Document:

exv10w24

 

Exhibit 10.24

US BioEnergy Corporation has entered into Change in Control Agreements, each dated as of September
28, 2007, with each of Richard Atkinson, Gregory S. Schlicht, Chad Hatch and Kim Regenhard. All
such agreements are substantially identical in all material respects to the agreement attached
hereto.

 

 

CHANGE IN CONTROL AGREEMENT

          THIS AGREEMENT, dated September 28, 2007 is made by and between US BioEnergy Corporation (the
“Company”), and Richard Atkinson (the “Executive”).

          WHEREAS, the Company considers it essential to the best interests of its stockholders to
foster the continued employment of key management personnel; and

          WHEREAS, the Board recognizes that, as is the case with many publicly held corporations, the
possibility of a Change in Control exists and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders; and

          WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Company’s management, including
the Executive, to their assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a Change in Control;

          NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
the Company and the Executive hereby agree as follows:

          1. Defined Terms. The definitions of capitalized terms used in this Agreement are
provided in the last Section hereof.

          2. Term of Agreement. The Term of this Agreement shall commence on the date hereof
and shall continue in effect through December 31, 2009; provided, however, that
commencing on January 1, 2009 and each January 1 thereafter, the Term shall automatically be
extended for one additional year unless, not later than September 30 of the preceding year, the
Company or the Executive shall have given notice not to extend the Term; and further
provided, however, that if a Change in Control shall have occurred during the Term,
the Term shall expire no earlier than twenty-four (24) months beyond the month in which such Change
in Control occurred.

          3. Company’s Covenants Summarized. In order to induce the Executive to remain in the
employ of the Company and in consideration of the Executive’s covenants set forth in Section 4
hereof, the Company agrees, under the conditions described herein, to pay the Executive the
Severance Payments and the other payments and benefits described herein. No Severance Payments
shall be payable under this Agreement unless there shall have been (or, under the terms of the
second sentence of Section 6.1 hereof, there shall be deemed to have been) a termination of the
Executive’s employment with the Company following a Change in Control and during the Term. This
Agreement shall not be construed as creating an express or implied contract of employment and,
except as otherwise agreed in writing between the Executive and the

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Company, the Executive shall not have any right to be retained in the employ of the Company.

          4. The Executive’s Covenants. The Executive agrees that, subject to the terms and
conditions of this Agreement, in the event of a Potential Change in Control during the Term, the
Executive will remain in the employ of the Company until the earliest of (i) a date which is six
(6) months from the date of such Potential Change in Control, (ii) the date of a Change in Control,
(iii) the date of termination by the Executive of the Executive’s employment for Good Reason or by
reason of death, Disability or Retirement, or (iv) the termination by the Company of the
Executive’s employment for any reason.

          5. Compensation Other Than Severance Payments.

          5.1 Following a Change in Control and during the Term, during any period that the Executive
fails to perform the Executive’s full-time duties with the Company as a result of incapacity due to
physical or mental illness, the Company shall pay the Executive’s full salary to the Executive at
the rate in effect at the commencement of any such period, together with all compensation and
benefits payable to the Executive under the terms of any compensation or benefit plan, program or
arrangement maintained by the Company during such period (other than any disability plan), until
the Executive’s employment is terminated by the Company for Disability.

          5.2 If the Executive’s employment shall be terminated for any reason following a Change in
Control and during the Term, the Company shall pay the Executive’s full salary to the Executive
through the Date of Termination at the rate in effect immediately prior to the Date of Termination
or, if higher, the rate in effect immediately prior to the first occurrence of an event or
circumstance constituting Good Reason, together with all compensation and benefits payable to the
Executive through the Date of Termination under the terms of the Company’s compensation and benefit
plans, programs or arrangements as in effect immediately prior to the Date of Termination or, if
more favorable to the Executive, as in effect immediately prior to the first occurrence of an event
or circumstance constituting Good Reason.

          5.3 If the Executive’s employment shall be terminated for any reason following a Change in
Control and during the Term, the Company shall pay to the Executive the Executive’s normal
post-termination compensation and benefits as such payments become due. Such post-termination
compensation and benefits shall be determined under, and paid in accordance with, the Company’s
retirement, insurance and other compensation or benefit plans, programs and arrangements as in
effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in
effect immediately prior to the occurrence of the first event or circumstance constituting Good
Reason; provided, however, that the Executive shall be entitled to a cash payment in respect of the
Executive’s accrued paid time off, calculated based on the Executive’s base salary in effect at the
Date of Termination (without giving effect to any change thereto constituting Good Reason).

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          5.4 Upon the occurrence of a Change in Control, all of the Executive’s then-outstanding
options, restricted stock and other equity awards from the Company which vest based on continued
service with the Company shall immediately vest. All of the Executive’s then-outstanding options,
restricted stock and other equity awards which vest based on the achievement of specific
performance criteria will vest on a pro-rata basis to the extent that the performance criteria have
been achieved as of the date of the Change in Control. If and to the extent actual performance
results as of the Change in Control date cannot be determined at the time of the Change in Control,
such performance-based equity awards will vest on a pro-rata basis as of the date of the Change in
Control assuming performance at the target level was achieved.

          6. Severance Payments.

          6.1 Subject to Section 6.2 hereof, if the Executive’s employment is terminated during the two
year period immediately following a Change in Control and during the Term, other than (A) by the
Company for Cause, (B) by reason of death or Disability, or (C) by the Executive without Good
Reason, then the Company shall pay the Executive the amounts, and provide the Executive the
benefits, described in this Section 6.1 (“Severance Payments”), in addition to any payments and
benefits to which the Executive is entitled under Section 5 hereof. For purposes of this
Agreement, the Executive’s employment shall be deemed to have been terminated following a Change in
Control by the Company without Cause or by the Executive with Good Reason, if within the 90 day
period prior to a Change in Control (i) the Executive’s employment is terminated by the Company
without Cause and such termination was at the request or direction of a Person who has entered into
an agreement with the Company the consummation of which would constitute a Change in Control, (ii)
the Executive terminates his employment for Good Reason prior to a Change in Control and the
circumstance or event which constitutes Good Reason occurs at the request or direction of such
Person, or (iii) the Executive’s employment is terminated by the Company without Cause or by the
Executive for Good Reason and such termination or the circumstance or event which constitutes Good
Reason is otherwise in connection with or in anticipation of a Change in Control.

               (A) In lieu of any further salary payments to the Executive for periods subsequent to
the Date of Termination and in lieu of any severance benefit otherwise payable to the
Executive, the Company shall pay to the Executive a lump sum severance payment, in cash,
equal to two times the sum of (i) the Executive’s base salary as in effect immediately
prior to the Date of Termination or, if higher, in effect immediately prior to the first
occurrence of an event or circumstance constituting Good Reason, and (ii) the greater of
(1) the target annual bonus of the Executive pursuant to any annual bonus or incentive plan
maintained by the Company in respect of the fiscal year in which occurs the Date of
Termination or (2) the annual bonus earned by the Executive pursuant to any annual bonus or
incentive plan maintained by the Company with respect to

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the fiscal year ending immediately prior to the fiscal year in which occurs the Date
of Termination.

            (B) For the twenty-four (24) month period immediately following the Date of
Termination, the Company shall arrange to provide the Executive and his dependents health,
vision care and dental insurance benefits substantially similar to those provided to the
Executive and his dependents immediately prior to the Date of Termination or, if more
favorable to the Executive, those provided to the Executive and his dependents immediately
prior to the first occurrence of an event or circumstance constituting Good Reason, at no
greater after tax cost to the Executive than the after tax cost to the Executive
immediately prior to such date or occurrence; provided, however, that,
unless the Executive consents to a different method, such health insurance benefits shall
be provided through a third-party insurer. Benefits otherwise receivable by the Executive
pursuant to this Section 6.1(B) shall be reduced to the extent benefits of the same type
are received by or made available to the Executive by a subsequent employer during the
twenty-four (24) month period following the Executive’s termination of employment (and any
such benefits received by or made available to the Executive shall be reported to the
Company by the Executive).

          6.2 (A) Notwithstanding any other provisions of this Agreement, in the event that any payment
or benefit received or to be received by the Executive (including any payment or benefit received
in connection with a Change in Control or the termination of the Executive’s employment, whether
pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such
payments and benefits, including the Severance Payments, being hereinafter referred to as the
“Total Payments”) would not be deductible (in whole or part), by the Company, an affiliate or
Person making such payment or providing such benefit as a result of section 280G of the Code, then,
to the extent necessary to make such portion of the Total Payments deductible (and after taking
into account any reduction in the Total Payments provided by reason of section 280G of the Code in
such other plan, arrangement or agreement), the cash Severance Payments shall first be reduced (if
necessary, to zero), and all other Severance Payments shall thereafter be reduced (if necessary, to
zero); provided, however, that the Executive may elect to have the noncash
Severance Payments reduced (or eliminated) prior to any reduction of the cash Severance Payments.

          (B) For purposes of this limitation, (i) no portion of the Total Payments the receipt or
enjoyment of which the Executive shall have waived at such time and in such manner as not to
constitute a “payment” within the meaning of section 280G(b) of the Code shall be taken into
account, (ii) no portion of the Total Payments shall be taken into account which, in the opinion of
tax counsel (“Tax Counsel”) reasonably acceptable to the Executive and selected by the accounting
firm which was, immediately prior to the Change in Control, the Company’s independent auditor (the
“Auditor”), does not constitute a “parachute payment” within the meaning of section 280G(b)(2) of
the Code, including by reason of section 280G(b)(4)(A) of the Code, (iii) the Severance Payments
shall be reduced only to the extent necessary so that the Total Payments (other than those

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referred to in clauses (i) or (ii)) in their entirety constitute reasonable compensation for
services actually rendered within the meaning of section 280G(b)(4)(B) of the Code or are otherwise
not subject to disallowance as deductions by reason of section 280G of the Code, in the opinion of
Tax Counsel, and (iv) the value of any noncash benefit or any deferred payment or benefit included
in the Total Payments shall be determined by the Auditor in accordance with the principles of
sections 280G(d)(3) and (4) of the Code.

          (C) If it is established pursuant to a final determination of a court or an Internal Revenue
Service proceeding that, notwithstanding the good faith of the Executive and the Company in
applying the terms of this Section 6.2, the Total Payments paid to or for the Executive’s benefit
are in an amount that would result in any portion of such Total Payments being subject to the
Excise Tax, then, if such repayment would result in (i) no portion of the remaining Total Payments
being subject to the Excise Tax and (ii) a dollar-for-dollar reduction in the Executive’s taxable
income and wages for purposes of federal, state and local income and employment taxes, the
Executive shall have an obligation to pay the Company upon demand an amount equal to the sum of (i)
the excess of the Total Payments paid to or for the Executive’s benefit over the Total Payments
that could have been paid to or for the Executive’s benefit without any portion of such Total
Payments being subject to the Excise Tax; and (ii) interest on the amount set forth in clause (i)
of this sentence at the rate provided in section 1274(b)(2)(B) of the Code from the date of the
Executive’s receipt of such excess until the date of such payment.

          6.3 Subject to Section 14 hereof, the payments provided in subsection (A) of Section 6.1
hereof shall be made not later than the fifth day following the Date of Termination. At the time
that payments are made under this Agreement, the Company shall provide the Executive with a written
statement setting forth the manner in which such payments were calculated and the basis for such
calculations including, without limitation, any opinions or other advice the Company has received
from Tax Counsel, the Auditor or other advisors or consultants (and any such opinions or advice
which are in writing shall be attached to the statement).

          6.4 The Company also shall pay to the Executive all legal fees and expenses incurred by the
Executive in disputing in good faith any issue hereunder relating to the termination of the
Executive’s employment, in seeking in good faith to obtain or enforce any benefit or right provided
by this Agreement or in connection with any tax audit or proceeding to the extent attributable to
the application of section 4999 of the Code to any payment or benefit provided hereunder. Such
payments shall be made within five (5) business days after delivery of the Executive’s written
requests for payment accompanied with such evidence of fees and expenses incurred as the Company
reasonably may require.

          7. Termination Procedures and Compensation During Dispute.

          7.1 Notice of Termination. After a Change in Control and during the Term, any
purported termination of the Executive’s employment (other than by reason of

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death) shall be communicated by written Notice of Termination from one party hereto to the
other party hereto in accordance with Section 10 hereof. For purposes of this Agreement, a “Notice
of Termination” shall mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive’s employment under the provision so indicated.
Further, a Notice of Termination for Cause is required to include a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of
the Board at a meeting of the Board which was called and held for the purpose of considering such
termination (after reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive’s counsel, to be heard before the Board) finding that, in the good
faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of
the definition of Cause herein, and specifying the particulars thereof in detail.

          7.2 Date of Termination. “Date of Termination,” with respect to any purported
termination of the Executive’s employment after a Change in Control and during the Term, shall mean
(i) if the Executive’s employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that the Executive shall not have returned to the full-time
performance of the Executive’s duties during such thirty (30) day period), and (ii) if the
Executive’s employment is terminated for any other reason, the date specified in the Notice of
Termination (which, in the case of a termination by the Company, shall not be less than thirty (30)
days (except in the case of a termination for Cause) and, in the case of a termination by the
Executive, shall not be less than fifteen (15) days nor more than sixty (60) days, respectively,
from the date such Notice of Termination is given).

          7.3 Dispute Concerning Termination. If within fifteen (15) days after any Notice of
Termination is given, or, if later, prior to the Date of Termination (as determined without regard
to this Section 7.3), the party receiving such Notice of Termination notifies the other party that
a dispute exists concerning the termination, the Date of Termination shall be extended until the
earlier of (i) the date on which the Term ends or (ii) the date on which the dispute is finally
resolved, either by mutual written agreement of the parties or by a final judgment, order or decree
of an arbitrator or a court of competent jurisdiction (which is not appealable or with respect to
which the time for appeal therefrom has expired and no appeal has been perfected);
provided, however, that the Date of Termination shall be extended by a notice of
dispute given by the Executive only if such notice is given in good faith and the Executive pursues
the resolution of such dispute with reasonable diligence.

          7.4 Compensation During Dispute. If a purported termination occurs following a Change
in Control and during the Term and the Date of Termination is extended in accordance with Section
7.3 hereof, the Company shall continue to pay the Executive the full compensation in effect when
the notice giving rise to the dispute was given (including, but not limited to, salary) and
continue the Executive as a participant in all compensation, benefit and insurance plans in which
the Executive was participating

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when the notice giving rise to the dispute was given, until the Date of Termination, as
determined in accordance with Section 7.3 hereof. Amounts paid under this Section 7.4 are in
addition to all other amounts due under this Agreement (other than those due under Section 5.2
hereof) and shall not be offset against or reduce any other amounts due under this Agreement.

          8. No Mitigation. The Company agrees that, if the Executive’s employment with the
Company terminates during the Term, the Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to
Section 6 hereof or Section 7.4 hereof. Further, except as specifically provided in Section 6.1(B)
hereof, no payment or benefit provided for in this Agreement shall be reduced by any compensation
earned by the Executive as the result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Executive to the Company, or otherwise.

          9. Successors; Binding Agreement.

          9.1 In addition to any obligations imposed by law upon any successor to the Company, the
Company will require any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.

          9.2 This Agreement shall inure to the benefit of and be enforceable by the Executive’s
personal or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive shall die while any amount would still be payable to the
Executive hereunder (other than amounts which, by their terms, terminate upon the death of the
Executive) if the Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive’s estate.

          10. Notices. For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return receipt requested, postage prepaid,
addressed, if to the Executive, to the address inserted below the Executive’s signature on the
final page hereof and, if to the Company, to the address set forth below, or to such other address
as either party may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon actual receipt:

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To the Company:

US BioEnergy Corporation

5500 Cenex Drive

Inver Grove Heights, MN 55077

Attention: General Counsel

          11. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing and signed by the
Executive and such officer as may be specifically designated by the Board. No waiver by either
party hereto at any time of any breach by the other party hereto of, or of any lack of compliance
with, any condition or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. This Agreement supersedes any other agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof which have been made by
either party; provided, however, that this Agreement shall supersede any agreement
setting forth the terms and conditions of the Executive’s employment with the Company only in the
event that the Executive’s employment with the Company is terminated on or following a Change in
Control, by the Company other than for Cause or by the Executive for Good Reason. The validity,
interpretation, construction and performance of this Agreement shall be governed by the laws of the
State of South Dakota, without reference to the conflicts of laws provisions thereof. All
references to sections of the Exchange Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments provided for hereunder shall be paid net of
any applicable withholding required under federal, state or local law and any additional
withholding to which the Executive has agreed. The obligations of the Company and the Executive
under this Agreement which by their nature may require either partial or total performance after
the expiration of the Term (including, without limitation, those under Sections 6 and 7 hereof)
shall survive such expiration.

          12. Validity. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

          13. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
instrument.

          14. Section 409A Compliance. It is the intention of the Company and the Executive that
this Agreement not result in taxation of the Executive under Section 409A of the Code and the
regulations and guidance promulgated thereunder and that the Agreement shall be construed in
accordance with such intention. Without limiting the generality of the foregoing, the Company and
the Executive agree as follows:

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     (i) Notwithstanding anything to the contrary herein, if the Executive is a “specified
employee” (within the meaning of Section 409A(a)(2)(B)(i) of the Code) with respect to the Company,
any amounts (or benefits) otherwise payable to or in respect of him under this Agreement pursuant
to the Executive’s termination of employment with the Company shall be delayed, to the extent
required so that taxes are not imposed on the Executive pursuant to Section 409A of the Code, until
the earliest date permitted by Section 409A(a)(2) of the Code;

     (ii) For purposes of this Agreement, the Executive’s employment with the Company will not be
treated as terminated unless and until such termination of employment constitutes a “separation
from service” for purposes of Section 409A of the Code;

     (iii) To the extent necessary to comply with the provisions of Section 409A of the Code and
the guidance issued thereunder (A) reimbursements to the Executive as a result of the operation of
Section 6.1(B) or Section 6.4 hereof shall be made not later than the end of the calendar year
following the year in which the reimbursable expense is incurred and shall otherwise be made in a
manner that complies with the requirements of Treasury Regulation Section 1.409A-3(i)(l)(iv) and
(B) if Executive is a “specified employee” (within the meaning of Section 409A(a)(2)(B)(i) of the
Code), any reimbursements to the Executive as a result of the operation of such sections with
respect to a reimbursable event within the first six months following the Date of Termination which
are required to be delayed pursuant to Section 14(i) shall be made as soon as practicable following
the date which is six months and one day following the Date of Termination (subject to clause (A)
of this sentence); and

     (iv) If the provisions of Section 5.4 are applicable to an equity or equity-based award
subject to the provisions of Section 409A of the Code and the immediate payment of the award
contemplated by Section 5.4 would result in taxation under Section 409A, payment of such awards
shall be made upon the earliest date upon which such payment may be made without resulting in
taxation under Section 409A of the Code.

          15. Definitions. For purposes of this Agreement, the following terms shall have the
meanings indicated below:

          (A) “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of
the Exchange Act.

          (B) “Auditor” shall have the meaning set forth in Section 6.2 hereof.

          (C) “Base Amount” shall have the meaning set forth in section 280G(b)(3) of the Code.

          (D) “Board” shall mean the Board of Directors of the Company.

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          (E) “Cause” for termination by the Company of the Executive’s employment shall mean the
Executive’s (i) commission of a felony or other crime of moral turpitude, (ii) breach of any
material term of the severance agreement or the company’s policies and procedures, as in effect
from time to time, (iii) willful and continued failure to perform material duties of his position
or habitual neglect of any such material duties, which failure or neglect continues after the
employee has been given notice and 30 days to cure, or (iv) willful engaging in conduct that is
materially injurious to the company, monetarily or otherwise.

          (F) A “Change in Control” shall be deemed to have occurred if the event set forth in any one
of the following paragraphs shall have occurred:

               (I) Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act) acquires or becomes a “beneficial owner” (as defined in
Rule 13d-3 or any successor rule under the Securities Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the combined
voting power of the Voting Securities, provided, however, that the following shall
not constitute a Change in Control pursuant to this Section 15(F)(I): (A) any
acquisition of Voting Securities or Stock of the Company directly from the Company
other than in connection with a transaction described in Section 15(F)(III); (B)
any acquisition or beneficial ownership by the Company or a Subsidiary; (C) any
acquisition or beneficial ownership by any employee benefit plan (or related trust)
sponsored or maintained by the Company or one or more of its Subsidiaries; (D) any
acquisition or beneficial ownership by any corporation with respect to which,
immediately following such acquisition, more than 50% of the combined voting power
of the Company’s then outstanding Voting Securities and the Stock of the Company is
then beneficially owned, directly or indirectly, by all or substantially all of the
persons who beneficially owned Voting Securities and Stock of the Company
immediately prior to such acquisition in substantially the same proportions as
their ownership of such Voting Securities and Stock, as the case may be,
immediately prior to such acquisition; or

               (II) A majority of the members of the Board shall not be Continuing Directors;
or;

               (III) The consummation of a merger, consolidation or reorganization of the
Company or a statutory exchange of outstanding Voting Securities of the Company,
unless, immediately following such merger, consolidation, reorganization or
exchange, all or substantially all of the persons who were the beneficial owners,
respectively, of Voting Securities and Stock of the Company immediately prior to
such reorganization, merger, consolidation or exchange beneficially own, directly
or indirectly, more than 50% of, respectively, the combined voting

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power of the then outstanding voting securities entitled to vote generally in
the election of directors and the then outstanding shares of common stock, as the
case may be, of the corporation resulting from such reorganization, merger,
consolidation or exchange in substantially the same proportions as their ownership
immediately prior to such reorganization, merger, consolidation or exchange, of the
Voting Securities and Stock of the Company, as the case may be; or

               (IV) Approval by the shareholders of the Company of (x) a complete liquidation
or dissolution of the Company or (y) the consummation of the sale or other
disposition of all or substantially all of the assets of the Company (in one or a
series of transactions), other than to a corporation with respect to which,
immediately following such sale or other disposition, more than 50% of,
respectively, the combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of directors and the
then outstanding shares of common stock of such corporation is then beneficially
owned, directly or indirectly, by all or substantially all of the persons who were
the beneficial owners, respectively, of the Voting Securities and Stock of the
Company immediately prior to such sale or other disposition in substantially the
same proportions as their beneficial ownership immediately prior to such sale or
other disposition, of the Voting Securities and Stock of the Company, as the case
may be.

          (G) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

          (H) “Company” shall mean US BioEnergy Corporation and, except in determining whether or not
any Change in Control of the Company has occurred, shall include any successor to its business
and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise.

          (I) “Continuing Directors” means: (i) individuals who, on the date of this Agreement, are
directors of the Company; (ii) individuals elected as directors of the Company subsequent to the
date hereof for whose election proxies shall have been solicited by the Board; and (iii) any
individual elected or appointed by the Board to fill vacancies on the Board caused by death or
resignation (but not by removal) or to fill newly-created directorships; provided, however, that a
Continuing Director shall not include a director whose initial assumption of office is in
connection with an actual or threatened election contest, including, but not limited to, a consent
solicitation, relating to the election of directors of the Company.

          (J) “Date of Termination” shall have the meaning set forth in Section 7.2 hereof.

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          (K) “Disability” shall be deemed the reason for the termination by the Company of the
Executive’s employment, if, as a result of the Executive’s incapacity due to physical or mental
illness, the Executive shall have been absent from the full-time performance of the Executive’s
duties with the Company for a period of six (6) consecutive months, the Company shall have given
the Executive a Notice of Termination for Disability, and, within thirty (30) days after such
Notice of Termination is given, the Executive shall not have returned to the full-time performance
of the Executive’s duties.

          (L) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.

          (M) “Executive” shall mean the individual named in the first paragraph of this Agreement.

          (N) “Good Reason” for termination by the Executive of the Executive’s employment shall mean
the occurrence (without the Executive’s express written consent) after any Change in Control, or
prior to a Change in Control under the circumstances described in clauses (ii) and (iii) of the
second sentence of Section 6.1 hereof (treating all references in paragraphs (I) through (VI) below
to a “Change in Control” as references to a “Potential Change in Control”), of any one of the
following acts by the Company, or failures by the Company to act, unless such act or failure to act
is corrected prior to the Date of Termination specified in the Notice of Termination given in
respect thereof:

               (I) a material adverse alteration in the nature or status of the Executive’s
duties, responsibilities or stature from those in effect immediately prior to the
Change in Control;

               (II) a material reduction in the Executive’s salary or target annual bonus
opportunity from those in effect immediately prior to the Change in Control;

               (III) failure by the Company to pay the Executive current compensation within
a reasonable period after that compensation is due;

               (IV) failure by the Company to provide the Executive with benefits that are
substantially similar in the aggregate to those provided to the Executive
immediately prior to the Change in Control, except for reductions in benefits which
apply to all similarly situated individuals;

               (V) a relocation of the Executive’s principal place of employment to a new
work location 50 miles or more from the Executive’s place of employment immediately
prior to the Change in Control, excluding a relocation to the Minneapolis/St. Paul,
Minnesota greater metropolitan area; or

13

 

               (VI) the failure by the Company to require a successor to assume this
Agreement.

          The Executive’s continued employment shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting Good Reason hereunder.

          (O) “Notice of Termination” shall have the meaning set forth in Section 7.1 hereof.

          (P) “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified
and used in Sections 13(d) and 14(d) thereof

          (Q) “Potential Change in Control” shall be deemed to have occurred if the event set forth in
any one of the following paragraphs shall have occurred:

               (I) the Company enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control;

               (II) the Company or any Person publicly announces an intention to take or to
consider taking actions which, if consummated, would constitute a Change in
Control;

               (III) any Person becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 15% or more of either the then outstanding
 shares of common stock of the Company or the combined voting power of the Company’s
then outstanding securities (not including in the securities beneficially owned by
such Person any securities acquired directly from the Company or its affiliates);
or

               (IV) the Board adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.

          (R) “Retirement” shall be deemed the reason for the termination by the Executive of the
Executive’s employment if such employment is terminated in accordance with the Company’s retirement
policy, including early retirement, generally applicable to its salaried employees.

          (S) “Severance Payments” shall have the meaning set forth in Section 6.1 hereof.

          (T) “Stock” means the common stock, $0.01 par value per share, of the Company.

14

 

          (U) “Subsidiary” means any corporation (other than the Company), foreign or domestic, in an
unbroken chain of corporations beginning with the Company if each of the corporations (other than
the last corporation in the unbroken chain) owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in the chain.

          (V) “Tax Counsel” shall have the meaning set forth in Section 6.2 hereof.

          (W) “Term” shall mean the period of time described in Section 2 hereof (including any
extension, continuation or termination described therein).

          (X) “Total Payments” shall mean those payments so described in Section 6.2 hereof.

          (Y) “Voting Securities” means the Company’s then outstanding securities entitled to vote
generally in the election of directors.

15

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 
	 	 	US BIOENERGY CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Gordon W. Ommen	 	 
	 

	 	 	 	      Gordon W. Ommen	 	 
	 

	 	 	 	      CEO and President	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Richard Atkinson	 	 
	 	 	 	 	 
	 

	 	 	 	Richard Atkinson	 	 
	 

	 	 	 	Senior Vice President & CFO	 	 

16exv10w4

 

EXHIBIT
10.4

THE
ASSOCIATED GENERAL CONTRACTORS OF AMERICA

 

STANDARD FORM OF DESIGN-BUILD

AGREEMENT AND GENERAL CONDITIONS

BETWEEN OWNER AND CONTRACTOR

(Where
the Basis of Payment is a Lump Suns)

 

TABLE OF ARTICLES

1.      AGREEMENT

2,      GENERAL PROVISIONS

3.      CONTRACTOR’S RESPONSIBILITIES

4.      OWNER’S RESPONSIBILITIES

5.      SUBCONTRACTS

6.      CONTRACT TIME

7.      CONTRACT PRICE

8.      CHANGES IN THE WORK

9.      PAYMENT

10.    INDEMNITY. INSURANCE AND WAIVER OF SUBROGATION

11.    TERMINATION OF THE AGREEMENT AND OWNER’S RIGHT TO PERFORM CONTRACTOR’S RESPONSIBILITIES

12.    DISPUTE RESOLUTION

13.    MISCELLANEOUS PROVISIONS

14.    LIST OF CONTRACT DOCUMENTS

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

 

 

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

STANDARD FORM OF DESIGN-BUILD AGREEMENT AND

GENERAL CONDITIONS BETWEEN OWNER AND CONTRACTOR

(Where the Basis of Payment is a Lump Sum)

ARTICLE I

AGREEMENT

This Agreement is made this 30 day of June

In the year 2006, by and between the

	 	 	 
	OWNER
	 	 
	 
	 	 
	(Name and Address)

	 	Western Dubuque Biodiesel, LLC
	 

	 	10749 Jamesmeier Road
	 

	 	Farley, Iowa 52046
	 
	 	 
	and the
	 	 
	CONTRACTOR
	 	 
	(Name and Address)

	 	Renewable Energy Group, (REG)
	 

	 	406 First Street, P O Box 68
	 

	 	Ralston, IA 51459

for services in connection with the following

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

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

ARTICLE 2

GENERAL PROVISIONS

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

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

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

2.4 DEFINITIONS

.1 The Contract Documents consist of:

	 	a.	 	Change Orders and written amendments to this Agreement signed by both the Owner and
Contractor;
	 
	 	b.	 	This Agreement, except for the existing Contract Documents set forth in item e below;

	 
	 	c.	 	The most current Documents approved by the Owner pursuant to Subparagraph 3.1.1;

	 
	 	d.	 	The information provided by the Owner pursuant to Clause 4.1.2.1;
	 
	 	e.	 	The Contract Documents in existence at the time of this Agreement which are set forth
in Article 14;
	 
	 	f.	 	The Owner’s Programs provided pursuant to Subparagraph 4.1.1.

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

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

 

 

accordance with and reasonably inferable from the Contract Documents.

.3 The term Day shall mean calendar day.

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

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

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

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

ARTICLE 3

CONTRACTOR’S RESPONSIBILITES

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

3.1 DESIGN SERVICES

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

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

3.2 CONSTRUCTION SERVICES

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

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

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

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

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

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

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

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

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

3.3 HAZARDOUS MATERIAL

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

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

 

 

agency with jurisdiction.

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

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

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

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

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

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

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

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

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

3.6 WARRANTIES AND COMPLETION

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

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

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

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

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

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

ARTICLE 4

OWNER’S RESPONSIBILITIES

4.1 INFORMATION AND SERVICES PROVIDED BY OWNER

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

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

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

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

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

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

4.2 RESPONSIBILITIES DURING DESIGN

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

4.3 RESPONSIBILITIES DURING CONSTRUCTION

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

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

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

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

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

.1 shall be fully acquainted with the Project:

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

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

ARTICLE 5

SUBCONTRACTS

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

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

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

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

ARTICLE 6

CONTRACT TIME

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

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

 

 

6.3 DELAYS IN THE WORK

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

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

ARTICLE 7

CONTRACT PRICE

The
Contract Price is $37,689,425 (Thirty Seven Million, Six Hundred
Eighty Nine Thousand, Four Hundred Twenty Five Dollars) subject to adjustment in accordance with the provisions of
Article 8. Price is per REG Proposal Letter dated June 28, 2006.

ARTICLE 8

CHANGES IN THE WORK

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

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

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

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

.2 a mutually accepted, itemized lump sum; or

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

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

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

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

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

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

ARTICLE 9

PAYMENT

9.1 INITIAL PAYMENT Upon execution of this Agreement an initial payment of
___dollars shall be made to the Contractor. The amount of the initial payment shall
be credited against ______ the Contract Price at final payment.  Prior to signing of this
Agreement the Owner has made payment to the Contractor for Pre-construction Services. This payment
totaling $2,500,000 and the Work attributed to it become a part of this Agreement and are included in the
Contract Price of this Agreement. This Agreement supersedes any pre-existing agreements between
Owner and Contractor. Retainage on this Project shall be in amount of
5% of each invoice and
shall become due in accordance with Article 9.2.7.

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

 

 

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

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

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

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

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

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

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

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

9.3 FINAL PAYMENT

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

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

.1 outstanding liens;

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

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

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

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

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

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

ARTICLE 10

INDEMNITY, INSURANCE AND WAIVER OF SUBROGATION

10.1
INDEMNITY 

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

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

 

 

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

10.2 CONTRACTOR’S LIABILITY INSURANCE

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

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	.1 workers’ compensation, disability benefit and other employee benefit claims under acts
applicable to the Work;
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	.2 under applicable employers liability law, bodily injury, occupational, sickness, disease
or death claims of the Contractor’s employees;
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	.3 bodily injury, sickness, disease, or death claims for damages to persons not employed by
the Contractor;
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	.4 usual personal injury liability claims for damages directly or indirectly related to the
person’s employment by the Contractor or for damages to any other person;
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	.5 damage to or destruction of tangible property, including resulting loss of use, claims
for property other than the work itself and other property insured under Paragraph 11.5 10.5;
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	.6 bodily injury, death or property damage claims resulting from motor vehicle liability in
the use, maintenance or ownership of any motor vehicle; and
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	.7 contractual liability claims involving the Contractor’s obligations under Subparagraph 11.1.1.
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	10.2.2	 	The Contractor’s Commercial General and Automobile Liability Insurance as required by
Subparagraph 11.2.1 shall be written for not less than the following limits of liability:
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	.1	 	 	Commercial General Liability Insurance	 	 
	 

	 	 	 	 	 	a.
	 	Each Occurrence Limit
	 	$	1,000,000	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	b.
	 	General Aggregate
	 	$	2,000,000	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	c.
	 	Products/Completed	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Operations Aggregate
	 	$	2,000,000	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	d.
	 	Personal and Advertising	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Injury Limit
	 	$	1,000,000	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	.2	 	 	Comprehensive Automobile Liability Insurance	 	 
	 

	 	 	 	 	 	a.
	 	Combined Single Limit Bodily	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Injury and Property Damage
	 	$	1,000,000	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	
Or
	 	Each occurrence
	 	 
	 

	 	 	 	 	 	b.
	 	Bodily Injury
	 	$	N/A	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Each Person
	 	 
	 

	 	 	 	 	 	 	 	 	 	$	N/A	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Each Occurrence
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	c.
	 	Property Damage
	 	$	N/A	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Each Occurrence
	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	.3	 	 	Umbrella Liability	 	$	10,000,000	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

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

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

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

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

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

10.5 INSURANCE TO PROTECT PROJECT

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

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

 

 

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

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

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

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

10.6 PROPERTY INSURANCE LOSS ADJUSTMENT

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

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

10.7 WAIVER OF SUBROGATION

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

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

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

ARTICLE 11

TERMINATION OF THE AGREEMENT AND OWNER’S RIGHT TO

PERFORM CONTRACTOR’S RESPONSIBILITIES

11.1 TERMINATION BY THE CONTRACTOR

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

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

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

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

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

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

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

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

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

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

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

 

 

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

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

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

.4 if the Contractor otherwise materially breaches this Agreement.

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

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

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

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

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

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

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

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

11.4 SUSPENSION BY THE OWNER FOR CONVENIENCE

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

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

ARTICLE 12

DISPUTE RESOLUTION

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

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

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

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

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

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

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

ARTICLE 13

MISCELLANEOUS PROVISIONS

 

 

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

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

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

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

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

13.6 OTHER PROVISIONS

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

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

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

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

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

ARTICLE 14

EXISTING CONTRACT DOCUMENTS

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

     REG Proposal Letter, dated June 28, 2006

     REG Process Guarantee Letter, dated June 23, 2006.

     Technical Specifications, dated June 23, 2006.

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

 

 

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

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	OWNER: WESTERN DUBUQUE BIODIESEL, LLC  
	 
	 	 	 	 	 	 	 	 	 	 
	ATTEST:

	 	/s/ Ed Recker
	 	 	BY:	 
	/s/ Bruce Klostermann	 	 
	 

	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	PRINT NAME: 	Bruce Klostermann	 	 
	 

	 	 	 	 	 	 	PRINT TITLE:
	Vice Chairman	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	CONTRACTOR: RENEWABLE ENERGY GROUP
	 
	 	 	 	 	 	 	 	 	 	 
	ATTEST:

	 	/s/ Vickie Ayers
	 	 	BY:
	 	/s/ Philip Sargent	 	 
	 

	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	PRINT NAME:
	Philip Sargent	 	 
	 

	 	 	 	 	 	 	PRINT TITLE:
	Partner	 	 

 

 

REG

June 28, 2006

Mr. Ed Recker

Western Dubuque Biodiesel, LLC Board of Directors

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

Farley, Iowa 52046

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

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

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

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

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

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

Biodiesel Facility Pricing

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

 

 

June 28, 2006

Western Dubuque Biodiesel

Page 2 of 2

	 	 	 	 	 
	Total Contract Price
	 	$	37,689,425	 
	Alternative #1 FFA Equipment Tower
	 	$	3,335,000	 
	Alternative #2 Security Fence
	 	$	100,900	 
	Alternative #3 Concrete Floor-Storage Bldg.
	 	$	14,120	 
	Adder #1 Fire water tank (if needed)
	 	$	404,200	 

Notes:

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

Builder’s risk and hot work insurance are not included in our contract price above. We estimate
the cost of this policy will be around $80,000. A payment and performance bond is not included in our
contract price above. We estimate the cost of this bond will be
around $270,000.

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

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

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

This proposal does not include a firewater tank, as we understand the city will have adequate
water. Confirmation will be determined once utilities are in place.
Possible adder: $404,200.

This proposal does not include the cost of 2 (two) mainline rail switches installed on the mainline
to be done by the CN and paid by the owner. (Estimated cost is
$240,000)

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

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

 

 

Biodiesel Board of Directors.

Bill Raney

Sales Production Manager

Renewable Energy Group

PO Box 68

Ralston, Iowa 51459

 

 

REG

June 23, 2006

To: Western Dubuque Biodiesel, LLC

From : Renewable Energy Group, LLC

Subject: REG Process Guarantee for 30 MGPY Biodiesel Facility

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

Performance Data for Continuous Transesterification Process (Biodiesel Process)

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

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

	 	 	 	 	 
	 

	 	Moisture and Volatiles:
	 	0.05% max
	 

	 	Acidity:
	 	0.5% max
	 

	 	Phosphorus Total:
	 	2 ppm max
	 

	 	Soap:
	 	50 ppm max
	 

	 	Unsaponifiables*:
	 	1.0% max
	 
	 	 	 	 
	Product Information:	 	 
	 

	 	Biodiesel yield **:
	 	greater than 95%
	 

	 	Crude Glycerine:
	 	approximately 0.13 lb of 75-80% glycerine per
Pound of product
	 

	 	Fatty matter:
	 	less than 0.01 lb
	 

	 	Methanol stream:
	 	99.9 methanol (recycled)
	 

	 	Water stream (0.2% methanol):
	 	nil

	*	 	Amount and component makeup of phosphorus and unsaponifiables must be at a level to theoretically
allow Biodiesel product to conform to ASTM D 6751 or equivalent standard.
	 
	**	 	Yield based on available triglyceride content after subtraction of moisture, unsaponifiables and
FFA. Biodiesel product will conform to ASTM D 6751 or equivalent standard.

 

 

Summary — Performance Standards — Inputs and Outputs

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Peak Hour*	 	 	Peak Day**	 	 	Annual***	 
	Inputs
	 	 	 	 	 	 	 	 	 	 	 	 
	•   Pre-treated triglyceride
	 	3,987 gal.	 	95,688 gal.	 	31,578,947 gal.
	 
	•   Methanol (99,9%)
	 	2,528 lb.	 	60,682 lb.	 	20,025,000 lb.
	 
	•   Sodium Methoxide
	 	710 lb.	 	17,045 lb.	 	5,626,000 lb.
	 
	(25% NAOH)
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	•   Steam (150 psi)
	 	9,091 lb.	 	218,182 lb.	 	72,000,000 lb.
	 
	•   Connected Power
	 	213 kwh	 	5,113 kwh	 	1,687,500 kwh
	 
	Outputs
	 	 	 	 	 	 	 	 	 	 	 	 
	•   Biodiesel
	 	3,788 gal.	 	90,909 gal.	 	30,000,000 gal.
	 
	•   Glycerin
	 	3,693 lb.	 	88,629 lb.	 	29,247,624 lb.

 

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

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