2 If unit prices are set forth in the Contract Documents or are subsequently agreed to by the
parties, but application of such unit prices will cause substantial inequity to Owner or
Design-Builder because of differences in the character or quantity of such unit items as originally
contemplated, such unit prices shall be equitably adjusted.

9.4.3 If Owner and Design-Builder disagree upon whether Design-Builder is entitled to be paid for
any

			
	 	 	 
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services required by Owner, or if there are any other disagreements over the scope of Work or
proposed changes to the Work, Owner and Design-Builder shall resolve the disagreement pursuant to
Article 10 hereof. As part of the negotiation process, Design-Builder shall furnish Owner with a
good faith estimate of the costs to perform the disputed services in accordance with Owner’s
interpretations. If the parties are unable to agree and Owner expects Design-Builder to perform
the services in accordance with Owner’s interpretations, Design-Builder shall proceed to perform
the disputed services,
conditioned upon Owner issuing a written order to Design-Builder (i) directing Design-Builder to
proceed and (ii) specifying Owner’s interpretation of the services that are to be performed. If
this occurs, Design-Builder shall be entitled to submit in its Applications for Payment an amount
equal to fifty percent (50%) of its reasonable estimated direct cost to perform the services, and
Owner agrees to pay such amounts, with the express understanding that (i) such payment by Owner
does not prejudice Owner’s right to argue that it has no responsibility to pay for such services
and (ii) receipt of such payment by Design-Builder does not prejudice Design-Builder’s right to
seek full payment of the disputed services if Owner’s order is deemed to be a change to the Work.

9.5 Emergencies

9.5.1 In any emergency affecting the safety of persons and/or property, Design-Builder shall act,
at its discretion, to prevent threatened damage, injury or loss. Any change in the Contract Price
and/or Contract Time(s) on account of emergency work shall be determined as provided in this
Article 9.

Article 10

Contract Adjustments and Disputes

10.1 Requests for Contract Adjustments and Relief

10.1.1 If either Design-Builder or Owner believes that it is entitled to relief against the other
for any event arising out of or related to the Work or Project, such party shall provide written
notice to the other party of the basis for its claim for relief. Such notice shall, if possible,
be made prior to incurring any cost or expense and in accordance with any specific notice
requirements contained in applicable sections of these General Conditions of Contract. In the
absence of any specific notice requirement, written notice shall be given within a reasonable time,
not to exceed twenty-one (21) days, after the occurrence giving rise to the claim for relief or
after the claiming party reasonably should have recognized the event or condition giving rise to
the request, whichever is later. Such notice shall include sufficient information to advise the
other party of the circumstances giving rise to the claim for relief, the specific contractual
adjustment or relief requested and the basis of such request.

10.2 Dispute Avoidance and Resolution

10.2.1 The parties are fully committed to working with each other throughout the Project and agree
to communicate regularly with each other at all times so as to avoid or minimize disputes or
disagreements. If disputes or disagreements do arise, Design-Builder and Owner each commit to
resolving such disputes or disagreements in an amicable, professional and expeditious manner so as
to avoid unnecessary losses, delays and disruptions to the Work.

10.2.2 Design-Builder and Owner will first attempt to resolve disputes or disagreements at the
field level through discussions between Design-Builder’s Representative and Owner’s Representative.

10.2.3 If a dispute or disagreement cannot be resolved through Design-Builder’s Representative and
Owner’s Representative, Design-Builder’s Senior Representative and Owner’s Senior Representative,
upon the request of either party, shall meet as soon as conveniently possible, but in no case later
than thirty (30) days after such a request is made, to attempt to resolve such dispute or
disagreement. Prior to any meetings between the Senior Representatives, the parties will exchange
relevant information that will assist the parties in resolving their dispute or disagreement.

10.2.4 If after meeting the Senior Representatives determine that the dispute or disagreement
cannot be resolved on terms satisfactory to both parties, the parties shall submit the dispute or
disagreement to non-binding mediation. The mediation shall be conducted by a mutually agreeable
impartial mediator, or if the parties cannot so agree, a mediator designated by the American
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Industry Mediation Rules. The
mediation will be governed by and conducted pursuant to a mediation agreement negotiated by the
parties or, if the parties cannot so agree, by procedures established by the mediator.

10.3 Arbitration

10.3.1 Any claims, disputes or controversies between the parties arising out of or relating to the
Agreement, or the breach thereof, which have not been resolved in accordance with the procedures
set forth in Section 10.2 above shall be decided by arbitration in accordance with the Construction
Industry Arbitration Rules of the AAA then in effect, unless the parties mutually agree otherwise.

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

10.3.3 Design-Builder and Owner expressly agree that any arbitration pursuant to this Section 10.3
may be joined or consolidated with any arbitration involving any other person or entity (i)
necessary to resolve the claim, dispute or controversy, or (ii) substantially involved in or
affected by such claim, dispute or controversy. Both Design-Builder and Owner will include
appropriate provisions in all contracts they execute with other parties in connection with the
Project to require such joinder or consolidation.

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

10.4 Duty to Continue Performance

10.4.1 Unless provided to the contrary in the Contract Documents, Design-Builder shall continue to
perform the Work and Owner shall continue to satisfy its payment obligations to Design-Builder,
pending the final resolution of any dispute or disagreement between Design-Builder and Owner.

10.5 CONSEQUENTIAL DAMAGES

10.5.1 NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY (EXCEPT AS SET FORTH IN SECTION 10.5.2
BELOW), NEITHER DESIGN-BUILDER NOR OWNER SHALL BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL LOSSES
OR DAMAGES, WHETHER ARISING IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR
OTHERWISE, INCLUDING BUT NOT LIMITED TO LOSSES OF USE, PROFITS, BUSINESS, REPUTATION OR FINANCING.

10.5.2 The consequential damages limitation set forth in Section 10.5.1 above is not intended to
affect the payment of liquidated damages, if any, set forth in Article 5 of the Agreement, which
both parties recognize has been established, in part, to reimburse Owner for some damages that
might otherwise be deemed to be consequential.

Article 11

Stop Work and Termination for Cause

11.1 Owner’s Right to Stop Work

11.1.1 Owner may, without cause and for its convenience, order Design-Builder in writing to stop
and suspend the Work. Such suspension shall not exceed sixty (60) consecutive days or aggregate
more than ninety (90) days during the duration of the Project.

11.1.2 Design-Builder is entitled to seek an adjustment of the Contract Price and/or Contract
Time(s) if its cost or time to perform the Work has been adversely impacted by any suspension of
stoppage of work by Owner.

11.2 Owner’s Right to Perform and Terminate for Cause

11.2.1 If Design-Builder persistently fails to (i) provide a sufficient number of skilled workers,
(ii) supply the materials required by the Contract Documents, (iii) comply with applicable Legal
Requirements, (iv) timely pay, without cause, Design Consultants or Subcontractors, (v) prosecute
the Work with promptness and diligence to ensure that the Work is completed by the Contract
Time(s), as such times may be adjusted, or (vi) perform material obligations under the Contract
Documents, then Owner, in addition to any other rights and

			
	 	 	 
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remedies provided in the Contract
Documents or by law, shall have the rights set forth in Sections 11.2.2 and 11.2.3 below.

11.2.2 Upon the occurrence of an event set forth in Section 11.2.1 above, Owner may provide written
notice to Design-Builder that it intends to terminate the Agreement unless the problem cited is
cured, or commenced to be cured, within seven (7) days of Design-Builder’s receipt of such notice.
If Design-Builder fails to cure, or reasonably commence to cure, such problem, then Owner may give
a second written notice to Design-Builder of its intent to terminate within an additional seven (7) day
period. If Design-Builder, within such second seven (7) day period, fails to cure, or reasonably
commence to cure, such problem, then Owner may declare the Agreement terminated for default by
providing written notice to Design-Builder of such declaration.

11.2.3 Upon declaring the Agreement terminated pursuant to Section 11.2.2 above, Owner may
enter upon the premises and take possession, for the purpose of completing the Work, of all
materials, equipment, scaffolds, tools, appliances and other items thereon, which have been
purchased or provided for the performance of the Work, all of which Design-Builder hereby
transfers, assigns and sets over to Owner for such purpose, and to employ any person or persons to
complete the Work and provide all of the required labor, services, materials, equipment and other
items. In the event of such termination, Design-Builder shall not be entitled to receive any
further payments under the Contract Documents until the Work shall be finally completed in
accordance with the Contract Documents. At such time, if the unpaid balance of the Contract Price
exceeds the cost and expense incurred by Owner in completing the Work, such excess shall be paid by
Owner to Design-Builder. Notwithstanding the preceding sentence, if the Agreement establishes a
Guaranteed Maximum Price, Design-Builder will only be entitled to be paid for Work performed prior
to its default. If Owner’s cost and expense of completing the Work exceeds the unpaid balance of
the Contract Price, then Design-Builder shall be obligated to pay the difference to Owner. Such
costs and expense shall include not only the cost of completing the Work, but also losses, damages,
costs and expense, including attorneys’ fees and expenses, incurred by Owner in connection with the
reprocurement and defense of claims arising from Design-Builder’s default, subject to the waiver of
consequential damages set forth in Section 10.5 hereof.

11.2.4 If Owner improperly terminates the Agreement for cause, the termination for cause will be
converted to a termination for convenience in accordance with the provisions of Article 8 of the
Agreement.

11.3 Design-Builder’s Right to Stop Work

11.3.1 Design-Builder may, in addition to any other rights afforded under the Contract Documents or
at law, stop work for the following reasons:

	 	.1	 	Owner’s failure to provide financial assurances as required under Section 3.3
hereof; or
	 
	 	.2	 	Owner’s failure to pay amounts properly due under Design-Builder’s Application
for Payment.

11.3.2 Should any of the events set forth in Section 11.3.1 above occur, Design-Builder has the
right to provide Owner with written notice that Design-Builder will stop work unless said event is
cured within seven (7) days from Owner’s receipt of Design-Builder’s notice. If Owner does not
cure the problem within such seven (7) day period, Design-Builder may stop work. In such case,
Design-Builder shall be entitled to make a claim for adjustment to the Contract Price and Contract
Time(s) to the extent it has been adversely impacted by such stoppage.

11.4 Design-Builder’s Right to Terminate for Cause

11.4.1 Design-Builder, in addition to any other rights and remedies provided in the Contract
Documents or by law, may terminate the Agreement for cause for the following reasons:

	 	.1	 	The Work has been stopped for sixty (60) consecutive days, or more than ninety
(90) days during the duration of the Project, because of court order, any government
authority having jurisdiction over the Work, or orders by Owner under Section 11.1.1
hereof, provided that such stoppages are not due to the acts or omissions of
Design-

			
	 	 	 
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	© 1998 Design-Build Institute of America	 	 

 

 

	 	 	 	Builder or anyone for whose acts Design-Builder may be
responsible. 
	 
	 	.2	 	Owner’s failure to provide Design-Builder with any information, permits or
approvals that are Owner’s responsibility under the Contract Documents which result in
the Work being stopped for sixty (60) consecutive days, or more
than ninety (90) days during the duration of the Project, even though Owner has not ordered Design-
Builder in writing to stop and suspend the Work pursuant to Section 11.1.1 hereof.
	 
	 	.3	 	Owner’s failure to cure the problems set forth in Section 11.3.1 above after
Design-Builder has stopped the Work.

11.4.2 Upon the occurrence of an event set forth in Section 11.4.1 above, Design-Builder may
provide written notice to Owner that it intends to terminate the Agreement unless the problem cited
is cured, or commenced to be cured, within seven (7) days of Owner’s receipt of such notice. If
Owner fails to cure, or reasonably commence to cure, such problem, then Design-Builder may give a
second written notice to Owner of its intent to terminate within an additional seven (7) day
period. If Owner, within such second seven (7) day period, fails to cure, or reasonably commence
to cure, such problem, then Design-Builder may declare the Agreement terminated for default by
providing written notice to Owner of such declaration. In such case, Design-Builder shall be
entitled to recover in the same manner as if Owner had terminated the Agreement for its convenience
under Article 8 of the Agreement.

11.5 Bankruptcy of Owner or Design-Builder

11.5.1 If either Owner or Design-Builder institutes or has instituted against it a case under the
United States Bankruptcy Code (such party being referred to as the “Bankrupt Party”), such event
may impair or frustrate the Bankrupt Party’s ability to perform its obligations under the Contract
Documents. Accordingly, should such event occur:

	 	.1	 	The Bankrupt Party, its trustee or other successor, shall furnish, upon request
of the non-Bankrupt Party, adequate assurance of the ability of the Bankrupt Party to
perform all future material obligations under the Contract Documents, which assurances
shall be provided within ten (10) days after receiving notice of the request; and
	 
	 	.2	 	The Bankrupt Party shall file an appropriate action within the bankruptcy court
to seek assumption or rejection of the Agreement within sixty (60) days of the
institution of the bankruptcy filing and shall diligently prosecute such action.

If the Bankrupt Party fails to comply with its foregoing obligations, the non-Bankrupt Party shall
be entitled to request the bankruptcy court to reject the Agreement, declare the Agreement
terminated and pursue any other recourse available to the non-Bankrupt Party under this Article 11.

11.5.2 The rights and remedies under Section 11.5.1 above shall not be deemed to limit the ability
of the non-Bankrupt Party to seek any other rights and remedies provided by the Contract Documents
or by law, including its ability to seek relief from any automatic stays under the United States
Bankruptcy Code or the right of Design-Builder to stop Work under any applicable provision of these
General Conditions of Contract.

Article 12

Miscellaneous

12.1 Assignment

12.1.1 Neither Design-Builder nor Owner shall, without the written consent of the other assign,
transfer or sublet any portion or part of the Work or the obligations required by the Contract
Documents.

12.2 Successorship

12.2.1 Design-Builder and Owner intend that the provisions of the Contract Documents are binding
upon the parties, their employees, agents, heirs, successors and assigns.

12.3 Governing Law

			
	 	 	 
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	© 1998 Design-Build Institute of America	 	 

 

 

12.3.1 The Agreement and all Contract Documents shall be governed by the laws of the place of the
Project, without giving effect to its conflict of law principles.

12.4 Severability

12.4.1 If any provision or any part of a provision of the Contract Documents shall be finally
determined to be superseded, invalid, illegal, or otherwise unenforceable pursuant to any
applicable Legal Requirements, such determination shall not impair or otherwise affect the
validity, legality, or enforceability of the remaining provision or parts of the provision of
the Contract Documents, which shall remain in full force and effect as if the unenforceable
provision or part were deleted.

12.5 No Waiver

12.5.1 The failure of either Design-Builder or Owner to insist, in any one or more instances, on
the performance of any of the obligations required by the other under the Contract Documents shall
not be construed as a waiver or relinquishment of such obligation or right with respect to future
performance.

12.6 Headings

12.6.1 The headings used in these General Conditions of Contract, or any other Contract Document,
are for ease of reference only and shall not in any way be construed to limit or alter the meaning
of any provision.

12.7 Notice

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

12.8 Amendments

12.8.1 The Contract Documents may not be changed, altered, or amended in any way except in writing
signed by a duly authorized representative of each party.

			
	 	 	 
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	 	Page 18
	of Contract Between Owner and Design — Builder	 	 
	© 1998 Design-Build Institute of America	 	 

 

 

Design Build Contract

US Bio Albert City, LLC

August 26, 2005

SUPPLEMENTARY CONDITIONS

These Supplementary Conditions amend or supplement the Standard Form of General Conditions of
Contract between Owner and Design-Builder (DBIA Document No. 535, 1998 Edition) and other
provisions of the Contract Documents as indicated below. All provisions, which are not so amended
or supplemented, remain in full force and effect.

SC – 1.2 Basic Definitions

The terms used in these Supplementary Conditions which are defined in the Standard Form of General
Conditions of Contract between Owner and Design-Builder (DBIA Document No. 535, 1998 Edition) have
the meanings assigned to them in the General Conditions.

SC – 1.2.1 Agreement

Delete Section 1.2.1 of the General Conditions in its entirety and insert the following in its
place:

Agreement refers to the executed Standard Form of Agreement between Owner and Design-Builder – Lump
Sum (DBIA Document No. 525, 1998 Edition).

SC – 1.2.11 Substantial Completion

Amend Section 1.2.11 of the General Conditions by striking out the following words: or an agreed
upon portion of the Work.

Add the following language at the end of Section 1.2.11 of the General Conditions. Substantial
Completion shall be attained at the point in time when the Facility is ready to begin operation for
its intended use (ethanol production).

As so amended, Section 1.2.11 reads as follows:

Substantial Completion is the date on which the Work is sufficiently complete so that Owner can
occupy and use the Project for its intended purposes. Substantial Completion shall be attained at
the point in time when the Facility is ready to begin operation for its intended use (ethanol
production).

SC – 2.1.2

Delete Section 2.1.2 of the General Conditions in its entirety and insert the following in its
place:

Design-Builder shall maintain a current, complete set of drawings and specifications at the Work
site. Owner may review such drawings and specifications, and Owner may be allowed, upon
Design-Builder’s approval, to make copies of drawings and specifications available at the Work site
that are applicable to Owner. Design-Builder shall provide Owner with regular communication
regarding the progress and any revisions to the drawings and specifications of the Work, including
whether (i) the Work is proceeding according to schedule, (ii) discrepancies, conflicts, or
ambiguities exist in the Contract Documents that require resolution, (iii) health and safety issues
exist in connection with the Work, and (iv) other items require resolution so as not to jeopardize
Design-Builder’s ability to complete the Work for the Contract Price and within the Contract
Time(s).

SC – 2.1.3

Delete Section 2.1.3 of the General Conditions in its entirety and insert the following in its
place:

Design-Builder shall prepare and submit a schedule for the execution of the Work to Owner. The
schedule shall indicate the dates for the start and completion of the various stages of Work,
including the dates when Owner’s obligations are required to be complete to enable Design-Builder
to achieve the Contract Time(s). The schedule shall be revised as required by conditions and
progress of the Work but such revisions

1

 

Design Build Contract

US Bio Albert City, LLC

August 26, 2005

SUPPLEMENTARY CONDITIONS

shall not relieve Design-Builder of its obligations to complete the Work within the Contract
Time(s), unless such revisions to the schedule are the result of any direct or indirect delay in
the completion of Owner’s obligations. Then Design-Builder shall be relieved of its obligations to
complete the Work within the Contract Time(s), and the Contract Time(s) for completion of the Work
shall be extended accordingly without penalty to Design-Builder.

SC – 2.1.4

Delete Section 2.1.4 of the General Conditions in its entirety and insert the following in its
place:

The parties will meet at a mutually agreeable time after execution of the Agreement to discuss
issues affecting the administration of the Work and to implement the necessary procedures,
including those relating to submittals and payment, to facilitate the ability of the parties to
perform their obligations under the Contract Documents.

SC – 2.3.1

Amend the second sentence of Section 2.3.1 of the General Conditions by striking out the words:
Performance Standard Requirements; and inserting the following: Exhibit A: Performance Guarantee
Criteria; and as so amended, Section 2.3.1 reads as follows:

The standard of care for all design professional services performed to execute the Work shall be
the care and skill ordinarily used by members of the design profession practicing under similar
conditions at the same time and locality of the Project. Notwithstanding the preceding sentence,
if the parties agree upon specific performance standards for any aspect of the Work, which
standards are to be set forth in an exhibit to the Agreement entitled “Exhibit A: Performance
Guarantee Criteria,” the design professional services shall be performed to achieve such standards.

SC – 2.4.1

Delete Section 2.4.1 of the General Conditions in its entirety and insert the following in its
place:

Reserved.

SC – 2.4.2

Delete Section 2.4.2 of the General Conditions in its entirety and insert the following in its
place:

Reserved.

SC – 2.4.3

Delete Section 2.4.3 of the General Conditions in its entirety and insert the following in its
place:

Reserved.

SC – 2.6.1

Amend Section 2.6.1 of the General Conditions by striking out the words: an Owner’s Permit List;
and inserting the following: Exhibit C: Owner’s Responsibilities; and as so amended, Section 2.6.1
reads as follows:

Except as identified in Exhibit C: Owner’s Responsibilities List attached as an exhibit to the
Agreement, Design-Builder shall obtain and pay for all necessary permits, approvals, licenses,
government charges and inspection fees required for the prosecution of the Work by any government
or quasi-government entity having jurisdiction over the Project.

SC – 3.5.1

Amend Section 3.5.1 of the General Conditions by striking out the words: the

2

 

Design Build Contract

US Bio Albert City, LLC

August 26, 2005

SUPPLEMENTARY CONDITIONS

Owner’s Permit List;
and inserting the following: Exhibit C:
Owner’s Responsibilities; and as so amended, Section 3.5.1 reads as follows:

Owner shall obtain and pay for all necessary permits, approvals, licenses, government charges and
inspection fees set forth in Exhibit C: Owner’s Responsibilities attached as an exhibit to the
Agreement.

SC – 6.4.1

Amend the first sentence of Section 6.4.1 of the General Conditions by inserting the phrase: in
accordance with Section 6.3 above; and as so amended, Section 6.4.1 reads as follows:

If Owner fails to pay Design-Builder any amount that becomes due, in accordance with Section 6.3
above, Design-Builder, in addition to all other remedies provided in the Contract Documents, may
stop Work pursuant to Section 11.3 hereof. All payments due and unpaid shall bear interest at the
rate set forth in the Agreement.

SC – 11.3.2

Delete Section 11.3.2 of the General Conditions in its entirety and insert the following in its
place:

Should any of the events set forth in Section 11.3.1 above occur, Design-Builder has the right to
provide Owner with written notice that Design-Builder will stop work unless said event is cured
within seven (7) days from Owner’s receipt of Design-Builder’s notice. If Owner fails to cure, or
reasonably commence to cure, such problem, then Design-Builder may give a second written notice to
Owner of its intent to stop work within an additional seven (7) day period. If Owner, within such
second seven (7) day period, fails to cure, or reasonably commence to cure, such problem, then
Design-Builder may stop work. In such case, Design-Builder shall be entitled to make a claim for
adjustment to the Contract Price and Contract Time(s) to the extent it has been adversely impacted
by such stoppage.

SC – 10.5.1

Amend Section 10.5.1 of the General Conditions by inserting the phrase “except Design-Builder does
not waive any such damages resulting from or arising out of any breach of Owner’s duties and
obligations under the limited license granted by Design-Builder to Owner pursuant to Article 4 of
the Lump Sum Agreement”; and as so amended, Section 10.5.1 reads as follows:

NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY (EXCEPT AS SET FORTH IN SECTION 10.5.2 BELOW),
NEITHER DESIGN-BUILDER NOR OWNER SHALL BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL LOSSES OR
DAMAGES, WHETHER ARISING IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR
OTHERWISE, INCLUDING BUT NOT LIMITED TO LOSSES OF USE, PROFITS, BUSINESS, REPUTATION OR FINANCING,
EXCEPT DESIGN-BUILDER DOES NOT WAIVE ANY SUCH DAMAGES RESULTING FROM OR ARISING OUT OF ANY BREACH
OF OWNER’S DUTIES AND OBLIGATIONS UNDER THE LIMITED LICENSE GRANTED BY DESIGN-BUILDER TO OWNER
PURSUANT TO ARTICLE 4 OF THE LUMP SUM AGREEMENT.

3exv10w3

 

Exhibit 10.3

***** PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE OMISSIONS HAVE BEEN INDICATED BY ASTERISKS
(“*****”), AND THE OMITTED TEXT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

LUMP SUM DESIGN-BUILD AGREEMENT

BETWEEN

VAL-E ETHANOL, LLC (“OWNER”)

AND

FAGEN, INC. (“DESIGN-BUILDER”)

January 6, 2006

Val-E Ethanol, LLC

Fagen, Inc. Final

January 6, 2006

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	Article 1 Definitions; Rules of Interpretation	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	1.1	 	 	Rules of Construction
	 	 	1	 
	 

	 	 	1.2	 	 	Defined Terms
	 	 	2	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 2 The Project	 	 	6	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.1	 	 	Services to be Performed
	 	 	6	 
	 

	 	 	2.2	 	 	Extent of Agreement
	 	 	6	 
	 

	 	 	2.3	 	 	Conflicting Provisions
	 	 	7	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 3 Design Builder Responsibilities	 	 	7	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.1	 	 	Design Builder’s Services in General
	 	 	7	 
	 

	 	 	3.2	 	 	Design Development and Services
	 	 	7	 
	 

	 	 	3.3	 	 	Standard of Care
	 	 	9	 
	 

	 	 	3.4	 	 	Government Approvals and Permits
	 	 	9	 
	 

	 	 	3.5	 	 	Subcontractors
	 	 	9	 
	 

	 	 	3.6	 	 	Maintenance of Site
	 	 	10	 
	 

	 	 	3.7	 	 	Project Safety
	 	 	10	 
	 

	 	 	3.8	 	 	Submission of Reports
	 	 	11	 
	 

	 	 	3.9	 	 	Training
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 4 Owner’s Responsibilities	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.1	 	 	Duty to Cooperate
	 	 	11	 
	 

	 	 	4.2	 	 	Furnishing of Services and Information
	 	 	12	 
	 

	 	 	4.3	 	 	Financial Information; Cooperation with Lenders; Failure to Obtain
Financial Closing
	 	 	12	 
	 

	 	 	4.4	 	 	Owner’s Representative
	 	 	13	 
	 

	 	 	4.5	 	 	Government Approvals and Permits
	 	 	13	 
	 

	 	 	4.6	 	 	Owner’s Separate Contractors
	 	 	13	 
	 

	 	 	4.7	 	 	Security
	 	 	13	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 5 Ownership of Work Product; Risk of Loss	 	 	14	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.1	 	 	Work Product
	 	 	14	 
	 

	 	 	5.2	 	 	Owner’s Limited License Upon Payment in Full
	 	 	14	 
	 

	 	 	5.3	 	 	Owner’s Limited License Upon Owner’s Termination for Convenience or
Design Builder’s Election to Terminate
	 	 	15	 
	 

	 	 	5.4	 	 	Owner’s Limited License Upon Design Builder’s Default
	 	 	16	 
	 

	 	 	5.5	 	 	Owner’s Indemnification for Use of Work Product
	 	 	16	 
	 

	 	 	5.6	 	 	Risk of Loss
	 	 	16	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 6 Commencement and Completion of the Project	 	 	16	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.1	 	 	Work Schedule
	 	 	16	 
	 

	 	 	6.2	 	 	Phase I and Phase II Engineering
	 	 	17	 
	 

	 	 	6.3	 	 	Notice to Proceed; Commencement
	 	 	17	 
	 

	 	 	6.4	 	 	Project Start Up and Testing
	 	 	17	 

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	 	 	6.5	 	 	Substantial Completion
	 	 	17	 
	 

	 	 	6.6	 	 	Final Completion
	 	 	18	 
	 

	 	 	6.7	 	 	Post Completion Support
	 	 	20	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 7 Performance Testing	 	 	20	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.1	 	 	Performance Guarantee
	 	 	20	 
	 

	 	 	7.2	 	 	Performance Testing
	 	 	20	 
	 

	 	 	7.3	 	 	Bonds and Other Performance Security
	 	 	21	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 8 Warranties	 	 	22	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	8.1	 	 	Design Builder Warranty
	 	 	22	 
	 

	 	 	8.2	 	 	Correction of Defective Work
	 	 	23	 
	 

	 	 	8.3	 	 	Warranty Period Not Limitation to Owner’s Rights
	 	 	23	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 9 Contract Price	 	 	23	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.1	 	 	Contract Price
	 	 	23	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 10 Payment Procedures	 	 	24	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.1	 	 	Payment at Financial Closing
	 	 	24	 
	 

	 	 	10.2	 	 	Progress Payments
	 	 	24	 
	 

	 	 	10.3	 	 	Final Payment
	 	 	25	 
	 

	 	 	10.4	 	 	Failure to Pay Amounts Due
	 	 	25	 
	 

	 	 	10.5	 	 	Design Builder’s Payment Obligations
	 	 	26	 
	 

	 	 	10.6	 	 	Record Keeping and Finance Controls
	 	 	26	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 11 Hazardous Conditions and Differing Site Conditions	 	 	26	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.1	 	 	Hazardous Conditions
	 	 	26	 
	 

	 	 	11.2	 	 	Differing Site Conditions; Inspection
	 	 	27	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 12 Force Majeure; Change in Legal Requirements	 	 	27	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	12.1	 	 	Force Majeure Event
	 	 	27	 
	 

	 	 	12.2	 	 	Effect of Force Majeure Event
	 	 	28	 
	 

	 	 	12.3	 	 	Change in Legal Requirements
	 	 	29	 
	 

	 	 	12.4	 	 	Effect of Industry Wide Disruption on Contract Price
	 	 	29	 
	 

	 	 	12.5	 	 	Time Impact And Availability
	 	 	29	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 13 Changes to the Contract Price and Scheduled Completion Dates	 	 	30	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	13.1	 	 	Change Orders
	 	 	30	 
	 

	 	 	13.2	 	 	Contract Price Adjustments
	 	 	30	 
	 

	 	 	13.3	 	 	Emergencies
	 	 	31	 
	 

	 	 	13.4	 	 	Requests for Contract Adjustments and Relief
	 	 	31	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 14 Indemnity	 	 	31	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.1	 	 	Tax Claim Indemnification
	 	 	31	 
	 

	 	 	14.2	 	 	Payment Claim Indemnification
	 	 	31	 
	 

	 	 	14.3	 	 	Design Builder’s General Indemnification
	 	 	32	 
	 

	 	 	14.4	 	 	Owner’s General Indemnification
	 	 	32	 

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	Article 15 Stop Work; Termination for Cause	 	 	33	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.1	 	 	Owner’s Right to Stop Work
	 	 	33	 
	 

	 	 	15.2	 	 	Owner’s Right to Perform and Terminate for Cause
	 	 	33	 
	 

	 	 	15.3	 	 	Owner’s Right to Terminate for Convenience
	 	 	34	 
	 

	 	 	15.4	 	 	Design Builder’s Right to Stop Work
	 	 	35	 
	 

	 	 	15.5	 	 	Design Builder’s Right to Terminate for Cause
	 	 	35	 
	 

	 	 	15.6	 	 	Bankruptcy of Owner or Design Builder
	 	 	36	 
	 

	 	 	15.7	 	 	Lenders’ Right to Cure
	 	 	37	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 16 Representatives of the Parties	 	 	37	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	16.1	 	 	Designation of Owner’s Representatives
	 	 	37	 
	 

	 	 	16.2	 	 	Designation of Design Builder’s Representatives
	 	 	37	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 17 Insurance	 	 	38	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	17.1	 	 	Insurance
	 	 	38	 
	 

	 	 	17.2	 	 	Design Builder’s Insurance Requirements
	 	 	39	 
	 

	 	 	17.3	 	 	Owner’s Liability Insurance
	 	 	40	 
	 

	 	 	17.4	 	 	Owner’s Property Insurance
	 	 	40	 
	 

	 	 	17.5	 	 	Coordination with Loan Documents
	 	 	42	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 18 Representations and Warranties	 	 	42	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	18.1	 	 	Design Builder and Owner Representations and Warranties. Each of
Design Builder and Owner represents that:
	 	 	42	 
	 

	 	 	18.2	 	 	Design Builder Representation and Warranties
	 	 	42	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 19 Dispute Resolution	 	 	42	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	19.1	 	 	Dispute Avoidance and Mediation
	 	 	42	 
	 

	 	 	19.2	 	 	Arbitration
	 	 	43	 
	 

	 	 	19.3	 	 	Duty to Continue Performance
	 	 	44	 
	 

	 	 	19.4	 	 	Consequential Damages
	 	 	44	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 20 Confidentiality of Shared Information	 	 	44	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	20.1	 	 	Non Disclosure Obligation
	 	 	44	 
	 

	 	 	20.2	 	 	Publicity and Advertising
	 	 	44	 
	 

	 	 	20.3	 	 	Term of Obligation
	 	 	45	 
	 
	 	 	 	 	 	 	 	 	 	 
	Article 21 Miscellaneous	 	 	45	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	21.1	 	 	Assignment
	 	 	45	 
	 

	 	 	21.2	 	 	Successors
	 	 	45	 
	 

	 	 	21.3	 	 	Governing Law
	 	 	45	 
	 

	 	 	21.4	 	 	Severability
	 	 	45	 
	 

	 	 	21.5	 	 	No Waiver
	 	 	45	 
	 

	 	 	21.6	 	 	Headings
	 	 	46	 
	 

	 	 	21.7	 	 	Notice
	 	 	46	 
	 

	 	 	21.8	 	 	No Privity with Design Consultant/Subcontractors
	 	 	47	 
	 

	 	 	21.9	 	 	Amendments
	 	 	47	 

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	 	 	21.10	 	 	Entire Agreement
	 	 	47	 
	 

	 	 	21.11	 	 	Third Party Beneficiaries
	 	 	47	 
	 

	 	 	21.12	 	 	Counterparts
	 	 	47	 
	 

	 	 	21.13	 	 	Survival
	 	 	47	 

	 	 	 	 	 
	EXHIBIT A

	 	Performance Guarantee Criteria
	 	A-1
	 
	 	 	 	 
	EXHIBIT B

	 	General Project Scope
	 	B-1
	 
	 	 	 	 
	EXHIBIT C

	 	Owner’s Responsibilities
	 	C-1
	 
	 	 	 	 
	EXHIBIT D

	 	ICM License Agreement
	 	D-1
	 
	 	 	 	 
	EXHIBIT E

	 	Schedule of Values
	 	E-1
	 
	 	 	 	 
	EXHIBIT F

	 	Form of Progress Report
	 	F-1
	 
	 	 	 	 
	EXHIBIT G

	 	Required Permits
	 	G-1
	 
	 	 	 	 
	EXHIBIT H

	 	Form of Performance Bond
	 	H-1
	 
	 	 	 	 
	EXHIBIT I

	 	Form of Payment Bond
	 	I-1
	 
	 	 	 	 
	EXHIBIT J

	 	Work Schedule
	 	J-1
	 
	 	 	 	 
	EXHIBIT K

	 	Preliminary Construction Documents
	 	K-1
	 
	 	 	 	 
	EXHIBIT L

	 	Draw (Payment) Schedule
	 	L-1
	 
	 	 	 	 
	EXHIBIT M

	 	Air Emissions Application or Permit
	 	M-1
	 
	 	 	 	 
	EXHIBIT N

	 	Phase I and Phase II Engineering Services Agreement
	 	N-1

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LUMP SUM DESIGN-BUILD CONTRACT

          This LUMP SUM DESIGN-BUILD CONTRACT (the “Agreement”) is made as of January 6, 2006,
(the “Effective Date”) by and between Val-E Ethanol, LLC, a Nebraska limited liability
company (the “Owner”) and Fagen, Inc., a Minnesota corporation (the
“Design-Builder”).

RECITALS

          A. The Owner desires to develop, construct, own and operate a 40 million gallons per year
(“MGY”) dry grind ethanol production facility located at Ord, Nebraska (the
“Plant”); and

          B. Design-Builder desires to provide design, engineering, procurement and construction
services for the Plant.

          NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein and
for other good and valuable consideration, Owner and Design-Builder agree as follows.

AGREEMENT

Article 1

Definitions; Rules of Interpretation

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

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

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

AAA is defined in Section 19.1.

Agreement is defined in the Preamble.

Air Emissions Tester means a third party entity engaged by Owner meeting all required state and
federal requirements for such testing entities, to conduct air emissions testing of the Plant in
accordance with Exhibit A.

Applicable Law means

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

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

Application for Payment is defined in Section 10.2.1.

As Built Plans is defined in Section 5.2.

Bankrupt Party is defined in Section 15.6.1.

Baseline Index is defined in Section 12.4.1.

CCI is defined in Section 12.4.1.

Certificate of Substantial Completion is defined in Section 6.5.3

Construction Documents is defined in Section 3.2.2.

Contract Documents is defined in Section 2.2.

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Contract Price is defined in Section 9.1.

Damages is defined in Section 14.3.1.

Day or Days shall mean calendar days unless otherwise specifically noted in the Contract Documents.

Design-Builder is defined in the Preamble.

Design-Builder’s Representative is defined in Section 16.2.

Design-Builder’s Senior Representative is defined in Section 16.2.

Design Consultant is a qualified, licensed design professional that is not an employee of
Design-Builder, but is retained by Design-Builder, or employed or retained by anyone under contract
with Design-Builder or Subcontractor, to furnish design services required under the Contract
Documents.

Differing Site Conditions is defined in Section 11.2.1.

Effective Date is defined in the Preamble.

Final Application for Payment is defined in Section 10.3.

Final Completion is defined in Section 6.6.2.

Final Completion Date is the date that is 90 Days after the Substantial Completion Date.

Final Payment is defined in Section 10.3.

Financial Closing means the execution of the Financing Documents by all the parties thereto, and
the fulfillment of all conditions precedent thereunder necessary to permit the advance of funds to
pay amounts due under this Agreement.

Financing Documents means the final loan documents with the lender or lenders providing financing
for the construction or term financing of the Plant.

Force Majeure Event is defined in Section 12.1.

Governmental Approvals are any material authorizations or permissions issued or granted by any
Governmental Authority to the Project, its Owner, the Design-Builder, Subcontractors and their
affiliates in connection with any activity related to the Project.

Governmental Authority means any federal, state, local or municipal governmental body; any
governmental, quasi-governmental, regulatory or administrative agency, commission, body or other
authority exercising or entitled to exercise any administrative, executive, judicial, legislative,
policy, regulatory or taxing authority or power; or any court or governmental

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tribunal; in each case having jurisdiction over the Owner, the Design-Builder, the Project, or the
Site.

Hazardous Conditions are any materials, wastes, substances and chemicals deemed to be hazardous
under applicable Legal Requirements, or the handling, storage, remediation, or disposal of which
are regulated by applicable Legal Requirements.

ICM is defined in Section 5.2.1.

ICM License Agreement means the license agreement to be executed between Owner and ICM, Inc.,
substantially in the form attached hereto as Exhibit D.

Indemnified Parties is defined in Section 5.2.

Independent Engineer means Owner’s and Lenders’ independent engineer.

Industry-Wide Disruption is defined in Section 12.4.

Legal Requirements or Laws are all applicable federal, state and local statutes, laws, codes,
ordinances, rules, regulations, judicial decisions, orders, decrees plans, injunctions, permits,
tariffs, governmental agreements and governmental restrictions, whether now or hereafter in effect,
of any government or quasi-government entity having jurisdiction over the Project or Site, the
practices involved in the Project or Site, or any Work, including any consensus standards for
materials, products, systems, and services established by ASTM International, any successor
organization thereto, or any Governmental Authority.

Lenders means the lenders that are party to the Financing Documents.

Lenders’ Agent means an agent or agents acting on behalf of the Lenders.

Manufacturer’s Warranty shall mean a warranty provided by the original manufacturer or vendor of
equipment used by Design-Builder in the Plant.

MGY is defined in the Recitals.

Notice to Proceed is defined in Section 6.3.

Oversight Items is defined in Section 4.3.

Owner is defined in the Preamble.

Owner Indemnified Parties is defined in Section 14.3.1.

Owner’s Representative is defined in Section 16.1.

Owner’s Senior Representative is defined in Section 16.1.

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Pass Through Warranties mean any warranties provided to Design-Builder by a Subcontractor which
are assigned to Owner.

Pay Period means, with respect to a given Application for Payment or Progress Report, the one month
period following the last day of the previous Pay Period to which the immediately prior Application
for Payment or Progress Report is applied; provided that the initial Pay Period shall commence on
the date of delivery of the Notice to Proceed and end on the 24th day of the calendar month during
which the Notice to Proceed is issued.

Payment Bond is defined in Section 7.4.2.

Performance Bond is defined in Section 7.4.1.

Performance Guarantee Criteria means the criteria listed in Exhibit A.

Performance Tests is defined in Section 7.2.1.

Phase I is defined in Exhibit C.

Phase II is defined in Exhibit C.

Plant is defined in the Recitals.

Preliminary Construction Documents is defined in Section 3.2.1.

Progress Report is defined in Section 3.8.

Project is defined in Section 2.1.

Project Scope is defined in Exhibit B.

Punch List is defined in Section 6.5.3.

Qualified Independent Expert means an expert retained by Owner and approved by Design-Builder
pursuant to Section 11.1.2.

Safety Representative is defined in Section 3.7.1.

Schedule of Values is defined in Section 10.2.5.

Scheduled Substantial Completion Date is defined in Section 6.5.1.

Site is the land or premises on which the Project is located.

Subcontractor is any person or entity retained by Design-Builder, or by any person or entity
retained directly or indirectly by Design-Builder, in each case as an independent contractor to
perform a portion of the Work and shall include materialmen and suppliers.

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Substantial Completion is defined in Section 6.5.2.

Work is defined in Section 3.1.

Work Product is defined in Section 5.1.

Work Schedule is defined in Section 6.1.

Article 2

The Project

          2.1 Services to be Performed. Pursuant to this Agreement, Design-Builder shall perform all
work and services in connection with the engineering, design, procurement, construction startup,
testing and training for the operation and maintenance of the Plant, and provide all material,
equipment, tools and labor necessary to complete the Plant in accordance with the terms of this
Agreement. The Plant, together with all equipment, labor, services and materials furnished
hereunder is defined as the “Project.”

          2.2 Extent of Agreement. This Agreement consists of the following documents, and all
exhibits, schedules, appendices and attachments hereto and thereto (collectively, the “Contract
Documents”):

                    2.2.1. All written modifications, amendments and change orders to this Agreement.

                    2.2.2. This Agreement, including all exhibits and attachments, executed by Owner and
Design-Builder, including those below:

	 	 	 	 	 
	 	 	List of Exhibits
	 

	 	Exhibit A
	 	Performance Guarantee Criteria
	 

	 	Exhibit B
	 	General Project Scope
	 

	 	Exhibit C
	 	Owner’s Responsibilities
	 

	 	Exhibit D
	 	ICM License Agreement
	 

	 	Exhibit E
	 	Schedule of Values
	 

	 	Exhibit F
	 	Progress Report
	 

	 	Exhibit G
	 	Permits Required
	 

	 	Exhibit H
	 	Form of Performance Bond
	 

	 	Exhibit I
	 	Form of Payment Bond
	 

	 	Exhibit J
	 	Work Schedule
	 

	 	Exhibit K
	 	Preliminary Construction Documents
	 

	 	Exhibit L
	 	Draw (Payment) Schedule
	 

	 	Exhibit M
	 	Air Emissions Application or Permit
	 

	 	Exhibit N
	 	Phase I and Phase II Engineering Services Agreement

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                    2.2.3. Preliminary Construction Documents prepared by Design-Builder pursuant to Section 3.2.1
and the Construction Documents to be prepared by Design-Builder pursuant to Section 3.2.2 shall be
incorporated in this Agreement.

          2.3 Conflicting Provisions. In the event of any conflict or inconsistency between the body of
this Agreement and any Exhibit or Schedule hereto, the terms and provisions of this Agreement, as
amended from time to time, shall prevail and be given priority. Subject to the foregoing, the
several documents and instruments forming part of this Agreement are to be taken as mutually
explanatory of one another and in the case of ambiguities or discrepancies within or between such
parts the same shall be explained and interpreted, if possible, in a manner which gives effect to
each part and which avoids or minimizes conflicts among such parts. No oral representations or
other agreements have been made by the parties except as specifically stated in the Contract
Documents.

Article 3

Design-Builder Responsibilities

          3.1 Design-Builder’s Services in General. Except for services and information to be provided
by Owner and specifically set forth in Article 4 and Exhibit C, Design-Builder shall perform or
cause to be performed all design, engineering, procurement, construction services, supervision,
labor, inspection, testing, start-up, material, equipment, machinery, temporary utilities and other
temporary facilities to complete construction of the Project consistent with the Contract Documents
(the “Work”). All design and engineering and construction services and other Work of the
Design-Builder shall be performed in accordance with (i) the Project Scope as set forth in Exhibit
B, (ii) the Construction Documents, (iii) all Legal Requirements, and (iv) generally accepted
construction and design-build standards of the fuel ethanol industry in the Midwest United States.
Any design and engineering or other professional service to be performed pursuant to this
Agreement, which under Applicable Law must be performed by licensed personnel, shall be performed
by licensed personnel as required by Law. The enumeration of specific duties and obligations to be
performed by the Design-Builder under the Contract Documents shall not be construed to limit in any
way the general undertakings of the Design-Builder as set forth herein. Design-Builder’s
Representative shall be reasonably available to Owner and shall have the necessary expertise and
experience required to supervise the Work. Design-Builder’s Representative shall communicate
regularly with Owner and shall be vested with the authority to act on behalf of Design-Builder.

          3.2 Design Development and Services.

                    3.2.1. As of the Effective Date, but in no event later than thirty (30) Days from the
Effective Date, Design-Builder has or shall have provided to Owner the following documents, and any
other documents reasonably agreed to by Design-Builder and Owner as applying to the conceptual
design of the Project and required to apply for the construction air permit or completion of the
Site layout in cooperation with Owner’s rail engineer (collectively, the “Preliminary
Construction Documents”), which shall be consistent with the Project Scope and once approved by
Owner, shall be part of this Agreement:

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	 	(a)	 	major equipment lists, with sizes;
	 
	 	(b)	 	process flow diagram;
	 
	 	(c)	 	process design criteria and/or process description; and
	 
	 	(d)	 	Site layout.

Owner shall have thirty (30) Days from the date it receives the Preliminary Construction Documents
to review and approve such documents. The Preliminary Construction Documents shall establish
performance standards for the completed Project and identify components required to meet those
performance standards. Any changes to the Preliminary Construction Documents shall be subject to
the prior review and approval by Owner, such approval not to be unreasonably withheld or delayed.

                    3.2.2. Where required by Law, Design-Builder shall provide through qualified, licensed design
professionals employed by Design-Builder, or procured from qualified, independent licensed Design
Consultants, the necessary design services, including architectural, engineering and other design
professional services, for the preparation of the required drawings, specifications and other
design submittals required to permit construction of the Work in accordance with this Agreement and
the Preliminary Construction Documents (such drawings, specifications and design submittals
collectively and together with the Preliminary Construction Documents, the “Construction
Documents”). To the extent not prohibited by Legal Requirements, Design-Builder may prepare
Construction Documents for a portion of the Work to permit construction to proceed on that portion
of the Work prior to completion of the Construction Documents for the entire Work.

                    3.2.3. Construction of the Plant shall be consistent with the Construction Documents.

                    3.2.4. Design-Builder shall maintain a current, complete set of drawings and specifications at
the Site. Owner shall have the right to review such drawings and specifications. Owner and
Independent Engineer may not make copies of the available drawings and specifications without
Design-Builder’s written permission, and, granted such permission, may only do so to the extent
such drawings and specifications directly pertain to the Plant; provided however that, pursuant to
Section 5.1 of this Agreement, Design-Builder retains ownership of and property interests in any
drawing or specifications made available and/or copied.

                    3.2.5. Except as provided elsewhere in this Agreement, it is understood and agreed that
review, comment and/or approval by Owner (or its designees) or Independent Engineer of any
documents or submittals that Design-Builder is required to submit to Owner (or its designees) or
Independent Engineer hereunder for their review, comment and/or approval (including without
limitation the Preliminary Construction Documents pursuant to Section 3.2.1 hereof or other
Construction Documents pursuant to Sections 3.2.2 and 3.2.4 hereof) shall not relieve or release
Design-Builder from any of its duties, obligations or liabilities provided for under the terms of
this Agreement or transfer any design liability from Design-Builder to Owner.

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          3.3 Standard of Care.

          All services performed by the Design-Builder and its Subcontractors pursuant to the
Construction Documents shall be performed in accordance with the standard of care and skill
generally accepted in the fuel ethanol industry in the Midwest United States during the relevant
time period or in accordance with any of the practices, methods and acts that in the exercise
of reasonable judgment in light of the facts known at the time the decision was made, could have
been expected to accomplish the desired result at a reasonable cost consistent with good business
practices, safety and expedition. This standard of care is not intended to be limited to the
optimum practice, method or act to the exclusion of all others, but rather to be acceptable
practices, methods or acts generally accepted in the construction and design-build standards of the
fuel ethanol industry in the Midwest United States. Design-Builder and its Subcontractors shall
perform all construction activities efficiently and with the requisite expertise, skill,
competence, resources and care to satisfy the requirements of the Contract Documents and all
applicable Legal Requirements. Design-Builder shall at all times exercise complete and exclusive
control over the means, methods, sequences and techniques of construction.

          3.4 Government Approvals and Permits.

          Except as identified in Exhibit C and, with respect to items identified as Owner’s
responsibility, in Exhibit G (which items shall be obtained by Owner pursuant to Section 4.5),
Design-Builder shall obtain and pay for all necessary permits, approvals, licenses, government
charges and inspection fees required for the prosecution of the Work by any government or
quasi-government entity having jurisdiction over the Project. Design-Builder shall provide
reasonable assistance to Owner in obtaining those permits, approvals and licenses that are Owner’s
responsibility.

          3.5 Subcontractors.

                    3.5.1. Design-Builder may subcontract portions of the Work in accordance with the terms
hereof.

                    3.5.2. Design-Builder assumes responsibility to Owner for the proper performance of the Work
of Subcontractors and any acts and omissions in connection with such performance. Nothing in the
Contract Documents is intended or deemed to create any legal or contractual relationship between
Owner and any Subcontractor, including but not limited to any third-party beneficiary rights.

                    3.5.3. Design-Builder shall coordinate the activities of all of Design-Builder’s
Subcontractors. If Owner performs other work on the Project or at the Site with separate
contractors under Owner’s control, Design-Builder agrees to reasonably cooperate and coordinate its
activities with those separate contractors so that the Project can be completed in an orderly and
coordinated manner without unreasonable disruption.

                    3.5.4. Design-Builder shall ensure that each subcontract with a Subcontractor is assignable to
Owner without consent of the Subcontractor or any other person or entity in the

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event that
Design-Builder shall be in an uncured default or terminated with cause under the terms of this
Agreement.

          3.6 Maintenance of Site.

          Design-Builder shall keep the Site reasonably free from debris, trash and construction wastes
to permit Design-Builder to perform its construction services efficiently, safely and
without interfering with the use of adjacent land areas. Upon Substantial Completion of the
Work, or portion of the Work, as applicable, Design-Builder shall remove all debris, trash,
construction wastes, materials, equipment, machinery and tools arising from the Work or applicable
portions thereof to permit Owner to occupy the Project for its intended use.

          3.7 Project Safety.

                    3.7.1. Design-Builder recognizes the importance of performing the Work in a safe manner so as
to prevent damage, injury or loss to (i) any individuals at the Site, whether working or visiting,
(ii) the Work, including materials and equipment incorporated into the Work or stored on-Site or
off-Site, and (iii) any other property at the Site or adjacent thereto. Design-Builder assumes
responsibility for implementing and monitoring all safety precautions and programs related to the
performance of the Work. Design-Builder shall, prior to commencing construction, designate a
representative (the “Safety Representative”) with the necessary qualifications and
experience to supervise the implementation and monitoring of all safety precautions and programs
related to the Work. Unless otherwise required by the Contract Documents, Design-Builder’s Safety
Representative shall be an individual stationed at the Site who may have responsibilities on the
Project in addition to safety. The Safety Representative shall make routine daily inspections of
the Site and shall hold weekly safety meetings with Design-Builder’s personnel, Subcontractors and
others as applicable.

                    3.7.2. Design-Builder and Subcontractors shall comply with all Legal Requirements relating to
safety, as well as any Owner-specific safety requirements set forth in the Contract Documents;
provided, that such Owner-specific requirements do not violate any applicable Legal Requirement.
As promptly as practicable, Design-Builder will report in writing any safety-related injury, loss,
damage or accident arising from the Work to Owner’s Representative and, to the extent mandated by
Legal Requirements, to all government or quasi-government authorities having jurisdiction over
safety-related matters involving the Project or the Work.

                    3.7.3. Design-Builder’s responsibility for safety under this Section 3.7 is not intended in
any way to relieve Subcontractors of their own contractual and legal obligations and responsibility
for (i) complying with all Legal Requirements, including those related to health and safety
matters, and (ii) taking all necessary measures to implement and monitor all safety precautions and
programs to guard against injury, losses, damages or accidents resulting from their performance of
the Work.

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          3.8 Submission of Reports.

          Design-Builder shall provide Owner with regular communication regarding the progress
(“Progress Report”) and any revisions to the drawings and specifications of the Work,
including whether (i) the Work is proceeding according to schedule, (ii) discrepancies, conflicts,
or ambiguities exist in the Contract Documents that require resolution, (iii) health and safety
issues exist in connection with the Work, and (iv) other items require resolution so as not to
jeopardize Design-Builder’s ability to complete the Work for the Contract Price and within the
contract time(s). Progress Reports shall be in the form of Exhibit F attached hereto.

          3.9 Training.

          At a mutually agreed time prior to start-up, Design-Builder shall provide two (2) weeks of
training at a plant in Russell, Kansas (or other location) for all of Owner’s employees required
for the operation and maintenance of the Plant in accordance with all design specifications
therefor contained in the Contract Documents and necessary in order to maintain the Performance
Guarantee Criteria, including operators, laboratory personnel, general, plant and maintenance
managers. Other personnel of Owner may receive such off-site training by separate arrangement
between Owner and Design-Builder and as time is available. All training personnel and costs
associated with such training personnel, including labor and all training materials will be
provided to Owner within the Contract Price at no additional cost. Owner will be responsible for
all travel and expenses of their employees and the Owner will pay all wages and all other expenses
for their personnel during the training. The training services will include training on computers,
laboratory procedures, field operating procedures, and overall plant section performance
expectations. Prior to the start-up training, Design-Builder shall provide Owner training manuals
and operating manuals and other documents reasonably necessary for the start-up process.

Article 4

Owner’s Responsibilities

          4.1 Duty to Cooperate.

                    4.1.1. Owner shall, throughout the performance of the Work, cooperate with Design-Builder and
perform its responsibilities, obligations and services in a timely manner to facilitate
Design-Builder’s timely and efficient performance of the Work and so as not to delay or interfere
with Design-Builder’s performance of its obligations under the Contract Documents.

                    4.1.2. Owner shall provide timely review and approval of Preliminary Construction Documents
subject to Section 3.2.1.

                    4.1.3. Owner shall pay all the reasonable costs incurred by Design-Builder for frost removal
so that winter construction can proceed. Such costs may include but are not limited to, equipment
costs, equipment rental costs, sheltering costs, special material costs, fuel costs and associated
labor costs. Owner acknowledges and agrees that such costs are in addition to, and not included
in, the Contract Price.

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          4.2 Furnishing of Services and Information.

                    4.2.1. Prior to the issuance of the Notice to Proceed, Owner shall provide to Design-Builder,
at Owner’s own cost and expense, for Design-Builder’s information and use, the following, all of
which Design-Builder is entitled to rely upon in performing the Work:

	 	(a)	 	surveys describing the property, boundaries, topography and
reference points for use during construction, including existing service and
utility lines;
	 
	 	(b)	 	geotechnical studies describing subsurface conditions including
soil borings, and other surveys describing other latent or concealed physical
conditions at the Site;
	 
	 	(c)	 	temporary and permanent easements, zoning and other
requirements and encumbrances affecting land use, or necessary to permit the
proper design and construction of the Project and enable Design-Builder to
perform the Work;
	 
	 	(d)	 	A legal description of the Site;
	 
	 	(e)	 	to the extent available, as-built and record drawings of any
existing structures at the Site; and
	 
	 	(f)	 	all environmental studies, reports and impact statements
describing the environmental conditions, including Hazardous Conditions, in
existence at the Site that have been conducted or performed.

                    4.2.2. Owner shall provide to Design-Builder all Owner’s deliverables under Exhibit C pursuant
to Owner’s Milestones. Such deliverables shall be provided, at Owner’s own cost and expense, for
Design-Builder’s information and use. Design-Builder is entitled to rely upon such deliverables in
performing the Work.

                    4.2.3. Owner is responsible for securing and executing all necessary agreements with adjacent
land or property owners that are necessary to enable Design-Builder to perform the Work and that
have been identified and notified in writing by Design-Builder to Owner prior to the Effective
Date. Owner is further responsible for all costs, including attorneys’ fees, incurred in securing
these necessary agreements.

          4.3 Financial Information; Cooperation with Lenders; Failure to Obtain Financial Closing.
Design-Builder acknowledges that Owner is seeking financing for the Project. Design-Builder agrees
to cooperate with Owner in good faith in order to satisfy the requirements of Owners’ financing
arrangements, including, where appropriate, the execution and delivery of documents or instruments
necessary to accommodate the Financial Closing. Owner agrees to pay all documented costs incurred
by Design-Builder incurred prior to and at Financial Closing, and thereafter during the term of
this Agreement, in connection with

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satisfying the requirements of Owners’ financing arrangements
including all documented attorney’s fees. Design-Builder and Owner also acknowledge that the
Lenders, as a condition to providing financing for the Plant, shall require Owner to provide the
Independent Engineer with certain participation and review rights with respect to Design-Builder’s
performance of the Work. Design-Builder acknowledges and agrees that such participation and review
rights shall consist of the right to (i) enter the Site and inspect the Work upon reasonable notice
to Design-Builder; (ii) attend all start-up and testing procedures; and (iii) review and approve
such other items for which Owner is required by Lenders to obtain the concurrence, opinion or a
certificate of the Independent Engineer or the Lenders pursuant to the Financing Documents which
items do not alter the rights or impose additional obligations on Design-Builder (collectively, the
“Oversight Items”).
Nothing in this Section 4.3 shall be deemed to require Design-Builder to agree to any
amendments to this Agreement that would adversely affect Design-Builder’s risks, rights or
obligations under this Agreement. Upon Financial Closing, Owner shall promptly provide to
Design-Builder an officer’s certificate certifying that Financial Closing has occurred and such
Owner’s officer’s certificate shall constitute evidence satisfactory to Design-Builder that Owner
has adequate funds available and committed to fulfill its obligations under the Contract Documents
for all purposes hereunder. Owner must obtain Financial Closing prior to issuing the Notice to
Proceed.

          4.4 Owner’s Representative. Owner’s Representative, as set forth in Section 16.1 hereof,
shall be responsible for providing Owner-supplied information and approvals in a timely manner to
permit Design-Builder to fulfill its obligations under the Contract Documents. Owner’s
Representative shall also provide Design-Builder with prompt notice if it observes any failure on
the part of Design-Builder to fulfill its contractual obligations, including any errors, omissions
or defects in the performance of the Work. Owner’s Representative shall be vested with the
authority to act on behalf of Owner and Design-Builder shall be entitled to rely on written
communication from Owner’s Representative with respect to a Project matter.

          4.5 Government Approvals and Permits. Owner shall obtain and pay for all necessary
Governmental Approvals required by Law, including permits, approvals, licenses, government charges
and inspection fees set forth in Exhibit C and, to the extent identified as Owner’s responsibility,
Exhibit G. Owner shall provide reasonable assistance to Design-Builder in obtaining those permits,
approvals and licenses that are Design-Builder’s responsibility pursuant to Exhibits G and Section
3.4.

          4.6 Owner’s Separate Contractors. Owner is responsible for all work, including such work
listed on Exhibit C, performed on the Project or at the Site by separate contractors under Owner’s
control. Owner shall contractually require its separate contractors to cooperate with, and
coordinate their activities so as not to interfere with, Design-Builder in order to enable
Design-Builder to timely complete the Work consistent with the Contract Documents.

          4.7 Security.

                    4.7.1. Owner shall be responsible for Site security (including fencing, alarm systems,
security guarding services and the like) at all times during the term of this Agreement to

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prevent
vandalism, theft and danger to the Project, the Site, and personnel. Owner shall coordinate and
supervise ingress and egress from the Site so as to minimize disruption to the Work.

                    4.7.2. Design-Builder shall at all times conduct its operations in a manner to minimize the
risk of loss, theft, or damage by vandalism, sabotage, or any other means. Design-Builder shall
continuously inspect all Work, materials, and equipment to discover and determine
any conditions that might involve such risks and shall be solely responsible for discovery,
determination, and correction of any such conditions.

Article 5

Ownership of Work Product; Risk of Loss

          5.1 Work Product. All drawings, specifications, calculations, data, notes and other materials
and documents, including electronic data furnished by Design-Builder to Owner under this Agreement
(“Work Product”) shall be instruments of service and Design-Builder shall retain the
ownership and property interests therein, including the copyrights thereto.

          5.2 Owner’s Limited License Upon Payment in Full. Upon Owner’s payment in full for all Work
performed under the Contract Documents, Design-Builder shall grant Owner a limited license to use
the Work Product in connection with Owner’s occupancy and repair of the Plant. Design-Builder
acknowledges and agrees that the limited license to use the Work Product granted hereby shall
provide Owner sufficient rights in and to the Work Product as shall be necessary for Owner to
operate and maintain the Plant and shall include any Pass Through Warranties in connection
therewith. Design-Builder shall provide Owner with a copy of the plans of the Plant, as built,
(the “As Built Plans”) conditioned on Owner’s express understanding that its use of the
Work Product and its acceptance of the As Built Plans is at Owner’s sole risk and without liability
or legal exposure to Design-Builder or anyone working by or through Design-Builder, including
Design Consultants of any tier (collectively the “Indemnified Parties”); provided, however,
that any performance guarantees, and warranties (of equipment or otherwise) shall remain in effect
according to the terms of this Agreement.

                    5.2.1. Owner shall be entitled to use the Work Product solely for purposes relating to the
Plant, but shall not be entitled to use the Work Product for any other purposes whatsoever,
including without limitation, expansion of the Plant. Notwithstanding the foregoing sentence,
Owner shall be entitled to use the Work Product for the operation, maintenance and repair of the
plant including the interconnection of, but not the design of, any future expansions to the Plant.
The limited license granted to Owner under Sections 5.2, 5.3 or 5.4 to use the Work Product shall
be limited by and construed according to the same terms contained in the ICM License Agreement
between Owner and ICM, Inc., attached hereto as Exhibit D and incorporated herein by reference
thereto, except (i) references in such ICM License Agreement to ICM and Proprietary Property shall
refer to Design-Builder and Work Product, respectively, (ii) the Laws of the State of Minnesota
shall govern such limited license, and (iii) the dispute resolution provisions contained in Article
19 hereof shall apply to any breach or threatened breach of Owner’s duties or obligations under
such limited license, except that Design-Builder

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shall have the right to seek injunctive relief in
a court of competent jurisdiction against Owner or its Representatives for any such breach or
threatened breach. Design-Builder is utilizing certain proprietary property and information of
ICM, Inc., a Kansas corporation (“ICM”), in the design and construction of the Project, and
Design-Builder may incorporate proprietary property and information of ICM into the Work Product.
Owner’s use of the proprietary property and
information of ICM shall be governed by the terms and provisions of the License Agreement
between Owner and ICM, attached hereto as Exhibit D, to be executed by such parties in connection
with the execution of this Agreement. This paragraph also applies to Articles 5.3 and 5.4 below.

          5.3 Owner’s Limited License Upon Owner’s Termination for Convenience or Design-Builder’s
Election to Terminate. If Owner terminates the Project for its convenience as set forth in Section
15.3 hereof, or if Design-Builder elects to terminate this Agreement in accordance with Section
15.5, Design-Builder shall, upon Owner’s payment in full of the amounts due Design-Builder under
this Agreement, grant Owner a limited license to use the Work Product to complete the Plant and
subsequently occupy and repair the Plant, subject to the following:

	 	(i)	 	Use of the Work Product is at Owner’s sole risk without liability or legal
exposure to any Indemnified Party; provided, however, that any Pass Through Warranties
regarding equipment or express warranties regarding equipment provided by this
Agreement shall remain in effect according to their terms; and
	 
	 	(ii)	 	If the termination for convenience is by Owner in accordance with Section 15.3
hereof, or if Design-Builder elects to terminate this Agreement in accordance with
Section 15.5, then Owner agrees to pay Design-Builder the additional sum of One Million
Dollars ($1,000,000.00) as compensation for the limited right to use the Work Product
completed “as is” on the date of termination in accordance with this Article 5.

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          5.4 Owner’s Limited License Upon Design-Builder’s Default. If this Agreement is terminated
due to Design-Builder’s default pursuant to Section 15.2 and (i) it is adjudged that Design-Builder
was in default, and (ii) Owner has fully satisfied all of its obligations under the Contract
Documents through the time of Design-Builder’s default, then Design-Builder shall grant Owner a
limited license to use the Work Product in connection with Owner’s completion and occupancy and
repair of the Plant. This limited license is conditioned on Owner’s express agreement that its use
of the Work Product is at Owner’s sole risk without liability or legal exposure to any Indemnified
Party; provided, however, that any Pass Through Warranties regarding equipment or express
warranties regarding equipment provided by this Agreement shall remain in effect according to their
terms. This limited license grants Owner the ability to repair the Plant at Owner’s discretion.

          5.5 Owner’s Indemnification for Use of Work Product. If Owner uses the Work Product or Plant
under any of the circumstances identified in this Article 5, to the fullest extent allowed by Law,
Owner shall defend, indemnify and hold harmless the Indemnified Parties from and against any and
all claims, damages, liabilities, losses and
expenses, including attorneys’ fees, arising out of or resulting from the use of the Work
Product and Plant; provided, however, that any Pass Through Warranties regarding equipment or
express warranties regarding equipment provided by this Agreement shall remain in effect according
to their terms.

          5.6 Risk of Loss. Design-Builder shall have no liability for a physical loss of or damage to
the Work unless such loss or damage is caused by Design-Builder or someone acting under its
direction or control. Design-Builder shall not be liable for physical loss of or damage to the Work
where such loss or damage is caused by the willful misconduct or gross negligence of Owner’s
employees or third parties who are not Subcontractors. Design-Builder shall have no liability for
losses or damages for which insurance coverage under this Agreement is available to Owner; in such
circumstances, Design Builder’s liability for losses and damages as described in this Section 5.6
shall be limited to losses or damages which exceed insurance coverage available to the Owner.

Article 6

Commencement and Completion of the Project

          6.1 Work Schedule. The preliminary schedule for the execution of the Work is attached as
Exhibit J hereto (the “Work Schedule”). The final schedule for execution of the Work shall
be provided within thirty (30) Days after receipt of the Notice to Proceed. The Work Schedule
provides the scheduled dates for the commencement and completion of the various stages of Work,
including the dates when Owner’s obligations are required to be complete to enable Design-Builder
to achieve the contract time(s). The Work Schedule shall be revised as required by conditions and
progress of the Work but such revisions shall not relieve Design-Builder of its obligations to
complete the Work within the contract time(s), unless such revisions to the Work Schedule are
required as a result of any delay in the completion of Owner’s obligations or as a result of a
Force Majeure Event. In such event, the Work Schedule shall be revised to provide, without
penalty to Design-Builder, a Day-for-Day extension of the contract

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time(s) for completion of the
Work for each Day during which Owner’s failure to complete
its obligations or a Force Majeure Event
causes such delay.

          6.2 Phase I and Phase II Engineering. Owner and Design-Builder have entered into that certain
Phase I and Phase II Engineering Services Agreement dated October 4, 2005 and attached hereto as
Exhibit N. Phase I and Phase II Engineering Services Agreement provides for Design-builder to
commence work on the Phase I and Phase II engineering for the Project as set forth therein. Owner
has agreed to pay Design-Builder $92,500.00 for such engineering services pursuant to the terms of
that agreement, the full amount of which shall be included in and credited to the Contract Price.
Notwithstanding the foregoing sentence, if a Notice to Proceed is not issued pursuant to Section
6.2, or Financial Closing is not obtained pursuant to Section 4.3, then Design-Builder shall keep
the full amount paid under the Phase I and Phase II Engineering Services Agreement as compensation
for the services provided thereunder.

          6.3 Notice to Proceed; Commencement. The Work shall commence within five (5) Days of
Design-Builder’s receipt of Owner’s written valid notice to proceed (“Notice to Proceed”) unless
the parties mutually agree otherwise in writing. The parties agree that a valid Owner’s Notice to
Proceed cannot be given until: *****. Owner and Design-Builder mutually agree that time is of the
essence with respect to the dates and times set forth in the Contract Documents. Design-Builder
must receive a valid Owner’s Notice to Proceed within one hundred and eighty (180) Days of the
Effective Date; otherwise, the Contract Price referred to in Section 9.1 shall be subject to a
price increase, or this Agreement shall terminate, either at Design-Builder’s sole option. If
Design-Builder chooses to terminate this Agreement pursuant to its right under the immediately
preceding sentence, then Design-Builder shall have no further obligations hereunder.

          6.4 Project Start-Up and Testing. Owner shall provide, at Owner’s cost, equipment, tools,
instruments and materials necessary for Owner to comply with its obligations under Exhibit C, raw
materials, consumables and personnel, necessary for start-up and testing of the Plant, and
Design-Builder shall provide supervision, standard and special test instruments, tools, equipment
and materials required to perform component and equipment checkout and testing, initial start-up,
operations supervision and corrective maintenance of all permanent Plant equipment within the scope
of the Work. Notwithstanding the foregoing sentence, Design-Builder shall be responsible for raw
materials and consumables to the extent such amounts provided by Owner are destroyed or damaged (as
opposed to consumed in the ordinary course of start-up and testing) by Design-Builder or its
personnel during start-up and testing. Design-Builder shall supervise and direct Owner’s personnel
who shall participate in the start-up activities with Design-Builder’s personnel to become familiar
with all aspects of the Plant. Owner and the Independent Engineer may witness start-up and testing
activities. Performance testing will be conducted in accordance with the provisions of Section 7.2
hereof.

          6.5 Substantial Completion.

                    6.5.1. Substantial Completion of the entire Work shall be achieved no later than Four Hundred
and Eighty Five (485) Days after the date of the Notice to Proceed, subject to

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adjustment in
accordance with the Contract Documents hereof (the “Scheduled Substantial Completion
Date”).

                    6.5.2. “Substantial Completion” shall be deemed to occur on the date on which the Work
is sufficiently complete so that Owner can occupy and use the Plant for its intended purposes.
Substantial Completion shall be attained at the point in time when the Plant is ready to grind corn
and begin operation for its intended use.

                    6.5.3. Procedures. Design-Builder shall notify Owner in writing when it believes Substantial
Completion has been achieved with respect to the Work. Within five (5) Days of Owner’s receipt of
Design-Builder’s notice, Owner and Design-Builder will jointly inspect such Work to verify that it
is substantially complete in accordance with the requirements of the Contract Documents. If such
Work is deemed substantially complete, Design-Builder
shall prepare and issue a “Certificate of Substantial Completion” for the Work that
will set forth (i) the date of Substantial Completion, (ii) the remaining items of Work that have
to be completed before Final Payment (“Punch List”), (iii) provisions (to the extent not
already provided in this Agreement) establishing Owner’s and Design-Builder’s responsibility for
the Project’s security, maintenance, utilities and insurance pending Final Payment, and (iv) an
acknowledgment that warranties with respect to the Work commence on the date of Substantial
Completion, except as may otherwise be noted in the Certificate of Substantial Completion. Upon
Substantial Completion of the entire Work and satisfaction of the Performance Guarantee Criteria
listed in Exhibit A, Owner shall release to Design-Builder all retained amounts relating, as
applicable, to the entire Work or completed portion of the Work, less an amount equal to the
reasonable value of all remaining or incomplete items of Work as noted in the Certificate of
Substantial Completion, and less an amount equal to the value of any Subcontractor lien waivers not
yet obtained.

	 	(a)	 	Owner, at its option, may use a portion of the Work prior to
completion of the entire Work; provided, that (i) a Certificate of Substantial
completion has been issued for the portion of Work addressing the items set
forth in Section 6.4.3 above, (ii) Design-Builder and Owner have, to the extent
required, obtained the consent of their sureties and insurers and the
appropriate government authorities having jurisdiction over the Project, and
(iii) Owner and Design-Builder agree that Owner’s use or occupancy will not
interfere with Design-Builder’s completion of the remaining Work in accordance
with the Contract Documents.

          6.6 Final Completion.

                    6.6.1. Final Completion of the Work shall be achieved within Ninety (90) Days after the date
of Substantial Completion.

                    6.6.2. “Final Completion” shall be achieved when the Owner reasonably determines that
the following conditions have been met:

	 	(a)	 	Substantial Completion has been achieved;

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	 	(b)	 	any outstanding amounts owed by Design-Builder to Owner have
been paid in full;
	 
	 	(c)	 	the items identified on the Punch List have been completed by
Design-Builder;
	 
	 	(d)	 	clean-up of the Site has been completed;
	 
	 	(e)	 	all permits required to have been obtained by Design-Builder
have been obtained;
	 
	 	(f)	 	the information in Section 6.6.4 has been provided to Owner;
	 
	 	(g)	 	certificates of insurance confirming that required coverages
will remain in effect consistent with the requirements of the Contract
Documents have been obtained;
	 
	 	(h)	 	release and waiver of all claims and liens from Design-Builder
and Subcontractors have been provided; and
	 
	 	(i)	 	the Performance Tests have been successfully completed.

                    6.6.3. After receipt of a Final Application for Payment from Design-Builder, Owner shall make
Final Payment in accordance with Section 10.3, less an amount equal to the value of any
Subcontractor lien waivers not yet obtained.

                    6.6.4. At the time of submission of its Final Application for Payment, Design-Builder shall
provide the following information:

	 	(a)	 	an affidavit that there are no claims, obligations or liens
outstanding or unsatisfied for labor, services, material, equipment, taxes or
other items performed, furnished or incurred for or in connection with the Work
which will in any way affect Owner’s interests;
	 
	 	(b)	 	a general release executed by Design-Builder waiving, upon
receipt of final payment by Design-Builder, all claims for payment, additional
compensation, or damages for delay, except those previously made to Owner in
writing and remaining unsettled at the time of Final Payment provided such
general release shall not waive defenses to claims that may be asserted by
Owner after payment or claims arising after payment;
	 
	 	(c)	 	consent of Design-Builder’s surety, if any, to Final Payment;
and
	 
	 	(d)	 	a hard copy of the As Built Plans; provided, however, that such
plans will remain the Work Product of the Design-Builder and subject in all
respects to Article 5.

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                    6.6.5. Upon making Final Payment, Owner waives all claims against Design-Builder except claims
relating to (i) Design-Builder’s failure to satisfy its payment obligations, (ii) Design-Builder’s
failure to complete the Work consistent with the Contract Documents, including defects appearing
within one year after Substantial Completion, and (iii) the terms of any warranties required by the
Contract Documents.

          6.7 Post Completion Support. Adequate personnel to complete all Work within the Work Schedule
will be maintained on-Site by Design-Builder or a Subcontractor until Final Completion has been
achieved. In addition to prosecuting the Work until Final Completion has been achieved,
Design-Builder or its Subcontractor will provide one month of on-Site operational support for
Owner’s personnel after successful completion of the Performance Tests and, from the date of
Substantial
Completion, will provide six (6) months of off-Site technical and operating procedure support
by telephone and other electronic data transmission and communication.

Article 7

Performance Testing

          7.1 Performance Guarantee. The Design-Builder guarantees that the Plant will meet the
performance criteria listed in Exhibit A (the “Performance Guarantee Criteria”) during a
performance test conducted and concluded pursuant to the terms hereof not later than Ninety (90)
Days after the date of Substantial completion. If there is a performance shortfall, Design-Builder
will pay all design and construction costs associated with making the necessary corrections.
Design-Builder retains the right to use its sole discretion in determining the method (which shall
be in accordance with generally accepted construction and design-build standards of the fuel
ethanol industry in the Midwest United States) to remedy any performance related issues.

                    7.1.1. If Owner, for whatever reason, prevents Design-Builder from demonstrating the
Performance Guarantee Criteria within thirty (30) Days of Design-Builder’s notice that the Plant is
ready for Performance Testing, then Design-Builder shall be excused from demonstrating compliance
with the Performance Guarantee Criteria during such period of time that Design-Builder is prevented
from demonstrating compliance with the Performance Guarantee Criteria; provided however that
Design-Builder will be deemed to have fulfilled all of its obligations to demonstrate that the
Plant meets the Performance Guarantee Criteria should such period of time during which
Design-Builder is prevented from demonstrating the Performance Criteria exceed thirty (30) Days or
extend beyond Final Completion.

          7.2 Performance Testing.

                    7.2.1. The Design-Builder shall direct and supervise the tests and, if necessary, the retests
of the Plant using Design-Builder’s supervisory personnel and the Air Emissions Tester shall
conduct the air emissions test, in each case, in accordance with the testing procedures set forth
in Exhibit A (the “Performance Tests”), to demonstrate, at a minimum, compliance with the
Performance Guarantee Criteria. Design-Builder shall cooperate with the Air Emissions Tester to
facilitate performance of all air emissions tests. Design-Builder shall not

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be held responsible
for the actions of Owner’s employees and third parties involved in the Performance Testing.

                    7.2.2. No later than thirty (30) Days prior to the earlier of the Scheduled Substantial
Completion Date or Substantial Completion, Design-Builder shall provide to Owner for review a
detailed testing plan for the Performance Tests (other than for air emissions). Owner and
Design-Builder shall agree upon a testing plan that shall be consistent with the Performance Test
Protocol contained in Exhibit A hereto. After such agreement has been reached, Design-Builder
shall notify the Owner five (5) business days prior to the date Design-Builder intends to commence
the Performance Tests and shall notify the Owner upon commencement of the Performance Tests. Owner
and Independent Engineer each have the right to witness all testing, including the Performance
Tests and any equipment testing, whether at the
Site or at the Subcontractor’s or equipment supplier’s premises during the course of this
Agreement. Notwithstanding the foregoing sentence, Owner shall bear the costs of providing a
witness to any such testing and all such witnesses shall comply at all times with Design-Builder’s,
Subcontractor’s or equipment supplier’s safety and security procedures and other reasonable
requirements, and otherwise conduct themselves in a manner that does not interfere with
Design-Builder’s, Subcontractor’s or equipment supplier’s activities or operations.

                    7.2.3. Design-Builder shall provide to Owner a performance test report (excluding results from
air emissions testing), including all applicable test data, calculations and certificates
indicating the results of the Performance Tests and, within five (5) business days of Owner’s
receipt of such results, Owner and Design-Builder will jointly inspect such Work and review the
results of the Performance Tests to verify that the Performance Guarantee Criteria have been met.
If Owner reasonably determines that the Performance Guarantee Criteria have not been met, Owner
shall notify Design-Builder the reasons why Owner determined that the Performance Guarantee
Criteria have not been met and Design-Builder shall promptly take such action or perform such
additional work as will achieve the Performance Guarantee Criteria and shall issue to the Owner
another notice in accordance with Section 7.2.2; provided however that if the notice relates to a
retest, the notice may be provided no less than two (2) business days prior to the Performance
Tests. Such procedure shall be repeated as necessary until Owner verifies that the Performance
Guarantee Criteria have been met.

          7.3 Bonds and Other Performance Security.

                    7.3.1. On or prior to the date of Financial Closing the Design-Builder shall deliver to Owner
a bond substantially in the form attached as Exhibit H (the “Performance Bond”) in an
initial amount equivalent to the Contract Price. Owner shall pay on the date of Financial Closing
all costs of obtaining such bond, plus pay Design-Builder a fee of 7.5% for obtaining such bond,
such fee to be calculated by multiplying 7.5% times the cost of the Performance Bond. Any amounts
payable to the surety due to Design-Builder’s default under this Agreement or the Performance Bond
shall be for the account of Design-Builder.

	 	(a)	 	Design-Builder shall post additional bonds or security (which
must be in form and substance satisfactory to Owner and the Lenders) or shall

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	 	 	 	increase the amount of the Performance Bond by the amount of any increases to
the Contract Price; provided, however, that Owner shall pay all costs of
obtaining such bonds or security, plus pay Design-Builder a fee of 7.5% for
obtaining such bonds or security, such fee to be calculated by multiplying 7.5%
times the cost of the bonds or security.
	 
	 	(b)	 	The Performance Bond shall secure the Design-Builder’s
obligations to complete the Work in accordance with this Agreement.

                    7.3.2. On or prior to the date of Financial Closing the Design-Builder shall deliver to Owner
a bond substantially in the form attached as Exhibit I (the “Payment Bond”) in an initial
amount equivalent to the Contract Price. Owner shall pay on the date of Financial Closing all
costs of obtaining such bond, plus pay Design-Builder a fee of 7.5% for obtaining such bond, such
fee to be calculated by multiplying 7.5% times the cost of the Payment Bond but
any amounts payable to the surety due to Design-Builder’s default under this Agreement or the
Payment Bond shall be for the account of Design-Builder.

	 	(a)	 	Design-Builder shall post additional bonds or security (which
must be in form and substance reasonably satisfactory to Owner and the Lenders)
or shall increase the amount of the Payment Bond by the amount of any increase
to the Contract Price.
	 
	 	(b)	 	The Payment Bond shall secure the Design-Builder’s obligations
to pay its Subcontractors, vendors and suppliers.
	 
	 	(c)	 	The Payment Bond shall provide the conditions upon which
Subcontractors, vendors and suppliers may draw upon such Payment Bond following
Design-Builder’s failure to pay amounts due such Subcontractors, vendors and
suppliers.

Article 8

Warranties

          8.1 Design-Builder Warranty. Design-Builder warrants to Owner that the construction,
including all materials and equipment furnished as part of the construction, shall be new, of good
quality, in conformance with the Contract Documents and all Legal Requirements, free of defects in
materials and workmanship. Design-Builder’s warranty obligation excludes defects caused by abuse,
alterations, or failure to maintain the Work by persons other than Design-Builder or anyone for
whose acts Design-Builder may be liable. Nothing in this warranty is intended to limit any
Manufacturer’s Warranty which provides Owner with greater warranty rights than set forth in this
Section 8.1 or the Contract Documents. Design-Builder will provide to Owner all manufacturers’ and
Subcontractors’ warranties upon the earlier of Substantial Completion or termination of this
Agreement. Owner’s failure to comply with all Operating Procedures shall void those guarantees,
representations and warranties, whether expressed or implied, that were given by Design-Builder to
Owner, concerning the performance of the Plant that are reasonably determined by Design-Builder to
be affected by such failure. If Design-

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Builder reasonably determines that all damage caused by
such failure can be repaired and Owner makes all repairs needed to correct such damage, as
reasonably determined by Design-Builder, all guarantees, representations and warranties shall be
reinstated for the remaining term thereof, if any, from the date of the repair.

          8.2 Correction of Defective Work.

                    8.2.1. Design-Builder agrees to correct any Work that is found to not be in conformance with
the Contract Documents, including that part of the Work subject to Section 8.1, within a period of
one year from the date of Substantial Completion of the Work; provided that such one-year period
shall be extended one Day for any part of the Work that is found to be not in conformance with the
Contract Documents for each Day that such part of the Work is not operating in conformity with the
Contract Documents, including any time during which any part of the Work is repaired or replaced
pursuant to this Article 8.

                    8.2.2. Design-Builder shall, within seven (7) Days of receipt of written notice from Owner
that the Work is not in conformance with the Contract Documents, take meaningful steps to commence
correction of such nonconforming Work, including the correction, removal or replacement of the
nonconforming Work and correction or replacement of any Work damaged by such nonconforming Work.
If Design-Builder fails to commence the necessary steps within such seven (7) Day period or fails
to continue to perform such steps through completion, Owner, in addition to any other remedies
provided under the Contract Documents, may provide Design-Builder with written notice that Owner
will commence or assume correction of such nonconforming Work and repair of such damaged Work with
its own resources. If, following such written notice, Owner performs such corrective and repair
Work, Design-Builder shall be responsible for all reasonable costs incurred by Owner in performing
the correction. If the nonconforming Work creates an emergency requiring an immediate response,
the seven (7) Day periods identified herein shall be inapplicable and Design-Builder shall
immediately correct, remove or replace the nonconforming Work.

          8.3 Warranty Period Not Limitation to Owner’s Rights. The one-year period referenced in
Section 8.2 above applies only to Design-Builder’s obligation to correct nonconforming Work and is
not intended to constitute a period of limitations for any other rights or remedies Owner may have
regarding Design-Builder’s other obligations under the Contract Documents.

Article 9

Contract Price

          9.1 Contract Price. As full consideration to Design-Builder for full and complete performance
of the Work and all costs incurred in connection therewith, Owner shall pay Design-Builder in
accordance with the terms of Article 10, the sum of Fifty-one Million, Eight Hundred Eight Thousand
Seven Hundred Sixty Dollars ($51,808,760.00) (“Contract Price”), subject to adjustments
made in accordance with Articles 12.4 and 13. The Contract Price does not include the water
pre-treatment system and the fire protection system which shall be provided by Fagen pursuant to a
Change Order executed by Owner on a time plus materials

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basis. Owner acknowledges that it has taken
no action which would impose a union labor or prevailing wage requirement on Design-Builder, Owner
or the Project. The Parties acknowledge and agree that if after the date hereof, an Owner’s action,
a change in Applicable Law or a Governmental Authority acting pursuant to a change in Applicable
Law or Owner’s action shall require Design-Builder to employ union labor or compensate labor at
prevailing wages, the Contract Price shall be adjusted upwards to include any increased costs
associated with such labor or wages.

Article 10

Payment Procedures

          10.1 Payment at Financial Closing. As part of the Contract Price, Owner shall pay
Design-Builder ***** as soon as allowed by its organizational documents and any other agreements or
Laws and at the latest, at Financial
Closing, as a mobilization fee. Said ***** mobilization fee payment shall be subject to
retainage as provided by Section 10.2.7.

          10.2 Progress Payments.

                    10.2.1. Application for Payment. On or before the twenty-fifth (25th) Day of each month
beginning with the first month following the Notice to Proceed, Design-Builder shall submit to
Owner its request for payment for all Work performed and not paid for during the previous Pay
Period (the “Application for Payment”). Design-Builder shall submit to Owner, along with
each Application for Payment, signed lien waivers received from Subcontractors and suppliers for
the Work included in the Application for Payment submitted for the immediately preceding Pay Period
and for which payment has been received.

                    10.2.2. The Application for Payment shall constitute Design-Builder’s representation that the
Work has been performed consistent with the Contract Documents and has progressed to the point
indicated in the Application for Payment. Title to the Work shall pass to Owner free and clear of
all claims, liens, encumbrances, and security interests upon Design-Builder’s receipt of payment
therefor, or upon the incorporation of the Work into the Project, whichever occurs earlier

                    10.2.3. Within fifteen (15) Days after Owner’s receipt of each properly submitted Application
for Payment, Owner shall pay Design-Builder all amounts properly due, but in each case less the
total of payments previously made, and less amounts properly withheld under this Agreement.

                    10.2.4. The Application for Payment may request payment for equipment and materials not yet
incorporated into the Project; provided that (i) Owner is satisfied that the equipment and
materials are suitably stored at either the Site or another acceptable location, (ii) the equipment
and materials are protected by suitable insurance, and (iii) upon payment, Owner will receive the
equipment and materials free and clear of all liens and encumbrances except for liens of the
Lenders and other liens and encumbrances permitted under the Financing Documents.

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                    10.2.5. Schedule of Values. Attached as Exhibit E is the “Schedule of Values” for all
of the Work. The Schedule of Values (i) subdivides the Work into its respective parts, (ii)
includes values for all items comprising the Work, and (iii) serves as the basis for monthly
progress payments made to Design-Builder throughout the Work.

                    10.2.6. Withholding of Payments. On or before the date set forth in Section 10.2.3, Owner
shall pay Design-Builder all amounts properly due. If Owner determines that Design-Builder is not
entitled to all or part of an Application for Payment, it will notify Design-Builder in writing at
least five (5) Days prior to the date payment is due. The notice shall indicate the specific
amounts Owner intends to withhold, the reasons and contractual basis for the withholding, and the
specific measures Design-Builder must take to rectify Owner’s concerns. Design-Builder and Owner
will attempt to resolve Owner’s concerns prior to the date payment is due. If the parties cannot
resolve such concerns, Design-Builder may pursue its rights under the Contract Documents, including
those under Article 19. Notwithstanding anything to the contrary in the Contract Documents, Owner
shall pay Design-Builder all undisputed amounts in an Application for Payment within the times
required by the Agreement.

                    10.2.7. Retainage on Progress Payments. Owner will retain ten percent (10%) of each payment
up to a maximum of $2,590,438.00. Once $2,590,438.00 has been retained in total, Owner will not
retain any additional amounts from any subsequent payments. Owner will also reasonably consider
reducing retainage for Subcontractors completing their work early in the Project. Upon Substantial
Completion of the entire Work or, if applicable, any portion of the Work, pursuant to Section 6.5,
Owner shall release to Design-Builder all retained amounts relating, as applicable, to the entire
Work or completed portion of the Work, less an amount equal to the reasonable value of all
remaining or incomplete items of Work and less an amount equal to the value of any Subcontractor
lien waivers not yet obtained, as noted in the Certificate of Substantial Completion, provided that
such payment shall only be made if Design-Builder has met the Performance Guarantee Criteria listed
in Exhibit A.

                    10.3 Final Payment. Design-Builder shall deliver to Owner a request for final payment (the
“Final Application for Payment”) when Final Completion has been achieved in accordance with
Section 6.5. Owner shall make final payment within thirty (30) Days after Owner’s receipt of the
Final Application for Payment (“Final Payment”).

          10.4 Failure to Pay Amounts Due.

                    10.4.1. Interest. Payments which are due and unpaid by Owner to Design-Builder, whether
progress payments or Final Payment, shall bear interest at the rate of Eighteen Percent (18%) per
annum, or the maximum rate allowed by Law.

                    10.4.2. Right to Suspend Work. If Owner fails to pay Design-Builder any undisputed amount
that becomes due, Design-Builder, in addition to all other remedies provided in the Contract
Documents, may stop Work pursuant to Section 15.4 hereof. All payments properly due and unpaid
shall bear interest at the rate set forth in Section 10.4.1.

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     10.5 Design-Builder’s Payment Obligations. Design-Builder will pay Design Consultants and
Subcontractors, in accordance with its contractual obligations to such parties, all the amounts
Design-Builder has received from Owner on account of their work. Design-Builder will impose similar requirements on Design
Consultants and Subcontractors to pay those parties with whom they have contracted. Design-Builder
will indemnify and defend Owner against any claims for payment and mechanic’s liens as set forth in
Section 14.2 hereof.

     10.6 Record Keeping and Finance Controls. With respect to changes in the Work performed on a
cost basis by Design-Builder pursuant to the Contract Documents, Design-Builder shall keep full and
detailed accounts and exercise such controls as may be necessary for proper financial management,
using accounting and control systems in accordance with generally accepted accounting principles
and as may be provided in the Contract Documents. During the performance of the Work and for a
period of three (3) years after Final Payment, Owner and Owner’s accountants shall be afforded
access from time to time, upon reasonable notice, to Design-Builder’s records, books,
correspondence, receipts, subcontracts, purchase orders, vouchers, memoranda and other data
relating to changes in the Work performed on a cost basis in accordance with the Contract
Documents, all of which Design-Builder shall preserve for a period of three (3) years after Final
Payment.

Article 11

Hazardous Conditions and Differing Site Conditions

     11.1 Hazardous Conditions.

          11.1.1. Unless otherwise expressly provided in the Contract Documents to be part of the Work,
Design-Builder is not responsible for any Hazardous Conditions encountered at the Site. Upon
encountering any Hazardous Conditions, Design-Builder will stop Work immediately in the affected
area and as promptly as practicable notify Owner and, if Design-Builder is specifically required to
do so by Legal Requirements, all government or quasi-government entities with jurisdiction over the
Project or Site. Design-Builder shall not remove, remediate or handle in any way (except in case
of emergency) any Hazardous Conditions encountered at the Site without prior written approval of
Owner.

          11.1.2. Upon receiving notice of the presence of suspected Hazardous Conditions, Owner shall
take the necessary measures required to ensure that the Hazardous Conditions are remediated or
rendered harmless. Such necessary measures shall include Owner retaining Qualified Independent
Experts to (i) ascertain whether Hazardous Conditions have actually been encountered, and, if they
have been encountered, (ii) prescribe the remedial measures that Owner is required under applicable
Legal Requirements to take with respect to such Hazardous Conditions in order for the Work to
proceed. Owner’s choice of such Qualified Independent Experts shall be subject to the prior
approval of Design-Builder, which approval shall not be unreasonably withheld or delayed.

          11.1.3. Design-Builder shall be obligated to resume Work at the affected area of the Project
only after Owner’s Qualified Independent Expert provides it with written certification that (i) the
Hazardous Conditions have been removed or rendered harmless, and (ii) all necessary

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approvals have been obtained from all government entities having jurisdiction over the Project
or Site and a remediation plan has been undertaken permitting the Work to proceed.

          11.1.4. Design-Builder will be entitled, in accordance with this Article 11, to an adjustment
in its Contract Price and/or contract time(s) to the extent Design-Builder’s cost and/or time of
performance have been adversely impacted by the presence of Hazardous Conditions, provided that
such Hazardous Materials were not introduced to the Site by Design-Builder, Subcontractors or
anyone for whose acts they may be liable.

          11.1.5. To the fullest extent permitted by Law, Owner shall indemnify, defend and hold
harmless Design-Builder, Design Consultants, Subcontractors, anyone employed directly or indirectly
for any of them, and their officers, directors, employees and agents, from and against any and all
claims, losses, damages, liabilities and expenses, including attorneys’ fees and expenses, arising
out of or resulting from the presence, removal or remediation of Hazardous Conditions at the Site.

          11.1.6. Notwithstanding the preceding provisions of this Section 11.1, Owner is not
responsible for Hazardous Conditions introduced to the Site by Design-Builder, Subcontractors or
anyone for whose acts they may be liable. Design-Builder 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 introduced to the Site by Design-Builder, Subcontractors
or anyone for whose acts they may be liable.

     11.2 Differing Site Conditions; Inspection.

          11.2.1. Concealed or latent physical conditions or subsurface conditions at the Site that (i)
differ from the conditions indicated in the Contract Documents, or (ii) are of an unusual nature,
differing from the conditions ordinarily encountered and generally recognized as inherent in the
Work are collectively referred to herein as “Differing Site Conditions.” If Design-Builder
encounters a Differing Site Condition, Design-Builder will be entitled to an adjustment in the
Contract Price and/or contract time(s) to the extent Design-Builder’s cost and/or time of
performance are adversely impacted by the Differing Site Condition.

          11.2.2. Upon encountering a Differing Site Condition, Design-Builder shall provide prompt
written notice to Owner of such condition, which notice shall not be later than fourteen (14)
business days after such condition has been encountered. Design-Builder shall, to the extent
reasonably possible, provide such notice before the Differing Site Condition has been substantially
disturbed or altered.

Article 12

Force Majeure; Change in Legal Requirements

     12.1 Force Majeure Event. Shall mean a cause or event beyond the reasonable control of, and
without the fault or negligence of a Party claiming Force Majeure, including, without limitation,
an emergency, floods, earthquakes, hurricanes, tornadoes, adverse weather

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conditions not reasonably
anticipated or acts of God; sabotage; vandalism beyond that which could reasonably be prevented by
a Party claiming Force Majeure; terrorism; war; riots; fire; explosion; blockades; insurrection;
strike; slow down or labor disruptions (even if such difficulties could be resolved by conceding to
the demands of a labor group); economic hardship or delay in the delivery of materials or equipment
that is beyond the control of a Party claiming Force Majeure, and action or failure to take action
by any Governmental Authority after the Effective Date (including the adoption or change in any
rule or regulation or environmental constraints lawfully imposed by such Governmental Authority),
but only if such requirements, actions, or failures to act prevent or delay performance; and
inability, despite due diligence, to obtain any licenses, permits, or approvals required by any
Governmental Authority (any such event, a “Force Majeure Event”).

     12.2 Effect of Force Majeure Event. Neither party shall be considered in default in the
performance of any of the obligations contained in the Contract Documents, except for the Owners or
the Design-Builder’s obligations to pay money (including but not limited to, Progress Payments
which become due and payable with respect to the period prior to the occurrence of the Force
Majeure Event), when and to the extent the failure of performance shall be caused by a Force
Majeure Event. If either party is rendered wholly or partly unable to perform its obligations
under the Contract Documents because of a Force Majeure Event, such party will be excused from
performance affected by the Force Majeure Event to the extent and for the period of time so
affected; provided that:

	 	(a)	 	the nonperforming party, within forty-eight (48) hours after
the nonperforming party actually becomes aware of the occurrence and impact of
the Force Majeure Event, gives the other party written notice describing the
event or circumstance in detail, including an estimation of its expected
duration and probable impact on the performance of the affected party’s
obligations hereunder, and continues to furnish timely regular reports with
respect thereto during the continuation of and upon the termination of the
Force Majeure Event;
	 
	 	(b)	 	the suspension of performance is of no greater scope and of no
longer duration than is reasonably required by the Force Majeure Event;
	 
	 	(c)	 	the obligations of either party that arose before the
occurrence causing the suspension of performance and the performance that is
not prevented by the occurrence, shall not be excused as a result of such
occurrence;
	 
	 	(d)	 	the nonperforming party uses its best efforts to remedy its
inability to perform and mitigate the effect of such event and resumes its
performance at the earliest practical time after cessation of such occurrence
or until such time that performance is practicable;
	 
	 	(e)	 	when the nonperforming party is able to resume performance of
its obligations under the Contract Documents, that party shall give the other
party written notice to that effect; and

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	 	(f)	 	Design-Builder shall be entitled to a Day for Day time
extension for those events set forth in Section 12.1 to the extent the
occurrence of such event delayed Design-Builder’s performance of its
obligations under this Agreement.

     12.3 Change in Legal Requirements. The Contract Price and/or the contract time(s) shall be
adjusted to compensate Design-Builder for the effects of any changes to the Legal Requirements that
occur after the date of this Agreement and as a result of such change, the performance of the Work
is adversely affected. Such effects may include, without limitation, revisions Design-Builder is
required to make to the Construction Documents because of changes in Legal Requirements.

     12.4 Effect of Industry-Wide Disruption on Contract Price. In the event that significant
industry-wide economic fluctuation or disruption beyond the control of and without the fault of the
Design-Builder or its Subcontractors is experienced or expected to be experienced by certain
markets providing essential materials and equipment to the Project during the performance of the
Work and such economic fluctuation or disruption adversely impacts the price, availability, and
delivery timeframes of essential materials and equipment (such event an “Industry-Wide
Disruption”), the Contract Price shall be adjusted to allocate the risk of such market
conditions between the Owner and Design-Builder through the following equitable escalation in the
Contract Price:

          12.4.1. If during the course of the Project the Construction Cost Index published by
Engineering News-Record Magazine (“CCI”) increases over the CCI published by Engineering
News-Record Magazine in the issue released during the first week of the month in which the
Effective Date takes place (the “Baseline Index”), Design-Builder shall notify Owner in
writing that it is adjusting the Contract Price.

          12.4.2. In the event that the CCI increases over the Baseline Index, the Contract Price shall
be adjusted to reflect such increase, but only with respect to those Applications for Payment
submitted after the date on which written notice of the adjustment in Contract Price is given.

          12.4.3. Payment for any adjustment in the Contract Price as a result of this Article 12 shall
be made in accordance with the terms of this Agreement.

     12.5 Time Impact And Availability. If the Design-Builder is delayed at any time in the
commencement or progress of the Work due to a delay in the delivery of, or unavailability of,
essential materials to the Project as a result of an Industry-Wide Disruption, the Design-Builder
shall be entitled to an equitable extension of the Contract Time on a day-for-day basis equal to
such delay. The Owner and Design-Builder shall undertake reasonable steps to mitigate the effect
of such delays. Notwithstanding any other provision to the contrary, the Design-Builder

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shall not be liable to the Owner for any expenses, losses or damages arising from a delay, or unavailability
of, essential materials to the Project as a result of an Industry-Wide Disruption.

Article 13

Changes to the Contract Price and Scheduled Completion Dates

13.1 Change Orders.

          13.1.1. A Change Order is a written instrument issued after execution of this Agreement signed
by Owner and Design-Builder, stating their agreement upon all of the following:

	 	(a)	 	the scope of the change in the Work;
	 
	 	(b)	 	the amount of the adjustment to the Contract Price; and
	 
	 	(c)	 	the extent of the adjustment to the contract time(s).

          13.1.2. All changes in the Work authorized by an applicable Change Order shall be performed
under the applicable conditions of the Contract Documents. Owner and Design-Builder shall
negotiate in good faith and as expeditiously as possible the appropriate adjustments for such
changes. Prior to incurring any costs with respect to estimating services, design services and any
other services involved in the preparation of the proposed revisions to the Contract Documents,
Design-Builder must obtain the written approval of Owner for such costs.

          13.1.3. If Owner requests a proposal for a change in the Work from Design-Builder and
subsequently elects not to proceed with the change, a Change Order shall be issued to reimburse
Design-Builder for reasonable costs incurred for estimating services, design services and any other
services involved in the preparation of proposed revisions to the Contract Documents; provided that
such costs were previously approved by Owner pursuant to Section 13.1.2.

     13.2 Contract Price Adjustments.

          13.2.1. The increase or decrease in Contract Price resulting from a change in the Work shall
be a mutually accepted lump sum, properly itemized and supported by sufficient substantiating data
to permit evaluation by Owner.

          13.2.2. If Owner and Design-Builder disagree upon whether Design-Builder is entitled to be
paid for any services required by Owner, or if there are any other disagreements over the scope of
Work or proposed changes to the Work, Owner and Design-Builder shall resolve the disagreement
pursuant to Article 19 hereof. As part of the negotiation process, Design-Builder shall furnish
Owner with a good faith estimate of the costs to perform the disputed services in accordance with
Owner’s interpretations. If the parties are unable to agree and Owner expects Design-Builder to
perform the services in accordance with Owner’s interpretations, Design-Builder shall proceed to
perform the disputed services, conditioned upon

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Owner issuing a written order to Design-Builder (i)
directing Design-Builder to proceed, and (ii) specifying Owner’s interpretation of the services
that are to be performed. If this occurs, Design-Builder shall be entitled to submit in its
Applications for Payment an amount equal to fifty percent (50%) of its reasonable estimated direct
cost to perform the services, and Owner agrees to pay such amounts, with the express understanding
that (x) such payment by Owner does not prejudice Owner’s right to argue that it has no
responsibility to pay for such services, and (y) receipt of such payment by Design-Builder does not
prejudice Design-Builder’s right to seek full payment of the disputed services if Owner’s order is
deemed to be a change to the Work.

     13.3 Emergencies. In any emergency affecting the safety of persons and/or property,
Design-Builder shall act, at its discretion, to prevent threatened damage, injury or loss and shall
notify the Owner as soon as practicable and in any event within forty-eight (48) hours after
Design-Builder becomes aware of the emergency. The notice to Owner shall describe the emergency in
detail, including a reasonable estimation of its expected duration and impact, if any, on the
performance of Design-Builder’s obligations hereunder. Any change in the Contract Price and/or the
contract time(s) on account of emergency work shall be determined as provided in this Article 13.

     13.4 Requests for Contract Adjustments and Relief. If either Design-Builder or Owner believes
that it is entitled to relief against the other for any event arising out of or related to the Work
or Project, such party shall provide written notice to the other party of the basis for its claim
for relief. Such notice shall, if possible, be made prior to incurring any cost or expense and in
accordance with the notice requirements contained in Section 21.7. In the absence of any specific
notice requirement, written notice shall be given within a reasonable time, not to exceed
twenty-one (21) Days, after the occurrence giving rise to the claim for relief or after the
claiming party reasonably should have recognized the event or condition giving rise to the request,
whichever is later. Such notice shall include sufficient information to advise the other party of
the circumstances giving rise to the claim for relief, the specific contractual adjustment or
relief requested and the basis of such request.

Article 14

Indemnity

     14.1 Tax Claim Indemnification. If, in accordance with Owner’s direction, an exemption for
all or part of the Work is claimed for taxes, Owner shall indemnify, defend and hold harmless
Design-Builder from and against any liability, penalty, interest, fine, tax assessment, attorneys’
fees or other expenses or costs incurred by Design-Builder as a result of any action taken by
Design-Builder in accordance with Owner’s directive.

     14.2 Payment Claim Indemnification. To the extent Design-Builder has received payment for the
Work, Design-Builder shall indemnify, defend and hold harmless Owner Indemnified Parties from any
claims or mechanic’s liens brought against Owner Indemnified Parties or against the Project as a
result of the failure of Design-Builder, or those for whose acts it is responsible, to pay for any
services, materials, labor, equipment, taxes or other items or

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obligations furnished or incurred
for or in connection with the Work. Within three (3) business days of receiving written notice
from Owner that such a claim or mechanic’s lien has been filed, Design-Builder shall commence to
take the steps necessary to discharge such claim or lien, including, if necessary, the furnishing
of a mechanic’s lien bond. If Design-Builder fails to do so, Owner will have the right to
discharge the claim or lien and hold Design-Builder liable for costs and expenses incurred,
including attorneys’ fees.

     14.3 Design-Builder’s General Indemnification.

          14.3.1. Design-Builder, to the fullest extent permitted by Law, shall indemnify, hold harmless
and defend Owner, Lenders, Lenders’ Agent, and their successors, assigns, officers, directors,
employees and agents (“Owner Indemnified Parties”) from and against any and all losses,
costs, damages, injuries, liabilities, claims, demands, penalties, interest and causes of action,
including without limitation attorney’s fees (collectively, the “Damages”) for bodily
injury, sickness or death, and property damage or destruction (other than to the Work itself) to
the extent resulting from the negligent or intentionally wrongful acts or from omissions of
Design-Builder, Design Consultants, Subcontractors, anyone employed directly or indirectly by any
of them or anyone for whose acts any of them may be liable.

          14.3.2. If an employee of Design-Builder, Design Consultants, Subcontractors, anyone employed
directly or indirectly by any of them or anyone for whose acts any of them may be liable has a
claim against Owner Indemnified Parties, Design-Builder’s indemnity obligation set forth in Section
14.3.1 above shall not be limited by any limitation on the amount of damages, compensation or
benefits payable by or for Design-Builder, Design Consultants, Subcontractors, or other entity
under any employee benefit acts, including workers’ compensation or disability acts.

          14.3.3. Without limiting the generality of Section 14.3.1 hereof, Design-Builder shall fully
indemnify, save harmless and defend the Owner Indemnified Parties from and against
any and all Damages in favor of any governmental authority or other third party to the extent
caused by (a) failure of Design-Builder or any Subcontractor to comply with Legal Requirements as
required by this Agreement, or (b) failure of Design-Builder or any Subcontractor to properly
administer and pay any taxes or fees required to be paid by Design-Builder under this Agreement.

          14.3.4. Nothing in the Design-Builder’s General Indemnification contained in this Section 14.3
shall be read to limit in any way any entitlement Design-Builder shall have to insurance coverage
under any insurance policy, including any insurance policy required by either Party under this
Agreement.

     14.4 Owner’s General Indemnification. Owner, to the fullest extent permitted by Law, shall
indemnify, hold harmless and defend Design-Builder and any of Design-Builder’s officers, directors,
employees, or agents from and against claims, losses, damages, liabilities, including attorneys’
fees and expenses, for bodily injury, sickness or death, and property damage or destruction (other
than to the Work itself) to the extent resulting from the negligent acts or

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intentionally wrongful
acts or from omissions of Owner, its officers, directors, employees, agents, or anyone for whose
acts any of them may be liable.

          14.4.1. Without limiting the generality of Section 14.4 hereof, Owner shall fully indemnify,
save harmless and defend the Design-Builder and any of Design-Builder’s officers, directors,
employees, or agents from and against any and all Damages in favor of any governmental authority or
other third party to the extent caused by (a) failure of Owner or any of Owner’s agents to comply
with Legal Requirements as required by this Agreement, or (b) failure of Owner or Owner’s agents to
properly administer and pay any taxes or fees required to be paid by Owner under this Agreement.

          14.4.2. Nothing in the Owner’s General Indemnification contained in this Section 14.4 shall be
read to limit in any way any entitlement Design-Builder shall have to insurance coverage under any
insurance policy, including any insurance policy required by either Party under this Agreement.

Article 15

Stop Work; Termination for Cause

     15.1 Owner’s Right to Stop Work. Owner may, without cause and for its convenience, order
Design-Builder in writing to stop and suspend the Work. Such suspension shall not exceed sixty
(60) consecutive Days or aggregate more than ninety (90) Days during the duration of the Project.
Design-Builder is entitled to seek an adjustment of the Contract Price and/or the contract time(s)
if its cost or time to perform the Work has been adversely impacted by any suspension or stoppage
of work by Owner.

     15.2 Owner’s Right to Perform and Terminate for Cause.

          15.2.1. If (i) Design-Builder persistently fails to provide a sufficient number of skilled
workers; (ii) Design-Builder persistently fails to supply the materials required by the Contract
Documents; (iii) Design-Builder persistently fails to comply with applicable Legal Requirements;
(iv) Design-Builder persistently fails to timely pay, without cause, Design Consultants or
Subcontractors; (v) Design-Builder fails to perform the Work with promptness and diligence to
ensure that the Work is completed by the contract time(s), as such times may be adjusted in
accordance with this Agreement; (vi) Design-Builder fails to perform material obligations under the
Contract Documents; (vii) Design-Builder persistently fails to maintain insurance in accordance
with the provisions of Article 17 hereof; (viii) a default occurs under the Performance Bond or the
Payment Bond, or the Performance Bond or Payment Bond is revoked or terminated, or the surety under
the Performance Bond or Payment Bond institutes or has instituted against it a case under the
United States Bankruptcy Code, (ix) Design-Builder purports to make an assignment of this Agreement
in breach of the provisions of Section 20.1 hereof, or (x) any representation or warranty made by
Design-Builder under Section 18.1 hereof was false or materially misleading when made, then Owner,
in addition to any other rights and remedies provided in the Contract Documents or by law or
equity, shall have the rights set forth in Sections 15.2.2 and 15.2.3 below.

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          15.2.2. Upon the occurrence of an event set forth in Section 15.2.1 above, Owner may provide
written notice to Design-Builder that it intends to terminate the Agreement unless the problem
cited is cured, or commenced to be cured within seven (7) Days of Design-Builder’s receipt of such
notice. If Design-Builder fails to cure, or reasonably commence to cure such problem and
thereafter diligently pursue such cure to completion, then Owner may give a second written notice
to Design-Builder of its intent to terminate following an additional seven (7) Day period. If
Design-Builder, within such second seven (7) Day period, fails to cure, or reasonably commence to
cure such problem and thereafter diligently pursue such cure to completion, then Owner may declare
the Agreement terminated for default by providing written notice to Design-Builder of such
declaration.

          15.2.3. Upon declaring the Agreement terminated pursuant to Section 15.2.2 above, Owner may
enter upon the premises and take possession, for the purpose of completing the Work, of all
materials, equipment, scaffolds, tools, appliances and other items thereon, which have been
purchased for the performance of the Work, all of which Design-Builder hereby transfers, assigns
and sets over to Owner for such purpose, and to employ any person or persons to complete the Work
and provide all of the required labor, services, materials, equipment and other items. In the
event of such termination, Design-Builder shall not be entitled to receive any further payments
under the Contract Documents until the Work shall be finally completed in accordance with the
Contract Documents. At such time, if the unpaid balance of the Contract Price exceeds the cost and
expense incurred by Owner in completing the Work, Design-Builder will be paid promptly by Owner for
Work performed prior to its default. If Owner’s cost and expense of completing the Work exceeds
the unpaid balance of the Contract Price, then Design-Builder shall be obligated to promptly pay
the difference to Owner. Such costs and expense shall include not only the cost of completing the
Work, but also losses, damages, costs and expenses, including attorneys’ fees and expenses, incurred by Owner in connection with the
re-procurement and defense of claims arising from Design-Builder’s default, subject to the waiver
of consequential damages set forth in Section 19.4 hereof.

          15.2.4. If Owner improperly terminates the Agreement for cause, the termination for cause will
be converted to a termination for convenience in accordance with the provisions of Section 15.3.

     15.3 Owner’s Right to Terminate for Convenience.

          15.3.1. Upon ten (10) Days’ written notice to Design-Builder, Owner may, for its convenience
and without cause, elect to terminate this Agreement. In such event, Owner shall pay
Design-Builder for the following:

	 	(a)	 	to the extent not already paid, all Work executed, and for
proven loss, cost or expense in connection with the Work;
	 
	 	(b)	 	the reasonable costs and expenses attributable to such
termination, including demobilization costs;

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	 	(c)	 	amounts due in settlement of terminated contracts with
Subcontractors and Design Consultants;
	 
	 	(d)	 	overhead and profit margin in the amount of fifteen percent
(15%) on the sum of items (a) and (b) above; and
	 
	 	(e)	 	all retainage withheld by Owner on account of Work that has
been completed in accordance with the Contract Documents.

          15.3.2. If Owner terminates this Agreement pursuant to this Section 15.3 and proceeds to
design and construct the Project through its employees, agents or third parties, Owner’s rights to
use the Work Product shall be as set forth in Section 5.3.

          15.4 Design-Builder’s Right to Stop Work.

          15.4.1. Design-Builder may, in addition to any other rights afforded under the Contract
Documents or at Law, stop work for Owner’s failure to pay amounts properly due under
Design-Builder’s Application for Payment.

          15.4.2. If any of the events set forth in Section 15.4.1 above occur, Design-Builder has the
right to stop work by providing written notice to Owner that Design-Builder will stop work unless
such event is cured within seven (7) Days from Owner’s receipt of Design-Builder’s notice. If Owner
fails to cure or reasonably commence to cure such problem and thereafter diligently pursue such
cure to completion, then Design-Builder may give a second written notice to Owner of its intent to
stop work within an additional seven (7) Day period. If Owner, within such second seven (7) Day
period, fails to cure, or reasonably commence to cure
such problem and thereafter diligently pursue such cure to completion, then Design-Builder may
stop work. In such case, Design-Builder shall be entitled to make a claim for adjustment to the
Contract Price and contract time(s) to the extent it has been adversely impacted by such stoppage.

     15.5 Design-Builder’s Right to Terminate for Cause.

          15.5.1. Design-Builder, in addition to any other rights and remedies provided in the Contract
Documents or by Law, may terminate the Agreement for cause for the following reasons:

	 	(a)	 	The Work has been stopped for sixty (60) consecutive Days, or
more than ninety (90) Days during the duration of the Project, because of court
order, any government authority having jurisdiction over the Work, or orders by
Owner under Section 15.1 hereof, provided that such stoppages are not due to
the acts or omissions of Design-Builder, Design Consultant and their respective
officers, agents, employees, Subcontractors or any other person for whose acts
the Design-Builder may be liable under Law.

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	 	(b)	 	Owner’s failure to provide Design-Builder with any information,
permits or approvals that are Owner’s responsibility under the Contract
Documents which result in the Work being stopped for sixty (60) consecutive
Days, or more than ninety (90) Days during the duration of the Project, even
though Owner has not ordered Design-Builder in writing to stop and suspend the
Work pursuant to Section 15.1 hereof.
	 
	 	(c)	 	Owner fails to meet its obligations under Exhibit C and such
failure results in the Work being stopped for sixty (60) consecutive Days, or
more than ninety (90) Days during the duration of the Project even though Owner
has not ordered Design-Builder in writing to stop and suspend the Work pursuant
to Section 15.1 hereof.
	 
	 	(d)	 	Owner’s failure to cure the problems set forth in Section
15.4.1 above within seven (7) Days after Design-Builder has stopped the Work.

          15.5.2. Upon the occurrence of an event set forth in Section 15.5.1 above, Design-Builder may
elect to terminate this Agreement by providing written notice to Owner that it intends to terminate
the Agreement unless the problem cited is cured within seven (7) Days of Owner’s receipt of such
notice. If Owner fails to cure, or reasonably commence to cure, such problem, then Design-Builder
may give a second written notice to Owner of its intent to terminate within an additional seven (7)
Day period. If Owner, within such second seven (7) Day period, fails to cure such problem, then
Design-Builder may declare the Agreement terminated for default by providing written notice to
Owner of such declaration. In such case, Design-Builder shall be entitled to recover in the same
manner as if Owner had terminated the Agreement for its convenience under Section 15.3.

15.6 Bankruptcy of Owner or Design-Builder.

          15.6.1. If either Owner or Design-Builder institutes or has instituted against it a case under
the United States Bankruptcy Code (such party being referred to as the “Bankrupt Party”),
such event may impair or frustrate the Bankrupt Party’s ability to perform its obligations under
the Contract Documents. Accordingly, should such event occur:

	 	(a)	 	The Bankrupt Party, its trustee or other successor, shall
furnish, upon request of the non-Bankrupt Party, adequate assurance of the
ability of the Bankrupt Party to perform all future obligations under the
Contract Documents, which assurances shall be provided within ten (10) Days
after receiving notice of the request; and
	 
	 	(b)	 	The Bankrupt Party shall file an appropriate action within the
bankruptcy court to seek assumption or rejection of the Agreement within sixty
(60) Days of the institution of the bankruptcy filing and shall diligently
prosecute such action.

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          15.6.2. If the Bankrupt Party fails to comply with its foregoing obligations, the non-Bankrupt
Party shall be entitled to request the bankruptcy court to reject the Agreement, declare the
Agreement terminated and pursue any other recourse available to the non-Bankrupt Party under this
Article 15.

          15.6.3. The rights and remedies under this Section 15.6 shall not be deemed to limit the
ability of the non-Bankrupt Party to seek any other rights and remedies provided by the Contract
Documents or by Law, including its ability to seek relief from any automatic stays under the United
States Bankruptcy Code or the right of Design-Builder to stop Work under any applicable provision
of this Agreement.

     15.7 Lenders’ Right to Cure. At any time after the occurrence of any event set forth in
Section 15.4.1 or Section 15.5.1, the Lenders shall have the right, but not the obligation, to cure
such default on behalf of Owner.

Article 16

Representatives of the Parties

     16.1 Designation of Owner’s Representatives. Owner designates the individual listed below as
its senior representative (“Owner’s Senior Representative”), which individual has the
authority and responsibility for avoiding and resolving disputes under Article 19:

[Owner’s Representative

Title

Address

Telephone:

Facsimile:]

     Owner designates the individual listed below as its representative (“Owner’s
Representative”), which individual has the authority and responsibility set forth in Section
4.4:

[Owner’s Senior Representative

Title

Address

Telephone:

Facsimile:]

     16.2 Designation of Design-Builder’s Representatives. Design-Builder designates the
individual listed below as its senior representative (“Design-Builder’s Senior
Representative”), which individual has the authority and responsibility for avoiding and
resolving disputes under Article 19:

Roland “Ron” Fagen

CEO and President

501 W. Highway 212

P.O. Box 159

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Granite Falls, MN 56241

Telephone: (320) 564-3324

Design-Builder designates the individual listed below as its representative (“Design-Builder’s
Representative”), which individual has the authority and responsibility set forth in Section 3.1:

Aaron Fagen

Chief Operating Officer

501 W. Highway 212

P.O. Box 159

Granite Falls, MN 56241

Telephone: (320) 564-3324

Article 17

Insurance

     17.1 Insurance. Design-Builder shall procure and maintain in force through the Final
Completion Date the following insurance coverages with the policy limits indicated, and otherwise
in compliance with the provisions of this Agreement:

	 	 	 	 	 
	Commercial General Liability
	 	 	 	 
	General Aggregate

	 	 	 	 
	Products-Comp/Op AGG
	 	$	2,000,000	 
	Personal & Adv Injury
	 	$	1,000,000	 
	Each Occurrence
	 	$	1,000,000	 
	Fire Damage (Any one fire)
	 	$	50,000	 
	Med Exp (Any one person)
	 	$	5,000	 
	 
	 	 	 	 
	Automobile Liability
	 	 	 	 
	 
	 	 	 	 
	Combined Single Limit

	 	 	 	 
	Each Occurrence
	 	$	1,000,000	 
	 
	 	 	 	 
	Excess Liability – Umbrella Form:
	 	 	 	 
	 
	Each Occurrence
	 	$	20,000,000	 
	Aggregate
	 	$	20,000,000	 
	 
	 	 	 	 
	Workers’ Compensation
	 	 	 	 
	 
	 	 	 	 
	Statutory limits as required by the state in which the Work is performed

	 
	 	 	 	 
	Employers’ Liability
	 	 	 	 
	 
	 	 	 	 
	Each Accident
	 	$	1,000,000	 

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	Disease-Policy Limit
	 	$	1,000,000	 
	Disease-Each Employee
	 	$	1,000,000	 
	 
	 	 	 	 
	Professional Errors and Omissions
	 	 	 	 
	 
	 	 	 	 
	Per Claim
	 	$	5,000,000	 
	Annual
	 	$	5,000,000	 

     17.2 Design-Builder’s Insurance Requirements.

          17.2.1. Design-Builder is responsible for procuring and maintaining from insurance companies
authorized to do business in the state in which the Project is located, and with the minimum rating
set forth below, the following insurance coverages for certain claims which may arise from or out
of the performance of the Work and obligations under the Contract Documents:

	 	(a)	 	coverage for claims arising under workers’ compensation,
disability and other similar employee benefit Laws applicable to the Work;
	 
	 	(b)	 	coverage for claims by Design-Builder’s employees for bodily
injury, sickness, disease, or death;
	 
	 	(c)	 	coverage for claims by any person other than Design-Builder’s
employees for bodily injury, sickness, disease, or death;
	 
	 	(d)	 	coverage for usual personal injury liability claims for damages
sustained by a person as a direct or indirect result of Design-Builder’s
employment of the person, or sustained by any other person;
	 
	 	(e)	 	coverage for claims for damages (other than to the Work)
because of injury to or destruction of tangible property, including loss of
use;
	 
	 	(f)	 	coverage for claims of damages because of personal injury or
death, or property damage resulting from ownership, use and maintenance of any
motor vehicle; and
	 
	 	(g)	 	coverage for contractual liability claims arising out of
Design-Builder’s obligations under Section 14.2.

          17.2.2. Design-Builder’s liability insurance required by this Section 17.2 shall be written
for the coverage amounts set forth in Section 17.1 and shall include completed operations insurance
for the period of time set forth in the Agreement.

          17.2.3. Design-Builder’s liability insurance set forth in Sections 17.2.1 (a) through (g)
above shall specifically delete any design-build or similar exclusions that could compromise
coverages because of the design-build delivery of the Project.

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          17.2.4. To the extent Owner requires Design-Builder or any Design Consultant to provide
professional liability insurance for claims arising from the negligent performance of design
services by Design-Builder or the Design Consultant, the coverage limits, duration and other
specifics of such insurance shall be as set forth in the Agreement. Any professional liability
shall specifically delete any design-build or similar exclusions that could compromise coverages
because of the design-build delivery of the Project. Such policies shall be provided prior to the
commencement of any design services hereunder.

          17.2.5. Prior to commencing any construction services hereunder, Design-Builder shall provide
Owner with certificates evidencing that (i) all insurance obligations required by the Contract
Documents are in full force and in effect and will remain in effect for the duration required by
the Contract Documents and (ii) no insurance coverage required hereunder will be canceled, renewal
refused, or changed unless at least thirty (30) Days prior written notice is given to Owner.

     17.3 Owner’s Liability Insurance. Owner shall procure and maintain from insurance companies
authorized to do business in the state in which the Project is located such liability insurance to
protect Owner from claims which may arise from the performance of Owner’s obligations under the
Contract Documents or Owner’s conduct during the course of the Project. The general and
professional liability insurance obtained by Owner shall name Design-Builder, Design Consultants, Subcontractors, the
Lenders and Lenders’ Agent as additional insureds, without application of deductible, retention or
retrospective premiums as to the additional insureds.

     17.4 Owner’s Property Insurance.

          17.4.1. Unless otherwise provided in the Contract Documents, Owner shall procure from
insurance companies authorized to do business in the state in which the Project is located, and
maintain through Final Completion, property insurance upon the entire Project in a minimum amount
equal to the full insurable value of the Project, including professional fees, overtime premiums
and all other expenses incurred to replace or repair the insured property. The property insurance
obtained by Owner shall include as additional insureds the interests of Owner, Design-Builder,
Design Consultants, Subcontractors, the Lenders and Lenders’ Agent and shall insure against the
perils of fire and extended coverage, theft, vandalism, malicious mischief, collapse, flood,
earthquake, debris removal and other perils or causes of loss as called for in the Contract
Documents and without application of any deductible, retention or retrospective premium. Owner
shall maintain coverage equal to or in excess of the value of each of Design-Builder’s, Design
Consultants’, and Subcontractors’ property on the Site. The property insurance shall include
physical loss or damage to the Work, including materials and equipment in transit, at the Site or
at another location as may be indicated in Design-Builder’s Application for Payment and approved by
Owner.

          17.4.2. Unless the Contract Documents provide otherwise, Owner shall procure and maintain
boiler and machinery insurance that will include as additional insureds the Owner, Design-Builder,
Design Consultants, and Subcontractors, in an amount not less than Contract

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Price and without
application of any deductible, retention or retrospective premium as to the additional insureds.
Owner shall maintain coverage equal to or in excess of the value of each of Design-Builder’s,
Design Consultants’, and Subcontractors’ interest or investment in boiler or machinery equipment on
the Site.

          17.4.3. Prior to Design-Builder commencing any Work, Owner shall obtain a builder’s risk
insurance policy naming Owner as the insured, with Design-Builder, Design Consultants and
Subcontractors as additional insureds, in an amount not less than the Contract Price and without
application of deductible, retention or retrospective premium as to the additional insureds.

          17.4.4. Owner shall also obtain, prior to Design-Builder commencing any Work, terrorism
coverage as described by the Terrorism Risk Insurance Act of 2002, Pub. L. No. 107-297, 116 Stat.
2322 (2002) or any successor act or renewing act for the period during which the Terrorism Risk
Insurance Act or any successor act or renewing act is in effect.

          17.4.5. Prior to Design-Builder commencing any Work, Owner shall provide Design-Builder with
copies of the insurance policies required under this Section 17.4 evidencing that (i) all Owner’s
insurance obligations required by the Contract Documents are in full force and in effect and will
remain in effect until Design-Builder has completed all of the Work and has received Final Payment
from Owner, and (ii) no insurance coverage will be canceled, renewal refused, or changed unless at least thirty (30) Days prior written notice is given to
Design-Builder. Owner’s property insurance shall not lapse or be cancelled if Owner occupies a
portion of the Work pursuant to Section 6.6.3. Owner shall be required to provide
Design-Builder, for Design-Builder’s possession, copies of all insurance policies to which
Design-Builder, Design Consultant, and Subcontractors are named as additional insureds. In the
event Owner replaces insurance providers for any policy required under this Section, revises policy
coverages, or otherwise modifies any applicable insurance policy in any way, Owner shall provide
Design-Builder, for its review or possession as provided under this subsection 17.4.5, a copy of
such new, revised or modified policy.

          17.4.6. Any loss covered under Owner’s property insurance shall be adjusted with Owner and
Design-Builder and made payable to both of them as trustees for the insureds as their interests may
appear, subject to any applicable mortgage clause. All insurance proceeds received as a result of
any loss will be placed in a separate account and distributed in accordance with such agreement as
the interested parties may reach. Any disagreement concerning the distribution of any proceeds
will be resolved in accordance with Article 19 hereof.

          17.4.7. Owner and Design-Builder waive against each other and Owner’s separate contracts,
Design Consultants, Subcontractors, agents and employees of each and all of them all damages
covered by property insurance provided herein, except such rights as they may have to the proceeds
of such insurance. Design-Builder and Owner shall, where appropriate, require similar waivers of
subrogation from Owner’s separate contractors, Design Consultants Subcontractors, and insurance
providers and shall require each of them to include similar waivers in their contracts or policies.

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     17.5 Coordination with Loan Documents. Notwithstanding anything herein to the contrary, all
provisions relating to insurance and insurance proceeds shall be conformed to the requirements of
the Lenders in connection with any financing.

Article 18

Representations and Warranties

     18.1 Design-Builder and Owner Representations and Warranties. Each of Design-Builder and
Owner represents that:

	 	(i)	 	it is duly organized, validly existing and in good standing under the Laws of
its formation and has all requisite power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the transactions
contemplated hereby;
	 
	 	(ii)	 	this Agreement has been duly executed and delivered by such party and
constitutes the legal, valid and binding obligations of such party, enforceable against
such party in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium or similar Laws
affecting creditor’s rights or by general equitable principles;
	 
	 	(iii)	 	the execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby do not and will not conflict with or violate
(a) the certificate of incorporation or bylaws or equivalent organizational documents
of such party, or (b) any Law applicable to such party and other than the permits
listed on Exhibit G, such execution, delivery and performance of this Agreement does
not require any governmental approval; and
	 
	 	(iv)	 	there is no action pending or, to the knowledge of such party, threatened,
which would hinder, modify, delay or otherwise adversely affect such party’s ability to
perform its obligations under the Contract Documents.

     18.2 Design-Builder Representation and Warranties. Design-Builder further represents that it
has the necessary financial resources to fulfill its obligations under this Agreement.

Article 19

Dispute Resolution

     19.1 Dispute Avoidance and Mediation. The parties are fully committed to working with each
other throughout the Project and agree to communicate regularly with each other at all times so as
to avoid or minimize disputes or disagreements. If disputes or disagreements do arise,
Design-Builder and Owner each commit to resolving such disputes or disagreements in an

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amicable,
professional and expeditious manner so as to avoid unnecessary losses, delays and disruptions to
the Work.

Design-Builder and Owner will first attempt to resolve disputes or disagreements at the field level
through discussions between Design-Builder’s Representative and Owner’s Representative.

If a dispute or disagreement cannot be resolved through Design-Builder’s Representative and Owner’s
Representative, Design-Builder’s Senior Representative and Owner’s Senior Representative, upon the
request of either party, shall meet as soon as conveniently possible, but in no case later than
thirty (30) Days after such a request is made, to attempt to resolve such dispute or disagreement.
Prior to any meetings between the Senior Representatives, the parties will exchange relevant
information that will assist the parties in resolving their dispute or disagreement.

If, after meeting, the Senior Representatives determine that the dispute or disagreement cannot be
resolved on terms satisfactory to both parties, the parties shall submit the dispute or
disagreement to non-binding mediation. The mediation shall be conducted in Minneapolis,
Minnesota by a mutually agreeable impartial mediator, or if the parties cannot so agree, a mediator
designated by the American Arbitration Association (“AAA”) pursuant to its Construction
Industry Arbitration Rules and Mediation Procedures. The mediation will be governed by and
conducted pursuant to a mediation agreement negotiated by the parties or, if the parties cannot so
agree, by procedures established by the mediator.

     19.2 Arbitration. Any claims, disputes or controversies between the parties arising out of or
relating to the Agreement, or the breach thereof, which have not been resolved in accordance with
the procedures set forth in Section 19.1 above shall be decided by arbitration to be conducted in
Minneapolis, Minnesota in accordance with the Construction Industry Arbitration Rules and Mediation
Procedures of the AAA then in effect, unless the parties mutually agree otherwise.

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

Design-Builder and Owner expressly agree that any arbitration pursuant to this Section 19.2 may be
joined or consolidated with any arbitration involving any other person or entity (i) necessary to
resolve the claim, dispute or controversy, or (ii) substantially involved in or affected by such
claim, dispute or controversy. Both Design-Builder and Owner will include appropriate provisions
in all contracts they execute with other parties in connection with the Project to require such
joinder or consolidation.

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

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     19.3 Duty to Continue Performance. Unless provided to the contrary in the Contract Documents,
Design-Builder shall continue to perform the Work and Owner shall continue to satisfy its payment
obligations to Design-Builder, pending the final resolution of any dispute or disagreement between
Design-Builder and Owner.

     19.4 Consequential Damages.

          19.4.1. Notwithstanding anything herein to the contrary (except as set forth in Section 19.4.2
below), neither Design-Builder nor Owner shall be liable to the other for any consequential losses
or damages, whether arising in contract, warranty, tort (including negligence), strict liability or
otherwise, including but not limited to, losses of use, profits, business, reputation or financing,
except that Design-Builder does not waive any such damages resulting from or arising out of any
breach of Owner’s duties and obligations under the limited license granted by Design-Builder to
Owner pursuant to Article 5.

          19.4.2. The consequential damages limitation set forth in Section 19.4.1 above is not intended
to affect the payment of liquidated damages, if any, set forth in Section 7.3 of the Agreement,
which both parties recognize has been established, in part, to reimburse Owner for some damages
that might otherwise be deemed to be consequential.

Article 20

Confidentiality of Shared Information

     20.1
Non-Disclosure Obligation. Except as required by court order, subpoena, or Applicable Law,
neither party shall disclose to third parties any confidential or proprietary information regarding
the other party’s business affairs, finances, technology, processes, plans or installations,
product information, know-how, or other information that is received from the other party pursuant
to this Agreement or the parties’ relationship prior thereto or is developed pursuant to this
Agreement, without the express written consent of the other party, which consent shall not be
unreasonably withheld. The parties shall at all times use their respective reasonable efforts to
keep all information regarding the terms and conditions of this Agreement confidential and shall
disclose such information to third persons only as reasonably required for the permitting of the
Project; financing the development, construction, ownership, operation and maintenance of the
Plant; or as reasonably required by either party for performing its obligations hereunder and if
prior to such disclosure, the disclosing party informs such third persons of the existence of this
confidentiality obligation and only if such third persons agree to maintain the confidentiality of
any information received. This Article 20 shall not apply to information that was already in the
possession of one party prior to receipt from the other, that is now or hereafter becomes a part of
the public domain through no fault of the party wishing to disclose, or that corresponds in
substance to information heretofore or hereafter furnished by third parties without restriction on
disclosure.

     20.2 Publicity and Advertising. Neither Owner nor Design-Builder shall make or permit any of
their subcontractors, agents, or vendors to make any external announcement or publication, release
any photographs or information concerning the Project or any part thereof, or make any other type
of communication to any member of the public, press, business entity, or

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any official body which
names the other Party unless prior written consent is obtained from the other Party, which consent
shall not be unreasonably withheld.

     20.3 Term of Obligation. The confidentiality obligations of the Parties pursuant to this
Article 20 shall survive the expiration or other termination of this Agreement for a period of two
(2) years.

Article 21

Miscellaneous

     21.1 Assignment. This Agreement shall be binding upon, shall inure to the benefit of, and may
be performed by, the successors and permitted assigns of the parties, except that neither
Design-Builder nor Owner shall, without the written consent of the other, assign or transfer this
Agreement or any of the Contract Documents. Design-Builder’s subcontracting portions of the Work
in accordance with this Agreement shall not be deemed to be an assignment of this Agreement. Owner
may assign all of its rights and obligations under the Contract Documents to its Lenders or
Lenders’ Agent as collateral security in connection with Owner obtaining or arranging any financing
for the Project; provided, however, Owner shall deliver, at least ten (10) Days prior to any such
assignment, to Design-Builder (i) written notice of such assignment and (ii) a copy of the
instrument of assignment. The Lenders or Lenders’ Agent may assign the Contract Documents or their
rights under the Contract Documents, including without limitation in connection with any
foreclosure or other enforcement of their security interest. Design-Builder shall execute, if
requested, a consent to assignment for the benefit of the Lenders and/or the Lenders’ Agent,
provided that with respect to any such assignments such assignee demonstrates to Design-Builder’s
satisfaction that it has the capability to fulfill Owner’s obligations under this Agreement.

     21.2 Successors. Design-Builder and Owner intend that the provisions of the Contract
Documents are binding upon the parties, their employees, agents, heirs, successors and assigns.

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

     21.4 Severability. If any provision or any part of a provision of the Contract Documents
shall be finally determined to be superseded, invalid, illegal, or otherwise unenforceable pursuant
to any applicable Legal Requirements, such determination shall not impair or otherwise affect the
validity, legality, or enforceability of the remaining provision or parts of the provision of the
Contract Documents, which shall remain in full force and effect as if the unenforceable provision
or part were deleted.

     21.5 No Waiver. The failure of either Design-Builder or Owner to insist, in any one or more
instances, on the performance of any of the obligations required by the other under the Contract
Documents shall not be construed as a waiver or relinquishment of such obligation or right with respect
to future performance.

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

     21.7 Notice. Whenever the Contract Documents require that notice be provided to a party,
notice shall be delivered in writing to such party at the address listed below. Notice will be
deemed to have been validly given if delivered (i) in person to the individual intended to receive
such notice, (ii) by registered or by certified mail, postage prepaid to the address indicated in
the Agreement within four (4) Days after being sent, or (iii) by facsimile, by the time stated in a
machine-generated confirmation that notice was received at the facsimile number of the intended
recipient.

If to Design-Builder, to:

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

Attention: Aaron Fagen

Fax: (320) 564-3278

with a copy to:

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

Attention: Bruce Langseth

Fax: (320) 564-3278

If to Owner, to:

[Owner Contact]

[Address]

and

Lender’s Agent at the address provided for Lender’s Agent to Design-Builder by Owner
by notice within five Days following the Financial Closing.

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     21.8 No Privity with Design Consultant/Subcontractors. Nothing in the Contract Documents is
intended or deemed to create any legal or contractual relationship between Owner and any Design
Consultant or Subcontractor.

     21.9 Amendments. The Contract Documents may not be changed, altered, or amended in any way
except in writing signed by a duly authorized representative of each party.

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

     21.11 Third-Party Beneficiaries. Except as expressly provided herein, this Agreement is
intended to be solely for the benefit of the Owner, the Design-Builder and permitted assigns, and
is not intended to and shall not confer any rights or benefits on any person not a signatory
hereto.

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

     21.13 Survival. Notwithstanding any provisions herein to the contrary, the Work Product
provisions set forth in Article 5 and the indemnity obligations set forth herein shall survive (in
full force) the expiration or termination of this Agreement, and shall continue to apply to the
Parties to this Agreement even after termination of this Agreement or the transfer of such Party’s
interest in this Agreement.

[The next page is the signature page.]

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     IN WITNESS WHEREOF, the parties hereto have caused their names to be hereunto subscribed by
their officers thereunto duly authorized, intending thereby that this Agreement shall be effective
as of this Effective Date.

	 	 	 	 	 	 	 
	OWNER:

	 	 	 	DESIGN-BUILDER:	 	 
	 
	 	 	 	 	 	 
	Val-E Ethanol, LLC
 

(Name of Owner)

	 	 
	 	Fagen, Inc.
 

(Name of Owner)
	 	 
	 
	 	 	 	 	 	 
	/s/ CLIFFORD F. MESNER
 

(Signature)

	 	 	 	/s/ RON FAGEN
 

(Signature)
	 	 
	 
	 	 	 	 	 	 
	Clifford F. Mesner
 

(Printed Name)

	 	 	 	Roland “Ron” Fagen
 

(Printed Name)
	 	 
	 
	 	 	 	 	 	 
	Chairman of the Board
 

(Title)

	 	 	 	CEO and President
 

(Title)
	 	 
	 
	 	 	 	 	 	 
	Date: 01/09/06

	 	 	 	Date: 01/11/06	 	 

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EXHIBIT A

Performance Guarantee Criteria

	 	 	 	 	 	 	 
	Criteria	 	Specification	 	Testing Statement	 	Documentation
	Plant Capacity –
fuel grade ethanol

	 	Operate at a rate
of 45 million
gallons per year of
denatured fuel
grade ethanol
meeting the
specifications of
ASTM 4806 based on
353 days of
operation per
calendar year and
4.76% denaturant.
	 	24 hour

performance test
	 	Production records
and a written
report by
Design-Builder.
	 
	 	 	 	 	 	 
	Plant Capacity –
fuel grade ethanol

	 	Operate at a rate
of 40 million
gallons per year of
denatured fuel
grade ethanol
meeting the
specifications of
ASTM 4806 based on
353 days of
operation per
calendar year and
4.76% denaturant.
	 	Seven day

performance test
	 	Production records
and a written
report by
Design-Builder.
	 
	 	 	 	 	 	 
	Corn to Ethanol
Conversion ratio;
*****

	 	Not be less than
2.80 denatured
gallons of ethanol
per bushel (56#) of
corn
	 	As determined by
meter readings
during a seven day
performance test.
	 	Production records
and written
analysis by
Design-Builder.
	 
	 	 	 	 	 	 
	Electrical Energy

	 	0.75 kWh per
denatured gallon of
fuel grade ethanol
*****
	 	As determined by
meter readings
during a seven day
performance test.
	 	Production records
and written
analysis by
Design-Builder.
	 
	 	 	 	 	 	 
	Natural Gas

	 	Shall not exceed
34,000 Btu per
denatured gallon of
fuel grade ethanol.
(This Performance
Criteria relates to
production of
ethanol and
excludes any
natural gas usage
that may occur for
drying corn.)
	 	As determined by
meter readings
during a seven day
performance test.
	 	Production records
and written
analysis by
Design-Builder.

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	Criteria	 	Specification	 	Testing Statement	 	Documentation
	Process Water
Discharge (not
including cooling
tower and boiler
blowdown and water
pretreatment (RO)
discharge)

	 	Zero gallons under
normal operations
	 	Process discharge
meter
	 	Control System
reports
	 
	 	 	 	 	 	 
	Air Emissions

	 	Must meet the
requirements
prescribed as of
the date hereof by
the State of
Nebraska Department
of Environmental
Quality, Air
Quality Division
	 	As required by
agency and
performed by
Owner’s Air
Emission Tester.
	 	Written report by
Owner’s Air
Emission Tester.

As part of the performance Guarantee Criteria the Plant shall operate in accordance with all Legal
Requirements.

DISCLAIMER:

Owner’s failure to materially comply with the operating procedures issued by ICM, Inc./Fagen, Inc.
shall void all performance guaranties and warranties set forth in this Design-Build Agreement.

Owner understands that the startup of the plant requires resources and cooperation of the Owner,
vendors and other suppliers to the project. Design-Builder disclaims any liability and Owner
indemnifies Design-Builder for non-attainment of the Performance Guarantee Criteria directly or
indirectly caused by material non-performance or negligence of third parties not retained by
Design-Builder.

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EXHIBIT B

General Project Scope

Construct a 40 million-gallon per year (MGY) dry mill fuel ethanol plant near Ord, Nebraska. The
plant will grind approximately 14.3 million bushels of corn per year to produce approximately 40
MGY of denatured fuel ethanol. The plant will also produce approximately 128,600 tons per year of
11% moisture dried distillers grains with solubles (DDGS), and approximately 121,000 tons per year
of raw carbon dioxide (CO2) gas.

Delivered corn will be dumped in the receiving building. The receiving building will have two
truck grain receiving bays and a rail receiving bay, including an underground conveyor from the
rail pit to the second truck receiving bay both of which share a common receiving leg. Said
receiving building shall have sufficient height to accommodate end-dump trailers. The truck driver
will drive onto the pitless scale located near the administration building, be weighed and sampled,
then drive to the receiving building, dump the grain, then proceed back to the pitless scale and
obtain a final weight ticket from the scale operator. The trucks will not be required to move
during the unloading process in the receiving building. Maximum truck dump time is ten minutes.
Two independent 15,000-bushel legs will lift the corn to one of two 200,000 – bushel concrete
storage bins. A dust collection system will be installed on the grain receiving system to limit
particulate emissions as described in the Air Quality Permit application. There is also a railroad
car scale for receiving corn by rail and loading DDGS in rail and trucks.

Ground corn will be mixed in a slurry tank, routed through a pressure vessel and steam flashed off
in a flash vessel. Cooked mash will continue through liquefaction tanks and into one of the
fermenters. Simultaneously, propagated yeast will be added to the mash as the fermenter is
filling. After batch fermentation is complete, the beer will be pumped to the beer well and then
to the beer column to vaporize the alcohol from the mash.

Alcohol streams are dehydrated in the rectifier column, the side stripper, and the molecular sieve
system. Two hundred proof alcohol is pumped to the tank farm day tank and blended with five
percent natural gasoline as the product is being pumped into one of two 750,000 gallon final
storage tanks. Loading facilities for truck and rail cars will be provided. Tank farm tanks
include: one tank for 190 proof storage, one tank for 200 proof storage, one tank for denaturant
storage and two 750,000 gallon tanks for denatured ethanol storage.

Corn mash from the beer stripper is dewatered in the centrifuge(s). Wet cake from the
centrifuge(s) is conveyed to the DDGS dryer system. Wet cake is conveyed from the centrifuges to
the dryer where the water is removed from the cake and the product is dried to 11% moisture. A wet
cake pad is located along side the DDGS dryer building to divert modified wet or wet cake to the
pad when necessary or for limited production of modified wet or wet cake for sales. Water in the
thin stillage is evaporated and recycled by the Bio-Methanation system. Syrup is added to the wet
cake entering the dryer. DDGS is pneumatically conveyed to flat storage in the DDGS storage
building. Shipping is accomplished by scooping and pushing the product with a front-end loader
into an in-floor conveyor system. The DDGS load out pit has capacity for

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approximately one semi-trailer load. DDGS is weighed with the truck/rail car platform scales. A
dedicated modified wet cake storage and loading system including a pitless scale is also located
across from the DDGS dryer building.

Fresh water for the boilers, cooking, cooling tower and other processes will be obtained from the
Owner supplied water pretreatment system. Boiler water conditioned in regenerative softeners will
be pumped through a deaerator scrubber and into a deaerator tank. Appropriate boiler chemicals
will be added as preheated water is sent to the boiler.

Steam energy will be provided by one Thermal Oxidizer (TO) driven boiler system utilizing a high
percentage of condensate return to a condensate receiver tank.

The TO/Heat Recovery Steam Generator is a process used to thermally oxidize the exhaust gasses from
the Dryers. This process will be used to reduce VOCs and particulates that are in the dryer
exhaust and ensure compliance with environmental regulations. The energy required to complete
thermal oxidization will then be ducted to a waste heat boiler that will produce 100% of the steam
requirements of the ethanol plant. The exhaust gasses from the waste heat boiler will be ducted
through stack gas economizer(s) to recover the maximum amount of energy possible from the exhaust
gas stream. After the economizer(s), the gas stream will be vented to atmosphere through a stack.

The process will be cooled by circulating water through heat exchangers, a chiller, and a cooling
tower.

The design includes a compressed air system consisting of air compressor(s), a receiver tank,
pre-filter, coalescing filter, and double air
dryer(s).

The design also incorporates the use of a clean-in-place (CIP) system for cleaning cook,
fermentation, distillation, evaporation, centrifuges, and other systems. Fifty percent caustic
soda is received by truck and stored in a tank.

Under normal operating circumstances, the plant will not have any wastewater discharges that have
been in contact with corn, corn mash, cleaning system, or contact process water. An ICM/Phoenix
Bio-Methanator will reduce the organic acids in process water allowing complete reuse within the
plant. The plant will have blowdown discharges from the cooling tower and may have water discharge
from any water pre-treatment processes. Owner shall provide on-site connection to sanitary sewer
or septic system.

Most plant processes are computer controlled by a Siemens/Moore APACS distributed control system
with graphical user interface and three workstations. The control room control console will have
dual monitors to facilitate operator interface between two graphics screens at the same time.
Additional programmable logic controllers (PLCs) will control certain process equipment. Design
Builder provides lab equipment.

The cooking system requires the use of anhydrous ammonia, and other systems require the use of
sulfuric acid. Therefore, a storage tank for ammonia and a storage tank for acid will be on site
to

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provide the quantities necessary. The ammonia storage requires that plant management implement and
enforce a Process Safety Management (PSM) program. The plant design may require additional
programs to ensure safety and to satisfy regulatory authorities.

NOTE: Exhibit B is a general description of the plant’s basic operation. Not all equipment and
equipment sizes quoted may be used on every plant. Site specific equipment and equipment sizes
will be determined during each plant’s final design.

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EXHIBIT C

Owner’s Responsibilities

The Owner shall perform and provide the permits, authorizations, services and construction as
specifically described hereafter:

	1)	 	Land and Grading – Owner shall provide a site near or in Ord, Nebraska. Owner shall obtain
all legal authority to use the site for its intended purpose and perform technical due
diligence to allow Design-Builder to perform including, but not limited to, proper zoning
approvals, building permits, elevation restrictions, soil tests, and water tests. The site
shall be rough graded per Design-Builder specifications and be +/- three inches of final grade
including the rough grading for Site roadways. The site soils shall be modified as required
to provide a minimum allowable soil bearing pressure as described in Table 1.
	 
	 	 	Other items to be provided by the Owner include, but are not limited to, the following:
initial site survey (boundary and topographic) as required by the Design-Builder, layout of
the property corners including two construction benchmarks, Soil Borings and subsequent
Geotechnical Report describing recommendation for Roads, foundations and if required, soil
stabilization/remediation, land disturbance permit, erosion control permit, site grading as
described above with minimum soil standards, placement of erosion control measures, plant
access road from a county, state or federal road designed to meet local county road
standards, plant storm and sanitary sewers, fire water system with hydrants and plant water
main branches taken from the system to be within five feet of the designated building
locations, all tanks, motors and other equipment associated with or necessary to operate the
fire water loop and associated systems, plant roads as specified and designed for the
permanent elevations and effective depth, “construction” grading plan as drawn (including
site retention pond), plant water well and associated permit(s). Owner shall also provide
the final grading, seeding and mulching, and site fencing at the site.
	 
	 	 	Owner is encouraged to obtain preliminary designs/information and estimates of the cost of
performing all Owner required permits and services as stated in this Exhibit C.
Specifically, the cost of the fire water systems (including associated fire water pumps,
required tank, building (if required), sprinklers, and all other equipment and materials
associated with the fire water delivery systems) is estimated being in excess of $800,000.
The requirements of each state and the decisions of each Owner will increase or decrease the
actual cost. Owner shall prepare site according to Design-Builder’s engineering plans
provided for the site work under the Phase I and Phase II Engineering Services Agreement.
	 
	2)	 	Permits – Owner shall obtain all Operating Permits including, but not limited to, air quality
permits, in a timely manner to allow construction and startup of the plant as scheduled by
Design-Builder.

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	3)	 	Storm Water Runoff Permit – Owner shall obtain the construction storm-water runoff permit and
permanent storm-water runoff permit. Design-Builder shall obtain the erosion control/land
disturbance permit.

	4)	 	Nebraska Pollutant Elimination Discharge Permit – Owner shall obtain a permit to discharge
cooling tower water, boiler blowdown water, reverse osmosis (“R.O.”) reject water and any
other waste water directly to a designated waterway or other location. Owner shall supply the
discharge piping to transport to the designated waterway or other location.

	5)	 	Natural Gas and/or Propane Service – Owner shall procure and supply a continuous supply of
natural gas of at least 1.5 billion cubic feet per year, at a minimum rate of 200-400 MCF per
hour and at a minimum pressure of at least 200 psig at the plant site, then reduced to 60 psig
for distribution to the use points. Pressure reducing stations must be located so as to
provide stable pressure at the point of use. Owner shall provide all gas piping to the use
points and supply meters and regulators to provide burner tip pressures as specified by
Design-Builder. Owner shall also supply a digital flowmeter on-site with appropriate output
for monitoring by the plant’s computer control system.

	6)	 	Temporary Electrical Service – Owner shall secure electrical service to supply a minimum 750
KW of electrical power during construction. Owner shall procure, install, and maintain
temporary service to up to three temporary service transformers located throughout the site.
The transformer sizing, locations, and underground electrical feed routing layout are to be
determined jointly by the Owner, the Design-Builder and the energy supplier. Design-Builder
shall pay energy demand and usage charges up to Substantial Completion.

	7)	 	Permanent Electrical Service – (1) The Owner is responsible to secure continuous service from
an energy supplier to serve the facility. The service from the energy supplier shall be of
sufficient size to provide at a minimum 10 MW of electrical capacity to the site. (2) The
Owner is responsible for procurement, installation and maintenance of the site distribution
system, including but not limited to the required substation and all associated distribution
lines, switchgear, sectional cabinets, distribution transformers, transformer pads, etc. An
on-site primary digital meter is also to be supplied for monitoring of electrical usage and
demand. This meter must have the capability to be monitored via a telephone line or other
electrical signal. (3) The responsibility of the Design-Builder starts at the secondary
electrical terminals of the site distribution system transformers that have been installed by
Owner (i.e., the 480 volt terminals for the process building transformers; the 480 volt
terminals for the energy center transformers; the 480 volt terminals for the grains
transformer; the 480 volt terminals for the pumphouse transformer; and the 4160 volt terminals
for the chiller transformer; and the 4160 volt terminals of the thermal oxidizer transformer).
(4) The site distribution system requirements, layout, and meters are to be determined
jointly by the Owner, the Design-Builder and the energy supplier.

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	 	 	Design-Builder will be providing soft start motor controllers for all motors greater than
150 horsepower and where demanded by process requirements. Owner is encouraged to discuss
with its electrical service supplier whether additional soft start motor controllers are
advisable for this facility and such can be added, with any increased cost being an Owner’s
cost.
	 
	 	 	Design-Builder will provide power factor correction to 0.92 lagging at plant nameplate
capacity. Owner is encouraged to discuss with its electrical service supplier any
requirements for power factor correction above 0.92 lagging. Additional power factor
correction can be added with any increased cost being an Owner’s cost.

	8)	 	Water Supply and Service Agreement – Owner shall supply on-site process wells or other water
source capable of providing a quantity of water which includes process water, R.O. feed water,
cooling tower make-up water, of a quality which will allow discharges to comply with NPDES
limits. Owner should consider providing a redundant supply source. Design-Builder shall
provide the standard zeolite water softener system. Any increased costs incurred for another
water treatment system if water does not meet the quality requirements shall be the
responsibility of the Owner. Owner will supply one process fresh water supply line
terminating within five (5) feet of the point of entry designated by Design-Builder, one
potable supply line terminating within five (5) feet of the process building at a point of
entry designated by Design-Builder, and one potable supply line to the administration building
at a point of entry designated by administration building contractor.
	 
	 	 	Owner shall pay for a water pre-treatment system to be designed and constructed by
Design-Builder and to be integrated into the Plant. The pre-treatment system will be
designed to provide the Plant with the quantity and quality of raw and treated water needed
to supply the Plant’s process needs. The water pre-treatment system design will also
consider and recommend to Owner equipment required to meet the discharge requirements under
the Plant’s NPDES or other wastewater discharge permit. Owner is to execute Change Orders
as necessary for the design and construction of such water pre-treatment system.
Design-Builder shall recover costs for the design and construction of such system from the
Owner on a time plus material basis. A Change Order, pursuant to Article 13.1, shall be
executed by Owner and Design-Builder to compensate Design-Builder, on a time plus materials
basis, for any costs and expenses related to such water pre-treatment system.

	9)	 	Wastewater Discharge System, Permits and/or Service Agreement – Owner shall provide the
discharge piping, septic tank and drainfield system or connect to municipal system as required
for the sanitary sewer requirements of the Plant. These provisions shall comply with all
federal, state, and local regulations, including any permitting issues.

	10)	 	Roads and Utilities – Owner shall provide and maintain the ditches and permanent roads,
including the gravel, pavement or concrete, with the roads passing standard compaction tests.
(Design-Builder will maintain aggregate construction roads during

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	 	 	construction of the Plant and will return to original pre-construction condition prior to
Owner completing final grade and surfacing.)
	 
	 	 	Except as otherwise specifically stated herein the Owner shall install all utilities so that
they are within five (5) feet of the designated building/structure locations.

	11)	 	Administration Building – The administration building – one story free standing, office
computer system, telephone system, office copier and fax machine and office furniture and any
other office equipment and personal property for the administration building shall be the sole
and absolute cost and responsibility of Owner and Design-Builder shall have no responsibility
in regards thereto.

	12)	 	Maintenance and Power Equipment – The maintenance and power equipment as described in Table 2
and any other maintenance and power equipment as required by the plant or desired by Owner
shall be the sole and absolute cost and responsibility of Owner and Design-Builder shall have
no responsibility in regards thereto.

	13)	 	Railroads – Owner is responsible for any costs associated with the railroads including, but
not limited to, all rail design and engineering and construction and Design-Builder shall have
no responsibility in regards thereto.

	14)	 	Drawings – Owner shall supply drawings to Design-Builder of items supplied under items 11)
and 13) and also supply Phase II redline drawings.

	15)	 	Fire Protection System – Fire Protection System requirements vary by governmental
requirements per location and by insurance carrier requirements. Owner is responsible to
provide the required fire protection system for the Plant. This may include storage tanks,
pumps, underground fire water mains, fire hydrants, foam or water monitor valves, sprinkler
systems, smoke and heat detection, deluge systems, or other provisions as required by
governmental codes or Owner’s insurance carrier’s fire protection criteria.
	 
	 	 	Owner shall pay for a Fire Protection System to be designed and constructed by Design-Builder and
to be integrated into the Plant. The Fire Protection System shall be designed and constructed to
meet the governmental and insurance requirements. Owner is to execute Change Orders as necessary
for the design and construction of such Fire Protection System. Design-Builder shall recover costs
for the design and construction of such system from Owner on a time plus material basis. A Change
Order, pursuant to Article 13.1, shall be executed by Owner and Design-Builder to compensate
Design-Builder, on a time plus materials basis, for any costs and expenses related to such water
pre-treatment system.

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Table 1 Minimum Soil Bearing Pressure – Responsibility of Owner

	 	 	 	 	 
	 	 	Required Allowable Soil Bearing Pressure
	Description	 	(pounds per square foot)
	Grain Storage Silos
	 	 	8,000	 
	Cook Water Tank
	 	 	3,500	 
	Methanator Feed Tank
	 	 	3,500	 
	Liquifaction Tank #1
	 	 	3,500	 
	Liquifaction Tank #2
	 	 	3,500	 
	Fermentation Tank #1
	 	 	5,000	 
	Fermentation Tank #2
	 	 	5,000	 
	Fermentation Tank #3
	 	 	5,000	 
	Beerwell
	 	 	5,000	 
	Whole Stillage Tank
	 	 	3,500	 
	Thin Stillage Tank
	 	 	3,500	 
	Syrup Tank
	 	 	3,500	 
	190 Proof Day Tank
	 	 	3,000	 
	200 Proof Day Tank
	 	 	3,000	 
	Denaturant Tank
	 	 	3,000	 
	Fire Water Tank
	 	 	3,000	 
	Denatured Ethanol Tank #1
	 	 	4,000	 
	Denatured Ethanol Tank #2
	 	 	4,000	 
	All Other Areas
	 	 	3,000	 

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Table 2 Maintenance and Power Equipment – Responsibility of Owner

	 	 	 
	Description	 	Additional Description
	Spare Parts

	 	Spare parts
	 

	 	Parts bins
	 

	 	Misc. materials, supplies and equipment
	 
	 	 
	Shop supplies and equipment

	 	One shop welder
	 

	 	One portable gas welder
	 

	 	One plasma torch
	 

	 	One acetylene torch
	 

	 	One set of power tools
	 

	 	Two sets of hand tools with tool boxes
	 

	 	Carts and dollies
	 

	 	Hoists (except centrifuge overhead crane)
	 

	 	Shop tables
	 

	 	Maintenance office furnishings & supplies
	 

	 	Fire Extinguishers
	 

	 	Reference books
	 

	 	Safety manuals
	 

	 	Safety cabinets & supplies, etc.
	 
	 	 
	Rolling stock

	 	Used 1 1/2 yard front end loader
	 

	 	New Skid loader
	 

	 	Used Fork lift
	 

	 	Used Scissors lift, 30 foot
	 

	 	Used Pickup truck
	 

	 	Track Mobile

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EXHIBIT D

ICM License Agreement

THIS LICENSE AGREEMENT (this “License Agreement”) is entered into and made effective as of the
6th day of January, 2006 (“Effective Date”) by and between Val-E Ethanol, LLC, a limited liability
company (“OWNER”), and ICM, Inc., a Kansas corporation (“ICM”).

     WHEREAS, OWNER has entered into that certain Design-Build Lump Sum Contract dated January 6,
2006 (the “Contract”) with Fagen, Inc., a Minnesota corporation (“Fagen”), under which Fagen is to
design and construct a 40 million gallon per year ethanol plant for OWNER to be located in or near
Ord, Nebraska (the “Plant”);

     WHEREAS, ICM has granted Fagen the right to use certain proprietary technology and information
of ICM in the design and construction of the Plant; and

     WHEREAS, OWNER desires from ICM, and ICM desires to grant to OWNER, a license to use such
proprietary technology and information in connection with OWNER’s ownership, operation, maintenance
and repair of the Plant, all upon the terms and conditions set forth herein;

     NOW, THEREFORE, the parties, in consideration of the foregoing premises and the mutual
promises contained herein and for other good and valuable consideration, receipt of which is hereby
acknowledged, agree as follows:

	 	1.	 	Upon substantial completion of the Plant by Fagen pursuant to the terms of the Contract
or, if later, payment by OWNER of all amounts due and owing to Fagen under the Contract,
ICM grants to OWNER a limited license to use the Proprietary Property (hereinafter defined)
solely in connection with the ownership, operation, maintenance and repair of the Plant,
subject to the limitations provided herein (the “Purpose”).
	 
	 	2.	 	The “Proprietary Property” means, without limitation, documents, Operating Procedures
(hereinafter defined), materials and other information that are furnished by ICM to OWNER
in connection with the Purpose, whether orally, visually, in writing, or by any other
means, whether tangible or intangible, directly or indirectly (including, without
limitation, through Fagen) and in whatever form or medium including, without limitation,
the design, arrangement, configuration, and specifications of (i) the combinations of
distillation, evaporation, and alcohol dehydration equipment (including, but not limited
to, pumps, vessels, tanks, heat exchangers, piping, valves and associated electronic
control equipment) and all documents supporting those combinations; (ii) the combination of
the distillers grain drying (DGD), and heat recovery steam generation (HRSG) equipment
(including, but not limited to, pumps, vessels, tanks, heat exchangers, piping and
associated electronic control equipment) and all documents supporting those combinations;
and (iii) the computer system, known as the distributed control system (DCS and/or PLC)
(including, but not limited to, the software configuration, programming, parameters, set
points, alarm points, ranges, graphical interface, and system hardware connections) and all
documents supporting that system. The “Operating Procedures” means, without limitation,
the process equipment and specifications manuals, standards of quality, service protocols,
data collection methods, construction specifications, training methods, engineering
standards and any other information prescribed by ICM from time to time concerning the
Purpose. Proprietary Property shall not include any information or materials that OWNER
can demonstrate by clear and convincing written evidence: (i) was lawfully in the
possession of OWNER prior to disclosure by

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	 	 	 	ICM or Fagen; (ii) was in the public domain prior to disclosure by ICM or Fagen; (iii) was
disclosed to OWNER by a third party other than Fagen having the legal right to possess and
disclose such information or materials; or (iv) after disclosure by ICM or Fagen comes into
the public domain through no fault of OWNER or its members, directors, officers, employees,
agents, contractors, consultants or other representatives (hereinafter collectively referred
to as “Representatives”). Information and materials shall not be deemed to be in the public
domain merely because such information is embraced by more general disclosures in the public
domain, and any combination of features shall not be deemed to be within the foregoing
exceptions merely because individual features are in the public domain if the combination
itself and its principles of operation are not in the public domain.

	 	3.	 	OWNER shall not use the Proprietary Property for any purpose other than the Purpose.
OWNER shall not use the Proprietary Property in connection with any expansion or
enlargement of the Plant. ICM and its Representatives shall have the express right at any
time to enter upon the premises of the Plant to inspect the Plant and its operation to
ensure that OWNER is complying with the terms of this License Agreement.
	 
	 	4.	 	OWNER’s failure to materially comply with the Operating Procedures shall void all
guarantees, representations and warranties, whether expressed or implied, if any, that were
given by ICM to OWNER, directly or indirectly through Fagen, concerning the performance of
the Plant that ICM reasonably determines are materially affected by OWNER’s failure to
materially comply with such Operating Procedures. OWNER agrees to indemnify, defend and
hold harmless ICM, Fagen and their respective Representatives from any and all losses,
damages and expenses including, without limitation, reasonable attorneys’ fees resulting
from, relating to or arising out of Owner’s or its Representatives’ (a) failure to
materially comply with the Operating Procedures or (b) negligent use of the Proprietary
Property.
	 
	 	5.	 	Any and all modifications to the Proprietary Property made by OWNER or its
Representatives shall be the property of ICM. OWNER shall promptly notify ICM of any such
modification and OWNER agrees to assign all right, title and interest in such modification
to ICM; provided, however, OWNER shall retain the right, at no cost, to use such
modification in connection with the Purpose.
	 
	 	6.	 	ICM has the exclusive right and interest in and to the Proprietary Property and the
goodwill associated therewith. OWNER will not, directly or indirectly, contest ICM’s
ownership of the Proprietary Property. OWNER’s use of the Proprietary Property does not
give OWNER any ownership interest or other interest in or to the Proprietary Property
except for the limited license granted to OWNER herein.
	 
	 	7.	 	OWNER shall pay no license fee or royalty to ICM for OWNER’s use of the Proprietary
Property pursuant to this License Agreement, the consideration for the limited license
granted herein is certain payments by Fagen to ICM, which is funded by and included in the
amounts payable by OWNER to Fagen for the construction of the Plant under the Contract.
	 
	 	8.	 	OWNER may not assign the limited license granted herein, in whole or in part, without
the prior written consent of ICM, which will not be unreasonably withheld or delayed.
Prior to any assignment, OWNER shall obtain from such assignee a written instrument, in
form and substance reasonably acceptable to ICM, agreeing to be bound by all the terms and
provisions of this License Agreement. Any assignment of this License Agreement shall not
release OWNER from (i) its duties and obligations hereunder concerning the disclosure and
use of the Proprietary

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	 	 	 	Property by OWNER or its Representatives, or (ii) damages to ICM resulting from, or arising
out of, a breach of such duties or obligations by OWNER or its Representatives. ICM may
assign its right, title and interest in the Proprietary Property, in whole or part, subject
to the limited license granted herein.
	 
	 	9.	 	The Proprietary Property is confidential and proprietary. OWNER shall keep the
Proprietary Property confidential and shall use all reasonable efforts to maintain the
Proprietary Property as secret and confidential for the sole use of OWNER and its
Representatives for the Purpose. OWNER shall retain all Proprietary Property at its
principal place of business and/or the Plant. OWNER shall not at any time without ICM’s
prior written consent, copy, duplicate, record, or otherwise reproduce the Proprietary
Property, in whole or in part, or otherwise make the same available to any unauthorized
person provided, OWNER shall be permitted to copy, duplicate or otherwise reproduce the
Proprietary Property in whole or in part in connection with, and to the extent it is
necessary and essential for, the Purpose so long as all such copies, duplicates or
reproductions are kept at its principal place of business and/or the Plant and are treated
the same as any other Proprietary Property. OWNER shall not disclose the Proprietary
Property except to its Representatives who are directly involved with the Purpose, and even
then only to such extent as is necessary and essential for such Representative’s
involvement. OWNER shall inform such Representatives of the confidential and proprietary
nature of such information and, if requested by ICM, OWNER shall obtain from such
Representative a written instrument, in form and substance reasonably acceptable to ICM,
agreeing to be bound by all of the terms and provisions of this License Agreement to the
same extent as OWNER. OWNER shall make all reasonable efforts to safeguard the Proprietary
Property from disclosure by its Representatives to anyone other than permitted hereby.
OWNER shall notify ICM immediately upon discovery of any unauthorized use or disclosure of
the Proprietary Property, or any other breach of this License Agreement by OWNER or its
Representatives, and shall cooperate with ICM in every reasonable way to help ICM regain
possession of the Proprietary Property and prevent its further unauthorized use or
disclosure. In the event that OWNER or its Representatives are required by law
to disclose the Proprietary Property, OWNER shall provide ICM with prompt written notice of
same so that ICM may seek a protective order or other appropriate remedy. In the event
that such protective order or other appropriate remedy is not obtained, OWNER or its
Representatives will furnish only that portion of the Proprietary Property which in the
reasonable opinion of its or their legal counsel is legally required and will exercise its
reasonable efforts to obtain reliable assurance that the Proprietary Property so disclosed
will be accorded confidential treatment.
	 
	 	10.	 	OWNER agrees to indemnify ICM for any and all damages (including, without limitation,
reasonable attorneys’ fees) arising out of or resulting from any unauthorized disclosure or
use of the Proprietary Property by OWNER or its Representatives. OWNER agrees that ICM
would be irreparably damaged by reason of a violation of the provisions contained herein
and that any remedy at law for a breach of such provisions would be inadequate. OWNER
agrees that ICM shall be entitled to seek injunctive or other equitable relief in a court
of competent jurisdiction against OWNER or its Representatives for any unauthorized
disclosure or use of the Proprietary Property without the necessity of proving actual
monetary loss or posting any bond. It is expressly understood that the remedy described
herein shall not be the exclusive remedy of ICM for any breach of such covenants, and ICM
shall be entitled to seek such other relief or remedy, at law or in equity, to which it may
be entitled as a consequence of any breach of such duties or obligations.

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	 	11.	 	The duties and obligations of OWNER under this License Agreement, and all provisions
relating to the enforcement of such duties and obligations shall survive and remain in full
force and effect notwithstanding any termination or expiration of the Contract or this
License Agreement.
	 
	 	12.	 	ICM may terminate this License Agreement upon written notice to OWNER if OWNER
willfully or wantonly (a) uses the Proprietary Property for any purpose, or (b) discloses
the Proprietary Property to anyone, in each case other than permitted herein. Upon
termination of this License Agreement, OWNER shall cease using the Proprietary Property for
any purpose (including the Purpose) and, upon request by ICM, shall promptly return to ICM
all documents or other materials in OWNER’s or its Representatives’ possession that contain
Proprietary Property in whatever format, whether written or electronic, including any and
all copies or reproductions of the Proprietary Property. OWNER shall permanently delete
all such Proprietary Property from its computer hard drives and any other electronic
storage medium (including any backup or archive system). OWNER shall deliver to ICM a
written certificate which certifies that all electronic copies or reproductions of the
Proprietary Property have been permanently deleted.
	 
	 	13.	 	The laws of the State of Kansas, United States of America (or US), shall govern the
validity of the provisions contained herein, the construction of such provisions, and the
interpretation of the rights and duties of the parties. Any legal action brought to
enforce or construe the provisions of this License Agreement shall be brought in the
federal or state courts located in Wichita, Kansas, and the parties agree to and hereby
submit to the exclusive jurisdiction of such courts and agree that they will not invoke the
doctrine of forum non conveniens or other similar defenses in any such action brought in
such courts. Notwithstanding the foregoing, nothing in this License Agreement will affect
any right ICM may otherwise have to bring any action or proceeding relating to this License
Agreement against OWNER or its properties in the courts of any jurisdiction. In the event
the Plant is located in, or OWNER is organized under the laws of, a country other than the
US, OWNER hereby specifically agrees that any injunctive or other equitable relief granted
by a court located in the State of Kansas, US, or any award by a court located in the State
of Kansas, shall be specifically enforceable as a foreign judgment in the country in which
the Plant is located, OWNER is organized or both, as the case may be, and agrees not to
contest the validity of such relief or award in such foreign jurisdiction, regardless of
whether the laws of such foreign jurisdiction would otherwise authorize such injunctive or
other equitable relief, or award.
	 
	 	14.	 	OWNER hereby agrees to waive all claims against ICM and ICM’s Representatives for any
consequential damages that may arise out of or relate to this License Agreement, the
Contract or the Proprietary Property whether arising in contract, warranty, tort (including
negligence), strict liability or otherwise, including but not limited to losses of use,
profits, business, reputation or financing. OWNER further agrees that the aggregate
recovery of OWNER and Fagen (and everyone claiming by or through OWNER and Fagen), as a
whole, against ICM and ICM’s Representatives, collectively, for any and all claims that
arise out of, relate to or result from this License Agreement, the Proprietary Property or
the Contract, whether arising in contract, warranty, tort (including negligence), strict
liability or otherwise, shall not exceed One Million US Dollars ($1,000,000).
	 
	 	15.	 	The terms and conditions of this License Agreement constitute the entire agreement
between the parties with respect to the subject matter hereof and supersede any prior
understandings, agreements or representations by or between the parties, written or oral.
Any rule of construction to the effect that any ambiguity is to be resolved against the
drafting party shall not be applicable in the interpretation of this License Agreement.
This License Agreement may not be modified or

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	 	 	 	amended at any time without the written consent of the parties.

	 	16.	 	All notices, requests, demands, reports, statements or other communications (herein
referred to collectively as “Notices”) required to be given hereunder or relating to this
License Agreement shall be in writing and shall be deemed to have been duly given if
transmitted by personal delivery or mailed by certified mail, return receipt requested,
postage prepaid, to the address of the party as set forth below. Any such Notice shall be
deemed to be delivered and received as of the date so delivered, if delivered personally,
or as of the third business day following the day sent, if sent by certified mail. Any
party may, at any time, designate a different address to which Notices shall be directed by
providing written notice in the manner set forth in this paragraph.
	 
	 	17.	 	In the event that any of the terms, conditions, covenants or agreements contained in
this License Agreement, or the application of any thereof, shall be held by a court of
competent jurisdiction to be invalid, illegal or unenforceable, such term, condition,
covenant or agreement shall be deemed void ab initio and shall be deemed severed from this
License Agreement. In such event, and except if such determination by a court of competent
jurisdiction materially changes the rights, benefits and obligations of the parties under
this License Agreement, the remaining provisions of this License Agreement shall remain
unchanged unaffected and unimpaired thereby and, to the extent possible, such remaining
provisions shall be construed such that the purpose of this License Agreement and the
intent of the parties can be achieved in a lawful manner.
	 
	 	18.	 	The duties and obligations herein contained shall bind, and the benefits and advantages
shall inure to, the respective successors and permitted assigns of the parties hereto.
	 
	 	19.	 	The waiver by any party hereto of the breach of any term, covenant, agreement or
condition herein contained shall not be deemed a waiver of any subsequent breach of the
same or any other term, covenant, agreement or condition herein, nor shall any custom,
practice or course of dealings arising among the parties hereto in the administration
hereof be construed as a waiver or diminution of the right of any party hereto to insist
upon the strict performance by any other party of the terms, covenants, agreement and
conditions herein contained.
	 
	 	20.	 	In this License Agreement, where applicable, (i) references to the singular shall
include the plural and references to the plural shall include the singular, and (ii)
references to the male, female, or neuter gender shall include references to all other such
genders where the context so requires.

	 	 	 
	OWNER:

	 	DESIGN-BUILDER:
	 
	 	 
	Val-E Ethanol, LLC

	 	ICM, Inc.
	 

	 	 
	(Name of Owner)

	 	(Name of Owner)
	 
	 	 
	/s/ CLIFFORD F. MESNER

	 	/s/ DAVE VANDER GRIEND
	 

	 	 
	(Signature)

	 	(Signature)
	 
	 	 
	Clifford F. Mesner

	 	Dave Vander Griend
	 

	 	 
	(Printed Name)

	 	(Printed Name)
	 
	 	 
	Chairman of the Board

	 	CEO
	 

	 	 
	(Title)

	 	(Title)

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	Date: 01/09/06

	 	Date: 01/17/06
	 
	 	 
	Address for giving notices:

	 	Address for giving notices:
	 
	 	 
	 

	 	301 N First Street
	 

	 	 Colwich,
KS 67030
	 

	 	 

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EXHIBIT E

Schedule of Values

VAL-E ETHANOL, LLC

40 MGPY ETHANOL PLANT

ORD, NE

1/06/2006

	 	 	 	 	 
	 	 	DESCRIPTION 	 	VALUE
	1
	 	MOBILIZATION	 	*****
	2
	 	ENGINEERING	 	*****
	3
	 	GENERAL CONDITIONS	 	*****
	4
	 	SITEWORK	 	*****
	5
	 	CONCRETE	 	*****
	6
	 	MASONRY / ARCHITECTURAL	 	*****
	7
	 	STRUCTURAL STEEL – MISC. METALS	 	*****
	8
	 	PRE-ENGINEERED BUILDINGS	 	*****
	9
	 	GRAIN HANDLING SYSTEM	 	*****
	10
	 	PROCESS TANKS & VESSELS	 	*****
	11
	 	FIELD ERECTED TANKS	 	*****
	12
	 	HEAT EXCHANGERS	 	*****
	13
	 	PROCESS EQUIPMENT	 	*****
	14
	 	CENTRIFUGES	 	*****
	15
	 	CHILLER	 	*****
	16
	 	TRUCK SCALES & PROBE	 	*****
	17
	 	ETHANOL LOADOUT & FLARE SYSTEM	 	*****
	18
	 	COOLING TOWER	 	*****
	19
	 	DRYER SYSTEM	 	*****
	20
	 	THERMAL OXIDIZER	 	*****
	21
	 	METHANATOR	 	*****
	22
	 	PROCESS PIPING & VALVES	 	*****
	23
	 	PAINTING	 	*****
	24
	 	INSULATION	 	*****
	25
	 	PLUMBING & HVAC	 	*****
	26
	 	ELECTRICAL	 	*****
	27
	 	INSTRUMENTATION	 	*****
	28
	 	START-UP	 	*****
	29
	 	DEMOBILIZATION	 	*****
	 
	 	 	 	 
	 
	 	TOTAL CONTRACT AMOUNT	 	$51,808,760

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EXHIBIT F

Form of Progress Report

Progress Report (Example)

	A.	 	Project Overview – Brief description of project including plant capacity, major contractors
(if applicable), completion dates (including Substantial Completion, Final Completion Date,
estimated performance testing start, etc.), etc. Should also include progress reporting
period.

	B.	 	Project Status – Divided into engineering, construction, and Owner responsibilities as well
as a summary describing project status as a whole. Subsections include:

          B1 – Engineering – Current month progress and status as compared to plan, 1-month look
ahead/goals, issues being worked, critical path activities, and statement regarding support of
construction activities.

          B2 – Construction – Current month progress and status as compared to plan, 1-month look
ahead/goals, issues being worked, critical path activities, procurement activities (if applicable),
subcontracting activities (if applicable), and statement regarding completion of owner
responsibilities as it relates to Design-Builder completion of work schedule. In addition, it
should include:

	A.	 	Site Work and Utilities – Owner Responsibility

	 	1.	 	Plant Fire Water Loop – 98% Complete.
	 
	 	2.	 	Railroad: Rail ties on tracks A and B are up to Rail Load out; tracks C and D
are installed past DDG building to rail car storage area. Tracks A and B to be complete
when Grains building is complete.
	 
	 	3.	 	Power Company is 100% complete on permanent power.
	 
	 	4.	 	Gas line to plant has commenced, gas to be on site by Oct. 21.
	 
	 	5.	 	City water main from main entrance to tank is installed, awaiting word from City.
	 
	 	6.	 	Road work has started at main entrance and Admin. Area, final grading has
started in these areas as well.

	B.	 	Grains Storage & Handling

	 	1.	 	Grains receiving building is 95% complete.
	 
	 	2.	 	Continuing to installing all miscellaneous ladders and platforms for collectors
and bag houses. Continuing to install dust collection system for Grains receiving.
	 
	 	3.	 	Electrical is right behind installing conduit and wire to equipment.
	 
	 	4.	 	Pit area 95% complete.
	 
	 	5.	 	Continue to install main legs for Grain to Silos.
	 
	 	6.	 	HVAC equipment on site, yet to be installed.

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	C.	 	Energy Building

	 	1.	 	99% of Equipment installed.
	 
	 	2.	 	Electrical nearly 94% complete. Have started bumping motors and conveyors for
rotation.
	 
	 	3.	 	Steel 100% complete.
	 
	 	4.	 	All end walls are complete with siding. Half of the roof is installed.
	 
	 	5.	 	Mechanical piping is at 30% complete.
	 
	 	6.	 	All RO equipment is installed. All totes are installed. Tubing to Boiler and DA
has started. Electrical completing installation for power and controls to RO equipment.

	D.	 	Process / Fermentation Building

	 	1.	 	99% of the Equipment is installed.
	 
	 	2.	 	Piping is 98% complete.
	 
	 	3.	 	Vinyl Composite tile 70% complete. Ceramic tile to bathrooms is complete.
	 
	 	4.	 	HVAC equipment installation is complete. Final tie ins for office area, server
room and maintenance room continuing.

	E.	 	Distillation and Evap Area

	 	1.	 	Mechanical is about 98% complete. Complete small bore piping where needed.

	 
	 	2.	 	Electrical is behind Mechanical installing instruments and wiring.

	F.	 	Tank Farm

	 	1.	 	Mechanical is 98% complete, waiting on Specialty items to arrive for installation.

	 
	 	2.	 	All pumps have been installed and piping is complete to and from.
	 
	 	3.	 	Electrical continuing installation of cable tray, 95% of instruments are
installed, wire is about 85% complete.

	G.	 	Chiller – Cooling Tower

	 	1.	 	Chiller Building –Overhead doors have been completed.
	 
	 	2.	 	Cooling Tower erection is 100% complete.
	 
	 	3.	 	HVAC unit on site, yet to be installed.

B3 – Commissioning and Start-up – Activities related to commissioning and start-up including
training completed, turnover packages completed, status of testing procedures, etc.

B4 – Total Project – Overall project status, including critical path activities.

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C – Health and Safety – Summary including number of craft, number of first aid cases, number of
recordable cases, and number of lost time accidents. If applicable, safety programs implemented at
site, etc.

D – Schedule – Including most recent updated schedule accompanied with schedule overview,
comparison to baseline, and critical path activities. The schedule should correspond to
application for payment.

E – Financial – Including total of invoices submitted to date as well as change orders submitted
and status.

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EXHIBIT G

Required Permits

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Responsibility	 	 	 	 
	 	 	Type of	 	for Obtaining	 	Assistance in	 	 
	No.	 	Application/Permit	 	Permit	 	Preparation	 	Notes
	 
	 	 	 	 	 	 	 	 
	1

	 	Underground Utility Locating Service
	 	Design-Builder/Owner
	 	 	 	Notification service for underground work.
	 
	 	 	 	 	 	 	 	 
	2

	 	Septic Tank & Drain Field Permit
	 	Owner	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	3

	 	Railroad Permit/Approval
	 	Owner
	 	Design-Builder	 	 
	 
	 	 	 	 	 	 	 	 
	4

	 	Archeological Survey
	 	Owner	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	5

	 	Highway Access Permit
	 	Owner
	 	 	 	State Department of Transportation or County
	 
	 	 	 	 	 	 	 	 
	6

	 	Building Permits
	 	Design-Builder	 	 	 	 
	 

	 	Mechanical
	 	Design-Builder	 	 	 	 
	 

	 	Electrical
	 	Design-Builder	 	 	 	 
	 

	 	Structures
	 	Design-Builder	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	7

	 	Construction Air Permit
	 	Owner
	 	Design-Builder	 	 
	 
	 	 	 	 	 	 	 	 
	8

	 	Construction Permit
	 	Owner
	 	Design-Builder	 	 
	 
	 	 	 	 	 	 	 	 
	9

	 	Operations Permit
	 	Owner
	 	Design-Builder	 	 
	 
	 	 	 	 	 	 	 	 
	10

	 	Wastewater Permit
	 	Owner
	 	Design-Builder	 	 
	 
	 	 	 	 	 	 	 	 
	11

	 	Water Appropriation Permit
	 	Owner
	 	Design-Builder	 	 
	 
	 	 	 	 	 	 	 	 
	12

	 	Fire Protection
	 	Owner
	 	Design-Builder	 	 
	 
	 	 	 	 	 	 	 	 
	13

	 	Above Ground Storage Tank Permit
	 	Design-Builder	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	14

	 	TTB Permit
	 	Owner	 	 	 	 

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EXHIBIT H

Form of Performance Bond

PERFORMANCE BOND

The American Institute of Architects,

AIA Document No. A312 (December, 1984 Edition)

Any singular reference to Contractor, Surety, Owner or other

party shall be considered plural where applicable.

	 	 	 
	CONTRACTOR (Name and Address):

	 	Amount: [Amount]
	Fagen, Inc.

	 	Description (Name and Location):
	P. O. Box 159

	 	[Project Name and Location]
	Granite Falls, MN 56241

	 	OWNER (Name and Address):
	CONSTRUCTION CONTRACT

	 	[Owner Name/Address]
	Date:

	 	SURETY (Name and Principal Place of
Business): [Name/Place of Business]

BOND#

Date (Not earlier than Construction Contract Date):

Amount:

					
	Modifications to this Bond:
	 	o None
	 	o See Page 2                    

	 	 	 	 	 	 	 	 	 	 	 
	CONTRACTOR AS PRINCIPAL	 	SURETY
	 
	 	 	 	 	 	 	 	 	 	 
	Company:

	 	(Corporate Seal)
	 	Company:
	 	(Corporate Seal)	 	 	 	 

	 	 	 	 	 	 	 
	Fagen, Inc.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Signature:

	 	 	 	Signature:	 	 
	 

	 	 

	Name and Title:

	 	 	 	Name and Title:	 	 
	 

	 	 
	 	 	 	 

(Any additional signatures appear an page 2.)

(FOR INFORMATION Only- Name, Address and Telephone)

OWNER’S REPRESENTATIVE (Architect, Engineer or other party):

AGENT OR BROKER:

1.      The Contractor and the Surety, jointly and severally, bind themselves, their heirs, executors,
administrators, successors and assigns to the Owner for the performance of the Construction
Contract, which is incorporated herein by reference.

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2.      If the Contractor performs the Construction Contract, the Surety and the Contractor shall have
no obligation under this Bond, except to participate in conferences
as provided in Subparagraph 3.1.

3.      If there is no Owner Default, the Surety’s obligation under this Bond shall arise after:

3.1      The Owner has notified the Contractor and the Surety at its address described in Paragraph 10
below that the Owner is considering declaring a Contractor Default and has requested and attempted
to arrange a conference with the Contractor and the Surety to be held not later than fifteen days
after receipt of such notice to discuss methods of performing the Construction Contract. If the
Owner, the Contractor and the Surety agree, the Contractor shall be allowed a reasonable time to
perform the Construction Contract, but such an agreement shall not waive the Owner’s right, if any,
subsequently to declare a Contractor Default; and

3.2      The Owner has declared a Contractor Default and formally terminated the Contractor’s right to
complete the contract. Such Contractor Default shall not be declared earlier than twenty days
after the Contractor and Surety have received notice as provided in Subparagraph 3.1; and

3.3      The Owner has agreed to pay the Balance of the Contract Price to the Surety in accordance with
the terms of the Construction Contract or to a contractor selected to perform the Construction
Contract in accordance with the terms of the contract with the Owner.

4.        When the Owner has satisfied the conditions of Paragraph 3, the Surety shall promptly and at the
Surety’s expense take one of the following actions:

4.1      Arrange for the Contractor with consent of the Owner, to perform and complete the Construction
Contract; or

4.2      Undertake to perform and complete the Construction Contract itself, through its agents or
through independent contractors; or

4.3      Obtain bids or negotiated proposals from qualified contractors acceptable to the Owner for a
contract for performance and completion of the Construction Contract, arrange for a contract to be
prepared for execution by the Owner and the contractor selected with the Owner’s concurrence, to be
secured with performance and payment bonds executed by a qualified surety equivalent to the bonds
issued on the Construction Contract, and pay to the Owner the amount of damages as described in
Paragraph 6 in excess of the Balance of the Contract Price incurred by the Owner resulting from the
Contractor’s default; or

4.4      Waive its right to perform and complete, arrange for completion, or obtain a new contractor and
with reasonable promptness under the circumstances:

.1      After investigation, determine the amount for which it may be liable to the Owner and, as
soon as practicable after the amount is determined, tender payment therefor to the Owner; or

.2      Deny liability in whole or in part and notify the Owner citing reasons therefor.

5.      If the Surety does not proceed as provided in Paragraph 4 with reasonable promptness, the Surety
shall be deemed to be in default on this Bond fifteen days after receipt of an additional written
notice from the Owner to the Surety demanding that the Surety perform its Obligations under this
Bond, and the Owner shall be entitled to enforce any remedy available to the Owner. If the Surety
proceeds as provided in Subparagraph 4.4, and the Owner refuses the payment tendered or the Surety
has denied liability, in whole or in part, without further notice the Owner shall be entitled to
enforce any remedy available to the Owner.

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6.      After the Owner has terminated the Contractor’s right to complete the Construction Contract, and
if the Surety elects to act under Subparagraph 4.1, 4.2, or 4.3 above, then the responsibilities of
the Surety to the Owner shall not be greater than those of the Contractor under the Construction
Contract, and the responsibilities of the Owner to the Surety shall not be greater than those of
the Owner under the Construction Contract. To the limit of the amount of this Bond, but subject to
commitment by the Owner of the Balance of the Contract Price to mitigation of costs and damages on
the Construction Contract, the Surety is obligated without duplication for:

6.1      The responsibilities of the Contractor for correction of defective work and completion of the
Construction Contract;

6.2      Additional legal design professional and delay costs resulting from the Contractor’s Default,
and resulting from the actions or failure to act of the Surety under Paragraph 4; and

6.3      Liquidated damages, or if no liquidated damages are specified in the Construction Contract,
actual damages caused by delayed performance or non-performance of the Contractor.

7.      The Surety shall not be liable to the Owner or others for obligations of the Contractor that are
unrelated to the Construction Contract and the Balance of the Contract Price shall not be reduced
or set off on account of any such unrelated obligations. No right of action shall accrue on this
Bond to any person or entity other than the Owner or its heirs, executors, administrators or
successors.

8.      The Surety hereby waives notice of any change, including changes of time, to the Construction
Contract or to related subcontracts, purchase orders and other obligations.

9.      Any proceeding, legal or equitable, under this Bond may be instituted in any court of competent
jurisdiction in the location in which the work or part of the work is located and shall be
instituted within two years after Contractor Default or within two years after the Contractor
ceased working or within two years after the Surety refuses or fails to perform its obligations
under this Bond, whichever occurs first. If the provisions of this Paragraph are void or
prohibited by law, the minimum period of limitation available to sureties as a defense in the
jurisdiction of the suit shall be applicable.

10.      Notice to the Surety, the Owner or the Contractor shall be mailed or delivered to the address
shown on the signature page.

11.      When this Bond has been furnished to comply with a statutory or other legal requirement in the
location where the construction was to be performed, any provision in this Bond conflicting with
said statutory or legal requirement shall be deemed deleted herefrom and provisions conforming to
such statutory or other legal requirement shall be deemed incorporated herein. The intent is that
this Bond shall be construed as a statutory bond and not as a common law bond.

12.      DEFINITIONS

12.1      Balance of the Contract Price: The total amount payable by the Owner to the Contractor under
the Construction Contract after all proper adjustments have been made, including allowance to the
Contractor of any amounts received or to be received by the Owner in settlement of insurance or
other claims for damages to which the Contractor is entitled, reduced by all valid and proper
payments made to or on behalf of the Contractor under the Construction Contract.

12.2      Construction Contract: The agreement between the Owner and the Contractor identified on the
signature page, including all Contract Documents and changes thereto.

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12.3      Contractor Default: Failure of the Contractor, which has neither been remedied nor waived, to
perform or otherwise to comply with the terms of the Construction Contract.

12.4      Owner Default: Failure of the Owner, which has neither been remedied nor waived, to pay the
Contractor as required by the Construction Contract or to perform and complete or comply with the
other terms thereof.

MODIFICATIONS TO THIS BOND ARE AS FOLLOWS:

This bond is subject to the attached Dual Obligee Rider dated

	 	 	 
	 

	 	 
	 

	 	 
	 

	 	 

(Space is provided below for additional signatures of added parties other than those appearing
on the cover page.)

	 	 	 	 	 	 	 	 	 	 	 
	CONTRACTOR AS PRINCIPAL	 	SURETY
	(Corporate Seal)	 	(Corporate Seal)
	 
	 	 	 	 	 	 	 	 	 	 
	Company:

	 	 	 	Company:	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Address:

	 	 	 	Address:	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name and Title:

	 	 	 	Name and Title:	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Signature:

	 	 	 	Signature:	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

Val-E Ethanol, LLC

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January 6, 2006

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DUAL OBLIGEE RIDER

(TO BE ATTACHED TO BOND AT TIME OF ISSUANCE)

TO BE ATTACHED TO AND FORM PART OF Performance and Payment Bond NO.                     , dated concurrently
with the execution of this Rider, issued by the                                         , a                      corporation, as
Surety, on behalf of Fagen, Inc., as Principal, and in favor of                     , as Obligee.

     IT IS HEREBY UNDERSTOOD AND AGREED that the above described bond(s) are hereby amended to
include the following paragraph:

Notwithstanding anything contained herein to the contrary, there shall be no
liability on the part of the Principal or Surety under this bond to the Obligees, or
either of them, unless the Obligees, or either of them, shall make payments to the
Principal or to the Surety in case it arranges for completion of the Contract upon
default of the Principal, strictly in accordance with the terms of said Contract as
to payments, and shall perform all the other obligations required to be performed
under said Contract at the time and in the manner therein set forth.

     IT IS FURTHER UNDERSTOOD AND AGREED that nothing herein contained shall be held to
change, alter or vary the terms of the above described bond(s) except as hereinbefore set forth.

SIGNED, SEALED AND DATED this ___day of                                         , 200_.

	 	 	 	 	 
	 	 	Fagen, Inc.
	 
	 	 	 	 
	 	 	 
	 	 	(Contractor)
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	[                                                            ]
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	(Surety)
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 

Val-E Ethanol, LLC

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January 6, 2006

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EXHIBIT I

Form of Payment Bond

PAYMENT BOND

The American Institute of Architects,

AIA Document No. A312 (December, 1984 Edition)

Any singular reference to Contractor, Surety, Owner or other

party shall be considered plural where applicable.

	 	 	 
	CONTRACTOR (Name and Address):

	 	 SURETY (Name and Principal Place
	Fagen, Inc.

	 	Place of Business):
	P. O. Box 159
	 	 
	Granite Falls, MN 56241
	 	 
	OWNER (Name and Address):
	 	 
	[NAME AND ADDRESS]
	 	 

CONSTRUCTION CONTRACT

Date:

Amount:

Description (Name and Location):

BOND#

Date (Not earlier than Construction Contract Date):

Amount:

					
	Modifications to this Bond:
	 	o None
	 	o See Page 2                    

	 	 	 	 	 	 	 	 	 	 	 
	CONTRACTOR AS PRINCIPAL	 	SURETY
	 
	 	 	 	 	 	 	 	 	 	 
	Company:

	 	(Corporate Seal)
	 	Company:
	 	(Corporate Seal)	 	 	 	 

	 	 	 	 	 	 	 
	Fagen, Inc.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Signature:

	 	 	 	Signature:	 	 
	 

	 	 
	 	 	 	 
	Name and Title:

	 	 	 	Name and Title:	 	 
	 

	 	 
	 	 	 	 

(Any additional signatures appear an page 2.)

(FOR INFORMATION Only- Name, Address and Telephone)

OWNER’S REPRESENTATIVE (Architect, Engineer or other party):

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AGENT or BROKER:

     The Contractor and the Surety, jointly and severally, bind themselves, their heirs, executors,
administrators, successors and assigns to the Owner to pay for labor, materials and equipment
furnished for use in the performance of the Construction Contract, which is incorporated herein by
reference.

     With respect to the Owner, this obligation shall be null and void if the Contractor:

     1.1 Promptly makes payment, directly or indirectly, for all sums due Claimants, and

     1.2 Defends, indemnifies and holds harmless the Owner from claims, demands, liens or suits by
any person or entity whose claim, demand, lien or suit is for the payment for labor, materials or
equipment furnished for use in the performance of the Construction Contract, provided the Owner has
promptly notified the Contractor and the Surety (at the address described in Paragraph 12) of any
claims; demands, liens or suits and tendered defense of such claims, demands, liens or suits to the
Contractor and the Surety, and provided there is no Owner Default.

     With respect to Claimants, this obligation shall be null and void if the Contractor promptly
makes payment, directly or Indirectly, for all sums due.

     The Surety shall have no obligation to Claimants under this Bond until:

          1.2.1 Claimants who are employed by or have a direct contract with the Contractor have given
notice to the Surety (at the address described in Paragraph 12) and sent a copy, or notice thereof,
to the owner, stating that a claim is being made under this Bond and, with substantial accuracy,
the amount of the claim.

          1.2.2 Claimants who do not have a direct contract with the Contractor:

          1.2.3 Have furnished written notice to the Contractor and sent a copy, or notice thereof, to
the Owner, within 90 days after having last performed labor or last furnished materials or
equipment included in the claim stating, with substantial accuracy, the amount of the claim and the
name of the party to whom the materials were furnished or supplied or for whom the labor was done
or performed; and

          1.2.4 Have either received a rejection in whole or in part from the Contractor, or not
received within 30 days of furnishing the above notice any communication from the Contractor by
which the Contractor has indicated the claim will be paid directly or Indirectly; and

          1.2.5 Not having been paid within the above 30 days, have sent a written notice to the Surety
(at the address described in Paragraph 12) and sent a copy, or notice thereof, to the Owner,
stating that a claim is being made under this Bond and enclosing a copy of the previous written
notice furnished to the Contractor.

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     If a notice required by Paragraph 4 is given by the Owner to the Contractor or to the Surety
that is sufficient compliance.

     When the Claimant has satisfied the conditions of Paragraph 4, the Surety shall promptly and
at the Surety’s expense take the following actions:

          1.2.6 Send an answer to the Claimant, with a copy to the Owner, within 45 days after receipt
of the claim, stating the amounts that are undisputed and the basis for challenging any amounts
that are disputed.

          1.2.7 Pay or arrange for payment of any undisputed amounts.

     The Surety’s total obligation shall not exceed the amount of this Bond, and the amount of this
Bond shall be credited for any payments made in good faith by the Surety.

     Amounts owed by the Owner to the Contractor under the Construction Contract shall be used for
the performance of the Construction Contract and to satisfy claims, if any, under any Construction
Performance Bond. By the Contractor furnishing and the Owner accepting this Bond, they agree that
all funds earned by the Contractor in the performance of the Construction Contract are dedicated to
satisfy obligations of the Contractor and the Surety under this Bond, subject to the Owner’s
priority to use the funds for the completion of the work.

     The Surety shall not be liable to the Owner, Claimants or others for obligations of the
Contractor that are unrelated to the Construction Contract. The Owner shall not be liable for
payment of any costs or expenses of any Claimant under this Bond, and shall have under this Bond no
obligation to make payments to, give notices on behalf of, or otherwise have obligations to
Claimants under this Bond.

     The Surety hereby waives notice of any change, including changes of time, to the Construction
Contract or to related subcontracts, purchase orders and other obligations.

     No suit or action shall be commenced by a Claimant under this Bond other than in a court of
competent jurisdiction in the location in which the work or part of the work is located or after
the expiration of one year from the date (1) on which the Claimant gave the notice required by
Subparagraph 4.1 or Clause 4.2.3, or (2) on which the last labor or service was performed by anyone
or the last materials or equipment were furnished by anyone under the Construction Contract,
whichever of (1) or (2) first occurs. If the provisions of this Paragraph are void or prohibited by
law, the minimum period of limitation available to sureties as a defense in the jurisdiction of the
suit shall be applicable.

     Notice to the Surety, the Owner or the Contractor shall be mailed or delivered to the address
shown on the signature page. Actual receipt of notice by Surety, the Owner or the Contractor,
however accomplished, shall be sufficient compliance as of the date received at the address shown
on the signature page.

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     When this Bond has been furnished to comply with a statutory or other legal requirement in the
location where the construction was to be performed, any provision in this Bond conflicting with
said statutory or legal requirement shall be deemed deleted herefrom and provisions conforming to
such statutory or other legal requirement shall be deemed incorporated herein. The intent is that
this Bond shall be construed as a statutory bond and not as a common law bond.

     Upon request by any person or entity appearing to be a potential beneficiary of this Bond, the
Contractor shall promptly furnish a copy of this Bond or shall permit a copy to be made.

DEFINITIONS

     Claimant: An individual or entity having a direct contract with the Contractor or with a
subcontractor of the Contractor to furnish labor, materials or equipment for use in the performance
of the Contract. The intent of this Bond shall be to include without limitation in the terms
“labor, materials or equipment” that part of water, gas, power, light, heat, oil, gasoline,
telephone service or rental equipment used in the Construction Contract, architectural and
engineering services required for performance of the work of the Contractor and the Contractor’s
subcontractors, and all other items for which a mechanic’s lien may be asserted in the jurisdiction
where the labor, materials or equipment were furnished.

     Construction Contract: The agreement between the Owner and the Contractor identified on the
signature page, including all Contract Documents and changes thereto.

     Owner Default: Failure of the Owner, which has neither been remedied nor waived, to pay the
Contractor as required by the Construction Contract or to perform and complete or comply with the
other terms thereof.

MODIFICATIONS TO THIS BOND ARE AS FOLLOWS:

This bond is subject to the attached Dual Obligee Rider dated [           ].

	 	 	 
	 

	 	 
	 

	 	 
	 

	 	 

(Space is provided below for additional signatures of added parties other than those appearing on
the cover page.)

	 	 	 	 	 	 	 	 	 	 	 
	CONTRACTOR AS PRINCIPAL	 	SURETY
	(Corporate Seal)	 	(Corporate Seal)
	 
	 	 	 	 	 	 	 	 	 	 
	Company:

	 	 	 	Company:	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Address:

	 	 	 	Address:	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name and Title:

	 	 	 	Name and Title:	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Signature:

	 	 	 	Signature:	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

Val-E Ethanol, LLC

Fagen, Inc. Final

January 6, 2006

I-4

 

DUAL OBLIGEE RIDER

(TO BE ATTACHED TO BOND AT TIME OF ISSUANCE)

TO BE ATTACHED TO AND FORM PART OF Performance and Payment Bond NO.                     , dated concurrently
with the execution of this Rider, issued by the                                         , a                      corporation, as
Surety, on behalf of Fagen, Inc., as Principal, and in favor of                                         , as Obligee.

IT IS HEREBY UNDERSTOOD AND AGREED that the above described bond(s) are hereby amended to include
the following paragraph:

Notwithstanding anything contained herein to the contrary, there shall be no liability on the part
of the Principal or Surety under this bond to the Obligees, or either of them, unless the Obligees,
or either of them, shall make payments to the Principal or to the Surety in case it arranges for
completion of the Contract upon default of the Principal, strictly in accordance with the terms of
said Contract as to payments, and shall perform all the other obligations required to be performed
under said Contract at the time and in the manner therein set forth.

IT IS FURTHER UNDERSTOOD AND AGREED that nothing herein contained shall be held to change, alter or
vary the terms of the above described bond(s) except as hereinbefore set forth.
SIGNED, SEALED AND DATED this ___day of                                         , 200_.

	 	 	 	 	 
	 	 	Fagen, Inc.
	 
	 	 	 	 
	 	 	 
	 	 	(Contractor)
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	[                                                            ]
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	(Surety)
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 

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Fagen, Inc. Final

January 6, 2006

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EXHIBIT J

Work Schedule

	 	 	 
	 	 	NUMBER OF DAYS TO
	 	 	BE COMPLETED AFTER
	OWNER’S RESPONSIBILITIES	 	NOTICE TO PROCEED
	Notice to Proceed

	 	*****
	Storm Water Permits Complete

	 	*****
	Natural Gas/Propane Supply Agreements
Complete

	 	*****
	Water Supply and Service Agreements Complete

	 	*****
	Risk Insurance Provider Selected/Fire
Protection Requirements Known

	 	*****
	NPDES Discharge Point Selected

	 	*****
	Electrical Service

	 	*****
	Water Pre-Treatment System Design Complete

	 	*****
	Wastewater Discharge System Complete

	 	*****
	Operating Permits Complete

	 	*****
	Discharge Permits Complete

	 	*****
	Pumphouse/Water Pre-treatment System Complete

	 	*****
	Fire Protection System Complete

	 	*****
	Administration Building Complete

	 	*****
	Paving (Plant Roads) Complete

	 	*****
	Rail Spur Complete

	 	*****
	Employees Hired and Ready for Training

	 	*****
	Natural Gas Pipeline Complete

	 	*****

	 	 	 	 	 
	 	 	NUMBER OF DAYS TO
	 	 	BE COMPLETED AFTER
	DESIGN-BUILDER’S RESPONSIBILITIES	 	NOTICE TO PROCEED
	Substantial Completion

	 	 	485	 
	 
	 	 	 	 
	Final Completion

	 	 	575	 

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EXHIBIT K

Preliminary Construction Documents

To be furnished at a later date per Section 3.2.1

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January 6, 2006

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EXHIBIT L

Draw (Payment) Schedule

VAL-E ETHANOL, LLC

Ord, NE

40 MGPY ETHANOL PLANT

Monthly Draw Schedule – 16 Month Project – 485 Days

1/06/06

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Month	 	 	 	 	 	 	 	 	 	Previously	 	 	 	 
	#	 	 	 	 	 	BILLING	 	Completed	 	Total	 	% of Total
	 	1	 	 	 	 	***	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	2	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	3	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	4	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	5	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	6	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	7	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	8	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	9	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	10	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	11	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	12	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	13	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	14	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	15	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	 	 	*****	 	 	 	*****
	 	16	 	 	 	 	 	 	 	 	*****	 	 	 	*****	 	$	51,808,760	 	 	 	*****
	 	 	 	 	 	 	 	 	 	 	 	 	$	51,808,760	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	***	 	 	 	*****	 	Mobilization Fee included in 1st Billing

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EXHIBIT M

Air Emissions Application or Permit

To be furnished at a later date in accordance with terms of the Contract

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EXHIBIT N

Phase I and Phase II Engineering Services Agreement

See Phase I and Phase II Engineering Services Agreement, attached hereto

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January 6, 2006

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PHASE I AND PHASE II

ENGINEERING SERVICES AGREEMENT

BETWEEN

VAL-E ETHANOL, LLC

AND

FAGEN ENGINEERING, LLC

October 4, 2005

 

 

TABLE OF CONTENTS

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

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Phase I and Phase II Engineering Agreement
October 4, 2005

i

 

Table of Contents

(continued)

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

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October 4, 2005

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Table of Contents

(continued)

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

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Phase I and Phase II Engineering Agreement

October 4, 2005

iii

 

PHASE I AND PHASE II

ENGINEERING SERVICES AGREEMENT

     THIS
PHASE I AND PHASE II ENGINEERING SERVICES AGREEMENT (the “Agreement”) is made as of October 4,
2005, (the “Effective Date”) by and between Val-E Ethanol, LLC, a Nebraska Limited Liability
Company (the “Client”) and Fagen Engineering, LLC a Minnesota Limited Liability Company (the
“Engineer”). Each of the Client and Engineer are referred to herein individually as a “Party” and
collectively as the “Parties.”

RECITALS

     WHEREAS, Client is developing a 40 million gallons per year dry grind ethanol production
facility to be located in Ord, Nebraska (the “Plant”) to be owned and operated by Client; and

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

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

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

Article 1

Definitions; Rules of Interpretation

     1.1
Rules of Construction.

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

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

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

     1.2 Defined Terms.

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

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

Applicable Law means

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Article 2

Retention of the Agent

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

Article 3

Engineer Responsibilities

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

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

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

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

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

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

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

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

	 	a)	 	Cover Sheet
	 
	 	b)	 	Property Layout Drawing
	 
	 	c)	 	Site Grading and Drainage Drawing (Final Interior Plant Grading)

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	 	d)	 	Roadway Alignment
	 
	 	e)	 	Utility Layout (Fire Loop)
	 
	 	f)	 	Utility Layout (Potable Water)
	 
	 	g)	 	Utility Layout (Well Water) if using on-Site wells
	 
	 	h)	 	Utility Layout (Sanitary Sewer)
	 
	 	i)	 	Utility Layout (Utility Water Blowdown)
	 
	 	j)	 	Utility Layout (Natural Gas)

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

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

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

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

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

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

Article 4

Client Responsibilities

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

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     4.2 Client’s Requirements. Client shall, prior to the commencement of Services by
Engineer, provide Engineer with Client’s requirements for the Project, including objectives and
constraints, design and construction standards, bonding and insurance requirements, and contract
forms.

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

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

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

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

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

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

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

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

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Build Agreement, a failure to follow Engineer’s recommendation and such deviation or failure
caused the claims.

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

Article 5

Compensation and Payment

     5.1 Compensation. In consideration of its performance of the Services, Client shall pay
Engineer for Engineer’s time in the performance of the Services at a fixed fee of $92,500 (“Fixed
Fee”) as compensation. Engineer’s compensation under this Section 5.1 shall be pursuant to the
Fee schedule attached hereto as Exhibit A, as such schedule may be modified from time to time. The
full amount of compensation paid by Client under this Section 5.1 shall be included in and credited
to the Design-Build Agreement’s contract price if entered into upon payment in full by Client.

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

     5.3 Reimbursement of Subcontractor Expenses.

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

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

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

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

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

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

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

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

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

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

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

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

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

Article 6

Construction Cost and Cost Estimates

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

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Article 7

Termination

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

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

Article 8

Ownership of Work Product

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

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

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

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

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Article 9

Successors and Assigns

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

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

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

Article 10

Warranty

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

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

Article 11

Indemnification

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

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

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

Article 12

Dispute Resolution

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

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

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

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

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Article 13

Confidentiality

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

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

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

Article 14

Miscellaneous

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

     14.2 Severability. If any provision or any part of a provision of the Agreement shall be
finally determined to be superseded, invalid, illegal, or otherwise unenforceable pursuant to any
applicable Legal Requirements, such determination shall not impair or otherwise affect the
validity, legality, or enforceability of the remaining provision or parts of the provision of the

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

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

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

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

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

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

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

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

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

     14.11 Notice. Whenever the Agreement requires that notice be provided to a Party, notice
shall be delivered in writing to such party at the address listed below. Notice will be deemed to
have been validly given if delivered (i) in person to the individual intended to receive such
notice, (ii) by registered or by certified mail, postage prepaid to the address indicated in the
Agreement within four (4) days after being sent, or (iii) by facsimile, by the time stated in a

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machine-generated confirmation that notice was received at the facsimile number of the
intended recipient.

     If to Engineer, to:

Fagen Engineering LLC

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

Attention: John Austgen

Fax: (320) 564-4861

     with a copy to:

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

Attention: Bruce Langseth

Fax: (320)564-3278

     If to Client, to:

Mr. Ron Fagen

Val-E Ethanol, LLC

Ord, NE 68028

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

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

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IN WITNESS WHEREOF, the Parties hereto have caused their names to be hereunto subscribed by
their officers thereunto duly authorized, intending thereby that this Agreement shall be effective
as of this October 4, 2005.

	 	 	 	 	 	 	 	 	 	 	 
	VAL-E ETHANOL, LLC	 	 	 	FAGEN ENGINEERING, LLC	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Ron Fagen	 	 	 	By:	 	/s/ John R. Austgen	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Title:

	 	[ILLEGIBLE]	 	 	 	Title:	 	Vice President 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Address for giving notices:	 	 	 	Address for giving notices:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Ord, NE 68028	 	 	 	501 West Highway 212	 	 
	 	 	 	 	 	 	PO Box 159	 	 
	 	 	 	 	 	 	Granite Falls, MN 56241	 	 

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EXHIBIT A

FAGEN ENGINEERING LLC

Fee Schedule FY 2005

CONFIDENTIAL

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

Subject to Revision January 1, 2006

Val-E Ethanol, LLC

Phase I and Phase II Engineering Agreement

October 4, 2005

16

 

EXHIBIT B

Fagen Engineering LLC

Reimbursable Expense Schedule

Effective January 1, 2005

CONFIDENTIAL

	 	 	 	 	 
	Expense Code	 	Expense Description	 	Billing Rate
	BCA

	 	Blackline Print Copy — A
	 	*****
	BCB

	 	Blackline Print Copy — B
	 	*****
	BCC

	 	Blackline Print Copy — C
	 	*****
	BCD

	 	Blackline Print Copy — D
	 	*****
	BCE

	 	Blackline Print Copy — E
	 	*****
	BOA

	 	Paper Print Original  — A
	 	*****
	BOB

	 	Paper Print Original  — B
	 	*****
	BOC

	 	Paper Print Original  — C
	 	*****
	BOD

	 	Paper Print Original  — D
	 	*****
	BOE

	 	Paper Print Original  — E
	 	*****
	DISK

	 	Floppy Disk
31/2''/ea
	 	*****
	FAX

	 	Fax Machine Usage/Page
	 	*****
	LD

	 	Long Distance Phone Calls
	 	*****
	LODGING

	 	Lodging
	 	*****
	MEALS

	 	Meal Expense
	 	*****
	MILEAGE

	 	Mileage/Mile
	 	*****
	PC1

	 	Photocopies 81/2x11 (<100)/ea
	 	*****
	PC2

	 	Photocopies 11xl7/ea
	 	*****
	PC3

	 	Photocopies (>100)/ea
	 	*****
	PO

	 	Postage
	 	*****
	PROSVC

	 	Outside Professional Services
	 	*****
	PROSVCEXP

	 	Outside Professional Services Expenses
	 	*****
	FLM

	 	Film & Developing
	 	*****
	SPECCOV

	 	Specification Book — Cover & Binder/ea
	 	*****
	TRANS

	 	Transportation
	 	*****
	UPS

	 	Delivery Service Charges
	 	*****
	VELLUM

	 	Original Print/square foot
	 	*****

Subject to Revision January 1, 2006

Val-E Ethanol, LLC

Phase I and Phase II Engineering Agreement

October 4, 2005

17

 

EXHIBIT C

Client’s Deliverable Site Obligations

Phase I Deliverables

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

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

Val-E Ethanol, LLC

Phase I and Phase II Engineering Agreement

October 4, 2005

18

 

Phase II Deliverables

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

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

Val-E Ethanol, LLC

Phase I and Phase II Engineering Agreement

October 4, 2005

19

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