Document:

EX-10.17

 

Exhibit 10.17

SCHEDULE OF NAMED EXECUTIVE OFFICERS WHO HAVE ENTERED INTO THE FORM OF INDEMNIFICATION AGREEMENT AS
SET FORTH IN EXHIBIT 10.16

Each of the following Named Executive Officers has entered into a Form of Indemnification Agreement
as set forth in Exhibit 10.16 as of the date indicated below:

	 	 	 	 	 
	NAME

	 	 	 	DATE

	 
	Carlos M. Cardoso

	 	 	 	May 29, 2003
	Stanley B. Duzy

	 	 	 	December 12, 2000
	David W. Greenfield

	 	 	 	October 1, 2001
	Ronald C. Keating

	 	 	 	March 1, 2006
	Catherine R. Smith

	 	 	 	May 11, 2005
	Markos I. Tambakeras

	 	 	 	July 1, 1999

Michael P. Wessner, who is listed as a Named Executive Officer in the Corporation’s 2006 Proxy
Statement, ceased being an employee of the Corporation effective June 8, 2006 in connection with
the divestiture of the J&L Industrial Supply segment.EXHIBIT
      10.1

     

     

    CONSTRUCTION

    AGREEMENT
      FOR THE BOARDMAN PROJECT

    

    

    BETWEEN

    

    

    Pacific
      Ethanol Columbia, LLC,

    as
      Owner

    

    

    AND

    

    

    Parsons
      RCIE Inc.,

    as
      Contractor

    

    

    

    

    Dated
      as of August 28, 2006

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

     

    
      
        	 	
                Page

              
	 	 
	ARTICLE
                I.   GENERAL MATTERS	
                1

              
	 	 
	
                1.1

              	
                Defined
                  Terms

              	
                1

              
	
                1.2

              	
                Interpretation

              	
                7

              
	
                1.3

              	
                Exhibits

              	
                8

              
	
                1.4

              	
                Order
                  of Precedence

              	
                9

              
	 	 	 
	ARTICLE
                II.   RETENTION OF CONTRACTOR	
                9

              
	 	 	 
	
                2.1

              	
                Retention
                  of Contractor

              	
                9

              
	
                2.2

              	
                Status
                  of Contractor; No Partnership

              	
                9

              
	
                2.3

              	
                Subcontractors
                  and Vendors.

              	
                10

              
	 	 
	ARTICLE
                III.   CERTAIN OBLIGATIONS AND RESPONSIBILITIES OF
                CONTRACTOR	
                10

              
	 	 
	
                3.1

              	
                Scope
                  of Work; Applicable Standards

              	
                10

              
	
                3.2

              	
                Control
                  and Method of the Work

              	
                11

              
	
                3.3

              	
                Compliance
                  with Law

              	
                11

              
	
                3.4

              	
                Certain
                  Matters Pertaining to Job Site

              	
                11

              
	
                3.5

              	
                Owner
                  Access to Job Site

              	
                12

              
	
                3.6

              	
                Inspection
                  and Testing of Work in Progress

              	
                12

              
	
                3.7

              	
                No
                  Waiver of Responsibility

              	
                13

              
	
                3.8

              	
                Defective
                  Work

              	
                13

              
	
                3.9

              	
                Clean
                  Up.

              	
                13

              
	
                3.10

              	
                Obtaining,
                  Maintaining and Identifying Permits

              	
                14

              
	
                3.11

              	
                Labor

              	
                14

              
	
                3.12

              	
                Project
                  Management and Contractor’s Representative

              	
                15

              
	
                3.13

              	
                Temporary
                  Office Quarters

              	
                15

              
	
                3.14

              	
                Cooperation
                  with Other Contractors

              	
                16

              
	
                3.15

              	
                Protection
                  and Safety

              	
                16

              
	
                3.16

              	
                Environmental
                  Matters

              	
                16

              
	
                3.17

              	
                Fire
                  Prevention

              	
                17

              
	
                3.18

              	
                Religious
                  and Archaeological Resources

              	
                18

              
	
                3.19

              	
                Reports,
                  Plans and Manuals

              	
                18

              
	
                3.20

              	
                Drawings,
                  Data and Other Materials

              	
                19

              
	
                3.21

              	
                Operating
                  and Maintenance Manuals

              	
                19

              
	
                3.22

              	
                Accounting
                  Information

              	
                19

              
	
                3.23

              	
                Contractor
                  Taxes

              	
                19

              
	
                3.24

              	
                RESERVED

              	
                19

              
	
                3.25

              	
                Contractor’s
                  Obligation to Notify

              	
                20

              
	
                3.26

              	
                Lines
                  and Grades

              	
                20

              
	
                3.27

              	
                RESERVED

              	
                20

              
	
                3.28

              	
                Emergencies

              	
                20

              
	
                3.29

              	
                Start
                  Up Process

              	
                20

              
	
                3.30

              	
                Access

              	
                20

              
	
                3.31

              	
                RESERVED

              	
                20

              

      

       

      
        
          
          

        

        
          -i-

          
            

          

        

        
          
          

        

      

       

      
        	 	
                Page

              
	 	 
	
                
                  ARTICLE
                    IV.   CERTAIN OBLIGATIONS OF OWNER

                

              	
                20

              
	 	 
	
                4.1

              	
                Permits

              	
                20

              
	
                4.2

              	
                Gas;
                  Electricity; Raw and Potable Water Supply and Wastewater
                  Disposal

              	
                21

              
	
                4.3

              	
                Access
                  to Property Site

              	
                21

              
	
                4.4

              	
                Rights
                  of Way

              	
                21

              
	
                4.5

              	
                RESERVED

              	
                21

              
	
                4.6

              	
                Owner
                  Taxes

              	
                21

              
	
                4.7

              	
                Owner’s
                  Cooperation

              	
                21

              
	
                4.8

              	
                Owner’s
                  Representative

              	
                22

              
	
                4.9

              	
                Operation
                  and Maintenance

              	
                22

              
	 	 
	ARTICLE
                V.   PROJECT SCHEDULE	
                22

              
	 	 
	
                5.1

              	
                Commencement
                  of Work

              	
                22

              
	
                5.2

              	
                Notices
                  to Proceed

              	
                22

              
	
                5.3

              	
                Project
                  Schedule

              	
                22

              
	
                5.4

              	
                Liquidated
                  Damages

              	
                23

              
	 	 
	
                ARTICLE
                  VI.   CHANGE ORDERS

              	
                24

              
	 	 
	
                6.1

              	
                Change
                  Order at Owner’s Request

              	
                24

              
	
                6.2

              	
                Change
                  Orders Requested by Contractor

              	
                24

              
	
                6.3

              	
                Changes
                  to Separated Contract Price; Disputes

              	
                26

              
	
                6.4

              	
                Information
                  Requests

              	
                26

              
	
                6.5

              	
                Minor
                  Changes

              	
                26

              
	 	 
	ARTICLE
                VII.   SEPARATED CONTRACT PRICE; PAYMENTS TO
                CONTRACTOR	
                26

              
	 	 
	
                7.1

              	
                Separated
                  Contract Price

              	
                27

              
	
                7.2

              	
                Requests
                  for Payment

              	
                27

              
	
                7.3

              	
                General
                  Provisions For Payments

              	
                27

              
	
                7.4

              	
                Retainage

              	
                28

              
	
                7.5

              	
                RESERVED

              	
                28

              
	
                7.6

              	
                Liens

              	
                28

              
	 	 
	ARTICLE
                VIII.   TITLE, RISK OF LOSS AND POSSESSION	
                29

              
	 	 
	
                8.1

              	
                Clear
                  Title

              	
                29

              
	
                8.2

              	
                Risk
                  of Loss

              	
                29

              
	 	 
	ARTICLE
                IX.   INSURANCE	
                29

              
	 	 
	
                9.1

              	
                Contractor
                  Insurance Policies

              	
                29

              
	
                9.2

              	
                Form
                  of Contractor Insurance Policies

              	
                30

              
	
                9.3

              	
                Certificates
                  of Insurance

              	
                30

              
	
                9.4

              	
                Inspection
                  of Contractor’s Insurance Policies

              	
                31

              
	
                9.5

              	
                Remedy
                  on Failure to Insure

              	
                31

              
	
                9.6

              	
                Management
                  of Insurance Policies

              	
                31

              
	
                9.7

              	
                Owner
                  Insurance Policies

              	
                31

              
	
                9.8

              	
                Form
                  of Owner’s Policies

              	
                32

              
	
                9.9

              	
                RESERVED

              	
                32

              
	
                9.10

              	
                RESERVED

              	
                32

              

      

       

      
        
          
          

        

        
          -ii-

          
            

          

        

        
          
          

        

      

       

      

        
          	 	 	
                  Page

                
	 	 	 
	
                  9.11

                	
                  RESERVED

                	
                  34

                
	
                  9.12

                	
                  RESERVED

                	
                  34

                
	 	 
	
                  ARTICLE
                    X. RESERVED

                	
                  34

                
	 	 
	
                  10.1

                	
                  RESERVED

                	
                  34

                
	
                  10.2

                	
                  RESERVED

                	
                  34

                
	
                  10.3

                	
                  RESERVED

                	
                  34

                
	
                  10.4

                	
                  RESERVED

                	
                  34

                
	
                  10.5

                	
                  RESERVED

                	
                  35

                
	
                  10.6

                	
                  RESERVED

                	
                  35

                
	
                  10.7

                	
                  RESERVED

                	
                  35

                
	
                  10.8

                	
                  RESERVED

                	
                  35

                
	
                  10.9

                	
                  RESERVED

                	
                  35

                
	 	 
	
                  ARTICLE
                    XI. CONTRACTOR

                	
                  35

                
	 	 
	
                  11.1

                	
                  Completion

                	
                  35

                
	
                  11.2

                	
                  Liquidated
                    Damages

                	
                  36

                
	
                  11.3

                	
                  Early
                    Completion Bonus

                	
                  36

                
	
                  11.4

                	
                  RESERVED

                	
                  36

                
	
                  11.5

                	
                  RESERVED

                	
                  36

                
	
                  11.6

                	
                  RESERVED

                	
                  37

                
	
                  11.7

                	
                  Payment
                    of Liquidated Damages

                	
                  37

                
	
                  11.8

                	
                  RESERVED

                	
                  37

                
	
                  11.9

                	
                  RESERVED

                	
                  37

                
	
                  11.10

                	
                  Bonds

                	
                  37

                
	 	 
	
                  ARTICLE
                    XII. CONTRACTOR’S WARRANTIES

                	
                  37

                
	 	 
	
                  12.1

                	
                  Warranties

                	
                  37

                
	
                  12.2

                	
                  Repair
                    of Nonconforming Work

                	
                  38

                
	
                  12.3

                	
                  RESERVED

                	
                  39

                
	
                  12.4

                	
                  RESERVED

                	
                  39

                
	
                  12.5

                	
                  RESERVED

                	
                  39

                
	 	 
	
                  ARTICLE
                    XIII. CONTRACTOR’S REPRESENTATIONS

                	
                  39

                
	 	 
	
                  13.1

                	
                  Representations
                    and Warranties

                	
                  39

                
	 	 
	
                  ARTICLE
                    XIV. FORCE MAJEURE AND OWNER CAUSED DELAY

                	
                  41

                
	 	 
	
                  14.1

                	
                  Definition
                    of Force Majeure Event

                	
                  41

                
	
                  14.2

                	
                  Notice
                    of Force Majeure Event

                	
                  41

                
	
                  14.3

                	
                  Delay
                    from Force Majeure Event

                	
                  42

                
	
                  14.4

                	
                  RESERVED

                	
                  42

                
	
                  14.5

                	
                  Notice
                    of Owner Caused Delay

                	
                  42

                
	
                  14.6

                	
                  Delay
                    from Owner Caused Delay

                	
                  43

                
	
                  14.7

                	
                  RESERVED

                	
                  43

                

        

      

       

      
        
          
          

        

        
          -iii-

          
            

          

        

        
          
          

        

      

       

      
        	 	 	
                Page

              
	 	 	 
	ARTICLE
                XV.   TERMINATION	
                43

              
	 	 
	
                15.1

              	
                Contractor
                  Events of Default

              	
                43

              
	
                15.2

              	
                Termination
                  by Owner Due to Contractor Default; Other Remedies

              	
                45

              
	
                15.3

              	
                Termination
                  by Owner for Convenience

              	
                46

              
	
                15.4

              	
                Suspension
                  by Owner for Convenience

              	
                47

              
	
                15.5

              	
                Termination
                  Due to Force Majeure Event

              	
                48

              
	
                15.6

              	
                Owner
                  Events of Default

              	
                48

              
	
                15.7

              	
                Termination
                  by Contractor Due to Owner Default

              	
                49

              
	
                15.8

              	
                Continuing
                  Obligations and Remedies During Event of Default

              	
                49

              
	
                15.9

              	
                Obligations
                  Upon Termination

              	
                49

              
	
                15.10

              	
                Termination
                  and Survival of Terms

              	
                49

              
	 	 
	
                ARTICLE
                  XVI.   INDEMNIFICATION

              	
                50

              
	 	 
	
                16.1

              	
                Contractor
                  Indemnification

              	
                50

              
	
                16.2

              	
                Owner
                  Indemnification

              	
                51

              
	
                16.3

              	
                Conditions
                  of Indemnification

              	
                51

              
	
                16.4

              	
                Contributory
                  Negligence

              	
                52

              
	
                16.5

              	
                Remedies
                  Not Exclusive

              	
                52

              
	
                16.6

              	
                Tax
                  Effect of Indemnification

              	
                52

              
	
                16.7

              	
                Survival
                  of Indemnification

              	
                52

              
	 	 
	 ARTICLE
                XVII.   DISPUTE RESOLUTION	
                52

              
	 	 
	
                17.1

              	
                Friendly
                  Consultation

              	
                52

              
	
                17.2

              	
                Litigation

              	
                53

              
	
                17.3

              	
                Continuing
                  Obligations and Rights

              	
                53

              
	
                17.4

              	
                Tolling
                  Statute of Limitations

              	
                53

              
	
                17.5

              	
                Audit
                  Rights

              	
                53

              
	
                17.6

              	
                Costs

              	
                53

              
	 	 
	ARTICLE
                XVIII.   MISCELLANEOUS	
                54

              
	 	 
	
                18.1

              	
                Assignment

              	
                54

              
	
                18.2

              	
                Good
                  Faith Dealings

              	
                54

              
	
                18.3

              	
                Confidentiality

              	
                54

              
	
                18.4

              	
                Notice

              	
                55

              
	
                18.5

              	
                Waiver

              	
                56

              
	
                18.6

              	
                Severability

              	
                56

              
	
                18.7

              	
                Governing
                  Law

              	
                56

              
	
                18.8

              	
                Entire
                  Agreement; Amendments

              	
                57

              
	
                18.9

              	
                Expenses
                  and Further Assurances

              	
                57

              
	
                18.10

              	
                No
                  Third Party Beneficiary

              	
                57

              
	
                18.11

              	
                Offset

              	
                57

              
	
                18.12

              	
                Counterparts

              	
                57

              
	
                18.13

              	
                Waiver
                  for Consequential Damages

              	
                57

              
	
                18.14

              	
                Limits
                  of Liability

              	
                58

              
	
                18.15

              	
                Time
                  is of the Essence

              	
                58

              
	
                18.16

              	
                Records
                  Retention

              	
                58

              
	
                18.17

              	
                Successors
                  and Assigns

              	
                58

              
	
                18.18

              	
                Financing
                  Parties’ Requirements

              	
                58

              

      

    

    
      
        
        

      

      
        -iv-

        
          

        

      

      
        
        

      

    

    This
      CONSTRUCTION AGREEMENT FOR THE BOARDMAN PROJECT (as amended, amended and
      restated, supplemented or otherwise modified from time to time, this
“Agreement”),
      dated
      as of August 28, 2006, is entered into by and between
      Pacific Ethanol Columbia, LLC,
      a
      limited liability company formed under the laws of the State
      of
Delaware
      (as more particularly defined herein, “Owner”)
      and
Parsons
      RCIE Inc.,
      a
      corporation organized under the laws of the State of Washington (as more
      particularly defined herein, “Contractor”).

     

    RECITALS:

     

    A. 
      Owner
      wishes to construct and operate an ethanol production facility with a capacity
      of at least 35,000,000 gallons
      per year, and all services and utilities related thereto, all to be built on
      the
      Property Site (as hereinafter defined) located in Boardman, Oregon;

     

    B. 
      Contractor has represented that it is experienced and qualified in providing
      construction management, construction services, and that it possesses the
      requisite expertise and resources to complete the Work (as hereinafter
      defined);

     

    C. 
      Contractor has agreed to provide, through itself or through Subcontractors
      and
      Vendors (as such terms are hereinafter defined), such Work for the Separated
      Contract Price (as hereinafter defined); and

     

    D. 
      Contractor has agreed to the timely and proper completion of the Work in
      accordance with the terms and conditions hereinafter set forth.

     

    AGREEMENT:

     

    NOW,
      THEREFORE, in consideration of the foregoing premises, the mutual promises
      and
      covenants herein contained, and other good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, Owner and Contractor
      hereby agree as follows:

     

    ARTICLE
      I.

    GENERAL
      MATTERS

     

    1.1 Defined
      Terms.
      As
      used
      in this Agreement, including the exhibits and other attachments hereto, each
      of
      the following terms shall have the meaning assigned to such term as set forth
      below:

     

    “Agreement”
      has the meaning set forth in the preamble.

     

    “Applicable
      Laws” means any act, statute, law, regulation, permit, license, ordinance, rule,
      judgment, order, decree, directive, guideline or policy (to the extent
      mandatory) or any similar form of decision or determination by, or any
      interpretation or administration of, any of the foregoing by any Government
      Authority with jurisdiction over the Plant, the Job Site, the performance of
      the
      Work or other services to be performed under the Contract
      Documents.

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    “Applicable
      Permits” means any and all permits, clearances, licenses, authorizations,
      consents, filings, exemptions or approvals from or required by any Government
      Authority that are necessary for the performance of the Work. All applicable
      permits for the Work which shall be provided by Owner.

     

    “Builder’s
      Risk Policy” has the meaning set forth in Section
      9.10(a).

     

    “Business
      Day” means any day other than a Saturday, Sunday or a legal holiday
      in the
      State
      of Oregon.

     

    “Change
      In Law” means the enactment, adoption, promulgation, modification, or repeal
      after the date of this Agreement of any Applicable Law of any Government
      Authority or the modification after the date of this Agreement of any Owner
      Permit issued or promulgated by any Government Authority that establishes
      requirements that materially and adversely affect Contractor’s costs or schedule
      for performing the Work; provided, however, a change in any national, federal,
      provincial or any other income tax law or any other law imposing a tax, duty,
      levy, impost, fee, royalty, or charge for which Contractor is responsible
      hereunder shall not be a Change In Law pursuant to this Agreement.

     

    “Change
      Order” has the meaning set forth in Section 6.1(a).

     

    “Changes”
      has the meaning set forth in Section 6.1(a).

     

    “Confidential
      Information” has the meaning set forth in Section 18.3(a).

     

    “Contract
      Documents” means this Agreement and all exhibits incorporated into the Agreement
      (as set forth in Section 1.3),
      as
      same may be amended, amended and restated, supplemented or modified from time
      to
      time in accordance with the terms hereof.

     

    “Contractor”
      means Parsons RCIE Inc., a Washington corporation (as referenced in the opening
      paragraph hereof), and includes its legal successors and permitted assignees
      as
      may be accepted by Owner, in writing, pursuant to the terms of the Contract
      Documents.

     

    “Contractor
      Deliverables” means all material documents relating to the Project to be
      delivered to Owner by Contractor for review and comment in accordance with
      the
      requirements of the Contract Documents.

     

    “Contractor
      Equipment” means all of the Contractor owned or leased construction equipment,
      machinery, materials, controls, apparatus, structures, tools, supplies and
      other
      goods provided and used by Contractor, its Subcontractors or Vendors for
      performance of the Work but which is not intended to be incorporated into the
      Plant.

     

    “Contractor
      Event of Default” has the meaning set forth in Section
      15.1.

     

    “Contractor
      Insurance Policies” has the meaning set forth in Section 9.1.

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    “Contractor
      Project Manager” means the person designated by Contractor as having the
      centralized responsibility, authority and supervisory power of Contractor for
      construction, as well as all matters relating to the administration of the
      provisions of the Contract Documents.

     

    “Contractor
      Rate Schedule” has the meaning set forth in Exhibit K.

     

    “Contractor
      Taxes” has the meaning set forth in Section 3.23.

     

    “Contractor’s
      Representative” has the meaning given in Section 3.12(b).

     

    “Damages”
      has the meaning set forth in Section
      16.1.

     

    “Day”
or
      “day” means a period of twenty-four (24) consecutive hours from 12:00
      midnight (Pacific time), and shall include Saturdays, Sundays and all holidays,
      except that in the event a time period set forth in the Contract Documents
      expires on a Day that is not a Business Day, such period shall be deemed to
      expire on the next Business Day thereafter.

     

    “Defect”
      means, any installation, construction, workmanship or Work that, in Owner’s
      reasonable judgment, (i) do not conform to the terms of the Contract
      Documents, or (ii) are not of uniform good quality, free from defects or
      deficiencies in workmanship, or that contain improper or inferior workmanship.
      The term “Defects” shall neither be construed to include material damage caused
      by Owner’s, or its employees, agents or other contractors, or other suppliers,
      acts or omissions to the extent arising out of abuse, misuse, negligence in
      operations, maintenance and repair (unless such act or omission was taken or
      made at the direction of Contractor) or failure to follow Contractor’s or
      manufacturers’ written recommendations and directions, nor shall the term
“Defects” be construed to include ordinary wear and tear, erosion, corrosion,
      and deterioration (unless as a result of a defect or deficiency). The term
      Defects shall not apply to any Owner furnished drawings, details, equipment,
      materials, layout, designs, engineering, software (“Owner Defects”). The Owner
      shall be responsible for providing all Drawings to Contractor for the Property
      Site. 

     

    “Dispute”
      has the meaning set forth in Section
      17.1.

     

    “Drawings”
      means (i) all specifications, calculations, plans, drawings, and analyses,
      and other documents which determine, establish, define or otherwise describe
      the
      scope, quantity, and relationship of the components of the Plant, including
      the
      structure and foundation thereof, and (ii) all technical drawings,
      operating drawings, specifications, shop drawings, diagrams, illustrations,
      schedules and performance charts, calculations, samples, patterns, models,
      operation and maintenance manuals, piping and instrumentation diagrams,
      underground structure drawings, conduit and grounding drawings, lighting
      drawings, conduit and cable drawings, electric one-line’s, electric schematics,
      connection diagrams and technical information of a like nature. Owner shall
      compensate Contractor for any Owner Defects pursuant to Article VI.

     

    “Early
      Completion Bonus” has the meaning set forth in Section 11.3.

     

    “Engineer”
      means the Owner’s engineer.

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    “Equipment”
      means all Owner supplied equipment, machinery, materials, apparatus, controls,
      structures, tools, supplies, goods and other items that are installed or
      incorporated into the Plant or otherwise form or are intended to form part
      of
      the Plant (other than Contractor Equipment).

     

    “Exempt
      Equipment” has the meaning set forth in Section
      3.23(b).

     

    “Final
      Acceptance” shall mean that all of the following have occurred:
      (i) Mechanical Completion has been achieved; (ii) mechanical calibrations
      and tests have been successfully completed and any Defects found have been
      corrected; (iii) the Work has been constructed in accordance with the
      Contract Documents and the Drawings; (iv)  the Plant is capable of
      being operated in a safe and proper manner in accordance with Applicable Laws;
      (v)  no defective or incomplete portions of the Work exist that have
      or could have a negative impact on the normal operation; (vi)  all
      items on the Punch List have been completed; and (vii) all of Contractor’s
      cleanup and related obligations have been completed.

     

    “Final
      Acceptance Certificate” means the certificate issued by Owner indicating that
      Final Acceptance has been achieved by Contractor.

     

    “Final
      Acceptance Date” means the date of achievement of Final Acceptance.

     

    “Force
      Majeure Event” has the meaning set forth in Section 14.1.

     

    “Government
      Authority” means any and all federal, state, county, city, municipal, local or
      regional authorities, departments, bodies, commissions, corporations, branches,
      directorates, agencies, ministries, courts, tribunals, judicial authorities,
      legislative bodies, administrative bodies, regulatory bodies, autonomous or
      quasi-autonomous entities or taxing authorities of the United States of America
      or any department, municipality or other political subdivision
      thereof.

     

    “Hazardous
      Material” means any hazardous materials, hazardous waste, hazardous
      constituents, hazardous or toxic or radioactive substances or petroleum products
      (including crude oil or any fraction thereof), defined or regulated as such
      under any Applicable Laws.

     

    “Holdback”
      has the meaning given in Section 7.4(a).

     

    “Indemnified
      Person” has the meaning set forth in Section
      16.3(a).

     

    “Indemnifying
      Party” has the meaning set forth in Section
      16.3(a).

     

    “Initial
      Site Mobilization” means the first instance when any of Contractor or its
      Subcontractors’ or Vendors’ Labor or other representatives is present on the
      Property Site after Owner has issued the Notice to Proceed.

     

    “Job
      Site” means the Property Site and any other areas where Contractor may
      temporarily obtain care, custody and control, use, easement or license for
      purposes directly, indirectly or incidentally related to performance of, or
      as
      an accommodation to, the Work.

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    “Labor”
      means the workforce of the relevant Person, including its staff and employee
      and
      non-employee and skilled and unskilled workers.

     

    “Lien”
      means any lien, security interest, mortgage, hypothecation, encumbrance or
      other
      restriction on title or property interest.

     

    “Liquidated
      Damages” has the meaning set forth in Section 11.2.

     

    “Major
      Equipment” means all equipment provided by Owner and includes (a) any item or
      component of the Project, the proper or efficient function of which affects
      the
      Plant’s output or reliability, and (b) without duplication, the long lead-time
      items of Equipment and critical items of Equipment listed on Exhibit N.
      Contractor shall not provide or be responsible for providing any Equipment
      or
      Major Equipment to be incorporated into the Plant.

     

    “Major
      Manufacturers” means the manufacturers of the Major Equipment. 

     

    “Mechanical
      Completion” means that (i) the Equipment for the Project has been installed with
      the required connections and controls to (a) operate continuously as a single,
      intergrated unit and (b) produce ethanol in the manner contemplated hereby;
      (ii)
      all instrumentation is operational and has been calibrated in accordance with
      manufacturers’ standards and guidelines; (iii) the Project has been completed
      and physically constructed in accordance with the Scope of Work; (iv) the
      Project is mechanically and electrically sound and, to Contractor’s knowledge,
      free from Defects; and (v) all insulation, and the like have been completed
      (exclusive of final insulation and other incidental items of the Project, the
      lack of which does not adversely impact the ability of the Project to operate
      as
      intended and does not offer a danger of damage to the Project or injury to
      personnel).

     

    “Mechanical
      Completion Date” means the actual date of achieving Mechanical Completion as
      determined pursuant to Section 11.1.

     

    “O&M
      Contractor” means the Person selected by Owner for the operation and maintenance
      of the Plant.

     

    “Owner”
      means Pacific Ethanol Columbia, LLC, a Delaware limited liability company (as
      referenced in the opening paragraph hereof) and it includes its legal successors
      and those assignees as may be designated by Owner, in writing, pursuant to
      the
      terms of this Agreement.

     

    “Owner
      Caused Delay” means a material delay in Contractor’s performance which is
      actually and demonstrably caused by Owner’s failure to perform any covenant of
      Owner hereunder (other than by exercise of rights under this Agreement,
      including the exercise by Owner of the right to have defective or nonconforming
      Work corrected or re-executed). 

     

    “Owner
      Event of Default” has the meaning set forth in Section
      15.6.

     

    “Owner
      Permits” means the Applicable Permits for
      the
      Work.

     

    “Owner
      Taxes” has the meaning set forth in Section 4.6.

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    “Parties”
      means, collectively, Owner and Contractor.

     

    “Person”
      means an individual, partnership, corporation, limited liability company,
      company, business trust, joint stock company, trust, unincorporated association,
      joint venture, Government Authority or other entity of whatever
      nature.

     

    “Plant”
      means the 35,000,000 gallons per year ethanol production facility, to be located
      on the Property Site as more particularly described in the Scope of
      Work.

     

    “Pre-Existing
      Hazardous Material” means Hazardous Material that existed on or in the Property
      Site prior to Initial Site Mobilization by Contractor.

     

    “Project”
      means the Plant and all equipment, services and utilities related thereto which
      must be completed as part of the Scope of Work.

     

    “Project
      Schedule” means the schedule for completion of the Work attached hereto as
Exhibit B.

     

    “Property
      Site” means that certain piece of property located in Boardman, Oregon, as more
      particularly described in Exhibit P.

     

    “Prudent
      Industry Practices” means the practices generally followed by the United States
      ethanol industry with respect to construction.

     

    “Punch
      List” has the meaning set forth in Section 7.4.

     

    “Qualified
      Insurer” has the meaning set forth in Section 9.3.

     

    “Red-line
      As-Built Drawings” means the Drawings that Contractor shall provide to Owner.
      Contractor shall submit one (1) set of Red-line As-Built markups to Owner within
      thirty (30) days after the Final Acceptance.

     

    “Reference
      Rate” means the lesser of (i) the prime rate of interest for United States
      of America financial institutions as reported from time to time by The
      Wall Street Journal (New
      York
      Edition) plus two percent (2%) or (ii) the maximum rate permitted by
      Applicable Law.

     

    “Request
      for Payment” means the written requests from Contractor to Owner for payment
      hereunder, which requests shall be in substantially the form of Exhibit F
      attached
      hereto.

     

    “Schedule
      of Values” is defined in Article 7.1 and attached as Exhibit D.

     

    “Scope
      of
      Work” means the services and work to be provided, or caused to be provided, by
      or through Contractor under the Contract Documents for the Separated Contract
      Price, as more particularly described in Exhibit A,
      as the
      same may be amended from time to time in accordance with the terms hereof,
      and
      which Scope of Work includes, without limitation, all construction, services,
      labor, materials, Contractor’s Equipment, operations and management that are
      indicated on, or reasonably incidental to the Contract Documents or the Drawings
      prepared in connection with the Contract Documents or that are required in
      accordance with Applicable Law.

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    “Separated
      Contract Price” means a Schedule of Values for the total sum payable by Owner as
      stated in Exhibit D
      for the
      Work (including all labor, supervision, all materials, and all Contractor
      Equipment) including overhead and profit, which sum shall be due in accordance
      with the terms of the Contract Documents as consideration for the timely
      performance of the Scope of Work to be performed by or through Contractor in
      order to complete the Project, all in strict accordance with the terms of the
      Contract Documents, which sum shall only be subject to adjustment in accordance
      with the Contract Documents.

     

    “Subcontractor”
      means any contractor who is under the supervision and directly employed by
      Contractor.

     

    “Substantial
      Subcontractor” means a Subcontractor whose contract or contracts (in the
      aggregate) with Contractor require payments by Contractor totaling at least
      $500,000.00. 

     

    “Substantial
      Vendor” means a Vendor whose contract or purchase orders (in the aggregate) with
      Contractor require payments by Contractor of at least $500,000.00.

     

    “Termination
      Payment” has the meaning set forth in Section 15.3(b).

     

    “Vendor”
      means any supplier, manufacturer or vendor of Equipment directly employed
      Contractor or any Subcontractor.

     

    “Warranty
      Period” has the meaning set forth in Section 12.1(d).

     

    “Work”
      has the meaning set forth in Section 3.1(a).

     

    1.2 Interpretation.
      Unless
      the context of the Contract Documents otherwise requires:

     

    (a) the
      headings contained in this Agreement are used solely for convenience and do
      not
      constitute a part of this Agreement between the Parties, nor should they be
      used
      to aid in any manner to construe or interpret this Agreement;

     

    (b) the
      gender of all words used herein shall include the masculine, feminine and neuter
      and the number of all words shall include the singular and plural
      words;

     

    (c) the
      terms
“hereof”, “herein” “hereto” and similar words refer to this entire Agreement and
      not to any particular Article, Section, Exhibit or any other subdivision of
      this
      Agreement;

     

    (d) references
      to “Article”, “Section” or “Exhibit” are to this Agreement unless specified
      otherwise;

     

    (e) reference
      to “this Agreement” (including any Exhibit hereto) or any other agreement,
      Exhibit, permit or document shall be construed as a reference to such agreement
      or document as the same may be amended, modified, supplemented or restated,
      and
      shall include a reference to any document which amends, modifies, supplements
      or
      restates, or is entered into, made or given pursuant to or in accordance with
      its terms;

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    (f) references
      to any law, statute, rule, regulation, notification or statutory provision
      (including Applicable Laws and Applicable Permits) shall be construed as a
      reference to the same as it may have been, or may from time to time be, amended,
      modified or re-enacted;

     

    (g) references
      to any Person shall be construed as a reference to such Person’s successors and
      permitted assigns; and

     

    (h) references
      to “includes”, “including” and similar phrases shall mean “including, without
      limitation”.

     

    1.3 Exhibits.
      The
      following exhibits are attached to and incorporated into and made a part of
      this
      Agreement:

     

    (a) Exhibit A
      - Scope of Work; Construction Bid Package dated May 15, 2006, including
      Addendums 1 and 2 (Exhibit A-1); Parsons RCIE’s response letter dated June 30,
      2006 (Exhibit A-2)

     

    (b) Exhibit B
      - Project Schedule [To be provided by Contractor and Owner as described in
      Section 11.1]

     

    (c) Exhibit C
      - [Reserved]

     

    (d) Exhibit D
      - Schedule of Values

     

    (e) Exhibit E
      - [Reserved]

     

    (f) Exhibit F
      - Form of Request For Payment (to be provided by Contractor promptly after
      execution of the Contract and subject to approval of form by Owner)

     

    (g) Exhibit G
      - Form of Final Acceptance Certificate (to be provided by Contractor promptly
      after execution of the Contract and subject to approval of form by
      Owner)

     

    (h) Exhibit H
      - Form of Contractor Certificate for Partial Waiver of Liens

     

    (i) Exhibit H-1
      - Form of Subcontractor Certificate for Partial Waiver of Liens

     

    (j) Exhibit I
      - [Reserved]

     

    (k) Exhibit J
      - [Reserved]

     

    (l) Exhibit K
      - Contractor’s Rate Schedule 

     

    (m) Exhibit L
      - [Reserved]

     

    (n) Exhibit M
      - [Reserved]

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    (o) Exhibit N
      - Major Equipment (pursuant to Construction Bid Package dated May 15, 2006,
      see
      Exhibit A-1)

     

    (p) Exhibit O
      - Project Management Team (Organizational Chart provided by Contractor promptly
      after execution of the Contract)

     

    (q) Exhibit P
      - Legal Description of Property Site

     

    (r) Exhibit Q
      - [Reserved]

     

    (s) Exhibit R
      - Form of Contractor Certificate for Final Waiver of Liens

     

    (t) Exhibit R-I
      - Form of Subcontractor Certificate for Final Waiver of Liens

     

    (u) Exhibit S
      - Form of Request for Change Order (provided by Contractor promptly after
      execution of the Contract)

     

    (v) Exhibit T
      - Contractor Commercial Offer ( See Exhibit A-2)

     

    1.4 Order
      of Precedence.
      In
      the
      event of conflicts among the terms of the Contract Documents, interpretations
      shall be based upon the following Contract Documents which are set forth in
      ranked order of precedence:

     

    (a) Amendments,
      addenda or other modifications to the Contract Documents (including Change
      Orders) duly signed and issued after the signing of this Agreement, with those
      of a later date having precedence over those of an earlier date;

     

    (b) The
      Agreement; and

     

    (c) The
      exhibits to the Agreement.

     

     

    ARTICLE
      II.

    RETENTION
      OF CONTRACTOR

     

    2.1 Retention
      of Contractor.
      Owner
      hereby engages Contractor, and Contractor hereby agrees to be engaged by Owner,
      to perform the Work in accordance with the terms and conditions set forth
      herein.

     

    2.2 Status
      of Contractor; No Partnership.
      Contractor
      shall be an independent contractor with respect to any and all Work performed
      and to be performed under the Contract Documents. The Contract Documents shall
      not be interpreted or construed to create an association, joint venture or
      partnership relationship among or between the Parties or any similar
      relationship, obligations or liabilities. Neither Party shall have any right,
      power or authority to enter into any agreement or undertaking for, act on behalf
      of, or to act as or be an agent or representative of, or to otherwise bind
      or
      obligate the other Party.

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    2.3 Subcontractors
      and Vendors.

     

    (a) Subject
      to the terms hereof, Contractor shall have the right to have any portion of
      the
      Work performed by a Subcontractor or Vendor qualified to perform such Work
      pursuant to written subcontracts or written purchase orders; provided that
      Contractor shall not be relieved from any liability or obligation under the
      Contract Documents. Contractor shall be solely responsible for engaging,
      managing, supervising and paying all such Subcontractors and Vendors. Contractor
      shall require that all Work performed, and all Equipment provided by
      Subcontractors and Vendors are received, inspected and otherwise furnished
      in
      accordance with the Contract Documents, and Contractor shall be liable for
      all
      acts, omissions, liabilities and Work (including Defects therein) of such
      Subcontractors and Vendors. Owner shall not have any obligation or liability
      to
      any Subcontractor or Vendor. Nothing in any contract, subcontract or purchase
      order with any Subcontractor or Vendor shall in any way diminish or relieve
      Contractor from any duties and obligations under the Contract Documents. No
      Subcontractor or Vendor is intended to be or shall be deemed a third-party
      beneficiary of the Contract Documents.

     

    (b) Each
      subcontract and purchase order shall require such Subcontractor and Vendor
      to
      include those terms and conditions of contracting which Contractor customarily
      includes in its subcontracts. At a minimum, all subcontracts shall require
      the
      Subcontractors to comply with Applicable Laws and Applicable Permits, shall
      provide that Owner has the right of inspection as provided hereunder. All
      subcontracts shall preserve and protect the rights of Owner, shall not prejudice
      such rights and shall require each Subcontractor to enter into similar
      agreements with other Subcontractors.

     

     

    ARTICLE
      III.

    CERTAIN
      OBLIGATIONS AND RESPONSIBILITIES OF CONTRACTOR

     

    3.1 Scope
      of Work; Applicable Standards.

     

    (a) Contractor
      shall, at its own cost and expense, (i)  construct, portions of the Plant,
      and perform its other obligations hereunder, in each case, as described in
      the
      scope of Work, and (ii) manage, supervise, inspect and furnish all Labor,
      Contractor Equipment, temporary structures, temporary utilities, products and
      services for the foregoing, in accordance with the Contract Documents,
      including, without limitation, the Project Schedule for the Scope of Work,
      as
      the same may be modified from time to time in accordance with the terms hereof
      by a Change Order or other amendment hereto (all of the foregoing obligations
      of
      Contractor being collectively referred to in this Agreement as the “Work”).

     

    (b) Subject
      to the remedies provided for herein, Contractor shall perform the Work in a
      manner that is (i) sufficient, complete and adequate in all respects
      necessary for the Project to successfully achieve Mechanical Completion by
      the
      Guaranteed Mechanical Completion Date; (ii) in conformance with
      professional standards and skill, expertise and diligence of construction
      professionals regularly involved in major ethanol projects of similar size
      and
      nature to the Project; (iii) in compliance with the terms of the Contract
      Documents, all Applicable Laws and Applicable Permits; and (iv) approved as
      to form, use and content by public and private entities authorized to administer
      or enforce any building or construction code or standard whose approval of
      the
      final design of the Plant, or any portion thereof, is necessary for the
      construction or operation of the Plant.

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    (c) In
      light
      of the foregoing, Contractor has included within the Separated Contract Price
      the cost to complete the entire Work. Items must be specifically listed in
      the
      Contract Documents, indicated in Drawings, or in Exhibit A
      (or
      reasonably incidental thereto)
      in order
      to be deemed to be items within the Work. Contractor’s exclusions are set forth
      on Exhibit
      T
      of this
      Agreement.

     

    (d) The
      Plant
      and the Work shall meet generally accepted standards utilized by construction
      professionals regularly involved in the construction of major ethanol projects.
      

     

    3.2 Control
      and Method of the Work.

     

    (a) Subject
      to the terms hereof, Contractor shall be solely responsible for performing
      or
      causing to be performed the Work in accordance with the terms of the Contract
      Documents, and for all means, methods, techniques, sequences, coordination,
      procedures, and safety and security programs in connection with such
      performance. Contractor shall inform Owner in advance concerning its plans
      for
      carrying out the Work. Contractor shall have the right to additional
      compensation and day for day time extension to the extent that Contractor’s
      ability to complete the Work in accordance with the terms hereof is materially
      impacted by unexpected delays or defects caused by Owner’s separate contractors,
      subcontractors, suppliers or vendors employed by Owner for the Project Site,
      or
      by Owner’s inability to timely obtain all Owner permits, in each case, as
      reasonably agreed by Owner and Contractor.

     

    (b) Whenever
      the words “as ordered,” “as directed,” “as required,” “as permitted,” “as
      allowed,” “approved,” “reasonable,” “suitable,” “acceptable,” “properly,”
“satisfactory,” or words or phrases of similar effect and import are used, it
      shall be understood that none of such terms shall imply that Owner has any
      authority over, right to control or responsibility for supervision of Contractor
      or its Subcontractors or Vendors, such supervision (including sole control
      over
      and responsibility therefor) being strictly reserved for Contractor.

     

    3.3 Compliance
      with Law.
      Contractor
      shall comply, and shall cause all of its Subcontractors, Vendors and Persons
      that it has a right to direct who are engaged in the performance of any of
      the
      Work to comply with, all Applicable Laws and Applicable Permits. Contractor
      shall perform the Work in a manner designed to protect the environment on the
      Job Site and minimize damage or nuisance to Persons and property of the public
      or others, including damage or nuisance resulting from pollution, noise or
      other
      causes arising as a consequence of methods of construction or operation of
      the
      Plant.

     

    3.4 Certain
      Matters Pertaining to Job Site.

     

    (a) Project
      Inspection.
      Contractor acknowledges that prior to the execution of this Agreement,
      Contractor (i) has made an examination of the Job Site and the surrounding
      areas, drawings and specifications; (ii) has made an examination to
      determine the difficulties and hazards incident to the performance of the Work,
      including (A) the location of the Project, (B) the proximity of the
      Project to adjacent facilities and structures, (C) the conditions of the
      roads and waterways in the vicinity of the Job Site, including the conditions
      affecting shipping and transportation, access, disposal, handling and storage
      of
      materials, (D) the nature and character of the soil, terrain and surface

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    conditions
      (excluding all subsurface conditions except as set forth in the preliminary
      soils report by Professional Services Industries, Inc. dated March 26, 2006)
      of
      the Job Site, (E) the labor conditions in the region of the Job Site,
      (F) Applicable Laws and Applicable Permits, (G) rights of Owner
      regarding the Job Site as set forth herein, (H) the local weather
      conditions based upon previous weather data, (I) the qualifications of all
      Subcontractors and Vendors, and (J) all other matters that might affect
      Contractor’s performance under this Agreement or the construction, start-up,
      demonstration and testing of the Plant; and (iii) has determined to
      Contractor’s satisfaction the nature and extent of such difficulties and
      hazards.

     

    (b) If
      Contractor (i) encounters any concealed subsurface conditions which a
      reasonable, experienced Contractor would not foresee existing at the Job Site
      and which vary materially from the conditions shown in this Agreement,or the
      preliminary soils report as referenced in Section 3.4(a) and (ii) any such
      condition causes a material increase or decrease in the Separated Contract
      Price
      or time required for performance of the Work or otherwise materially affects
      any
      provision of this Agreement, then Contractor shall notify Owner thereof and
      Owner may either (x) issue a Change Order prior to issuing the Notice to
      Proceed to address such condition or (y) terminate this Agreement pursuant
      to Section 15.3.
      

     

    3.5 Owner
      Access to Job Site.
      Owner
      shall have the right to have representatives on the Job Site full time. In
      addition, Contractor shall provide reasonable access to the Job Site and the
      Work at all times to Owner, Owner’s other contractors, and their respective
      employees, representatives, agents and consultants. All visitors to the Project
      Site shall comply with the Contractors’ Site Safety Rules. Provided, however,
      Contractor reserves the right to deny access from time to time should conditions
      at the Project Site potentially create risk of bodily harm.

     

    3.6 Inspection
      and Testing of Work in Progress.

     

    (a) Each
      item
      of Equipment to be supplied by Contractor shall be subject to inspection and
      testing during and upon completion of its fabrication and installation in
      accordance with the provisions of the Scope of Work. Without limiting the
      foregoing, Contractor shall assist in inspection and testing of the Equipment
      in
      accordance with standard inspection practices and as required by applicable
      specifications before their shipment.

     

    (b) Contractor
      shall perform inspection, expediting, quality surveillance and traffic services
      as are required for performance of the Scope of Work. Contractor shall perform
      such detailed inspection of work in progress at intervals appropriate to the
      stage of construction or fabrication of the Project as is necessary to ensure
      that such work is proceeding in accordance with this Agreement and the Contract
      Documents and to protect Owner against defects and deficiencies in such
      work.

     

    (c) Contractor
      shall permit Owner and, as authorized by Owner, any party designated by Owner,
      and the Financing Parties to inspect, test and observe the Work from time to
      time; provided, however, that none of such Persons shall have any authority
      or
      responsibility for such Work and provided that testing is non-destructive and
      in
      accordance with Prudent Industry Practices. Contractor shall provide Owner
      each
      month during performance of the Work with a schedule of all testing proposed
      for
      the following three (3) month period in compliance with the requirements of
      the Scope of Work. Any tests, observations or inspections shall not delay or
      interfere with Contractor’s progress of performing the Scope of
      Work.

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    3.7 No
      Waiver of Responsibility. No
      inspection made, acceptance of Work, payment of money or approval given by
      Owner, or the Financing Parties shall relieve Contractor of its obligations
      for
      the proper performance of the Work in accordance with the terms hereof. Owner
      may reject any Work with Defects or which is not in accordance with the
      requirements of the Contract Documents, regardless of the stage of completion,
      the time or place of discovery of error, and whether Owner previously accepted
      any or all of such Work through oversight or otherwise. No approval given by
      Owner, in and of itself, shall be considered as an assumption of risk or
      liability by any such Person. Any such approval shall mean that the Person
      giving the approval has no objection to the adoption or use by Contractor of
      the
      matter approved at Contractor’s own risk and responsibility. 

     

    3.8 Defective
      Work. Contractor
      shall at its own cost and expense correct or replace any Work that contains
      a
      Defect, or is not otherwise in accordance with the Contract Documents. Equipment
      that has been replaced, if situated on the Job Site, shall be removed by
      Contractor from the Job Site at Contractor’s own cost and expense. If Contractor
      or any Subcontractor defaults or neglects to carry out the Scope of Work in
      accordance with the Contract Documents and Contractor fails within a reasonable
      period of time (as reasonably determined by Contractor) after it knows or should
      have known of such default or neglects to commence and continue correction
      of
      such default or neglect with diligence and promptness, Owner may, without
      prejudice to other remedies Owner may have under this Agreement, correct such
      deficiencies. In such event, an appropriate Change Order shall be issued
      deducting from payments then or thereafter due to Contractor the cost of
      correcting such deficiencies. If payments then or thereafter due to Contractor
      are not sufficient to cover such amounts, Contractor shall pay the difference
      to
      Owner within three (3) days from Owner’s request therefor. Contractor shall
      correct any and all deficiencies as required by the Contract Documents
      notwithstanding any actual or possible legal obligation or duty of a
      Subcontractor concerning same and nothing contained in this Section shall modify
      Contractor’s obligation to achieve Final Acceptance in accordance with the
      Contract Documents. 

     

    3.9 Clean-Up.

     

    (a) Contractor
      shall at all times keep the Job Site reasonably free from waste, rubbish and
      Hazardous Material, other than Pre-Existing Hazardous Material, relating to
      its
      Work. Contractor shall maintain the Job Site in a neat and orderly condition
      throughout the performance of the Work. Contractor shall employ sufficient
      personnel to clean its office at the Job Site and work areas and shall cooperate
      with the other Persons working at the Job Site to keep the Job Site
      clean.

     

    (b) Prior
      to
      the Final Acceptance Date or as soon as practicable after the termination of
      this Agreement by Owner in accordance with the provisions of Article XV,
      Contractor shall (i) remove all Contractor Equipment from the Job Site
      (other than equipment, supplies and materials necessary or useful to the
      operation or maintenance of the Plant and Equipment and equipment, supplies
      and
      materials directed by Owner to remain at the Job Site until completion of the
      Plant), (ii) clean out all pits, pipes, chambers and conduits,
      (iii) tear down and remove all temporary structures on the Job Site built
      by it or its Subcontractors and restore such areas to a condition consistent
      with that of a newly constructed ethanol plant, except as required by Applicable
      Law, Section
      3.16(d)
      or any
      other provision of this Agreement, and (iv) remove all waste, and rubbish
      from and around the Job Site, except that Contractor shall not be required
      to
      excavate, remove, transport or otherwise dispose of (a) Pre-Existing
      Hazardous Material on the Job Site, other than as set forth in Section 3.16(a)(iv),
      or
      (b) any waste, rubbish or Hazardous Material caused by Owner or its
      representatives, agents or other contractors.

    
      
        
        

      

      
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    3.10 Obtaining,
      Maintaining and Identifying Permits.

     

    Owner
      shall timely obtain and maintain all permits. Contractor shall provide
      assistance reasonably requested by the Owner in connection with the Owner’s
      efforts to obtain and maintain the Permits. Owner agrees to compensate
      Contractor for the actual out of pocket costs (without mark-up) for any changes
      to the Work made during the permit process which requires additional work beyond
      the Scope of Work. 

     

    3.11 Labor.

     

    (a) General.
      Contractor shall be responsible for retaining all Labor necessary for it to
      perform its obligations hereunder and comply with the provisions hereof, all
      in
      accordance with Applicable Laws. Contractor shall be responsible for all costs
      incurred in complying with this Section 3.11
      or
      otherwise associated with its Labor.

     

    (b) Engagement
      of Labor.
      Contractor shall make its own arrangements for the engagement of all Labor
      in
      connection with the Contract Documents and the performance of the Work.
      Contractor shall employ in the performance of the Work only Labor, whether
      supervisors, skilled workers or laborers, who are competent to perform their
      assigned duties in a safe and secure manner and shall use all reasonable efforts
      to cause its Subcontractors and Vendors to adhere to the same standard with
      respect to their Labor. Contractor agrees, where required by Applicable Law,
      to
      employ only licensed personnel in good standing with their respective
      trades.

     

    (c) Identification.
      Contractor shall identify each member of its and its Subcontractor’s and
      Vendor’s Labor in accordance with the standards and procedures that are mutually
      acceptable to the Parties.

     

    (d) Supply
      of Services for Labor.
      Unless
      expressly excluded in Exhibit T, Contractor shall provide and maintain at the
      Job Site, in accordance with Applicable Laws and Applicable Permits, such
      accommodations, services and amenities as necessary for all Labor employed
      for
      the purpose of or in connection with the Contract Documents, including all
      water
      supply (both for drinking and other purposes), electricity supply, sanitation,
      safety, security, fire prevention and fire--fighting equipment, refuse disposal
      systems and other requirements in connection with such accommodations or
      amenities. Owner shall provide electricity at the property fence
      line.

     

    (e) General
      Management of Employees.
      Notwithstanding the provisions of Section 3.11(f),
      Contractor shall preserve its rights to exercise and shall exercise its
      management rights in performing the Work. Such management rights shall include
      the rights to hire, discharge, promote and transfer employees; to select and
      remove foremen or other persons at other levels of supervision; to establish
      and
      enforce reasonable standards of production; to introduce, to the extent
      feasible, labor saving Equipment and materials; to determine the number of
      craftsmen necessary to perform a task, job or project; and to establish,
      maintain and enforce rules and regulations conducive to efficient and productive
      operations.

    
      
        
        

      

      
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    (f) Labor
      Disputes.
      Contractor shall use reasonable efforts to minimize the risk of labor-related
      delays or disruption of the progress of the Work. Contractor shall promptly
      take
      any and all reasonable steps that may be available in connection with the
      resolution of violations of collective bargaining agreements or labor
      jurisdictional disputes, including the filing of appropriate processes with
      any
      court or administrative agency having jurisdiction to settle, enjoin or award
      damages resulting from violations of collective bargaining agreements or labor
      jurisdictional disputes. Contractor shall advise Owner promptly, in writing,
      of
      any actual or threatened labor dispute of which Contractor has knowledge that
      might materially affect the performance of the Work by Contractor or by any
      of
      its Subcontractors or Vendors. Notwithstanding the foregoing, the settlement
      of
      strikes, walkouts, lockouts or other labor disputes shall be at the discretion
      of the Party having the difficulty. Any additional costs resulting from labor
      disputes, strikes, walkouts or lockouts shall be shared equally between
      Contractor and Owner. Provided, however, that in any labor dispute where
      additional costs or delays are incurred by Contractor due to a labor dispute
      directly or indirectly caused by the Owner directly hiring or managing of labor,
      Contractor shall be compensated and provided a time extension pursuant to
      Article 6.2. 

     

    (g) Personnel
      Documents.
      Contractor shall ensure that all its personnel and personnel of any
      Subcontractors or Vendors performing the Work are, and at all times shall be,
      in
      possession of all such documents (including, without limitation, visas, driver’s
      licenses and work permits) as may be required by any and all Applicable
      Laws.

     

    (h) Replacement
      at Owner’s Request.
      Within
      ten (10) days after request by Owner, Contractor shall remove from the Job
      Site
      and performance of the Work, and cause any Subcontractor or Vendor to remove
      from the Job Site and performance of the Work, and as soon as reasonably
      practicable, any Person performing the Work whom Owner believes to be creating
      a
      safety hazard. 

     

    3.12 Project
      Management
      and
      Contractor’s Representative.

     

    (a) Project
      Management.
      Contractor has designated a management team as set forth on Exhibit O.
      During
      the performance of the Work from the Initial Site Mobilization and thereafter,
      Contractor shall maintain continuously at the Job Site adequate management,
      supervisory, administrative, security and technical personnel, to ensure
      expeditious and competent handling of all matters related to the Work, according
      to its determination of the staffing required for this purpose. 

     

    (b) Contractor’s
      Representative.
      Contractor shall appoint one individual (the “Contractor’s
      Representative”),
      who
      shall be authorized to act on behalf of Contractor and with whom Owner may
      consult at all reasonable times, and whose instructions, requests and decisions
      in writing will be binding upon Contractor. In the event that Contractor removes
      or replaces such representative, Contractor shall appoint another individual
      with the prior written consent of Owner, which shall not be unreasonably
      withheld. Contractor shall not remove or replace such representative without
      Owner’s prior written consent.

     

    3.13 Temporary
      Office Quarters.
      During
      the performance of the Work from the Initial Site Mobilization and thereafter,
      Contractor shall maintain a suitable office at the Job Site at or near the
      site
      of the Work which shall be the headquarters of Contractor’s Representative
      designated pursuant to Section 3.12.

    
      
        
        

      

      
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    3.14 Cooperation
      with Other Contractors.
      Contractor
      shall cooperate and cause its Subcontractors and Vendors to cooperate with
      Owner, and other unrelated contractors who may be working at or near the Job
      Site in order to assure that neither Contractor, nor any of its Subcontractors
      or Vendors unreasonably hinders or increases, or makes more difficult than
      necessary the work being done by Owner and other unrelated contractors.
      Contractor agrees to perform the Work in full cooperation with such others
      and
      to permit, reasonable access to, and use of, the Job Site and the Work, by
      said
      others or by Owner, whether such Work is partially or entirely complete, when,
      in the judgment of Owner, such access or use is necessary for the performance
      and completion of the work of others. All personnel entering or leaving the
      site
      shall follow Contractor’s Project Site Safety Rules. 

     

    3.15 Protection
      and Safety.

     

    (a) Prior
      to
      the Mechanical Completion Date, Contractor shall be responsible for the
      security, protection and safety of the Job Site or that are in any manner
      affected by the performance of the Work. As of the Mechanical Completion Date,
      Owner shall have control over the Project. 

     

    (b) Contractor
      shall initiate and maintain reasonable safety precautions and accident
      prevention programs for the Job Site and in the performance of the Work, which
      shall be in compliance with all Applicable Laws and Applicable Permits, to
      prevent injury to persons or damage to property on, about or adjacent to the
      Job
      Site and in the performance of the Work.

     

    3.16 Environmental
      Matters.

     

    (a) [Reserved]

     

    (i) [Reserved]

     

    (ii) Contractor
      shall conduct its activities under the Contract Documents, and shall cause
      each
      of its Subcontractors to conduct its activities, in a manner designed to prevent
      pollution of the environment or any other release of any Hazardous Material
      by
      Contractor and its Subcontractors and Vendors in a manner or at a level
      requiring remediation pursuant to any Applicable Law.

     

    (iii) Contractor
      shall not cause or allow the release or disposal of Hazardous Material at the
      Job Site, bring Hazardous Material to the Job Site, or transport Hazardous
      Material from the Job Site, except in accordance with Applicable Law and
      Applicable Permits and upon Owner’s written approval. Contractor shall be
      responsible for the management of and proper disposal of all Hazardous Material
      brought onto or generated at the Job Site by it or its Subcontractors or
      Vendors, if any. Contractor shall cause all such Hazardous Material brought
      onto
      or generated at the Job Site by it or its Subcontractors or Vendors, if any,
      (A) to be transported only by carriers maintaining valid permits and
      operating in compliance with such permits and laws regarding Hazardous Material
      pursuant to manifest and shipping documents identifying only Contractor as
      the
      generator of waste or person who

    
      
        
        

      

      
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    arranged
      for waste disposal, and (B) to be treated and disposed of only at
      treatment, storage and disposal facilities maintaining valid permits operating
      in compliance with such permits and laws regarding Hazardous Material, from
      which, to the best of Contractor’s knowledge, there has been and will be no
      release of Hazardous Material. Contractor shall submit to Owner a list of all
      Hazardous Material to be brought onto or generated at the Job Site prior to
      bringing or generating such Hazardous Material onto or at the Job Site.
      Contractor shall keep Owner informed as to the status of all Hazardous Material
      on the Job Site and disposal of all Hazardous Material from the Job
      Site.

     

    (iv) Owner
      warrants and represents that the Project Site does not contain Hazardous
      Materials. If Contractor or any of its Subcontractors or Vendors releases any
      Hazardous Material on, at, or from the Job Site, or becomes aware of any Person
      who has stored, released or disposed of Hazardous Material on, at, or from
      the
      Job Site during the Work, Contractor shall immediately notify Owner in writing.
      If Contractor’s Work involved the area where such release occurred, Contractor
      shall immediately stop any Work affecting the area. Contractor shall, at Owner’s
      sole cost and expense, diligently proceed to take all necessary or desirable
      remedial action to clean up fully the contamination caused by any release
      by Contractor or any of its Subcontractors or Vendors of any Pre-Existing
      Hazardous Material.  Any Hazardous Material that was brought onto or
      generated at the Job Site by Contractor or any of its Subcontractors or Vendors,
      whether on or off the Job, shall be the responsibility of
      Contractor.

     

    (v) If
      Contractor discovers any Pre-Existing Hazardous Material that has been stored,
      released or disposed of at the Property Site, Contractor shall immediately
      notify Owner in writing. If Contractor’s Work involves the area where such a
      discovery was made, Contractor shall immediately stop any Work affecting the
      area and Owner shall determine a reasonable course of action. Contractor shall
      not, and shall cause its Subcontractors and Vendors to not, take any action
      that
      may exacerbate any such contamination. If Owner desires Contractor to perform
      all or part of any evacuation that may become necessary as a result of the
      discovery of any such Pre-Existing Hazardous Material, it shall request a Change
      pursuant to Section
      6.1.
      If so
      requested by Owner, Contractor shall cooperate with and assist Owner in making
      the Job Site available for taking necessary remedial steps to clean up any
      such
      contamination at Owner’s expense as determined in accordance with Section
      6.3. 

     

    3.17 Fire
      Prevention.

     

    (a) Contractor
      shall be responsible for providing temporary fire prevention and protection
      while performing the Scope of Work and shall take all reasonable precautions
      to
      minimize the risk of fire during construction. Contractor shall provide
      instruction to the Labor in fire prevention control and shall provide
      appropriate fire-fighting and fire protection equipment and systems at the
      Job
      Site.

     

    (b) Contractor
      will implement reasonable fire protection precautions to protect Work in
      progress, in particular with regard to fuel and other flammable
      materials.

    
      
        
        

      

      
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    (c) Owner
      shall be responsible for the supply and installation of all permanent fire
      protection systems and appurtenances.

     

    3.18 Religious
      and Archaeological Resources.
      In
      the
      event any archaeological or religious sites, places, monuments or areas are
      discovered or identified by Contractor during the performance of Work under
      the
      Contract Documents, Contractor shall leave such sites untouched and protected
      by
      fencing and shall immediately stop any Work affecting the area. Contractor
      shall
      notify Owner of any such discovery as soon as practicable, and Contractor shall
      carry out Owner’s instructions for dealing with the same. All fossils, coins,
      articles of value or antiquity and structures and other remains or things of
      geological, archaeological, historical, religious, cultural or similar interest
      discovered on the Job Site shall, as between Owner and Contractor, be deemed
      to
      be the absolute property of Owner. Contractor shall prevent its and its
      Subcontractors’ and Vendors’ Labor and any other Persons from removing or
      damaging any such article or thing. Any additional costs or delays caused by
      encountering any religious and archaeological resources shall be submitted
      as a
      change order under Article VI.

     

    3.19 Reports,
      Plans and Manuals.

     

    (a) Status
      Reports.
      Within
      ten (10) days after the beginning of each month, Contractor shall prepare
      and submit to Owner written progress reports, in a form reasonably acceptable
      to
      Owner, which include a description of the progress and status of the Work
      compared to the Project Schedule, the status of Equipment and other scheduled
      deliveries, the Subcontractors’ activities, purchasing and construction
      progress. Photographs may also be included documenting the construction
      progress. Each photograph shall show the date, Contractor’s name and description
      of the view taken. In accordance with Section 5.3
      hereof,
      Contractor shall also report any events which may affect the Project Schedule,
      including any Force Majeure Events, liens on the Property Site or the Project,
      or any asserted violations of Applicable Laws or Applicable
      Permits.

     

    (b) Reporting
      of Accidents.
      Contractor shall report in writing to Owner (and, to the extent required by
      any
      Applicable Law or Applicable Permit, the appropriate Government Authority)
      details of any accident that is on or about the Job Site as soon as possible
      after its occurrence, but in any event not later than forty-eight (48)
      hours after such accident occurs. In the case of any fatality or serious injury
      or accident, Contractor shall, in addition, notify Owner (and, to the extent
      required by any Applicable Law or Applicable Permit, the appropriate Government
      Authority) immediately.

     

    (c) Meetings.
      During
      the performance of the Scope of Work, Contractor and Owner shall, at a minimum,
      conduct meetings each month at a mutually convenient time and date for the
      purpose of reviewing the progress of the Scope of Work, the latest progress
      reports, the Health Plan, the Environmental Plan, the Safety Plan, Contractor’s
      and Subcontractors’ adherence to the Scope of Work and the Project Schedule as
      well as the status of any claims on the Project and claims submitted pursuant
      to
      the terms of the Contract Documents. Contractor shall prepare detailed minutes
      of each such meeting, in form and content acceptable to Owner, and shall
      distribute same to Owner within five (5) days after such
      meeting.

    
      
        
        

      

      
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    (d) Contractor
      Not Relieved of Duties or Responsibilities.
      Neither
      the submission to or approval by Owner of progress and other reports, plans
      and
      manuals, nor the provision of general descriptions shall relieve Contractor
      of
      any of its duties or responsibilities under the Contract Documents.

     

    3.20 Drawings,
      Data and Other Materials.

     

    (a) All
      Drawings, Red-line As-Built Drawings, reports and other information (except
      financial, accounting and payroll records) furnished to Contractor, or prepared
      by it, its Subcontractors or others in connection with the performance of the
      Work, whenever provided, shall be kept by Contractor in an orderly and
      catalogued fashion for reference by Owner during the performance by Contractor
      of the Work. Contractor shall maintain at the Property Site at least
      one (1) copy of all Drawings, Red-line As-Built Drawings, Change Orders and
      other modifications in good order and marked to record all changes made during
      performance of the Work, including, without limitation, all field deviations
      from the construction drawings. Within thirty (30) days after Final Acceptance,
      or upon the earlier termination of this Agreement, Contractor shall transfer
      the
      Red-line As-Built Drawings, to Owner and they shall become the sole property
      of
      Owner.

     

    (b) Contractor
      shall furnish Owner with documents that correctly reflect, with substantial
      completeness, the Plant.

     

    (c) The
      Owner
      shall provide Contractor with a complete set of Drawings of the Plant to be
      constructed at the Property Site. Contractor shall maintain Red-line As-Built
      Drawings to record significant changes in the layout of the Work. 

     

    3.21 Operating
      and Maintenance Manuals.
      Contractor
      shall supply Owner with manuals and/or handbooks for all equipment supplied
      by
      Contractor.

     

    3.22 Accounting
      Information.
      During
      the term of this Agreement and continuing for two (2) years after the Final
      Acceptance Date, Contractor will provide Owner with any reasonably necessary
      assistance for Owner’s federal, state or local tax filings and filings with the
      Securities and Exchange Commission.

     

    3.23 Contractor
      Taxes. Contractor
      shall pay and administer all federal, state and local taxes and duties incurred
      or payable in connection with the Work, including, without limitation, taxes
      based on or related to Contractor’s or its Subcontractors’ or Vendors’ Labor or
      income, except for Owner Taxes (collectively, “Contractor Taxes”); provided,
      however, that if Contractor is responsible for payment of Owner Taxes under
      Applicable Law, unless otherwise instructed by Owner or Owner is contesting
      such
      taxes, Contractor shall pay such taxes and Owner shall reimburse Contractor
      therefor upon submission of evidence of payment. Contractor shall promptly
      provide Owner with reports or other evidence reasonably acceptable to Owner
      showing the payment of Contractor Taxes by Contractor and any Owner Taxes
      required to be paid by Contractor pursuant to this Section 3.23. Contractor
      shall cooperate with Owner to endeavor to minimize any Owner Taxes.

     

    3.24 [Reserved]

    
      
        
        

      

      
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    3.25 Contractor’s
      Obligation to Notify.
      Contractor
      shall keep Owner advised as to the status of the Equipment and Work and shall
      inform Owner in writing, within a reasonable time, upon the occurrence of any
      of
      the following: (i) any occurrence or event that may be expected to impact
      the schedule for delivery and/or installation of Equipment; (ii) any
      technical problem not anticipated at the start of the Work or of significant
      magnitude that may impact the Plant or any component thereof or the Project
      Schedule; (iii) any Defect; and (iv) any material changes to
      previously submitted information. Owner shall have the right to verify the
      information provided by Contractor. In connection therewith, Contractor shall
      identify those items provided to Owner that would enable Owner to verify such
      information in an expedient manner.

     

    3.26 Lines
      and Grades.
      Contractor
      shall provide for the proper laying out of the construction Work, for making
      measurements and for establishing temporary or permanent reference marks in
      connection with the construction Work and Plant. Contractor shall ensure that
      all improvements constructed in connection with the Work are constructed
      substantially within the boundaries of the Job Site as delineated in
      Exhibit P and do not encroach on any easements, rights of way or other
      improvements existing on the Property Site as delineated in Exhibit P.
      Tolerances shall be in accordance with applicable laws, construction industry
      standards and as specified or required by manufacturers.

     

    3.27 [Reserved]

     

    3.28 Emergencies.
      In
      the
      event of any emergency that endangers or could endanger life or property,
      Contractor shall take such action as may be reasonable and necessary to prevent,
      avoid or mitigate injury, damage or loss and shall, as soon as possible, report
      any such incidents, including Contractor’s response and actions with respect
      thereto, to Owner.

     

    3.29 Start
      Up Process.
      Contractor
      shall assist the Plant start-up in accordance with the process set forth in
      Exhibit A, Scope of Work.

     

    3.30 Access.
      Contractor
      shall use only the entrance(s) to the Job Site specified by Owner for ingress
      and egress of all personnel, equipment, vehicles, and materials. Contractor
      shall perform the Work consistent and in accordance with Owner’s ownership,
      license and easement rights in and to the Site.

    

     

    ARTICLE
      IV.

    CERTAIN
      OBLIGATIONS OF OWNER

     

    4.1 Permits. Owner
      shall, with Contractor’s reasonable assistance timely obtain and maintain, at
      its own cost and expense, all Permits. Owner shall deliver to Contractor
      evidence that the Permits necessary to begin construction of the Plant have
      been
      received by Owner or, if any such required Owner Permit has not actually been
      issued, that it has been approved for issuance, or in the opinion of Owner,
      will
      be approved for issuance. Any delays or additional costs related to permits
      shall be submitted as a change order as provided for in Section
      6.2.

    
      
        
        

      

      
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    4.2 Gas;
      Electricity; Raw and Potable Water Supply and Wastewater
      Disposal.
      No
      less
      than 90 days
      prior to Mechanical
      Completion,
      and
      through Final Acceptance, Owner shall supply at its expense all natural gas,
      electricity, raw water and all potable water at the Property Site, and shall
      dispose of all wastewater which is in conformance with governmental wastewater
      requirements from the Property Site as needed by Contractor in connection with
      the installation, start-up and testing of the Plant. 

     

    4.3 Access
      to Property Site.
      Subject
      to Section 3.30 and consistent with the terms of the Applicable Permits and
      Owner’s ownership, license, and easement rights in and to the Site, Owner shall
      make the Site reasonably available to Contractor and its Subcontractors and
      Vendors and assure reasonable rights of ingress and egress to and from the
      Site
      for Contractor and its Subcontractors and Vendors for performance of the Work;
      provided, however, that Contractor shall coordinate with Owner regarding
      (a) initial entry onto the Job Site or any part thereof, and
      (b) contact with the persons who own property on or near, or have granted
      license or easement rights in and to, the Job Site. 

     

    4.4 Rights
      of Way.
      Owner
      shall obtain, at its own cost and expense, any easements and rights of way
      over
      the property of others for the construction of the site access road as required,
      in order that Contractor Equipment, its personnel and its Subcontractors and
      Vendors have ingress to and egress from the Property Site. In addition, Owner
      shall provide reasonable assistance to Contractor, upon its request, in
      connection with Contractor’s procurement of any easements and rights of way over
      the property of others that are necessary for the personnel and construction
      equipment of Contractor and its Subcontractors and Vendors to have ingress
      to
      and egress from portions of the Job Site other than the Property Site, except
      for any transportation rights of way, permits or easements.

     

    4.5 [Reserved]

     

    4.6 Owner
      Taxes.
      Owner
      shall pay all real property taxes assessed against the Property Site and any
      permanent use charges or assessments such as water or sewer (but excluding
      charges and taxes for construction utilities and fuel to be supplied by
      Contractor as required hereunder, which shall be Contractor’s responsibility),
      and, subject to Section 3.23, Owner shall be responsible for the payment of,
      or
      reimbursement to Contractor of, state or local sales and/or use or excise taxes
      in connection with the purchase of all Equipment (including rentals, leases
      and
      consumables), except for such taxes Owner contests in good faith (collectively,
      “Owner Taxes”). In the event that Owner is required to pay additional state or
      local taxes because Contractor failed to follow written instructions of Owner
      appropriately, Contractor shall be responsible for the cost of such additional
      taxes within thirty (30) days of Owner’s request therefor. 

     

    4.7 Owner’s
      Cooperation.
      At
      no
      additional cost to Owner, Owner shall cooperate in all material respects to
      permit Contractor to timely perform its obligations hereunder and shall make
      reasonable
      efforts to supply to Contractor, in a timely manner, either directly or
      indirectly, material information and data that is available to Owner and that
      is
      required for the performance of the Work; Owner does warrant all material
      respects and the correctness of the information and documentation provided
      hereunder.

    
      
        
        

      

      
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    4.8 Owner’s
      Representative.
      No
      later
      than the date of this Agreement, Owner shall designate in writing one or more
      representatives at the Property Site (at least one of whom shall be at the
      Job
      Site during normal business hours) who shall act as the single point of contact
      for both Contractor and the Engineer with respect to the prosecution of the
      Work, administration of the Contract Documents on behalf of Owner, approval
      of
      Contractor’s submissions hereunder and inspection of the Work, as reasonably
      necessary for Contractor’s performance of the Work. Owner’s representative, as
      designated by Owner, shall have exclusive authority to approve Change Orders
      from time to time and Owner shall provide to Contractor the names of such
      members no later than the date of this Agreement.

     

    4.9 Operation
      and Maintenance.
      Owner
      shall, commencing 60 days prior to the anticipated Mechanical
      Completion Date,
      provide O&M personnel for testing, start-up, operation, commissioning, and
      maintenance of the Project; provided, however, that Contractor shall remain
      solely responsible for performing the Work in accordance with this Agreement,
      including Contractor’s obligation to achieve Mechanical Completion on or before
      the Guaranteed Mechanical
      Completion Date,
      except for any act, omission, failure, non-achievement, negligence or
      non-performance of such O&M personnel.

     

    4.10 Owner
      shall provide complete Approved for Construction (“AFC”) and permitted Drawings
      for the 35,000,000 MGPY ethanol plant designed and laid out for the Property
      Site.

     

    4.11 Owner
      shall provide all Equipment in accordance with the Project Schedule.
      Contractor’s sole responsibility will be to assemble or erect such
      Equipment.

     

     

    ARTICLE
      V.

    PROJECT
      SCHEDULE

     

    5.1 Commencement
      of Work.
      After
      the
      date hereof, Contractor will commence performance of the Work so as to ensure
      completion of the Work in accordance with the terms hereof.

     

    5.2 [Reserved]

     

    5.3 Project
      Schedule.

     

    (a) Contractor
      shall perform the Work in compliance with the Project Schedule, including
      completing the Work required by the Guaranteed Mechanical Completion Date.
      Contractor hereby covenants and warrants to Owner that in undertaking to
      complete the Work in accordance with the terms hereof. Contractor shall provide
      the reports as required herein, and provide any further information required
      by
      Owner as Owner, the Financing Parties or the Engineer may reasonably request
      to
      verify actual progress and forecast future progress of the Work. Contractor
      shall promptly notify Owner in writing of any occurrence that Contractor has
      reason to believe will adversely affect the completion of the Work by the
      Guaranteed Mechanical Completion Date
      or
      materially adversely affect completion of the Work in accordance with the
      Project Schedule. Contractor will specify in said notice the corrective action
      planned by Contractor to overcome the effect of the delay or potential
      delay.

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    (b) Without
      limiting the obligations of Contractor under Section 5.3(a),
      Contractor shall provide together with its monthly status reports required
      hereunder any revisions to the Project Schedule that provide for the orderly,
      practicable and expeditious completion of the Work in accordance with the
      requirements of the Contract Documents. Each revised Project Schedule shall
      be
      presented in such reasonable detail and shall address all material elements
      of
      the Work. Contractor shall consult with Owner in connection with each revision
      to the Project Schedule provided under this paragraph. 

     

    (c) In
      the
      event Owner reasonably believes Contractor’s completion will not be completed by
      the date required therein, Owner shall notify Contractor in writing, and
      Contractor shall, within fourteen (14) days of receipt of Owner’s notice,
      provide to Owner a written plan detailing the activities or sequence of events
      Contractor will implement to assure completion by the date required in
Exhibit B.
      In the
      event Contractor fails to complete by the date required in Exhibit B,
      Contractor shall provide to Owner a written recovery plan at the earliest
      possible date to minimize delay of the Project Schedule. Such recovery plan
      shall include, without limitation, reasonable evidence of increases in
      Contractor’s work force, increases in the number of shifts, overtime operations,
      additional days of Work per week, and such other evidence as necessary for
      the
      timely completion of the Work in accordance with the Contract Documents.
      Approval by Owner and the Engineer of such plan shall not (i) be deemed in
      any
      way to have relieved Contractor of its obligations under this Agreement relating
      to the failure to achieve Mechanical Completion or by the Guaranteed Mechanical
      Completion Date,
      (ii) limit the rights of Owner under Section
      11.2.
      Further, Contractor acknowledges that the implementation of any such recovery
      plan may result in material additional costs and expenditures for Contractor
      (including by way of overtime, additional crews and/or additional shifts).
      If
      the delay is caused by no fault of the Contractor, Contractor and Owner agree
      that Contractor may be entitled to a Change Order or any other compensation
      or
      increase in the Separated Contract Price in connection with the implementation
      of any such recovery plan.

     

    (d) In
      no
      event will Contractor’s failure to complete by the date required for such
      change, delay or otherwise affect the required completion date.

     

    5.4 Liquidated
      Damages.
      Nothing
      contained in this Article V shall relieve Contractor of its obligation to
      pay Schedule Liquidated Damages in the event that Mechanical
      Completion is
      not
      achieved by the Guaranteed Mechanical Completion Date.

    
      
        
        

      

      
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    ARTICLE
      VI.

    CHANGE
      ORDERS

     

    6.1 Change
      Order at Owner’s Request.

     

    (a) Owner
      may
      at any time, by written notice to Contractor, request an addition to or deletion
      from or other changes in the Work (together with any necessary or requested
      amendments to this Agreement with respect thereto) (hereinafter “Change”
or
      “Changes”
by
      submitting a Request for Change Order in the form attached hereto as
Exhibit S).
      Contractor shall reasonably review and consider such requested Change and shall
      make a written response thereto within seven (7) days after receiving such
      request. If Contractor believes that giving effect to any Change requested
      by
      Owner will increase or decrease its cost of performing the Work, shorten or
      lengthen the time needed for completion of the Work, require modification of
      its
      warranties in Article XII
      or
      require a modification of any other provisions of the Contract Documents, its
      response to the Change request shall set forth such changes (including any
      amendments to the Contract Documents) that Contractor deems necessary as a
      result of the requested Change and its justification therefor. If Contractor
      accepts the Changes requested by Owner (together with any amendments to the
      Contract Documents specified therein) or if the Parties agree upon a
      modification of such requested Changes, the Parties shall set forth the agreed
      upon Change in the Work and agreed upon amendments to the Contract Documents,
      if
      any, in a written change order signed by all Parties (a “Change
      Order”).
      Owner
      and Contractor agree that any change order shall include a 16% mark-up for
      burdened labor rates; 16% mark up for materials and supplies; 16% mark-up for
      rental rates and 16% mark-up for all subcontractor costs. If the Parties do
      not
      agree upon all terms of the Change Order, Contractor shall proceed with such
      Work and the dispute shall be resolved in accordance with the terms
      hereof.

     

    (b) Owner
      may
      at any time, by written notice to Contractor, propose Changes in the Work or
      the
      Project Schedule due to a Force Majeure Event or an Owner Caused Delay or as
      provided in Section 3.2(a), a third party caused delay. If there is a material
      impact on Work or the Project Schedule as a result of such Force Majeure Event,
      an Owner Caused Delay, or such third party delay, then the Parties agree to
      bargain reasonably and in good-faith for the execution of a mutually acceptable
      Change Order for compensation and a time extension. Force Majeure Events will
      only entitle Contractor to extensions of the Project Schedule; provided,
      however, that if the Force Majeure Event exceeds three (3) days, Contractor
      shall be entitled to an increase in the Separated Contract Price for all amounts
      incurred as a result of the extension of such Force Majeure Event beyond three
      (3) days.

     

    6.2 Change
      Orders Requested by Contractor.

     

    (a) It
      is the
      intent of Owner and Contractor that the Scope of Work attached hereto as
Exhibit A
      includes
      all items necessary for the proper execution and completion of the
      Work.

    
      
        
        

      

      
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    (b) Subject
      to paragraphs (c) and (d) below, Contractor may at any time, by written
      notice to Owner, request a Change in the Work (together with any necessary
      or
      requested amendments to the Contract Documents). If Contractor believes that
      such requested Change will increase or decrease its cost of performing the
      Work,
      lengthen or shorten the time needed for completion of the Work, require
      modification of its warranties in Article XII
      or
      require a modification of any other provisions of the Contract Documents, it
      shall notify Owner of such, setting forth its justification for and effect
      of
      such change. If Owner accepts the Changes requested by Contractor (together
      with
      amendments to the Contract Documents specified therein, if any), or if the
      Parties agree upon a modification of such requested Changes, the Parties shall
      set forth the agreed upon Change in the Work and agreed upon amendments to
      the
      Contract Documents, if any, in a written Change Order signed by all Parties.
      For
      the avoidance of doubt, the Parties agree that Owner’s representative shall have
      authority to approve Change Orders. The Parties hereby express their intention
      that this Agreement will not be modified orally, through course of conduct
      or
      otherwise (regardless of whether any other agreements or documents relating
      to
      this Project have been so amended or modified), unless a writing to such effect
      is executed by the Parties. Further, in the event either Party hereto proposes
      that any oral agreement or course of conduct be construed as an amendment or
      modification to this Agreement, it shall first notify the other Party in writing
      of such proposal in accordance with Section
      18.4.
      No such
      proposal notice shall be deemed accepted unless executed by the Party receiving
      the same.

     

    (c) Contractor
      may at any time, by written notice to Owner, propose Changes in the Work:
      (i) due to a Force Majeure Event, provided that such Force Majeure Event
      has an impact that will actually, demonstrably, adversely and materially affect
      Contractor’s ability to complete the Project by the required dates and further
      provided that Contractor complies with requirements provided in Article XIV
      and
Section 6.2(b);
      (ii) due to an Owner Caused Delay, or, as provided in Section 3.2(a), third
      party delay, provided that such Delay has a demonstrable material cost increase
      to Contractor and/or schedule impact that will actually, demonstrably, adversely
      and materially affect Contractor’s ability to complete the Project by the
      required date and further provided that Contractor complies with the
      requirements set forth in Article XIV;
      (iii) due to a Change In Law, provided that such Change In Law prevents
      Contractor from performing all or a portion of the Work, has a demonstrable
      material cost increase to Contractor and/or has a schedule impact that will
      actually, demonstrably, adversely and materially affect Contractor’s ability to
      complete all portions of the Project by the required date, and further provided
      that Contractor shall diligently make adjustments to minimize the effect of
      such
      Change In Law on the Project; or (iv) due to certain unforeseeable
      subsurface conditions. If Owner agrees that Contractor has met all of the
      applicable condition precedents for a requested Change, then the Parties agree
      to the execution of a mutually acceptable Change Order. If in such event the
      Parties are unable to agree on a mutually acceptable Change Order, then the
      dispute shall be resolved in accordance with Article XVII.
      Any
      extension permitted under this Section shall be of an equitable duration
      designed to reflect the delay actually caused by the relevant event despite
      Contractor’s efforts to mitigate the same. 

     

    (d) If
      Contractor knows of circumstances or events that do or may require a Change
      in
      the Work or Project Schedule, Contractor shall provide written notification
      to
      Owner of such within fifteen (15) days
      after the date Contractor knows or should have known (in the exercise of due
      diligence) of such circumstances or events.

    
      
        
        

      

      
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    6.3 Changes
      to Separated Contract Price; Disputes.
      A
      Change
      Order initiated by either Party may have the effect of either increasing or
      decreasing the Separated Contract Price. Any Contractor response to a Change
      Order under Section 6.1 and any Contractor request for Changes under
      Section 6.2, shall be accompanied by a proposed all inclusive lump sum cost
      to Owner. In the event that the Parties are unable to reach an agreement on
      an
      all inclusive lump sum cost to Owner or a not-to-exceed cost estimate as a
      result of a requested Change, then Contractor agrees to perform the requested
      Change pending resolution of the dispute pursuant to Article XVII. In
      addition, in the event that Owner and Contractor are unable to reach agreement
      on a Change Order for a Change requested by either Owner or Contractor, at
      the
      direction of Owner (and only at the direction of Owner), Owner’s proposed
      Changes shall become effective as a Change Order and Contractor shall continue
      to perform the Work in accordance with such Change Order and the proposed
      Changes shall be performed by Contractor pending resolution of the dispute
      pursuant to Article XVII. Owner shall promptly compensate Contractor with a
      change order for the undisputed amount and the disputed amount shall be
      submitted for resolution of a dispute under Article XVII

     

    6.4 Information
      Requests.
      Owner
      may
      request that Contractor provide written information (prior to the issuance
      of a
      request for Changes) regarding the effect of a contemplated Change on pricing,
      scheduling, warranty obligations or on other terms of the Contract Documents.
      The purpose of such a request will be to determine whether or not a Change
      will
      be requested. Contractor shall provide the requested information within
      fourteen (14) days after the receipt of said request. Contractor will be
      allowed to reasonably delay its response to such request to the extent that
      fulfilling such request would significantly delay progress on the Work. Such
      an
      information request is not a Change Order and does not authorize Contractor
      to
      commence performance of the contemplated change in Scope of Work.

     

    6.5 Minor
      Changes.
      Owner
      shall have the direct authority to issue clarifications and order minor changes
      in the Work, effected by written order, which do not involve any adjustment
      to
      the Separated Contract Price or the Guaranteed Mechanical
      Completion Date,
      provided that such clarifications and changes are consistent with the intent
      of
      the Contract Documents. Such clarifications and changes shall be binding on
      Owner and Contractor. Contractor shall carry out such written orders promptly
      and Contractor shall receive no additional compensation therefor, nor shall
      there be any change to the Contract Documents, provided that not additional
      costs or delay is incurred by Contractor for said minor change(s).

     

     

    ARTICLE
      VII.

    SEPARATED
      CONTRACT PRICE; PAYMENTS TO CONTRACTOR

     

    7.1 Separated
      Contract Price.
      Owner
      shall pay Contractor the Separated Contract Price, equal to Twenty-Four
      Million Two Hundred Two Thousand Four Hundred Eighty Two and No/100 Dollars
      ($24,202,482.00),
      as full
      payment for all Work to be performed by Contractor under the Contract Documents.
      The following amounts may also be payable to Contractor pursuant to the terms
      hereof are in addition to the Separated Contract Price: (i) change order work;
      (ii) any Early Completion Bonus; and (iii) interest payable on delayed
      payments by Owner hereunder. Except as expressly provided herein, payments
      of
      the Separated Contract Price shall be made based on the Schedule of Values
      as
      provided by Contractor to Owner. When the Contract is mutually executed between
      Owner and Contractor and Contractor provides the bond, Owner agrees to
      compensate Contractor within five (5) days thereof, the amount of five percent
      (5%) of the Contract Price. The Schedule of Values is formulated to ensure
      that
      the Contractor maintains a positive cash flow during the course of the
      Project.

    
      
        
        

      

      
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    7.2 Requests
      for Payment.
      Commencing
      after the date of this Agreement, prior to the tenth (10th) day of each
      month following any month, Contractor may submit to Owner a Request for Payment
      based upon the Schedule of Values on Work completed to date. Each Payment shall
      be due and payable within  twenty
      (20) calendar days after its receipt of a Request for Payment, provided that
      Contractor has delivered all Lien waivers requested by Owner in accordance
      with
      Section 7.6(b), Owner shall pay to Contractor the amount that remains after
      the deduction from the Payment requested of the following amounts: (i) any
      portion thereof that Owner disputes as not being due and owing, (ii) any
      overpayment made by Owner for any previous period, (iii) any Schedule
      Liquidated Damages and (including interest thereon) payable by Contractor,
      and
      (iv) any amounts withheld pursuant to Sections 7.3(c), 7.4 and 7.6(a).
      Owner shall not be obligated to make more than one payment during each month.
      If
      Contractor provides a Request for Payment after the tenth (10th) day of the
      month, Owner shall not be obligated to make payment until the following month.
      Disputes as to the achievement shall be resolved as soon as reasonably possible
      pursuant to Article XVII of this Agreement; provided, however, that Owner
      shall be required to pay only those amounts undisputed pending the resolution
      of
      such dispute pursuant to the terms of this Agreement. 

     

    7.3 General
      Provisions For Payments.

     

    (a) If
      applicable, any payment by Owner shall be accompanied by a notice to Contractor
      specifying the amount of each deduction and setting forth the reason(s) why
      the
      deduction is justified. If undisputed amounts are due and unpaid by Owner,
      Contractor shall be entitled to payment of such amount, plus interest thereon
      at
      one and one-half percentage (1 1⁄2%) per month from the date that such amount
      should have been paid until the date of such payment. Said interest shall be
      paid the following month along with the Request for Payment.

     

    (b) Failure
      or forbearance on the part of Owner in withholding any amounts due under an
      invoice shall not be construed as accepting or acquiescing to any disputed
      claims. In addition, the making of any Payment by Owner shall not constitute
      an
      admission by it that the Work covered by such payment (or any Work previously
      performed) is satisfactory or timely performed, and Owner shall have the same
      right to challenge the satisfactoriness and timeliness of such Work as if it
      had
      not made such payment.

     

    (c) Notwithstanding
      any other provision to the contrary contained herein, Owner, in addition to
      its
      rights set forth in Section 7.4,
      shall
      have no obligation to make payments to Contractor hereunder and Owner may decide
      not to certify payment or may nullify the whole or a part of a certification
      for
      payment made pursuant to a previous Request for Payment to such extent as may
      be
      necessary in Owner’s opinion to protect Owner from loss because of:
      (i) defective Work not remedied; (ii)  damage to Owner or another
      contractor, including damage to the property of Owner or any of its Affiliates;
      (iii) Contractor’s, or any Subcontractor’s or Vendor’s failure to carry out
      the Scope of Work in accordance with the Contract Documents; or (iv) the
      occurrence of a Contractor Event of Default. 

     

    (d) Each
      payment made pursuant to this Article shall be paid directly to Contractor.
      Such
      payment shall be wire-transferred to an account or accounts designated by
      Contractor in its Request for Payment.

    
      
        
        

      

      
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    7.4 Retainage.

     

    (a) Amount
      of Holdback.
      Owner
      shall retain and withhold payment of seven and one half percent (7 1⁄2%) of all
      payments made to Contractor (the “Holdback”).
      Such
      amount shall be held by Owner as security for the performance of Contractor’s
      obligations hereunder and any interest thereon shall accrue for the account
      of
      Owner and not Contractor. Owner shall place the Holdback in an interest bearing
      account for Contractor’s sole benefit. Owner and Contractor agree that no
      retention will be withheld for change order work. 

     

    (b) Release
      of Holdback.
      Owner
      shall hold the aggregate amount of the Holdback until the Mechanical Completion
      Date. After the Mechanical Completion Date, Owner shall release the Holdback
      less one hundred fifty percent (150%) of the value of outstanding punch list
      items (punch list items shall be mutually agreed to between Owner and
      Contractor). Once Contractor completes the punch list items, any remaining
      Holdback shall be immediately released and paid to Contractor. Provided,
      however, Owner may withhold up to $50,000.00 of such remaining amount until
      Contractor provides Owner with the red-line As-built drawings. Any interest
      accruing on such amount shall accrue for the account of Contractor.

     

    7.5 [Reserved]

     

    7.6 Liens.

     

    (a) Provided
      Owner has timely paid Contractor as required under this Agreement, within
      fifteen (15) days of receiving any notice of any Lien filed by any
      Subcontractor, or any Person working for, or through, Contractor or any
      Subcontractor, Contractor shall promptly commence to cause such Lien to be
      discharged or satisfied by bond or otherwise including, without limitation,
      by
      raising valid counterclaims against such Subcontractor. The expense of
      discharging or satisfying by bond any such Lien shall be paid by Contractor.
      Contractor shall indemnify, defend and hold harmless Owner, its Affiliates
      and
      all Persons acting for any of them, from and against any Lien against the
      property of Owner provided timely payment is made to Contractor. If Owner
      receives notice of any such lien, Owner shall provide notice thereof to
      Contractor. Contractor shall promptly commence all necessary proceedings to
      discharge or satisfy by bond any such Lien as soon as possible.

     

    (b) As
      a
      condition precedent to the making of any payment hereunder, Contractor and
      each
      of its Substantial Subcontractors and Substantial Vendors shall provide Owner
      with a certificate in the form attached hereto as Exhibit H
      and
Exhibit H-1.
      Contractor shall provide such certificates simultaneously with each Request
      for
      Payment.

     

    (c) To
      the
      extent allowed by Applicable Law, Contractor hereby subordinates any Liens
      to
      which it may be entitled under Applicable Law or under the provisions of the
      Contract Documents to any Lien granted in favor of the Financing Parties,
      whether such Lien in favor of Financing Parties is created, attached or
      perfected prior to or after the Lien in favor of Contractor. 

    
      
        
        

      

      
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    ARTICLE
      VIII.

    TITLE,
      RISK OF LOSS AND POSSESSION

     

    8.1 Clear
      Title.
      Contractor
      warrants that legal title to and the ownership of the Work shall pass to Owner,
      free and clear of any and all Liens caused or created by Contractor, its
      Subcontractors or Vendors upon payment to Contractor of the portion of the
      Separated Contract Price then actually due to Contractor in connection with
      the
      Request For Payment as provided in the Contract Documents.

     

    8.2 Risk
      of Loss.
      Risk
      of
      loss for the Project and the Work shall pass to Owner on the Mechanical
      Completion Date.
      Subject to the foregoing, from and after the date of the transfer of risk of
      loss (a) Owner shall assume all risk of physical loss or damage thereto,
      and all responsibility for compliance by the Plant with applicable safety and
      environmental laws, and all other Applicable Laws and (b) Owner shall, and
      does hereby, release Contractor from, and Owner will and shall cause insurers
      to
      waive its right of subrogation against Contractor and its Vendors and
      Subcontractors for loss or damage to the Plant which may thereafter occur;
      provided, however, Contractor shall continue to be responsible until the
      Mechanical Completion Date for claims, physical loss or damage to the Work
      to
      the extent resulting from Contractor’s negligent acts or omissions, and/or
      failure to comply with the requirements of the Contract Documents. 

     

     

    ARTICLE
      IX.

    INSURANCE

     

    9.1 Contractor
      Insurance Policies.
      

     

    Upon
      execution of the Agreement and continuing through the Final Acceptance Date,
      Contractor shall, at its sole cost and expense, obtain and maintain in force
      insurance policies satisfying the requirements of this Article IX
      providing the following coverages of the types and in the amounts as follows
      (the “Contractor
      Insurance Policies”):

     

    (a) Workers’
      Compensation that complies with the laws of the State of Oregon and such other
      jurisdictions as may be applicable to its operations and includes an alternate
      employer endorsement. The amount of coverage of the insurance policy shall
      be
      the statutory amount required by the laws of the State of Oregon. Contractor
      expressly agrees to comply with all provisions of the Workers’ Compensation Laws
      or similar employee benefit laws of the United States, or wherein said Work
      is
      to be performed, or of the countries from which its personnel are employed,
      where required, if applicable.

     

    (b) Employers’
      Liability Insurance including Occupational Disease in the amount of
      $1,000,000.

     

    (c) Comprehensive
      or Commercial General Liability insurance shall be in the amount of $1,500,000
      per occurrence and $3,000,000 in the aggregate, including, but not limited
      to
      coverage for the following:

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    (i) Premises
      and Construction Operations;

     

    (ii) Independent
      Contractors;

     

    (iii) Products
      and Completed Operations, maintained for a period of three (3) years from
      the Final Acceptance Date;

     

    (iv) Personal
      Injury Coverage (with the standard employee and contractual exclusions
      removed);

     

    (v) Broad
      Form Property Damage;

     

    (vi) Severability
      of Interest clause;

     

    (vii) Broad
      Form Named Insured Endorsement;

     

    (d) Automobile
      Liability Insurance, on an occurrence basis including coverage for all owned,
      leased, hired or non-owned automotive equipment (and containing appropriate
      no
      fault insurance provisions or other endorsements as are required under
      jurisdictional law or requirements), in the amount of $1,000,000 per occurrence
      or the amount required by Applicable Law, whichever is greater.

     

    (e) Umbrella
      Excess Liability to be provided on a following form basis in the amount of
      $10,000,000 each occurrence and in the aggregate.

     

    (f)
      To
      the extent that Contractor shall have licensed architects, engineers or
      consultants to perform Work under this Agreement, Professional (Errors and
      Omissions) Liability in limits not less than $1,500,000 each Claim and in the
      Aggregate,

     

    9.2 The
      insurance required by Section 9.1 and the Agreement shall be written for not
      less than limits of liability specified in the Contract Documents or required
      by
      law, whichever coverage is greater. Coverages, whether written on an occurrence
      or claims-made basis, shall be maintained without interruption from date of
      commencement of the Work until date of final payment and termination of any
      coverage required to be maintained after final payment. Policies secured to
      address Section 9.1.f may be issued on a “claims-made” basis provided policies
      have a retroactive date of placement prior to or coinciding with the
      commencement of any Work performed performed under this Agreement, continue
      until Final Completion, and include at least a (2) year discovery period for
      submitting claims following final completion.

     

    9.3 Qualified
      Insurers.
      All
      Contractor Insurance Policies shall be written by insurers reasonably acceptable
      to Owner and that are rated “A-” or higher by A.M. Best’s Key Rating Guide, or
      as may be approved in writing by Owner from time to time (a “Qualified
      Insurer”). 

    
      
        
        

      

      
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    9.4 Certificates
      of Insurance.
      Contractor
      shall require all insurers under Contractor Insurance Policies to provide the
      Owner with certificates of insurance, in form and substance acceptable to the
      Owner, evidencing and describing the insurance policies and endorsements
      maintained hereunder upon commencement of the Work, or upon issuance of such
      policies, if earlier, and on each issuance anniversary while such insurance
      is
      in effect. The certificates of insurance shall evidence and describe the
      insurance policies and endorsements, including, without limitation, the
      requirements for the additional insured and waiver of subrogation as described
      in Section 9.3. Notwithstanding anything to the contrary contained herein,
      evidence of such coverage shall be provided to Owner as a condition precedent
      to
      Mobilization.

     

    9.5 With
      respect to the policies secured pursuant to Section 9.1.a through 9.1.f, the
      policies shall be endorsed to 

     

    (a) name
      Owner, its lender and their respective officers, agents and employees as
      Additional Insured as respect to coverages specified for 9.1.b through 9.1.e
      by
      endorsements equivalent to ISO Form CG2010 (11/85) or ISO Form CG2010 (10/01)
      and ISO Form CG2037 (10/01);

    

    (b) provide
      that the interests and protections of the additional insureds shall not be
      affected by any misrepresentation, act or omission of Contractor/Subcontractor
      or any breach by Contractor/Subcontractor of any provisions in the policies
      which would otherwise result in forfeiture or reduction in
      coverage;

    

    (c) provide
      that Owner will not by inclusion as Additional Insured incur liability to the
      insurance carriers for payment of premiums or deductibles/self-insured
      retentions;

    

    (d) provide
      that the policies are primary and is not excess of or contributing with any
      insurance or self-insurance maintained by Owner;

    

    (e) provide
      that the policies contain a severability of interest clause stating that, except
      with respect to the coverage limits, insurance applies to each insured as though
      separate policies were issued to each.

    

    9.6 Policies
      purchased and maintained by Contractor and any Certificates issued to evidence
      insurance required under this Article 9 shall contain by endorsement a waiver
      by
      each insurance carrier of the right of subrogation against Owner, its officers,
      agents and employees. 

    

     

    9.7 Inspection
      of Contractor’s Insurance Policies.
      In
      respect of all Contractor Insurance Policies, Contractor shall, when so
      requested by Owner, make Contractor’s policies of insurance available for review
      at a location mutually agreed to If Policies are procured on a project specific
      basis, Contractor shall, when so requested by Owner, provide copies of such
      policies and confirmation of premium payment.

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    9.8 Remedy
      on Failure to Insure.
      If
      Contractor shall fail to obtain and keep in force Contractor Insurance Policies,
      Owner may, without limiting any other remedy it may have, obtain and keep in
      force any such insurance and pay such premium or premiums as may be necessary
      for that purpose and recover from Contractor whether by way of deduction, offset
      or otherwise the cost of obtaining and maintaining such insurance.

     

    9.9 Management
      of Insurance Policies.
      Except
      as
      directed by Owner, Contractor shall be responsible for managing and
      administering all Contractor Insurance Policies, including the payment of all
      deductibles and self-insured retention amounts, the filing of all claims and
      the
      taking of all necessary and proper steps to collect any proceeds on behalf
      of
      the relevant insured Person. If Contractor shall fail to perform these
      responsibilities, Owner may take such action as it determines appropriate under
      the circumstances. In the event Contractor collects proceeds on behalf of other
      Persons, it shall ensure that these are paid directly from the insurers to
      the
      relevant Person and, in the event that it receives any such proceeds, it shall,
      unless otherwise directed by Owner, pay such proceed to such Party forthwith
      and
      prior thereto, hold the same in trust for the recipient.

     

    9.10 Owner
      Insurance Policies.
      Prior
      to
      the Initial Site Mobilization by Contractor and continuing through the Final
      Acceptance Date, Owner shall obtain and maintain in force with responsible
      and
      reputable insurance carriers, subject to usual and customary terms, exclusions
      and limitations and deductible provisions the following insurance of the types
      set forth below:

     

    (a) All
      Risk Installation and Builder’s Risk Insurance.
      Upon
      the Initial Site Mobilization by Contractor and continuing through the
      Mechanical Completion Date, Owner shall obtain and maintain in force an All
      Risk
      Installation and Builder's Risk Insurance policy (the “Builder’s
      Risk Policy”)
      including Delay in Start-Up coverage. The Builder’s Risk Policy shall be in an
      amount at least equal to the full replacement value of the Project. A
      certificate of insurance evidencing the Builder's Risk Policy shall be furnished
      to Contractor prior to Mobilization by Contractor. Owner and Contractor shall
      be
      named as insureds thereunder. The Builder's Risk Policy shall contain the
      following terms: an amount equal to the full replacement value of the Work
      for
“all risks” of physical loss or damage except as hereinafter provided, including
      coverage for earth movement, flood, boiler and machinery, transit and off-site
      storage accident exposure, start-up and testing coverage until the Mechanical
      Completion Date. The Builder’s Risk Policy may contain separate sub-limits and
      deductibles subject to insurance company underwriting guidelines. The Builder’s
      Risk Policy will be maintained in accordance with terms currently available
      in
      the insurance market for the construction of electric generating facilities.
      

     

    (a.1)
      Contractor shall be liable to Owner for amount of the policy deductible not
      to
      exceed $100,000 each occurrence to the extent such losses payable under the
      property insurance are attributable to the Work, acts or omissions of the
      Contractor, its Subcontractors of all tiers, or for any other entity or party
      for whom the Contractor may be responsible. Such deductible amount shall not
      be
      included in the Cost of Work.

    
      
        
        

      

      
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    (a.2)
      Partial
      occupancy or use in accordance with Section [11] shall not commence until the
      insurance company or companies providing property insurance have consented
      to
      such partial occupancy or use by endorsement or otherwise. The Owner and the
      Contractor shall take reasonable steps to obtain consent of the insurance
      company or companies and shall, without mutual written consent, take no action
      with respect to partial occupancy or use that would cause cancellation, lapse
      or
      reduction of insurance.

    

    9.10.1
      Loss of
      Use Insurance. The Owner, at the Owner's option, may purchase and maintain
      such
      insurance as will insure the Owner against loss of use of the Owner's property
      due to fire or other hazards, however caused. 

    

    9.10.2
      Before
      an exposure to loss may occur, the Owner shall have on file a copy of each
      policy that includes insurance coverages required by this Section 9.10. Each
      policy shall contain all generally applicable conditions, definitions,
      exclusions and endorsements related to this Project. Each policy shall contain
      a
      provision that the policy will not be canceled or allowed to expire, and that
      its limits will not be reduced, until at least 30 days' prior written notice
      has
      been given to the Contractor.

    

    9.10.3
      Waivers
      of Subrogation. The Owner and Contractor waive all rights against (1) each
      other
      and any of their subcontractors of all tiers, agents and employees, each of
      the
      other, and (2) the Architect, Architect's consultants, and separate contractors,
      if any, and any of their subcontractors of all tiers, agents and employees,
      for
      damages caused by fire or other causes of loss to the extent covered by property
      insurance obtained pursuant to this Section 9.10 or other property insurance
      applicable to the Work, except such rights as they have to proceeds of such
      insurance held by the Owner in good faith. The Owner or Contractor, as
      appropriate, shall require of the Architect, Architect's consultants, separate
      contractors, if any, and the subcontractors of all tiers, agents and employees
      of any of them, by appropriate agreements, written where legally required for
      validity, similar waivers each in favor of other parties enumerated herein.
      The
      policies shall provide such waivers of subrogation by endorsement or otherwise.
      A waiver of subrogation shall be effective as to a person or entity even though
      that person or entity would otherwise have a duty of indemnification,
      contractual or otherwise, did not pay the insurance premium directly or
      indirectly, and whether or not the person or entity had an insurable interest
      in
      the property damaged. Notwithstanding anything to the contrary herein contained,
      in the event that either Owner or Contractor ("First Party") incurs a loss
      by
      fire or other casualty, which fire or other casualty shall have been caused
      in
      whole or in part by the negligence or acts or omissions of the other party
      or
      the other party's agents, contractors, employees or servants, then, to the
      extent that the First Party is compensated by the Builder's Risk Insurance
      Coverage obtained pursuant to Section 9.10 or any other property insurance
      of
      the First Party applicable to the Project, then the First Party (for itself
      and
      its successors and assigns) hereby waives and releases any claim that it might
      have against the other party. No party shall have any rights against either
      Owner or Contractor by reason of any fire or casualty damage, either by
      subrogation or assignment.

    

    9.10.4
      A loss
      insured under Owner's property insurance shall be adjusted by the Owner, in
      good
      faith and made payable to the Owner/Contractor in good faith for the insureds,
      as their interests may appear, subject to requirements of any applicable
      mortgagee clause and of Section 9.10.6. The Contractor shall pay Subcontractors
      their just shares of insurance proceeds received by the Contractor, and by
      appropriate agreements, written where legally required for validity, shall
      require Subcontractors to make payments to their Sub-subcontractors in similar
      manner.

    
      
        
        

      

      
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    9.10.5
      The
      Owner/Contractor shall have power to adjust and settle a loss with insurers
      in
      good faith unless one of the parties in interest shall object in writing within
      five days after occurrence of loss to the Owner’s exercise of this power; if
      such objection is made, the dispute shall be resolved as provided in Section
      [17]. The Owner shall, in the case of arbitration, make settlement with insurers
      in accordance with directions of the arbitrators. If distribution of insurance
      proceeds by arbitration is required, the arbitrators will direct such
      distribution. Contractor and Subcontractors of all tiers shall fully cooperate
      with insurers to provide information necessary to adjust and settle any and
      all
      losses.

     

    9.11 Form
      of Owner’s Policies.
      Prior
      to
      the Initial Site Mobilization by Contractor, Owner shall provide Contractor
      with
      a certificate of insurance evidencing those policies set forth in
      Section 9.10. Contractor shall be responsible for the payment of all
      deductibles for such claims caused, directly or indirectly, through the acts
      or
      omissions of Contractor or any Subcontractor or Vendor. 

     

    9.12 [Reserved]

     

    9.13 [Reserved]

     

    9.14 [Reserved]

     

    9.15 [Reserved]

     

    

     

    ARTICLE
      X.

    TESTS
      AND FINAL ACCEPTANCE

     

    10.1 [Reserved]

     

    (a) [Reserved]

     

    (b) [Reserved]

     

    10.2 [Reserved]

     

    10.3 [Reserved]

     

    10.4 [Reserved]

     

    (a) [Reserved]

     

    (b) [Reserved]

     

    10.5 [Reserved]

     

    (a) [Reserved]

    
      
        
        

      

      
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    (b) [Reserved]

     

    (c) [Reserved]

     

    10.6 [Reserved]

     

    (a) [Reserved]

     

    (b) [Reserved]

     

    10.7 [Reserved]

     

    10.8 [Reserved]

     

    10.9 [Reserved]

     

     

    ARTICLE
      XI.

    COMPLETION/LIQUIDATED
      DAMAGES/EARLY COMPLETION

     

    11.1 Completion
      Guarantee.

     

    (a) Contractor
      hereby agrees that Mechanical Completion will occur no later than the Guaranteed
      Mechanical Completion Date. The Guaranteed Mechanical Completion Date is three
      hundred (300) calendar days from the date of this Agreement which equates to
      June 24, 2007. Provided, however, that Owner shall provide Contractor, by the
      date of this Agreement, with a complete set of the “approved for construction
      and permitted drawings (foundations and footings)” for the fermentation area.
      The Owner shall provide the approved for construction and permitted drawings
      for
      the Main Process and DD&E areas within seven (7) calendar days from the date
      of this Agreement. Upon execution of this Agreement, Contractor and Owner agree
      to work together diligently to develop a mutually agreeable critical path
      schedule (Exhibit B) which shall incorporate the Schedules of Contractor and
      Owner furnished equipment and Owner employed contractors, subcontractors, and
      vendors. The Parties will use their good faith efforts to re-evaluate the
      Guaranteed Mechanical Completion Date (earlier or later) based upon the
      development of a mutually agreeable detailed critical path schedule.

     

    (b) In
      the
      event that Mechanical Completion occurs after the Guaranteed Mechanical
      Completion Date but Contractor achieves Mechanical Completion within ninety
      (90)
      days after the Guaranteed Mechanical Completion Date, Contractor shall pay
      and
      Owner shall accept as its sole remedy for each and every business day of such
      delay after the Guaranteed Mechanical Completion Date the Schedule Liquidated
      Damages described in Section 11.2.

     

    (c) If
      and in
      the event Contractor fails to achieve Mechanical Completion within ninety (90)
      days of the Guaranteed Mechanical Completion Date, then (i) Contractor
      shall be considered in default, and may, at Owner’s sole and exclusive
      discretion, be terminated in accordance with Article XV
      of this
      Agreement, and (ii) Contractor shall continue to pay the Liquidated Damages
      described in Section 11.2
      through
      the exhaustion of the aggregate amount of liquidated damages, payable by
      Contractor hereunder in accordance with Section 11.7(c).

    
      
        
        

      

      
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    11.2 Liquidated
      Damages.

     

    (a) Owner
      and
      Contractor acknowledge and agree that any failure to achieve Mechanical
      Completion for the Project by the Guaranteed Mechanical Completion Date will
      directly cause substantial damage to Owner, which damage cannot be ascertained
      with reasonable certainty. Accordingly, if Contractor shall fail to achieve
      Mechanical Completion for the Project by the Guaranteed Mechanical Completion
      Date, subject to Section 11.7(c),
      and
      such delay is solely caused by Contractor, it shall pay to Owner, as liquidated
      and agreed damages and not as a penalty, the following amounts (collectively,
      the “Liquidated
      Damages”)
      an
      amount equal to $10,000 for each Day (or portion thereof) that Mechanical
      Completion is delayed beyond the Guaranteed Mechanical Completion Date,
      commencing with the first Day following the Guaranteed Mechanical Completion
      Date through and including the actual Mechanical Completion Date. 

     

    (b) It
      is
      understood and agreed between the Parties that the terms, conditions and amounts
      fixed pursuant to this Article XI
      as
      Liquidated Damages for failure to achieve Mechanical Completion for the Project
      by the Guaranteed Mechanical Completion Date are reasonable, considering the
      damages that Owner would sustain in such event, and that these amounts are
      agreed upon and fixed as liquidated damages because of the difficulty of
      ascertaining the exact amount of damages that would be sustained as a result
      of
      delay in achieving Mechanical Completion. Payment of Liquidated Damages are
      the
      exclusive remedies for delays, actual damages, and consequential damages, if
      and
      in the event the Project ultimately achieves Mechanical Completion before the
      aggregate amount of liquidated damages is exhausted. Further, subject to the
      last sentence of this paragraph and provided Contractor (i) has not
      otherwise materially breached the Agreement, (ii) is paying the assessed
      Liquidated Damages, and (iii) Owner and the Engineer determine that
      Contractor can achieve Mechanical Completion within ninety (90) days of the
      Guaranteed Mechanical Completion Date, the failure to achieve Mechanical
      Completion by the applicable Guaranteed Mechanical Completion Date shall not
      be
      considered an event of default under the Contract Documents. Notwithstanding
      anything contained herein to the contrary, in the event that Contractor has
      not
      achieved Mechanical Completion but has reached its maximum liability hereunder
      for payment of liquidated damages in accordance with Section 11.7(c),
      Contractor shall be in breach of this Agreement.

     

    11.3 Early
      Completion Bonus.
      In
      the
      event Contractor achieves Mechanical
      Completion prior
      to
      the Guaranteed Mechanical
      Completion Date,
      then Owner shall pay to Contractor a bonus equal to the sum of Five Thousand
      dollars ($5,000) for
      each
      full day that Mechanical
      Completion is
      achieved prior to the Guaranteed Mechanical
      Completion
      Date,
      commencing with the first day following the Mechanical
      Completion
      Date
      through and including the Guaranteed Mechanical
      Completion
      Date;
      provided, however, that the amount of the Early Completion Bonus payable by
      Owner shall not exceed One Million Dollars ($1,000,000) (the “Early Completion
      Bonus”). 

     

    11.4 [Reserved]

     

    11.5 [Reserved]

    
      
        
        

      

      
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    11.6 [Reserved]

     

    11.7 Payment
      of Liquidated Damages.

     

    (a) Liquidated
      Damages, if any, under this Article XI
      shall
      accrue on a daily basis for each Day (or portion thereof) of delay. Within
      three
      (3) Days after the end of each week during which Liquidated Damages accrue
      under
      this Article XI,
      Owner
      shall provide Contractor with a statement of the amount of Liquidated Damages
      owed for such week. Owner shall provide Contractor with a statement of the
      amount of Liquidated Damages owed. Contractor shall pay any Liquidated Damages
      pursuant to this Article XI
      within
      seven (7) Days after receipt of such statement(s). Any amounts not paid when
      due
      shall accrue interest from the due date until paid at the Reference Rate
      (established as of the first day of the month in which payment is
      due).

     

    (b) Notwithstanding
      anything contained herein to the contrary, the maximum amount of Liquidated
      Damages payable by Contractor hereunder shall not exceed the total amount of
      One
      Million Five Hundred Thousand Dollars ($1,500,000).

     

    11.8 [Reserved]

     

    11.9 [Reserved]

     

    11.10 Bonds.
      (a)
      Concurrently with the execution of this Agreement, Contractor shall provide
      to
      Owner a performance and payment bond for the benefit of Owner and the Financing
      Parties under terms and conditions acceptable to Owner and the Financing Parties
      (as amended, amended and restated, supplemented or otherwise modified from
      time
      to time, the “Bonds”). The Bonds shall secure all of Contractor’s obligations
      hereunder (without regard to any limitation or liabilities hereunder), up to
      the
      amount of the Separated Contract Price. 

     

    (b) Contractor
      agrees to cause the Bonds to remain in full force and effect until Final
      Acceptance.

     

     

    ARTICLE
      XII.

    CONTRACTOR’S
      WARRANTIES

     

    12.1 Warranties.

     

    (a) Contractor
      warrants to Owner that all materials shall (i) be new and of good quality,
      and (ii) be free from improper workmanship and Defects.

     

    (b) Contractor
      warrants to Owner that the Work will be performed in a good and workmanlike
      manner, and that the Plant will: (i)  be constructed in accordance with the
      Drawings, Scope of Work, all Applicable Laws in existence and effect and
      Applicable Permits in existence and effect and other terms of the Contract
      Documents; (ii) contain the supplies and materials described in the Scope
      of Work.

    
      
        
        

      

      
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    (c) Except
      as
      expressly stated herein to the contrary, Contractor warrants that it shall
      remedy, in accordance with Section 12.2,
      any
      Defects in the Work due to faulty workmanship which appear within a period
      of
      twelve (12) months following Mechanical Completion (as such period may be
      extended in accordance with the terms hereof); (the “Warranty
      Period”).
      Contractor shall bear all costs of corrections and repairs during the Warranty
      Period for Contractor’s defective Work. The provisions of this Section apply to
      Work performed by Subcontractors and Vendors as well as Work performed directly
      by Contractor. The provisions of this Section do not apply to corrective work
      caused by the acts or omissions of Owner or any separate contractor of Owner.
      If
      and in the event Owner notifies Contractor of a Defect within the Warranty
      Period, Contractor, at Contractor’s expense, shall perform all Work necessary to
      remedy the Defect and the repair or replacement Work performed by
      Contractor.

     

    (d) THE
      WARRANTIES OF CONTRACTOR SET FORTH IN THIS AGREEMENT ARE EXCLUSIVE AND
      CONTRACTOR SPECIFICALLY DISCLAIMS ALL OTHER WARRANTIES, WHETHER STATUTORY,
      EXPRESS OR IMPLIED (INCLUDING ALL WARRANTIES OF MERCHANTABILITY AND FITNESS
      FOR
      A PARTICULAR PURPOSE AND ALL WARRANTIES ARISING FROM COURSE OF DEALING AND
      USAGE
      OF TRADE). The foregoing sentence is not intended to disclaim any other
      obligations of Contractor set forth herein.

     

    12.2 Repair
      of Nonconforming Work.

     

    (a) If
      the
      Work is found to contain Defects, or Contractor is otherwise in breach of any
      of
      the warranties set forth in Section 12.1
      within
      the Warranty Period, Contractor shall at its expense correct, repair or replace
      such Defect or otherwise cure such breach as promptly as practicable upon being
      given written notice thereof. Owner shall provide Contractor with reasonable
      access to the Plant in order to perform its obligation under this Article and
      the Parties shall schedule such corrections or replacements as necessary so
      as
      to minimize disruptions to the operation of the Plant. Contractor shall bear
      all
      costs and expenses associated with correcting any Defect or breach of warranty,
      including, without limitation, necessary disassembly, transportation, reassembly
      and retesting, as well as reworking, repair or replacement of such Work. If
      Contractor is obligated to repair, replace or renew any of the Work hereunder,
      Contractor will undertake a technical analysis of the problem and correct the
      “root cause” unless Contractor can demonstrate to Owner’s satisfaction that
      there is not a risk of the reoccurrence of such problem. Contractor’s
      obligations under this Section shall not be impaired or otherwise adversely
      affected by any actual or possible legal obligation or duty of any Vendor or
      Subcontractor to Contractor or Owner concerning any Defect or breach of
      warranty. No such correction or cure, as the case may be, shall be considered
      complete until Owner shall have reviewed and approved such remedial work.

     

    (b) If
      Contractor fails to complete or undertake with due diligence to complete the
      correction of any Defect or cure of any breach of warranty as required herein
      within twenty (20) days after receipt of written request by Owner to
      perform such obligations, then Owner may correct or cause to be corrected such
      Defect or cure such breach of warranty and Contractor shall be liable for all
      reasonable costs, charges, and expenses incurred by Owner in connection
      therewith, and Contractor shall, within fifteen (15) days after request
      therefor, pay to Owner an amount equal to such costs, charges, and expenses.
      Any
      such request by Owner shall be accompanied by proper documentation evidencing
      such costs, charges and expenses. 

    
      
        
        

      

      
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    12.3 [Reserved]

     

    12.4 [Reserved]

     

    12.5 [Reserved]

     

     

    ARTICLE
      XIII.

    CONTRACTOR’S
      REPRESENTATIONS

     

    13.1 Representations
      and Warranties.

     

    (a) Contractor
      represents and warrants to Owner that:

     

    (i) Contractor
      is a Washington
      corporation, and in good standing under
      the
      laws of State of Washington and
      is
      duly authorized and qualified to conduct business in the State of Oregon;

     

    (ii) Contractor
      has all requisite power and authority to conduct its business, own its
      properties and execute and deliver this Agreement and perform its obligations
      hereunder in accordance with the terms hereof;

     

    (iii) the
      execution, delivery, and performance of the Contract Documents have been duly
      authorized by all requisite corporation action
      and this Agreement constitutes the legal, valid and binding obligation of
      Contractor, enforceable against Contractor in accordance with its
      terms;

     

    (iv) neither
      the execution, delivery or performance of the Contract Documents conflicts
      with,
      or results in a violation or breach of the terms, conditions or provisions
      of,
      or constitutes a default under, the organizational documents of Contractor
      or
      any agreement, contract, indenture or other instrument under which Contractor
      or
      its assets are bound, nor violates or conflicts with any Applicable Law or
      any
      judgment, decree, order, writ, injunction or award applicable to
      Contractor;

     

    (v) Contractor
      is not in violation of any Applicable Law or Applicable Permit, which
      violations, individually or in the aggregate, would materially affect its
      performance of its obligations under the Contract Documents; 

     

    (vi) Contractor
      is the holder of all governmental consents, licenses, permissions and other
      authorizations and Applicable Permits required to operate and conduct its
      business now and as contemplated by the Contract Documents, other than
      Contractor Permits and Owner Permits which will be obtained in accordance with
      the terms of the Contract Documents; 

     

    (vii) Contractor,
      by itself and through its Subcontractors and Vendors, has the full
      experience
      and proper qualifications to perform the Work and to construct the Plant in
      accordance with the terms of the Contract Documents;

     

    
      
        
        

      

      
        -39-

        
          

        

      

      
        
        

      

    

    (viii) Contractor
      has visited and examined the Property Site and is fully familiar with such
      Property Site and surrounding area as determined from a prior site visit
      (conditions of which could materially change due to subsequent development
      by
      Owner’s separate contractor) and based on such visit and examination has no
      reason to believe that Contractor will be unable to complete the Work in
      accordance with the Contract Documents; 

     

    (ix) to
      the
      best of its knowledge, Contractor has reviewed all other documents and
      information necessary and available to Contractor in order to ascertain the
      nature, location and scope of the Work, the character and accessibility of
      the
      Property Site, the availability of facilities and utilities, and the location
      and character of existing or adjacent work or structures; 

     

    (x) Contractor
      acknowledges that this Agreement constitutes a fixed price obligation to,
      construct the Project pursuant to this Agreement; 

     

    (xi) Contractor
      is financially solvent, able to pay its debts as they mature, and possessed
      of
      sufficient working capital to complete its obligations under this Agreement;
      and

     

    (xii) Contractor
      is not providing any trade secrets, patents, copyrights or trademarks in
      relation to Contractor’s performance of the Work.

     

    (b) Owner
      represents and warrants to Contractor that: 

     

    (i) Owner
      is
      a limited
      liability company, duly formed, validly existing and in good standing under
      the
      laws of State of Delaware and is duly authorized and qualified to conduct
      business in the State of Oregon; 

     

    (ii) Owner
      has
      all requisite power and authority to conduct its business, own its properties
      and execute and deliver the Contract Documents and perform its obligations
      hereunder in accordance with the terms hereof;

     

    (iii) the
      execution, delivery, and performance of the Contract Documents have been duly
      authorized by all requisite limited liability company action and this Agreement
      constitutes the legal, valid and binding obligation of Owner, enforceable
      against Owner in accordance with its terms; 

     

    (iv) neither
      the execution, delivery or performance of the Contract Documents conflicts
      with,
      or results in a violation or breach of the terms, conditions or provisions
      of,
      or constitutes a default under, the organizational documents of Owner or any
      agreement, contract, indenture or other instrument under which Owner or its
      assets are bound, nor violates or conflicts with any Applicable Law or any
      judgment, decree, order, writ, injunction or award applicable to Owner;

     

    (v) Owner
      is
      not in violation of any Applicable Law or Applicable Permit, which violations,
      individually or in the aggregate, would materially affect its performance of
      its
      obligations under the Contract Documents; and 

    
      
        
        

      

      
        -40-

        
          

        

      

      
        
        

      

    

    (vi) Owner
      is
      the holder of all governmental consents, licenses, permissions and other
      authorizations and Applicable Permits required to operate and conduct its
      business now and as contemplated by the Contract Documents, other than Owner
      Permits which will be obtained in accordance with the terms of the Contract
      Documents.

     

     

    ARTICLE
      XIV.

    FORCE
      MAJEURE AND OWNER CAUSED DELAY

     

    14.1 Definition
      of Force Majeure Event.
      As
      used
      herein, the term “Force Majeure Event” shall mean any event or circumstance, or
      combination of events or circumstances, that arises after the date hereof,
      is
      beyond the reasonable control of the Party claiming the Force Majeure Event,
      is
      unavoidable or could not be prevented or overcome by the reasonable efforts
      and
      due diligence of the Party claiming the Force Majeure Event and has an impact
      which will actually, demonstrably, adversely and materially affect Owner’s
      ability to perform its obligations in accordance with the terms of the Contract
      Documents or Contractor’s ability to complete by the required date the Work and
      performance of its obligations in accordance with the terms of the Contract
      Documents. Without limiting the generality of the foregoing, events that may
      give rise to a Force Majeure Event include, without limitation, acts of God,
      natural disasters, fires, earthquakes, lightning, floods, storms, civil
      disturbances, riots, war, (except as set forth below), and the action of or
      failure to act on the part of any Government Authority having or asserting
      jurisdiction that is binding upon the Parties and has been opposed by all
      reasonable means, in each case, that meet the definition of Force Majeure Event
      as set forth above. 

     

    For
      cold
      weather to constitute a Force Majeure Event, the cold temperature must be a
      negative 10°F (with wind chill) or lower in order to constitute a Force Majeure
      Event as documented by the closest airport to the Project site.

     

    14.2 Notice
      of Force Majeure Event.
      The
      Party
      claiming a Force Majeure Event shall within thirty 30 calendar Days after it
      knows or reasonably should have known of the occurrence of the Force Majeure
      Event give the other Party written notice describing the details of the cause
      and nature of the Force Majeure Event, the anticipated length of delay due
      to
      the Force Majeure Event and any other affect on the Party’s performance of its
      obligations hereunder; provided that if the Force Majeure Event results in
      a
      breakdown of communications rendering it not reasonably practicable to give
      notice within the applicable time limit specified herein, then the Party
      claiming a Force Majeure Event shall give such notice as soon as reasonably
      practicable after the reinstatement of communications. Within thirty (30) days
      after initial notification, such Party shall provide sufficient proof of the
      occurrence and duration of such Force Majeure Event to the other Party and
      shall
      thereafter provide the other Party with periodic supplemental updates to reflect
      any change in information given to the other Party as often as requested by
      the
      other Party. The Party claiming the Force Majeure Event shall give notice to
      the
      other Party of (a) the cessation of the relevant Force Majeure Event and
      (b) the cessation of the effects of such Force Majeure Event on the
      performance by it of its obligations under the Contract Documents as soon as
      practicable after becoming aware thereof. No Force Majeure Event shall relieve
      any Party from performing those of its obligations that are not affected by
      the
      Force Majeure Event.

    
      
        
        

      

      
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    14.3 Delay
      from Force Majeure Event.
      So
      long
      as the conditions set forth in this Section 14.3 are satisfied, and subject
      to Section 14.7, neither Party shall be responsible or liable for or deemed
      in breach of this Agreement because of any failure or delay in complying with
      its obligations under or pursuant to the Contract Documents to the extent that
      such failure has been caused, or contributed to, by one or more Force Majeure
      Events or its effects or by any combination thereof, and in such
      event:

     

    (a) except
      as
      otherwise provided herein, the performance by the Party claiming the Force
      Majeure Event of its obligations hereunder shall be suspended, and in the event
      that such Party is required to start or complete an action during a specific
      period of time, such start date or period for completion shall be extended,
      on
      the condition that: (i) such suspension of performance and extension of
      time shall be of no greater scope and of no longer duration than is required
      by
      the effects of the Force Majeure Event; (ii) the Party claiming the Force
      Majeure Event complies with Section 14.2;
      and
      (iii) the Party claiming the Force Majeure Event continually uses
      commercially reasonable efforts to alleviate and mitigate the cause and effect
      of the Force Majeure Event and remedy its inability to perform; and

     

    (b) in
      the
      event Contractor desires to claim a Force Majeure Event, it must submit a
      request for Changes pursuant to Section 6.2,
      and
      Contractor shall be entitled to suspension of performance or extension of time
      (including an extension of the Mechanical Completion Date) and an increase
      in
      the Separated Contract Price (if otherwise allowed pursuant to Section 6.1(b))
      with
      respect thereto to the extent agreed upon by both Parties pursuant to a Change
      Order in accordance with the principles of this Section 14.3
      and
6.1(b).
      

     

    14.4 [Reserved]

     

    14.5 Notice
      of Owner Caused Delay.
      In
      the
      event Contractor desires to claim an Owner Caused Delay, Contractor shall within
      thirty (30) calendar Days after it knows or should have known of the occurrence
      of the Owner Caused Delay, give Owner written notice describing the details
      of
      the Owner Caused Delay, the anticipated length of such delay and any other
      affect on Contractor’s performance of its obligations hereunder. Within
      fifteen (15) days after initial notification, Contractor shall (i) provide
      to Owner demonstrable proof of the occurrence and duration of such Owner Caused
      Delay and, if requested by Owner, such proof shall be provided, and in any
      event
      verified, by an independent third party reasonably acceptable to Owner and
      Contractor at the sole cost and expense of Contractor; and (ii) thereafter
      provide Owner with periodic supplemental updates to reflect any change in
      information given to Owner as often as requested by Owner. 

    
      
        
        

      

      
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    14.6 Delay
      from Owner Caused Delay.
      So
      long
      as the conditions set forth in this Section 14.6 are satisfied and subject
      to Section 14.7, Contractor shall not be responsible or liable for or
      deemed in material breach of the Contract Documents because of any failure
      or
      delay in completing the Work in accordance with the Project Schedule or
      achieving Mechanical
      Completion by
      the
      Guaranteed Mechanical
      Completion Date
      to
      the extent that such failure has been caused by one or more Owner Caused Delays,
      and in such event, except as otherwise provided herein, the start date or period
      for completion of any portion of the Work shall be extended, on the condition
      that: (i) such suspension of performance and extension of time shall be of
      no greater scope and of no longer duration than is required by the effects
      of
      the Owner Caused Delay; (ii) Contractor complies with Section 14.5;
      and (iii) Contractor provides all assistance reasonably requested by Owner
      for the elimination or mitigation of the Owner Caused Delay. In the event
      Contractor desires to claim an Owner Caused Delay, it must submit a request
      for
      Changes pursuant to Section 6.2, and Contractor shall be entitled to
      suspension of performance or extension of time (including an extension of the
      Guaranteed Mechanical
      Completion Date)
      together with demonstrated, justified and reasonable additional costs, including
      but not limited to, idle equipment costs, incurred by reason of such delay
      to
      the extent agreed upon by both Parties pursuant to a Change Order in accordance
      with Section 6.2. Failure to comply with the terms of this
      Section 14.6 shall constitute a waiver of any claims for an increase in the
      Project Schedule or the Separated Contract Price as a result of an Owner Caused
      Delay. 

     

    14.7 [Reserved]

     

    ARTICLE
      XV.

    TERMINATION

     

    15.1 Contractor
      Events of Default.
      The
      occurrence and continuation of any of the following events shall constitute
      an
      event of default by Contractor (each a “Contractor Event of
      Default”):

     

    (a) (i) the
      failure of Contractor, subject to the grace period provided in Section 11.1
      hereof,
      to achieve Mechanical Completion by the Guaranteed Mechanical Completion Date
      or
      (ii) the failure of Contractor to diligently and competently prosecute the
      Work such that Owner’s reasonable projections indicate that Contractor will be
      unable to achieve Mechanical Completion within ninety (90) days after the
      Guaranteed Mechanical Completion Date;

     

    (b) any
      failure by Contractor to make any other payment or payments required to be
      made
      to Owner under the Contract Documents within ten (10) Business Days after
      receipt of written notice from Owner of Contractor’s failure to make such other
      payment or payments (except, in the case of payments other than Liquidated
      Damages, to the extent Contractor disputes such other payment or payments in
      good faith and in accordance with the terms of this Agreement);

    
      
        
        

      

      
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    (c) any
      breach by Contractor of any representation or warranty contained herein, or
      any
      obligation, covenant or agreement hereunder other than those specified in
      clause (f) above and (i) such breach is not cured by Contractor within
      thirty (30) days after notice thereof from Owner, or (ii) if such
      breach is not capable of being cured within such thirty (30) days,
      Contractor (A) fails to commence to cure such breach within such
      thirty (30) days period, (B) fails to thereafter diligently proceed to
      cure such breach in a manner reasonably satisfactory to Owner in its sole
      discretion or (C) fails to cure such breach within ninety (90) days
      after notice thereof from Owner;

     

    (d) any
      of
      the following occurs: (i) Contractor consents to the appointment of or
      taking possession by, a receiver, a trustee, custodian, or liquidator of itself
      or of a substantial part of its assets, or fails or admits in writing its
      inability to pay its debts generally as they become due, or makes a general
      assignment for the benefit of creditors; (ii) Contractor files a voluntary
      petition in bankruptcy or a voluntary petition or an answer seeking
      reorganization in a proceeding under any applicable bankruptcy or insolvency
      laws or an answer admitting the material allegations of a petition filed against
      it in any such proceeding, or seeks relief by voluntary petition, answer or
      consent, under the provisions of any now existing or future bankruptcy,
      insolvency or other similar law providing for the liquidation, reorganization,
      or winding up of corporations, or providing for an agreement, composition,
      extension, or adjustment with its creditors; (iii) a substantial part of
      Contractor’s assets are subject to the appointment of a receiver, trustee,
      liquidator, or custodian by court order and such order shall remain in effect
      for more than thirty (30) days; or (iv) Contractor is adjudged
      bankrupt or insolvent, has any property sequestered by court order and such
      order shall remain in effect for more than thirty (30) days, or has filed
      against it a petition under any bankruptcy, reorganization, arrangement,
      insolvency, readjustment of debt, dissolution or liquidation law of any
      jurisdiction, whether now or hereafter in effect, and such petition shall not
      be
      dismissed within thirty (30) days of such filing;

     

    (e) the
      dissolution of Contractor, except for the purpose of merger, consolidation
      or
      reorganization where the successor expressly assumes Contractor’s obligations
      hereunder and such assignment and assumption does not materially adversely
      affect the ability of the successor to perform its obligations under the
      Contract Documents and remains in full force and effect for the obligations
      of
      such successor; 

     

    (f) the
      transfer by Contractor of (i) all or a substantial portion of the rights
      and/or obligations of Contractor hereunder, except for an assignment permitted
      hereunder, or (ii) all or a substantial portion of the assets or
      obligations of Contractor, except where the transferee expressly assumes the
      transferred obligations and such transfer does not materially adversely affect
      the ability of Contractor or the transferee, as applicable, to perform its
      obligations under the Contract Documents; 

     

    (g) the
      failure of Contractor to provide and maintain in full force and effect the
      Bonds;

     

    (h) any
      failure by Contractor to maintain the insurance coverages required of it in
      accordance with Article IX;
      or

    
      
        
        

      

      
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    (i)  any
      abandonment of the Work by Contractor, where “Abandonment” for the purposes of
      this Section shall mean that Contractor has substantially reduced personnel
      at
      the Site or removed required equipment from the Site such that, in the opinion
      of an experienced construction manager, Contractor would not be capable of
      completing the Work.

     

    15.2 Termination
      by Owner Due to Contractor Default;
      Other Remedies.

     

    (a) Upon
      the
      occurrence and during the continuance of a Contractor Event of Default, Owner
      may, at its option, terminate this Agreement, without prejudice to any other
      rights and remedies available to Owner under this Agreement, by giving written
      notice thereof to Contractor, which termination shall be effective upon the
      giving of such notice by Owner. .

     

    (b) In
      the
      event of a termination by Owner under this Section, Owner shall have the right
      to take possession of and use all of the Contractor Equipment located at the
      Job
      Site on the date of such termination for the purpose of completing the Work
      and
      may employ any other Person to complete the Work by whatever method that Owner
      may deem necessary. In addition, Owner may make such reasonable expenditures
      as
      in Owner’s judgment will accomplish the timely completion of the Work in
      accordance with the terms hereof.

     

    (c) In
      the
      event of termination by Owner under this Section, Contractor shall not be
      entitled to receive any further payments under the Contract Documents, except
      for payments for Work completed prior to such termination for which Contractor
      has not previously been paid and demobilization costs (not less than two percent
      (2%) of Contract Price). Owner shall determine the amount of consideration
      for
      such completed Work in accordance with the Schedule of Values set forth in
      Exhibit D
      and
      Contractor’s Rate Schedule set forth in Exhibit K.
      Owner
      shall be entitled to offset against such amount due to Contractor any amounts
      due to Owner by Contractor. Any amounts due to Contractor under this
Section 15.2(c)
      shall be
      paid to Contractor within thirty (30) days after the Final Acceptance Date
      (as achieved by the substitute contractor).

     

    (d) In
      the
      event of termination by Owner under this Section, Contractor shall be
      responsible for and shall reimburse Owner for the following amounts:
      (i) all costs and expenses incurred by Owner to engage a substitute
      contractor to complete (or cure deficiencies in) the Work, including, without
      limitation, overhead and legal, engineering and other professional expenses;
      (ii) all costs and expenses incurred in connection with the termination of
      the Contract Documents, including costs and expenses incurred in connection
      with
      the obligations set forth under Section 15.9;
      (iii) the amount by which (A) the cost to complete (or cure
      deficiencies in) the Work, exceeds (B) the balance of the Separated
      Contract Price unpaid at the time of the termination; and (iv) all actual
      damages occasioned by reason of said default, except that Contractor agrees
      that
      Schedule Liquidated Damages shall apply in lieu of delay damages for late
      performance.

    
      
        
        

      

      
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    15.3 Termination
      by Owner for Convenience. 

     

    (a) Owner
      may
      terminate this Agreement at any time for any reason in its sole discretion
      by
      giving written notice thereof to Contractor, which termination shall be
      effective upon the giving of such notice by Owner. Upon receiving any such
      notice of termination, Contractor shall stop performing the Work and, except
      as
      otherwise directed by Owner, shall cancel as quickly as possible all orders
      placed by it with Subcontractors and Vendors and shall use all reasonable
      efforts to minimize cancellation charges and other costs and expenses associated
      with the termination of the Agreement. Contractor shall also promptly assign
      all
      subcontracts and purchase orders which Owner wishes to retain in accordance
      with
Section
      15.9.
      

     

    (b) In
      the
      event of a termination by Owner under this Section, Contractor shall be entitled
      to receive a termination payment (the “Termination
      Payment”)
      equal
      to the sum of the following, without duplication: (i) that portion of the
      Separated Contract Price that is applicable to Work completed up to the date
      of
      termination that has not previously been paid to Contractor (as determined
      below); (ii) the expenses reasonably incurred by Contractor in withdrawing
      Contractor’s Equipment and personnel from the Job Site and in otherwise
      demobilizing; (iii) the expenses reasonably incurred by Contractor in
      terminating contracts with Subcontractors and Vendors pertaining to the Work
      (excluding fees of any Affiliates of Contractor), except to the extent Owner
      has
      instructed Contractor not to terminate such contracts, in which event such
      contract will be assigned to Owner, subject to Owner’s assumption of same and,
      if required, Owner’s adequate assurance to such Subcontractors or Vendors
      regarding Owner’s ability to pay; (iv) the expenses incurred in connection
      with Contractor’s obligations set forth under Section 15.9
      (to the
      extent not otherwise reimbursed pursuant to the preceding clause (i)) and (v)
      loss of anticipated profits for the Work unperformed. 

     

    (c) Owner
      and
      Contractor shall determine the amount due to Contractor pursuant to the
      preceding clause (b)(i) in accordance with the Schedule of Values for
      completed Milestones and in accordance with the Contractor’s Rate Schedule for
      partially completed Milestones. Contractor shall document the costs claimed
      under clauses (b)(ii), (b)(iii), and (b)(iv) above to Owner’s
      reasonable satisfaction and shall supply Owner with copies of the Subcontractor
      and Vendor invoices and other receipts covering amounts claimed under such
      clauses. Contractor shall submit an invoice to Owner for the Termination Payment
      with the supporting information and documents referred to above, and Owner
      shall
      pay such invoice within thirty (30) days after its receipt of same unless
      it disputes any portion thereof, in which event Owner shall only pay the
      undisputed portion of the Termination Payment within such thirty (30) day
      period and the dispute over the remainder of the claimed Termination Payment
      may
      be resolved pursuant to Article XVII.
      Contractor shall utilize reasonable commercial efforts to include termination
      for convenience provision with terms similar to the foregoing in all
      subcontracts, contracts and purchase orders.

     

    (d) Any
      amount owed pursuant to Section 15.3(b)
      shall be
      subject to adjustment to the extent any Work contains Defects. 

    
      
        
        

      

      
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    15.4 Suspension
      by Owner for Convenience.

     

    (a) Owner
      may
      suspend all or a portion of the Work to be performed under the Contract
      Documents at any time for any reason in its sole discretion by giving written
      notice thereof to Contractor. Such suspension shall continue for the period
      specified in the notice of suspension; provided that Contractor agrees to resume
      performance of the Work upon five (5) Business days’ notice from Owner. Upon
      receiving any such notice of suspension, unless the notice requires otherwise,
      Contractor shall: (i) immediately discontinue the Work on the date and to
      the extent specified in the notice; (ii) place no further orders or
      subcontracts for Equipment, services or facilities with respect to suspended
      Work, other than to the extent required in the notice; (iii) promptly make
      every reasonable effort to obtain suspension, with terms satisfactory to Owner,
      of all orders, subcontracts and rental agreements to the extent they relate
      to
      performance of suspended Work; (iv) continue to protect and maintain the
      Work performed, including those portions on which Work has been suspended; and
      (v) take any other reasonable steps to minimize costs and expenses
      associated with such suspension. 

     

    (b) Except
      as
      provided in Section 15.4(c),
      as full
      compensation for any suspension under this Section, Contractor will be
      reimbursed by Owner for the costs, as reasonably incurred, without duplication
      of any item, to the extent that such costs directly result from such suspension
      of the Work, including: (i) a standby charge, without mark-up or multiplier
      (except that Contractor shall be entitled to charge a mark-up for its employees
      as provided in Exhibit K),
      sufficient to compensate Contractor for the direct and indirect costs
      attributable to keeping, to the extent required in the suspension notice, its
      organization and the Contractor Equipment committed to the Work on a standby
      basis, as agreed to by Owner and Contractor; provided that Contractor shall
      substantiate such charge with supporting information acceptable to Owner and;
      (ii) all necessary and reasonable costs incurred in connection with
      demobilization and remobilization of Contractor’s facility and Labor and the
      Contractor Equipment; and (iii) an equitable amount to reimburse Contractor
      for the cost of receiving, maintaining and protecting that portion of Work
      upon
      which performance has been suspended, as agreed to by Owner and
      Contractor.

     

    (c) Upon
      delivery of written notice by Owner to Contractor to resume suspended Work,
      Contractor shall immediately resume performance under the Contract Documents
      to
      the extent required in the notice. Contractor may request a Change Order as
      a
      result of a suspension of Work under this Section within fourteen (14) days
      after receipt of notice to resume the suspended Work; provided that such
      suspension was not due to Contractor’s negligence, willful misconduct or
      noncompliance with the terms of this Agreement. Contractor shall submit to
      Owner
      a request for Changes in accordance with Article VI
      and such
      request shall be accompanied by sufficient documentation setting forth the
      schedule impact and monetary extent of such claim in sufficient detail to permit
      thorough analysis by Owner; provided that if such information is not available
      within such fourteen (14) day period, Contractor shall notify Owner of such
      within such fourteen (14) day period and provide an expected date (which
      shall be as soon as reasonably practicable) for providing such information.
      Contractor shall permit access by Owner to pertinent records for purposes of
      reviewing the claims by Contractor of schedule and monetary impact.

    
      
        
        

      

      
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    15.5 Termination
      Due to Force Majeure Event. If
      a
      Force Majeure Event has occurred and continues for a period of at least
      one-hundred and eighty (180) days, then, notwithstanding that the Parties
      may by reason thereof have been granted an extension of required dates, either
      Party may deliver a written notice to the other Party stating its intention
      to
      terminate this Agreement. If at the expiration of thirty (30) days after
      the other Party’s receipt of such notice, the Force Majeure Event is continuing,
      this Agreement shall terminate immediately. In the event of such termination,
      Contractor shall be entitled to receive payments for Work completed prior to
      such termination for which Contractor has not previously been paid. The amount
      of consideration for such completed Work shall be determined by Owner in
      accordance with the Schedule of Values for completed Milestones and the
      Contractor’s Rate Schedule as set forth in Exhibit K for any partially
      completed Milestones. Each party shall bear its own costs and expenses in
      connection with a termination of this Agreement pursuant to this
      Section. 

     

    15.6 Owner
      Events of Default.
      The
      occurrence and continuation of any of the following events shall constitute
      an
      event of default by Owner (each, an “Owner Event of Default”):

     

    (a) a
      failure
      by Owner to make payment of any undisputed amount when due, and such breach
      is
      not cured by Owner within fifteen (15) calendar days after Owner’s receipt of
      notice thereof from Contractor;

     

    (b) any
      breach by Owner of any representation or non-monetary obligation herein, and
      such breach is not cured by Owner within thirty (30) days after Owner’s receipt
      of notice thereof from Contractor, or (ii) if such breach is not capable of
      being cured within such thirty (30) day period (as determined by Contractor
      in
      its reasonable discretion), Owner (A) fails to commence to cure such breach
      within such thirty (30) day period, or (B) fails to thereafter diligently
      proceed to cure such breach;

     

    (c) the
      duration of suspension of Work by Owner pursuant to Section 15.4
      and
      Owner Caused Delays exceed sixty (60) days, if Owner does not provide Contractor
      with a notice to resume the suspended Work within fifteen (15) days after
      written notice thereof from Contractor; or

     

    (d) any
      of
      the following occurs: (i) Owner consents to the appointment of or taking
      possession by, a receiver, a trustee, custodian, or liquidator of itself or
      of a
      substantial part of its assets, or fails or admits in writing its inability
      to
      pay its debts generally as they become due, or makes a general assignment for
      the benefit of creditors; (ii) Owner files a voluntary petition in
      bankruptcy or a voluntary petition or an answer seeking reorganization in a
      proceeding under any applicable bankruptcy or insolvency laws or an answer
      admitting the material allegations of a petition filed against it in any such
      proceeding, or seeks relief by voluntary petition, answer or consent, under
      the
      provisions of any now existing or future bankruptcy, insolvency or other similar
      law providing for the liquidation, reorganization, or winding up of
      corporations, or providing for an agreement, composition, extension, or
      adjustment with its creditors; (iii) a substantial part of Owner’s assets
      is subject to the appointment of a receiver, trustee, liquidator, or custodian
      by court order and such order shall remain in effect for more than
      thirty (30) days; or (iv) Owner is adjudged bankrupt or insolvent, has
      any property sequestered by court order and such order shall remain in effect
      for more than thirty (30) days, or has filed against it a petition under
      any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
      dissolution or liquidation law of any jurisdiction, whether now or hereafter
      in
      effect, and such petition shall not be dismissed within thirty (30) days of
      such filing.

    
      
        
        

      

      
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    15.7 Termination
      by Contractor Due to Owner Default.

     

    (a) Subject
      to Section
      15.7(b),
      upon
      the occurrence and during the continuance of an Owner Event of Default beyond
      the applicable grace period, Contractor may (i) suspend its performance of
      the
      Work; provided that Contractor shall immediately resume performance of the
      Work
      upon receipt of payment of the amount owed by Owner (other than any amount
      disputed in accordance with the terms of this Agreement), or (ii) terminate
      this
      Agreement twenty (20) Days after giving written notice thereof to Owner so
      long as the amount owed by Owner (other than any amount disputed in accordance
      with the terms of this Agreement) is not paid within such period. 

     

    (b) In
      the
      event of such termination, Contractor shall be entitled to receive compensation
      for Work completed prior to such termination for which Contractor has not
      previously been paid, plus interest thereon, at the Reference Rate and eighty
      percent (80%) of the anticipated profit for the unperformed Work. The amount
      of
      consideration for such completed Work shall be determined by Owner in accordance
      with the Schedule of Values as set forth in Exhibit D
      for
      completed Milestones and the Contractor’s Rate Schedule as set forth in
Exhibit K
      for any
      partially completed Milestones.

     

    15.8 Continuing
      Obligations and Remedies During Event of Default.
      In the
      event of the occurrence of any default hereunder (a) neither Party shall be
      relieved of any of its liabilities or obligations hereunder, unless and until
      such liabilities and obligations are terminated in accordance with the
      provisions hereof, and (b) each Party shall have the right to pursue any
      right or remedy available to it, hereunder.

     

    15.9 Obligations
      Upon Termination.
      Upon
      a
      termination of this Agreement pursuant to this Article XV:
      (a) Contractor shall leave the Job Site and remove from the Job Site all
      the waste, rubbish and Hazardous Material as Owner may request; (b) Owner
      shall take possession of the Job Site (whether at the Job Site, in transit
      or
      otherwise); (c) Contractor shall promptly assign to Owner or its designee
      any contract rights (including warranties, licenses, patents and copyrights)
      that it has to any and all Equipment and the Work, including, without
      limitation, contracts with Subcontractors and Vendors and including the
      assignment of the Assigned Agreements, and Contractor shall execute such
      documents as may be reasonably requested by Owner to evidence such assignment,
      subject to Owner’s assumption of same and, if required, Owner’s adequate
      assurance to such Subcontractors or Vendors regarding Owner’s ability to pay;
      (d) Contractor shall promptly furnish Owner with copies of all Drawings
      and, to the extent available, Red-line
      As-Built Drawings, (e) Contractor
      shall provide Owner and its designee with the right to use, all patented,
      copyrighted and other proprietary information relating to the Work that Owner
      deems necessary to complete the Work, and Contractor shall execute such
      documents as may be reasonably requested by Owner to evidence such right;
      (f) Contractor shall assist Owner in preparing an inventory of all
      Equipment in use or in storage at the Job Site; and (g) Contractor shall
      take such other action as required hereunder upon termination of this
      Agreement.

     

    15.10 Termination
      and Survival of Terms.
      Upon
      termination of this Agreement pursuant to this Article XV, the rights and
      obligations of the Parties hereunder shall terminate, except for (a) rights
      and obligations accrued as of the date of termination, (b) rights and
      obligations arising out of events occurring prior to the date of termination
      and
      (c) the rights and obligations of the Parties which survive termination,
      including the rights and obligations forth in Articles XII and
      XIII.

    
      
        
        

      

      
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    ARTICLE
      XVI.

    INDEMNIFICATION

     

    16.1 Contractor
      Indemnification.
      To
      the
      extent of and in proportion to its share of negligence as determined in
      accordance with Section 16.4, Contractor agrees to indemnify, defend and
      hold Owner and its affiliates, respective directors, officers, employees,
      representatives, agents, advisors, consultants, counsel and assigns harmless
      from and against any and all losses, claims, obligations, demands, assessments,
      penalties, liabilities, costs, damages and expenses (collectively, “Damages”)
      asserted against or incurred by such indemnitees by reason of or resulting
      from
      any and all of the following:

     

    (a) any
      bodily injury, death or damage to property caused by any negligent act or
      omission (including strict liability) or willful misconduct relating to or
      arising out of the performance of the Work or any curative action under any
      warranty following performance of the Work, of Contractor or any Affiliate
      thereof, any Subcontractor or Vendor, or anyone directly or indirectly employed
      by any of them, or anyone for whose acts such Person may be liable;

     

    (b) any
      third
      party (excluding Affiliates of Owner, Engineer or Financing Parties) claims
      resulting in bodily or property damage arising out of defective and/or
      nonconforming Work relating to or arising out of the performance of the
      Work;

     

    (c) claims
      by
      any Government Authority for any Contractor Taxes related to the
      Work;

     

    (d) any
      pollution or contamination which may originate from sources in Contractor’s and
      its Subcontractors’ and Vendors’ possession, use and control, excluding
      Pre-Existing Hazardous Material and Hazardous Material brought to the Site
      by
      Owner, including, without limitation, from Hazardous Material, toxic waste,
      industrial hazards, sanitary waste, fuel, lubricant, motor oil, paint, solvent,
      bilge and garbage;

     

    (e) to
      the
      extent Owner has timely paid all undisputed amounts due pursuant to the Contract
      Documents, any Lien, as set forth in Section 3.25,
      on the
      Equipment, the Job Site or any fixtures or personal property included in the
      Work (whether or not any such Lien is valid or enforceable) created by, through
      or under, or as a result of any act or omission (or alleged act or omission)
      of,
      Contractor or any Subcontractor, Vendor or other Person providing labor or
      materials in connection with the Work;

     

    (f) [Reserved]; 

     

    (g) any
      vitiation of any insurance policy procured under Article
      IX
      as a
      result of Contractor’s failure to comply with any of the requirements set forth
      in such policy or any other act by Contractor or any Subcontractor or
      Vendor;

     

    (h) or
      any
      failure of Contractor to comply with Applicable Laws or the conditions or
      provisions of Applicable Permits; and

    
      
        
        

      

      
        -50-

        
          

        

      

      
        
        

      

    

    (i) any
      claims with respect to employer’s liability or worker’s compensation filed by
      any employee of Contractor or any of its Subcontractors or Vendors.

     

    16.2 Owner
      Indemnification.
      Owner
      agrees to indemnify, defend and hold Contractor and its Affiliates and their
      respective directors, officers, employees, representatives, agents, advisors,
      consultants and counsel harmless from and against any and all Damages asserted
      against or incurred by such indemnitees by reason of or resulting from any
      and
      all of the following:

     

    (a) claims
      by
      any Government Authority for any Owner Taxes; 

     

    (b) any
      Pre-Existing Hazardous Material on the Property Site, except to the extent
      that
      Contractor’s or its Subcontractors’ or Vendors’ acts or omissions, gross
      negligence or willful misconduct caused a release of Pre-Existing Hazardous
      Material, exacerbated the Pre-Existing Hazardous Material or rendered removal
      or
      remediation of Pre-Existing Hazardous Material more costly; 

     

    (c) any
      third
      party claim arising out of or resulting from the breach by Owner of its
      obligations hereunder;

     

    (d) any
      bodily injury, death or damage to property caused by any negligent act or
      omission (including strict liability) or willful misconduct relating to or
      arising out of the performance of the Work or any curative action under any
      warranty following performance of the Work, of Owner, its engineers and
      financing party and other contractors or any Affiliate thereof, any
      Subcontractor or Vendor, or anyone directly or indirectly employed by any of
      them, or anyone for whose acts such Person may be liable;

     

    (e) Incomplete,
      defective, or erroneous Drawings; and

     

    (f) Infringement
      or violations of patent, copyright, trademark, license or royalties in
      connection with the ethanol plant process.

     

    16.3 Conditions
      of Indemnification.
      The
      respective rights and obligations of the Parties and the other indemnitees
      under
      this Article XVI with respect to claims resulting from the assertion of
      liability by third parties shall be subject to the following terms and
      conditions: 

     

    (a) Notice
      of Proceedings.
      Within
      twenty (20) days (or such earlier time as might be required to avoid
      materially prejudicing the indemnifying Party’s position) after receipt of
      notice of commencement of any legal action or of any claims against such
      indemnitee in respect of which indemnification will be sought, the Person
      claiming to be indemnified under the terms of this Section (the “Indemnified
      Person”)
      shall
      give the Party from which indemnification is sought (the “Indemnifying
      Party”)
      written notice thereof, together with a copy of such claim, process or other
      legal pleading. Failure of the Indemnified Person to give such notice will
      not
      reduce or relieve the Indemnifying Party of liability hereunder unless and
      to
      the extent that the Indemnifying Party was precluded from defending such claim,
      action, suit or proceeding as a result of the failure of the Indemnified Person
      to give such notice. In any event, the failure to so notify shall not relieve
      the Indemnifying Party from any liability that it may have to the Indemnifying
      Person otherwise than under this Article XVI.

    
      
        
        

      

      
        -51-

        
          

        

      

      
        
        

      

    

    (b) Conduct
      of Proceedings.
      Each
      Party and each other indemnitee shall have the right, but not the obligation,
      to
      contest, defend and litigate any claim, action, suit or proceeding by any third
      party alleged or asserted against it arising out of any matter in respect of
      which it is entitled to be indemnified hereunder and the reasonable costs and
      expenses thereof (including reasonable attorneys’ fees and expert witness fees)
      shall be subject to the said indemnity. The Indemnified Person shall provide
      reasonable assistance to the Indemnifying Party, at the Indemnifying Party’s
      expense, in connection with such claim, action, suit or proceeding. Upon such
      assumption, the Indemnifying Party shall reimburse the Indemnified Person for
      the reasonable costs and expenses previously incurred by it prior to the
      assumption of such defense by the Indemnifying Party. The Indemnifying Party
      shall keep the Indemnified Person informed as to the status and progress of
      such
      claim, action, suit or proceeding. The Indemnifying Party will not be liable
      to
      the Indemnified Person under this Article for any legal fees or expenses
      subsequently incurred by the Indemnified Person in connection with such defense.
      

     

    16.4 Contributory
      Negligence.
      If
      the
      joint, concurring, comparative or contributory fault, negligence or willful
      misconduct of the Parties gives rise to Damages for which the Parties are
      entitled to indemnification under this Article, then such Damages shall be
      allocated between the Parties in proportion to their respective degrees of
      fault, negligence or willful misconduct contributing to such
      Damages.

     

    16.5 Remedies
      Not Exclusive.
      The
      rights of indemnity shall not be exclusive with respect to any other right
      or
      remedy provided for in the Contract Documents.

     

    16.6 Tax
      Effect of Indemnification.
      Notwithstanding
      any term or provision of the Contract Documents to the contrary, any indemnity
      payments owed by a Party shall be reduced by any tax benefits to the Indemnified
      Person and increased by any tax detriments to the Indemnified Person resulting
      from such indemnity payment.

     

    16.7 Survival
      of Indemnification.
      The
      indemnification provisions of this Article shall survive the Final Acceptance
      Date and the termination of this Agreement.

     

     

    ARTICLE
      XVII.

    DISPUTE
      RESOLUTION

     

    17.1 Friendly
      Consultation.
      In
      the
      event of any dispute, controversy or claim between the Parties arising out
      of or
      relating to the Contract Documents, or the breach, termination or invalidity
      thereof (collectively, a “Dispute”), the Parties shall attempt in the first
      instance to resolve such Dispute through friendly consultations between the
      Parties. If such consultations do not result in a resolution of the Dispute
      within thirty (30) days, then either Party may pursue all of its remedies
      available pursuant to the Contract Documents. The Parties agree to attempt
      to
      resolve all Disputes arising hereunder promptly, equitably and in a good faith
      manner. The Parties further agree to provide each other with reasonable access
      during normal business hours to any and all non-privileged records, information
      and data pertaining to such Dispute.

    
      
        
        

      

      
        -52-

        
          

        

      

      
        
        

      

    

    17.2 Litigation.

     

    (a) If
      a
      Dispute cannot be resolved pursuant to Section 17.1,
      and in
      the event of litigation arising hereunder, the Parties agree that the venue
      for
      such litigation shall be Oregon State Superior Court of Multnomah
      County.
      The
      Parties irrevocably waive any objection which any of them may now or hereafter
      have to the bringing of any such action or proceeding in such respective
      jurisdictions, including any objection to the laying of venue based on the
      grounds of forum
      non conveniens
      and any
      objection based on the grounds of lack of in personam
      jurisdiction.

     

    (b) Interest
      at the Reference Rate from the date of the judgment award until the date of
      payment shall be due and payable to the prevailing Party on the date of receipt
      of such award; provided, however, if it is determined that the Party ordered
      to
      pay such amounts withheld the amounts in bad faith, interest shall accrue from
      the date the amount in dispute was first due until the date of
      payment.

     

    (c) The
      rights and obligations of the Parties under this Article XVII
      shall
      not be impaired, reduced or otherwise affected as a result of any of the
      following: (i) the receipt by a Party from any third party of any amounts
      in reimbursement of Damages that are the subject of the Dispute; or
      (ii) the assignment or transfer by either Party of any or all of its rights
      and/or obligations under the Contract Documents as permitted
      hereunder.

     

    17.3 Continuing
      Obligations and Rights.
      When
      any
      Dispute occurs and is the subject of friendly consultations or litigation,
      Contractor shall continue the Work in accordance with the Project Schedule
      and
      the terms hereof and Owner shall continue to make payments of undisputed amounts
      in accordance with the Contract Documents, and the Parties shall otherwise
      continue to exercise their rights, and fulfill their respective obligations,
      under the Contract Documents.

     

    17.4 Tolling
      Statute of Limitations.
      All
      applicable statutes of limitation and defenses based upon the passage of time
      and similar contractual limitations shall be tolled while the procedures
      specified in this Article XVII are pending. The Parties will take such
      action, if any, required to effectuate such tolling. Without prejudice to the
      procedures specified in this Article XVII, a Party may file a complaint for
      statute of limitations purposes, if in its sole judgment such action may be
      necessary to preserve its claims or defenses. Despite such action, the Parties
      will continue to participate in good faith in the procedures specified in this
      Article XVII.

     

    17.5 Audit
      Rights.
      In
      the
      event of a claim by Owner under this Agreement involving an amount greater
      than
      $500,000, Contractor shall grant audit rights to Owner with respect to all
      relevant documentation pertaining to such claim.

     

    17.6 Costs.
      The
      prevailing Party in any action or proceeding shall be entitled to recover from
      the other Party all of its reasonable costs and expenses incurred in connection
      with such action or proceeding, including actual attorneys’
fees.

    
      
        
        

      

      
        -53-

        
          

        

      

      
        
        

      

    

    ARTICLE
      XVIII.

    MISCELLANEOUS

     

    18.1 Assignment.

     

    (a) Except
      as
      expressly permitted in the Contract Documents, neither Party shall assign this
      Agreement, the Contract Documents or any portion hereof, or any of the rights
      or
      obligations hereunder, whether by operation of law or otherwise, without the
      prior written consent of the other Party. This Agreement shall inure to the
      benefit of, and be binding upon, the successors and permitted assigns of the
      Parties.

     

    (b) Owner
      shall be entitled to assign this Agreement, the Contract Documents and its
      rights herein without the consent of Contractor to any of Owner’s Affiliates
      that has a direct or indirect interest in the Project. In addition, Contractor
      hereby consents to the granting of a security interest in and an assignment
      by
      Owner of the Contract Documents and its rights herein to the Financing Parties
      and their successors, assigns and designees in connection with any financing
      or
      refinancing related to the development, construction, operation and maintenance
      of the Project. In furtherance of the foregoing, Contractor acknowledges that
      the Financing Parties may under certain circumstances assume the interests
      and
      rights of Owner under the Contract Documents.

     

    18.2 Good
      Faith Dealings.
      The
      Parties undertake to act fairly and in good faith in relation to the performance
      and implementation of the Contract Documents and to take such other reasonable
      measures as may be necessary for the realization of its purposes and
      objectives.

     

    18.3 Confidentiality.

     

    (a) Each
      Party agrees that the contents of the Contract Documents and any information
      relating to the negotiations or performance of the Contract Documents, any
      information provided pursuant to the Contract Documents relating to the Project,
      Plant, Owner, Contractor or their Affiliates which is designated or specifically
      marked as confidential (the “Confidential
      Information”)
      shall
      be treated as confidential and secret and that each Party, without the prior
      written consent of the disclosing Party, shall not disclose Confidential
      Information to any Person, except as permitted herein. 

     

    (b) Notwithstanding
      the foregoing, this Section shall not prevent either Party from disclosing
      any
      Confidential Information, including the contents of the Contract Documents,
      if
      and to the extent: (i) required to do so by Applicable Law or any
      Government Authority, provided that the Party required to disclose such
      information shall give prior notice to the other of such required disclosure
      and, if so requested by the other Party, shall use all reasonable efforts to
      oppose the requested disclosure as appropriate under the circumstances;
      (ii) disclosed to the Affiliates, Subcontractors, Vendors, Financing
      Parties, rating agencies, employees, directors, officers, agents, advisors
      or
      representatives as necessary; provided that such Persons are informed of the
      confidential nature of the Confidential Information, and the Party disclosing
      such information shall be liable to the other for any disclosure by such Persons
      in violation of the terms of this Section; (iii) such information was
      already in the public domain prior to disclosure by the disclosing Party to
      the
      other, or which after disclosure entered the public domain other than by a
      breach of the Contract Documents by the other Party or its Affiliates,
      Subcontractors, Vendors, employees, directors, officers, agents, advisers or
      representatives; (iv) such information was known to the recipient prior to
      the date of receipt of any of the Contract Documents and not obtained or derived
      under or in connection with the Contract Documents; or (v) such information
      was obtained by the recipient from a third party in lawful possession of such
      information which is not under a confidentiality obligation to the Party from
      whom such information originated.

    
      
        
        

      

      
        -54-

        
          

        

      

      
        
        

      

    

    (c) It
      is
      agreed that each Party shall be entitled to relief both at law and in equity,
      including, but not limited to injunctive relief and specific performance, in
      the
      event of any breach or anticipated breach of this Section, without proof of
      any
      actual or special damages. 

     

    (d) In
      addition, Contractor acknowledges and agrees that it is subject to the
      confidentiality provisions set forth in the Assigned Agreements, if
      any.

     

    (e) All
      right
      and title to, and interest in, Owner’s Confidential Information shall remain
      with Owner. All Confidential Information obtained, developed or created by
      or
      for Contractor exclusively for the Project, including copies thereof, is the
      exclusive property of Owner whether delivered to Owner or not. No right or
      license is granted to Contractor or any third party respecting the use of
      Confidential Information by virtue of this Agreement, except to the extent
      required for Contractor’s performance of its obligations hereunder. Contractor
      shall deliver the Confidential Information, including all copies thereof, to
      Owner upon request.

     

    (f) Contractor
      shall coordinate with Owner with respect to, and provide advance copies to
      Owner
      for review of, the text of any proposed announcement or publication that include
      any non-public information concerning the Work prior to the dissemination
      thereof to the public or to any Person other than Subcontractors, Vendors,
      the
      Financing Parties or advisors of Contractor, in each case, who agree to keep
      such information confidential. If Owner delivers written notice to Contractor
      rejecting any such proposed announcement or publication within two (2) Business
      Days after receiving such advance copies, Contractor shall not make such public
      announcement or publication; provided, however, that Contractor may disseminate
      or release such information in response to requirements of Government
      Authorities.

     

    18.4 Notice.
      Whenever
      a provision of the Contract Documents requires or permits any consent, approval,
      notice, request, or demand from one Party to another, the consent approval,
      notice, request, or demand must be in writing to be effective and shall be
      deemed to be delivered and received (a) if personally delivered or if
      delivered by telegram or courier service, when actually received by the Party
      to
      whom notice is sent, (b) if delivered by telex or facsimile, on the first
      business day following the day transmitted (with confirmation of receipt),
      or
      (c) if delivered by mail (whether actually received or not), at the close
      of business on the third Business Day following the day when placed in the
      mail,
      postage prepaid, certified or registered, addressed to the appropriate Party,
      at
      the address and/or facsimile numbers of such Party set forth below (or at such
      other address as such Party may designate by written notice to the other Party
      in accordance with this Section):

     

    If
      to
      Contractor:

     

    George
      Norton

    Parsons
      RCIE Inc.

    1216
      - 140th Avenue Court East

    Sumner,
      WA 98390

    [Phone]
      253-863-5200

    [Fax] (253)
      859-5702

    
      
        
        

      

      
        -55-

        
          

        

      

      
        
        

      

    

    with
      a
      copy to:

     

    John
      C. Dippold

    CARNEY
      BADLEY SPELLMAN, P.S.

    701
      Fifth Avenue, Suite 3600

    Seattle,
      WA 98104-7010

    [Phone]
      206-622-8020

    [Fax]
      206-467-8214

    

    If
      to
      Owner:

     

    Chief
      Operating Officer and General Counsel

    5711
      North West Avenue

    Fresno,
      CA 93711

    [Phone]
      559-435-1771

    [Fax]559-435-1478

    

    Any
      Party
      may change its address, facsimile number or e-mail number for the purposes
      of
      this Agreement by giving notice thereof to the other Party in the manner
      provided herein.

     

    18.5 Waiver.
      No
      delay,
      failure or refusal on the part of any Party to exercise or enforce any right
      under the Contract Documents shall impair such right or be construed as a waiver
      of such right or any obligation of another Party, nor shall any single or
      partial exercise of any right hereunder preclude other or further exercise
      of
      any right. The failure of a Party to give notice to the other Parties of a
      breach of the Contract Documents shall not constitute a waiver thereof. Any
      waiver of any obligation or right hereunder shall not constitute a waiver of
      any
      other obligation or right, then existing or arising in the future. Each Party
      shall have the right to waive any of the terms and conditions of the Contract
      Documents that are for its benefit. To be effective, a waiver of any obligation
      or right must be in writing and signed by the Party waiving such obligation
      or
      right.

     

    18.6 Severability.
      If
      any
      provision of the Contract Documents is held to be illegal, invalid, or
      unenforceable under present or future laws, such provision shall be fully
      severable; the Contract Documents shall be construed and enforced as if such
      illegal, invalid or unenforceable provision had never comprised a part of the
      Contract Documents; and the remaining provisions of the Contract Documents
      shall
      remain in full force and effect and shall not be affected by the illegal,
      invalid, or unenforceable provision or by its severance from the Contract
      Documents. Furthermore, in lieu of such illegal, invalid or unenforceable
      provision, there shall be added automatically as a part of the Contract
      Documents a provision as similar in its terms to such illegal, invalid or
      unenforceable provision as may be possible and be legal, valid and
      enforceable.

     

    18.7 Governing
      Law.
      The
      Contract Documents, and the rights and obligations of the Parties under or
      pursuant to the Contract Documents, shall be interpreted and construed according
      to the substantive laws of the State of Oregon.

    
      
        
        

      

      
        -56-

        
          

        

      

      
        
        

      

    

    18.8 Entire
      Agreement; Amendments.
      The
      Contract Documents contain the entire understanding of the Parties with respect
      to the subject matter hereof and supersedes all prior agreements, arrangements,
      discussions and undertakings between the Parties (whether written or oral)
      with
      respect to the subject matter hereof. The Contract Documents may only be amended
      by written instrument signed by all the Parties.

     

    18.9 Expenses
      and Further Assurances.
      Each
      Party shall pay its own costs and expenses in relation to the negotiation,
      preparation, execution and carrying into effect of the Contract Documents.
      

     

    18.10 No
      Third Party Beneficiary.
      Nothing
      in the Contract Documents nor any action taken hereunder shall be construed
      to
      create any duty, liability or standard of care to any Person that is not a
      Party. No person that is not a Party shall have any rights or interest, direct
      or indirect, in the Contract Documents or the services to be provided hereunder.
      The Contract Documents are intended solely for the benefit of the Parties,
      and
      the Parties expressly disclaim any intent to create any rights in any third
      party as a third-party beneficiary to the Contract Documents or the services
      to
      be provided hereunder.

     

    18.11 Offset.
      Notwithstanding
      any other provision hereof, any and all amounts owing or to be paid by Owner
      to
      Contractor hereunder or otherwise, shall be subject to offset and reduction
      in
      an amount equal to any amounts that may be owing at any time by Contractor
      to
      Owner. Further, for the avoidance of doubt, with respect to any provision of
      this Agreement that allows Owner to offset or set-off any amount then owed
      to
      Contractor, Owner shall have the express right to include in the amount offset
      or set-off all of the reasonable costs and expenses it incurs in connection
      with
      enforcing such provision.

     

    18.12 Counterparts.
      This
      Agreement may be executed in multiple counterparts, each of which shall be
      deemed an original, and all of which together shall constitute one and the
      same
      instrument.

     

    18.13 Waiver
      for Consequential Damages.
      Except
      for Liquidated Damages, and damages payable by Contractor to Owner pursuant
      to
      Section 15.2(d), and notwithstanding anything else in this Agreement to the
      contrary, Contractor and Owner waive claims against each other for any indirect,
      special or consequential damages arising out of or relating to this Agreement.
      This mutual waiver includes:

     

    (a) Damages
      incurred by Owner for rental expenses, for losses of use, income, profit,
      financing, business and reputation, and for loss of management or employee
      productivity, or the services of such persons;

     

    (b) Damages
      incurred by Contractor for principal office expenses, including the compensation
      of personnel stationed there, for loss of financing, business and reputation,
      and for loss of profit except anticipated profit arising directly from the
      work;
      and

     

    (c) This
      mutual waiver is not applicable, to all consequential damages due to either
      Party’s termination in accordance with Article XV.

    
      
        
        

      

      
        -57-

        
          

        

      

      
        
        

      

    

    18.14 Limits
      of Liability.

     

    (a) Contractor’s
      maximum liability from any cause whatsoever arising out of the Contract
      Documents shall not exceed the Contract Price (as the same may increase from
      time to time in accordance with the terms of this Agreement), however, such
      limitation of liability shall not apply to: (i) Contractor’s
      indemnification obligations under the Contract Documents; and (ii)  any
      loss or damage arising out of any tort (including negligence and strict
      liability) or connected with Contractor’s fraud, willful misconduct or illegal
      or unlawful acts. 

     

    (b) Contractor
      makes no representations, covenants, warranties, express or implied, other
      than
      those expressly set forth herein. The Party’s rights, liabilities,
      responsibilities and remedies with respect to the Work shall be exclusively
      those expressly set forth in the Contract Documents.

     

    (c) Owner’s
      maximum liability from any cause whatsoever arising out of the Contract
      Documents shall not exceed the Contract Price (as the same may increase from
      time to time in accordance with the terms of this Agreement), however, such
      limitation of liability shall not apply to: (i) Owner’s indemnification
      obligations under the Contract Documents; and (ii)  any loss or damage
      arising out of any tort (including negligence and strict liability) or connected
      with Owner’s fraud, willful misconduct or illegal or unlawful acts.

     

    18.15 Time
      is of the Essence.
      Contractor
      acknowledges that timely achievement by Contractor of Mechanical Completion,
      by
      the applicable scheduled date therefore is essential to Owner, and therefore
      TIME IS OF THE ESSENCE in performing all of Contractor’s obligations set forth
      herein.

     

    18.16 Records
      Retention.
      Contractor
      agrees to retain for a period of three (3) years from the Final Acceptance
      Date
      all records relating to its performance of the Work or Contractor’s warranty
      obligations herein, and to cause all Subcontractors and Vendors engaged in
      connection with the Work or the performance by Contractor of its warranty
      obligations herein to retain for the same period all their records relating
      to
      the Work.

     

    18.17 Successors
      and Assigns.
      Subject
      to Section 18.1, this Agreement shall be binding on the Parties hereto and
      on
      their respective successors and assigns.

     

    18.18 Financing
      Parties’ Requirements.
      Contractor
      acknowledges that Owner or an Affiliate thereof may borrow certain funds from
      the Financing Parties for the construction of the Plant and that, as a condition
      to making loans to Owner or such Affiliate, the Financing Parties may from
      time
      to time require certain documents from, and agreements by, Contractor and its
      Subcontractors and Vendors. In connection therewith, Contractor agrees to
      furnish to the Financing Parties, and to cause its Subcontractors and Vendors
      to
      furnish to the Financing Parties, such written information, certificates, copies
      of invoices and receipts, lien waivers (upon payment), affidavits, consents
      to
      assignment of the Contract Documents and other like documents as the Financing
      Parties may reasonably request. 

     

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK;

    SIGNATURES
      APPEAR ON FOLLOWING PAGE.]

    
      
        
        

      

      
        -58-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF the
      Parties have executed and delivered this Agreement as of the date first above
      written.

     

    
      

         

        
          	 	Pacific
                  Ethanol Columbia, LLC
	 	 	 
	 	
                  By:

                	/s/
                  Terrance Kulesa
	 	 	 
	 	
                  Name:

                	Terrance
                  Kulesa
	 	
                  Title:

                	VP
                  Operations
	 	
                  Date:

                	8-23-06

        

      

    

     

    

       

      
        
          	 	Parsons
                  RCIE, Inc.
	 	 	 
	 	
                  By:

                	/s/
                  George Norton
	 	 	 
	 	
                  Name:

                	George
                  Norton
	 	
                  Title:

                	Sr.
                  Vice President
	 	Date:	8/22/2006

        

         

         

        -59-

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