STANDARD FORM AGREEMENT

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EXHIBIT 10.1

THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA

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AGC DOCUMENT NO. 410

STANDARD FORM OF DESIGN-BUILD

AGREEMENT AND GENERAL CONDITIONS

BETWEEN OWNER AND DESIGN-BUILDER

(WHERE THE BASIS OF PAYMENT IS THE COST OF THE WORK

PLUS A FEE WITH A GUARANTEED MAXIMUM PRICE)

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THIS STANDARD FORM AGREEMENT WAS DEVELOPED WITH THE ADVISE AND

COOPERATION OF THE AGC PRIVATE INDUSTRY ADVISORY COUNCIL, A NUMBER OF FORTUNE

500 OWNERS' DESIGN AND CONSTRUCTION MANAGERS WHO HAVE BEEN MEETING WITH AGC

CONTRACTORS TO DISCUSS ISSUES OF MUTUAL CONCERN. AGC GRATEFULLY ACKNOWLEDGES THE

CONTRIBUTIONS OF THESE OWNERS' STAFF WHO PARTICIPATED IN THIS EFFORT TO PRODUCE

A BASIC AGREEMENT FOR CONSTRUCTION.

TABLE OF ARTICLES

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1. AGREEMENT

2. GENERAL PROVISIONS

3. DESIGN-BUILDER'S RESPONSIBILITIES

4. OWNER'S RESPONSIBILITIES

5. SUBCONTRACTS

6. TIME

7. COMPENSATION

8. COST OF THE WORK

9. CHANGES IN THE WORK

10. PAYMENT FOR CONSTRUCTION PHASE SERVICES

11. INDEMNITY, INSURANCE, BONDS, AND WAIVER OF SUBROGATION

12. SUSPENSION AND TERMINATION OF THE AGREEMENT AND OWNER'S

RIGHT TO PERFORM DESIGN-BUILDER'S RESPONSIBILITIES

13. DISPUTE RESOLUTION

14. MISCELLANEOUS PROVISIONS

15. EXISTING CONTRACT DOCUMENTS

AMENDMENT NO. I

Owners Program

AMENDMENT NO. 2

Technology Transfer Agreement between Owner, Engineer and

Design-Builder

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This Agreement has important legal and insurance consequences. Consultation

with an attorney and insurance consultant is encouraged with respect to its

completion or modification.

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AGC DOCUMENT NO.410 o STANDARD FORM OF DESIGN-BUILD AGREEMENT AND GENERAL

CONDITIONS BETWEEN OWNER AND DESIGN-BUILDER (Where the Basis of Payment is the

Cost of the Work Plus a Fee with a Guaranteed Maximum Price)

2001 The Associated General Contractors of America

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AGC DOCUMENT NO. 410

STANDARD FORM OF DESIGN-BUILD

AGREEMENT AND GENERAL CONDITIONS

BETWEEN OWNER.AND DESIGN-BUILDER

(Where the Basis of Payment is the Cost of the Work

Plus A FEE with a Guaranteed Maximum Price)

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ARTICLE 1

AGREEMENT

This Agreement is made the............7TH..............day

of...........JULY..............in the YEAR......2003, by and between the

OWNER

PACIFIC ETHANOL, INC.

440 W. FALLBROOK

SUITE 210

FRESNO, CA 93711

and the

DESIGN-BUILDER

W.M. LYLES CO.

(A CALIFORNIA CORPORATION)

P.O. BOX 4377

FRESNO, CA 93744-4377

for services in connection with the following

PROJECT

ETHANOL PLANT - CONSTRUCTION

ETHANOL PRODUCTION AT THE MADERA SITE

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

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ARTICLE 2 - GENERAL PROVISIONS

2.1 TEAM RELATIONSHIP THE OWNER AND THE Design-Builder AGREE TO PROCEED WITH THE

Project ON the basis of trust, good faith and fair dealing and shall take all

actions reasonably necessary to perform THIS AGREEMENT IN AN ECONOMICAL and

timely MANNER, including consideration OF DESIGN MODIFICATIONS AND alternative

materials or equipment that will permit the Work to be constructed within the

Guaranteed Maximum Price (GMP) AND by THE DATES OF Substantial COMPLETION AND

Final Completion AS established by Amendment No. 1. The Design-Builder agrees to

procure, as permitted by the law of the state where the project is located, the

design phase services and furnish construction phase services as set forth

below.

2.1.1 The Design-Builder represents that it is an independent contractor and

that it is familiar with the type of work it is undertaking.

2.1.2 Neither the Design-Builder nor any of its agents or employees shall act on

behalf of or in the name of the Owner unless authorized in writing by the

Owner's Representative.

2.2 ENGINEER Engineering services shall be procured from licensed, independent

design professionals retained by the Design-Builder with consultation from Owner

as permitted by the law of the state where the Project is located. The standard

of care for engineering services performed under this Agreement shall be the

care and skill ordinarily used by members of the engineering professions

practicing under similar conditions at the same time and locality. The entity

providing engineering services shall be referred to as the Engineer and provide

separate and exclusive Professional Liability Insurance as required. The

engineering services shall be procured pursuant to a separate agreement between

the Design-Builder and the Engineer.

2.2.1 THE Engineer FOR THE Project shall BE DELTA-T CORPORATION,

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, except for the signed and dated Lyles Diversified, Inc. Agreement

titled "Summary of Terms for Secured Debt With Equity." The Owner and the

Design-Builder AGREE TO LOOK SOLELY TO EACH other with RESPECT TO THE

PERFORMANCE OF THE AGREEMENT. THE Agreement and each and every provision is for

the exclusive benefit of the Owner and the Design-Builder and not for the

benefit of any third party or any third party beneficiary, except to the extent

expressly provided in the Agreement.

2.4 DEFINITIONS

.1 The Contract DOCUMENTS consist of:

a. Change Orders and written amendments to this Agreement

including exhibits and appendices, signed by both the Owner

and the Design-Builder, including Amendment No. 1 if executed;

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 Paragraph 3.1;

d. the information provided by the Owner pursuant to Clause

4.1.2.1;

e. the Contract Documents in existence at the time of

execution of this Agreement which are set forth in Article 15.

Additional Exhibits may be added to this document with proper

signature of the Owner and design-Builder;

f. the Owner's Program provided pursuant to Subparagraph 4.1.;

In case of any inconsistency, conflict or ambiguity among the Contract

Documents, the documents shall govern in the order in which they are

listed above.

.2 The term day shall mean calendar day unless otherwise specifically

defined.

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.3 DESIGN-BUILDER'S FEE means the compensation paid to the

Design-Builder for salaries and other mandatory or customary

compensation of the Design-Builder's employees at its principle and

branch offices except employees listed in Subparagraph 8.2.2, general

and administrative expenses of the Design-Builder's principal and

branch offices other than the field office, and the Design-Builder's

capital expenses, including interest on the Design-Builder's capital

employed FOR the WORK, AND PROFIT.

.4 DEFECTIVE WORK IS ANY portion of the Work not in conformance with

the Contract Documents as more fully described in Paragraph 3.8.

.5 The term Fast-track means accelerated scheduling which involves

commencing construction prior to the completion of drawings and

specifications and then using means such as bid PACKAGES AND EFFICIENT

COORDINATION TO COMPRESS THE overall schedule.

.6 FINAL COMPLETION occurs on the date when the Design-Builder's

obligations under this Agreement are complete and accepted by the Owner

and final payment becomes due and payable.

.7 A MATERIAL SUPPLIER is a party or entity retained by the

Design-Builder to provide material and equipment for the Work.

.8 Others means other contractors and all persons at the Worksite who

are not employed by Design-Builder, its Subcontractors or Material

Suppliers.

.9 The OWNER is the person or entity identified as such in this

Agreement and includes the Owner's Representative.

.10 The OWNER'S PROGRAM IS an initial description of the Owner's

objectives, that may include budget and time criteria, space

requirements and relationships, flexibility and expandability

requirements, special equipment and systems, and site requirements

completed by the Design-Builder and Engineer as described in Exhibit

No. C; Project Development Agreement.

.11 The PROJECT, as identified in Article 1, is the building, facility

and/or other improvements for which the Design-Builder is to perform

the Work under this Agreement It may also include improvements to be

undertaken by the Owner or Others.

.12 A SUBCONTRACTOR IS A party or entity retained by the Design-Builder

as. an independent contractor to provide the on-site labor, materials,

equipment and/or services necessary to complete a specific portion of

the Work. The term Subcontractor does not include the Engineer or any

separate contractor employed by the Owner or any separate contractor's

subcontractors.

.13 SUBSTANTIAL COMPLETION OF THE WORK, OF a designated portion, occurs

on the date when the Design-Builder's obligations are sufficiently

complete in accordance with the Contract Documents so that the Owner

can or does occupy or utilize the Project, or a designated portion, for

the use for which it is intended, in accordance with Paragraph 10.4.

The issuance of a Certificate of Occupancy is not a prerequisite for

Substantial Completion if the Certificate of Occupancy cannot be

obtained due to factors. beyond the Design-Builder's control. This date

shall be confirmed by a Certificate of Substantial Completion signed by

the Owner and the Design-Builder. The Certificate shall state the

respective responsibilities of the Owner and the Design-Builder 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,

within the time frame, if any, established in Amendment No. I for the

Date of Final Completion.

.14 A SUB-SUBCONTRACTOR IS a party or entity who has an agreement with

a Subcontractor to perform any portion of the Subcontractor's work.

.15 The WORK is the Design Development and Design Phase Services

procured or furnished in accordance with Paragraph 3.1, the GMP

Proposal provided in accordance with Paragraph 3.2, the Construction

Phase Services provided in accordance with Paragraph 3.3, Additional

Services that may be provided in accordance with paragraph 3.10, and

other services which are necessary to complete the Project in

accordance with and reasonably inferable from the Contract Documents.

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.16 WORKSITE means the geographical area at the location mentioned in

Article where the Work is to be performed.

ARTICLE 3 -DESIGN-BUILDER'S RESPONSIBILITIES

THE Design-Builder shall be responsible for procuring the design and for

furnishing the construction of the Work consistent with the Owner's Program; as

such the Owner may modify the Program during the course of the work up to

twenty-five (25)-percent design complete. The Design-Builder shall exercise

reasonable skill and judgment in the performance of its services consistent with

the team relationship described in Paragraph 2.1, but does not warrant nor

guarantee schedules and estimates other than those that are part of the GMP

proposal.

3.1 DESIGN PHASE SERVICES

3.1.1 PRELIMINARY EVALUATION - OWNER'S PROGRAM The Design-Builder shall review

the Owner's Program to ascertain the requirements of the Project and shall

verify' such requirements with the Owner. The Design-Builder's review shall also

provide to the Owner a preliminary evaluation of the site with regard to access,

traffic, drainage, parking, building placement and other considerations

affecting the plant, the environment and energy use, as well as information

regarding applicable governmental laws, regulations and requirements based on

the requirements of Exhibit No. C. The Design-Builder shall also propose, as

necessary, alternative architectural, civil, structural, mechanical, electrical

and other systems for review by the Owner, to determine the most desirable

approach on the basis of cost, technology, quality and speed of delivery. The

Design-Builder will also review existing test reports but will not undertake any

independent testing nor be required to furnish types of information derived

from. such testing in its Preliminary Evaluation. Based upon its review and

verification of the Owner's Program and other relevant information the

Design-Builder shall provide a Preliminary Evaluation of the Project's

feasibility for the Owner's acceptance. The Design-Builder's Preliminary

Evaluation shall specifically identify any deviations from the Owner's Program.

3.1.2 PRELIMINARY SCHEDULE - OWNER"S PROGRAM The Design-Builder shall prepare a

preliminary schedule of the Work as established by the information provide by

the Engineer in Exhibit No. C. The Owner shall provide written approval of

milestone dates established in the preliminary schedule of the Work. The

schedule shall show the activities of the Owner, the Engineer and the

Design-Builder necessary to meet the Owner's completion requirements. The

schedule shall be updated periodically with the level of detail for each

schedule update reflecting the information then available. If an update

indicates that a previously approved schedule will not be met, the

Design-Builder shall recommend corrective action to the Owner in writing.

3.1.3 PRELIMINARY ESTIMATE -- OWNER'S PROGRAM ' When sufficient Project

information has been identified, the Design-Builder shall prepare for the

Owner's acceptance a preliminary estimate established by the information

provided by the Engineer in Exhibit No. C utilizing typical W.M. LYLES CO.

estimating techniques. The estimate shall be updated periodically with the level

of detail for each estimate update reflecting the information then available. If

the preliminary estimate or any update exceeds the Owner's budget, the

Design-Builder shall make recommendations to the Owner.

3.1.4 DESIGN DEVELOPMENT DOCUMENTS - OWNER'S PROGRAM The Design-Builder shall

submit for the Owner's written approval the Design Development Documents as

submitted by the Engineer and required in Exhibit No. C signed by the

Design-Builder and Engineer based on the approved Schematic Design Documents.

The Design Development Documents shall further define the Project including

drawings and outline specifications fixing and describing the Project size and

character as to site utilization, and other appropriate elements incorporating

the structural, architectural, mechanical and electrical systems. One set of

these documents shall be furnished to the Owner. When the Design-Builder submits

the Design Development Documents, the Design-Builder shall identify in writing

all material changes and deviations that have taken place from the Schematic

Design Documents. The Design-Builder shall update the schedule and estimate

based on the Design Development Documents.

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3.1.5 TECHNOLOGY TRANSFER AGREEMENT AND FUTURE DESIGN SERVICES AGREEMENT Upon

execution of Exhibit No. C, the Owner, Engineer and Design-Builder shall enter

into good-faith negotiations for the Technology Transfer Agreement and the

Design-Builder and Engineer shall enter into good-faith negotiations for the

Design Services Agreement. Upon confirmation that the Owner has obtained the

necessary Project Financing, the Technology Transfer Agreement and Design

Services agreement shall be fully executed so as to not delay the project.

3.1.6 CONSTRUCTION DOCUMENTS Upon confirmation that the Owner has obtained the

necessary Project Financing, the Design-Builder shall submit for the Owner's

written approval Construction Documents based on the approved Design Development

Documents. The Construction Documents shall set forth in detail the requirements

for construction of the Work, and shall consist of drawings and specifications

based upon codes, laws and regulations enacted at the time of their preparation.

When the Design-Builder submits the Construction Documents, the Design-Builder

shall identify in writing all material changes and deviations that have taken

place from the Design Development Documents. Construction shall be in accordance

with these approved Construction Documents. One set of these documents shall be

furnished to the Owner prior to commencement of construction.

3.1.7 OWNERSHIP OF DOCUMENTS Upon the making of payment pursuant to Paragraph

10.5, the Owner shall receive ownership of the property rights, except for

copyrights and other limited license information provided and required by the

Engineer, of all documents, drawings, specifications, electronic data and

information prepared, provided OR PROCURED by the Design-Builder, its Engineer,

Subcontractors and Consultants and distributed to the Owner for this Project.

("Design-Build Documents")

.1 If this Agreement is terminated pursuant to Paragraph 12.1, the

Owner shall receive ownership of the property rights, except for

copyrights and other limited license information provide by the

Engineer, of the Design-Build Documents upon payment for all work

performed in accordance with this Agreement, at which time the Owner

shall have the right to use, reproduce and make derivative works from

the Design-Build Documents to complete the Work.

.2 If this Agreement is terminated pursuant to Paragraph 12.2, the

Owner shall receive ownership of the property rights, except for

copyrights and other limited license information provide by the

Engineer, of the Design-Build Documents upon payment of all sums

provided in Paragraph 12.2, at which time the Owner shall have the

right to use, reproduce and make derivative works from the Design-Build

Documents to complete the Work.

.3 The Owner may use, reproduce and make derivative works from the

Design-Build documents for subsequent renovation and remodeling of the

work, but shall not use, reproduce or make derivative works from the

Design-Build Documents for other projects without the written

authorization of the Design-Builder and Engineer, who shall not

unreasonably withhold consent.

.4 The Owner's use of the Design-Build Documents without the

Design-Builder's involvement or on other projects is at the Owner's

sole risk, except for the Design-Builder's indemnification obligation

pursuant to Paragraph 3.7, and the Owner shall defend, indemnify and

hold harmless the Design-Builder, its Engineer, Subcontractors, and

consultants, and the agents; officers, directors and employees of each

of them from and against any and all claims, damages, losses, costs

'and expenses, including but not limited to attorney's fees, costs and

expenses incurred in connection with any dispute resolution process,

arising out of or resulting from the Owner's use of the Design-Build

Documents.

.5 The Design-Builder shall obtain from its Engineer, Subcontractors

and consultants property rights and rights of use that correspond to

the rights given by the Design-Builder to the Owner in this Agreement.

3.2 GUARANTEED MAXIUM PRICE (GMP)

3.2.1 GMP PROPOSAL The GMP shall be the sum of the estimated Design-Builder's

Time and Material Cost of the work as defined in Article 8 and listed in Exhibit

No. B, Design-Builder's Fee as defined in Article land the Design-Builder's

Contingency as defined in Article 3.2.7. The GMP is subject to modification as

provided in Article 9.

3.2.1.1 The Design-Development Documents shall be sufficiently complete at the

time the GMP Proposal is submitted to the Owner. The Design-Builder shall

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provide in the GMP for further development of the Design-Build Documents

consistent with the Owner's Program. Such further development does not include

changes in scope, systems, kinds and quality of materials, finishes or

equipment, all of which if required, shall be incorporated by Change Order.

3.2.2 BASIS OF GUARANTEED MAXIMUM PRICE The Design-Builder shall include with

the GMP Proposal a written statement of its scope of work and basis, which shall

include:

.1 A list of the drawings and specifications, including all addenda,

which were used in preparation of the GMP Proposal;

.2 current Time and Material worksheet (Exhibit No. B);

.3 a list of the assumptions and clarifications made by the

Design-Builder in the preparation of the GMP Proposal to supplement the

information contained in the drawings and specifications;

.4 The Date of Substantial Completion and/or the Date of Final

Completion upon which the proposed GMP is based, and the Schedule of

Work upon which the Date of Substantial Completion and/or the Date of

Final Completion is based;

.5 a schedule of applicable alternate prices and unit prices if

necessary;

.6 Additional Services if any;

.7 the time limit for acceptance of the GMP proposal;

.8 the Design-Builder's Contingency as provided in Subparagraph 3.2.6;

.9 a statement of any work to be self performed by the Design-Builder;

and

.10 A statement identifying all patented or copyrighted materials,

methods or systems selected by the Design-Builder and incorporated in

the Work that are likely to require the payment of royalties or license

fees.

3.2.3 REVIEW AND ADJUSTMENT TO GMP PROPOSAL The Design-Builder shall meet with

the Owner to review the GMP Proposal. In the event that the Owner has any

comments relative to the GMP Proposal, or finds any inconsistencies or

inaccuracies in the information presented, it shall give prompt written notice

of such comments or findings to the Design-Builder, who shall make appropriate

adjustments to the GMP, its basis or both.

3.2.4 ACCEPTANCE OF GMP PROPOSAL Upon acceptance by the Owner of the GMP

Proposal, as MAY be amended by the Design-Builder in accordance with

Subparagraph 3.2.3, THE GMP AND ITS BASIS shall be set forth in Amendment No. 1.

The GMP and the date of Substantial Completion and/or the date of Final

Completion shall be subject to modification in Article 9.

3.2.5 FAILURE TO ACCEPT THE GMP PROPOSAL Unless the Owner accepts the GMP

Proposal in writing on or before the date specified in the GMP Proposal for such

acceptance and so notifies the Design-Builder, the GMP Proposal shall not be

effective. If the Owner fails to accept the GMP Proposal, or rejects the GMP

Proposal, the Owner shall have the right to:

.1 Suggest modifications to the GMP Proposal. If such modifications are

accepted in writing by Design-Builder, the GMP Proposal shall be deemed

accepted in accordance with Subparagraph 3.2.4;

.2 Direct the Design-Builder to proceed on the basis of reimbursement

as provided in Articles 7 and 8 without A GMP, in which case all

references in this agreement to the GMP shall not be applicable; or

In the absence of a GMP the parties may establish a Date of Substantial

Completion and/or a Date of Final Completion.

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3.2.6 DESIGN-BUILDER'S CONTINGENCY The GMP Proposal will contain, as part of the

estimated Cost of the Work, the Design-Builder's Contingency, a sum mutually

agreed upon and monitored by the Design-Builder and the Owner for use at the

Design-Builder's discretion to cover costs which are properly reimbursable as a

Cost of the Work but are not the basis for a Change Order. Any contingency

amount remaining after Owner's start=up and use of the project shall be

equitably split between the Design-Builder and Owner on a 50/50 basis.

3.2.7 CONSTRUCTION PHASE SERVICES The Construction. Phase will commence upon the

confirmation that the Owner has obtained the necessary Project Financing and

issuance by the Owner of a written notice to proceed with construction.

32.8 In order to complete the Work, the Design-Builder shall provide all

necessary construction supervision, construction equipment, labor, materials,

tools, and subcontracted items.

3.2.9 The Design-Builder 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.

3.2.10 The Design-Builder shall keep such full and detailed accounts as are

necessary for proper financial management under this Agreement. The Owner shall

be afforded access to all the Design-Builder's records, books, correspondence,

instructions, drawings, receipts, vouchers., memoranda and similar data relating

to this Agreement. The Design-Builder shall preserve all such records for a

period of three years after the final payment or longer where required by law.

3,2.11 The. Design-Builder shall provide periodic written reports to the Owner

on the progress of the Work in such detail as agreed to by the Owner and the

Design-Builder.

3.2.12 The Design-Builder shall develop a system of cost reporting for the Work,

including regular monitoring of actual costs for activities in progress and

estimates for uncompleted tasks and proposed changes in the Work. The reports

shall be presented to the Owner at mutually agreeable intervals.

3.2.13 The Design-Builder shall regularly remove debris and waste materials at.

the Worksite resulting from the Work. Prior to discontinuing Work in an area,

the Design-Builder shall clean the area and remove all rubbish and its

construction equipment, tools, machinery, waste and surplus materials. The

Design-Builder shall minimize and confine dust and debris resulting from

construction activities. At the completion of the Work, the Design-Builder shall

remove from the Worksite all construction equipment, tools, surplus materials,

waste materials and debris.

3.2.14 The Design-Builder shall prepare and submit to the Owner final marked up

as-built drawings in general documenting how the various elements of the Work

including changes were actually constructed or installed, or as defined by the

parties by attachment to this Agreement.

3.3 SCHEDULE OF THE WORK THE Design-Builder shall prepare and submit a final

Schedule of work for the Owner's Acceptance and Written Approval as to

Milestone Dates. This schedule shall indicate the dates for the start and

Completion of the various stages of the Work, including The dates when

information and 'approvals are required from the Owner. The Schedule shall be

revised as required by the conditions of the Work.

3.4 SAFETY OF PERSONS AND PROPERTY

3.4.1 SAFETY PRECAUTIONS AND PROGRAMS The Design-Builder shall have overall

responsibility for safety precautions and programs in the performance of the

Work. While the provisions of this Paragraph establish the responsibility for

safety between the Owner and the Design-Builder, they do not relieve

Subcontractors of their responsibility for the safety of persons or property in

the performance of their work, nor for compliance with the provisions of

applicable laws and regulations.

3.4.2 The Design-Builder shall seek to avoid injury, loss or damage to persons

or property by taking reasonable steps to protect:

.1 its employees and other persons at the Worksite;

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.2 materials, supplies and equipment stored at the Worksite for use in

performance of the Work; and

.3 the Project and all property located at the Worksite and adjacent to

work areas, whether or not said property or structures are part of the

Project or involved in the Work.

3.4.3 DESIGN-BUILDER'S SAFETY PROGRAM The Design-Builder's On-Site Safety

Program shall include all OSHA required elements and the following components:

.1 Established and administrated on-site Drug Prevention and Alcohol

Testing Program.

.2 Established and administrated on-site Safety Orientation Training

and Education Program.

3.4.4 DESIGN-BUILDER'S SAFETY REPRESENTATIVE The Design-Builder shall designate

an individual at the Worksite in the employ of the Design-Builder who shall act

as the Design-Builder's designated safety representative with a duty to prevent

accidents. The Design-Builder will. report immediately in writing all accidents

and injuries occurring at the Worksite to the Owner. If the Design-Builder is

required to file an accident report with a public authority, the Design-Builder

shall furnish a copy of the report to the Owner.

3.4.5 The Design-Builder shall provide the Owner with copies of all notices

required of the Design-Builder by law or regulation. The Design-Builder's safety

program shall comply with the requirements of governmental and

quasi-governmental authorities having jurisdiction over the Work.

3.4.6 Damage or loss not insured under property insurance which may arise from

the performance of the Work, to the extent of the negligence attributed to such

acts or omissions of the Design-Builder, or anyone for whose acts the

Design-Builder may be liable, shall be promptly remedied by the Design-Builder.

Damage or loss attributable to the acts or omissions of the Owner or Others and

not to the Design-Builder shall be promptly remedied by the Owner.

3.4.7 If the Owner or Owner's representative deems any part of the Work or

Worksite unsafe, the Owner, without assuming responsibility for the

Design-Builder's safety program, may require the Design-Builder to stop

performance of the Work or take corrective measures satisfactory to the Owner,

or both. The Design-Builder agrees to make no claim for damages, for an increase

in the GMP, compensation for Design Phase Services, the Design-Builder's Fee

and/or the Date of Substantial Completion and/or the Date of Final Completion

based on the Design-Builder's compliance with the Owner's reasonable request.

3.5 HAZARDOUS MATERIALS

3.5.1 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 Design-Builder shall not be obligated to commence or

continue work until all Hazardous Material discovered at the Worksite has been

removed, rendered or determined to be harmless by the Owner as certified by an

independent testing laboratory approved by the appropriate government agency.

3.5.2 If after the commencement of the Work, Hazardous Material is discovered at

the Project, the Design-Builder shall be entitled to immediately stop Work in

the affected area. The Design-Builder shall report the condition to the Owner

and, if required, the government agency with jurisdiction. The Design-Builder

reserves the right to remove any identified Hazardous Material under a separate

Time and Material Contract.

3.5.3 The Design-Builder shall not be required to perform any Work relating to

or in the area of Hazardous Material without written mutual agreement.

3.5.4 The Owner shall be responsible for retaining an independent testing

laboratory to determine the nature of the material encountered and weather 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 effects upon the Work of the Design-Builder.

The Design-Builder shall resume Work in the area affected by any Hazardous

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Material only upon written agreement between the parties after the Hazardous

Material has been removed or rendered harmless and only after approval, if

necessary, of the governmental agency or agencies with jurisdiction.

3.5.5 If the Design-Builder incurs additional costs and/or is delayed due to the

presence or remediation OF Hazardous Material, the Design-Builder shall be

entitled to an equitable adjustment in the GMP, compensation for Design Phase

Services, the Design-Builder's Fee and/or the Date of Substantial Completion

and/or the Date of Final Completion.

3.5.6 Provided the Design-Builder, its Subcontractors, Material Suppliers and

Sub-subcontractors, and the agents, officers, directors and employees of each of

them, have not, acting under their own authority, knowingly entered upon any

portion of the Work containing Hazardous Materials, and to the extent not caused

by the negligent acts or omissions of the Design-Builder, its Subcontractors,

Material Suppliers and Sub-subcontractors, and the agents, officers, directors

and employees of each of them, the Owner shall defend, indemnify and hold

harmless the Design-Builder, its Subcontractors and Sub-subcontractors, and the

agents, officers, directors and employees of each of them, from and against any

and all direct claims, damages, fosses, costs and expenses, including but not

limited to attorney's fees, costs and expenses incurred in connection with any

dispute resolution process, 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 Owner.

3.5.7 Material Safety Data (MSD) sheets as required by law and pertaining to

materials or substances used or consumed in the performance of the Work, whether

obtained by the Design-Builder, Subcontractors, the Owner or Others, shall be

maintained at the Project by the Design-Builder and made available to the Owner

and Subcontractors.

3.5.8 During the Design-Builder's performance of the Work, the Design-Builder

shall be responsible for the proper handling of all materials brought to the

Worksite by the Design-Builder. Upon the issuance of the Certificate of

Substantial Completion, the Owner shall be responsible under this Paragraph for

materials and substances brought to the site by the Design-Builder if such

materials or substances are required by the Contract Documents.

3.5.9 The terms of this Paragraph 3.5 shall survive the completion of the Work

under this Agreement and/or any termination of this Agreement.

3.6 ROYALTIES, PATENTS AND COPYRIGHTS The Design-Builder 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 Design-Builder and

incorporated in the Work. The Design-Builder 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 Design-Builder and Engineer harmless from all suits or

claims OF infringement of any patent rights or copyrights arising out of any

patented or copyrighted materials, methods or systems specified by the Owner.

3.7 WARRANTIES AND COMPLETION

3.7.1 The Design-Builder warrants that all materials and equipment furnished

under the Construction Phase of 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

Design-Builder agrees to correct all construction performed under this Agreement

which is defective in construction workmanship or materials within a period of

one year from the Date of Substantial Completion.

3.7.2 To the extent products, equipment, systems or materials incorporated in

the Work are specified and purchased by the Owner, they shall be covered

exclusively by the warranty of the manufacturer. There are no warranties that

extend beyond the description on the face of any such warranty. To the extent

products, equipment, systems or materials incorporated in the Work are specified

by the Owner but purchased by the Design-Builder and are inconsistent with

selection criteria that otherwise would have been followed by the

Design-Builder, the Design-Builder shall assist the Owner in pursuing warranty

claims. ALL OTHER WARRANTIES EXPRESSED OR IMPLIED INCLUDING THE WARRANTY OF

MERCHANTABILITY AND THE WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE ARE

EXPRESLY DISCLAIMED.

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3.7.3 The Design-Builder shall secure required certificates of inspection,

testing or approval and deliver them to the Owner.

3.7.4 The Design-Builder shall collect all written warranties and equipment

manuals and deliver them to the Owner in a format directed by the Owner.

3.7.5 With the assistance of the Owner's maintenance personnel, the

Design-Builder shall direct the checkout of utilities and start-up operations,

and adjusting and balancing of systems and equipment for readiness.

3.8 CONFIDENTIALITY The Design-Builder shall treat as confidential and not

disclose to third persons, except Subcontractors, Sub-subcontractors and the

Engineer as is necessary for the performance of the Work, or use for its own

benefit any of the Owner's developments, confidential information, know-how,

discoveries, production methods and the like that may be disclosed to the

Design-Builder or which the Design-Builder may acquire in connection with the

Work. The Owner shall treat as confidential information all of the

Design-Builder's estimating systems historical and parameter cost data and the

Engineer's Design/Process information that may be disclosed to the Owner in

connection with the performance of this Agreement.

3.9 ADDITIONAL SERVICES The. Design-Builder shall provide or procure the

following Additional Services upon the request of the Owner. A written agreement

between the Owner and the DESIGN-Builder shall define the extent of such

Additional Services before they are performed by the Design-Builder. If a GMP

has been established for the Work or any portion of the Work, such Additional

Services shall be considered a Change in the Work, unless they are specifically

included in the statement of the basis of the GMP as set forth in Amendment No.

1.

.1 Consultations, negotiations, and documentation supporting the

procurement of Project financing.

.2 Surveys, site evaluations, legal descriptions and aerial

photographs.

.3 Appraisals of existing equipment, existing properties, new equipment

and developed properties.

.4 Consultations and representations before governmental authorities or

others having jurisdiction over the Project other than normal

assistance in securing building permits.

.5 Investigation or making measured drawings of existing conditions or

the reasonably required verification of Owner-provided drawings and

information.

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

of the Project or the Work.

.7 Estimates, proposals, appraisals, consultations, negotiations and

services in connection with the repair or replacement of an insured

loss, provided such repair or replacement did not result from the

negligence of the Design-Builder.

.8 Obtaining service contractors and training maintenance personnel,

assisting and consulting in the use of systems and equipment after the

initial start up.

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

.10 Services requested by the Owner or required by the Work which are

not specified in the Contract Documents and which are not normally part

of generally accepted design and construction practice.

.11 Serving or preparing to serve as an expert witness in connection

with any proceeding, legal or otherwise, regarding the Project.

.12 Document reproduction exceeding the limits provided for in this

Agreement.

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3.10 DESIGN-BUILDER'S REPRESENTATIVE The Design-Builder shall designate a person

who shall be the Design-Builder's authorized representative. The

Design-Builder's Representative is: Mr. Rick Amigh.

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 available 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, fees,

permits 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

Design-Builder, 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 a reasonable allowance for changes in the Work as may be

approved in the course of the Work. Unless such reasonable evidence is provided,

the Design Builder shall not be required to commence or continue the Work. The

Design-Builder 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

Design-Builder to insist upon the providing of this evidence at any one time

shall not be a waiver of the Owner's obligation to make payments pursuant to

this Agreement, nor shall it be a waiver of the Design-Builder's right to

require that such evidence be provided at a later date.

4.1.4 The Design-Builder 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 PHASE

4.2.1 The Owner shall provide information for the Owner's Program at the

inception of the Design Phase and shall review. and timely approve in writing

all schedules, estimates, Preliminary Estimate, Schematic Design Documents,

Design Development Documents and Construction Documents furnished during the

Design Phase as set forth in Paragraph 3.1, and the GMP Proposal as set forth in

Paragraph 3.2.

4.2.2 The Owner shall provide good-faith negotiations in a timely manner so as

not to delay any contractual agreements.

4.3 RESPONSIBILITIES DURING CONSTRUCTION PHASE

4.3.1 The Owner shall review the Schedule of the Work as set forth in Paragraph

3.3 and timely approve the milestone dates set forth.

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 Design-Builder.

4.3.3 The Owner shall communicate with the Design-Builder's Subcontractors,

Material Suppliers and the Engineer only through or in the presence of the

Design-Builder. The Owner shall have no contractual obligations to

Subcontractors, suppliers, or the Engineer.

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

11.

4.4 OWNER'S REPRESENTATIVE The Owner's Representative is Mr. Neil Koehler. 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 Design-Builder'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 Design-Builder in writing in advance.

4.5 TAX EXEMPTION If in accordance with the Owner's direction the Design-Builder

may claim an exemption for taxes and the Owner shall defend, indemnify and hold

the Design-Builder harmless for all liability, penalty, interest, fine, tax

assessment, attorney's fees: or other expense or cost incurred by the

Design-Builder as a result of any action taken by the Design-Builder in

accordance with the Owner's direction.

ARTICLE 5 -- SUBCONTRACTS

Work not performed by the Design-Builder with its own forces shall be performed

by Subcontractors or the Engineer.

5.1 RETAINING SUBCONTRACTORS The Design-Builder shall not retain any

subcontractor to whom the Owner has a reasonable and timely objection, provided

that the Owner agrees to compensate the Design-Builder for any additional costs

incurred by the Design-Builder as a result of such objection. The Owner may

propose subcontractors to be considered by the Design-Builder. The

Design-Builder shall not be required to retain any subcontractor to whom the

Design-Builder has a reasonable objection.

5.2 MANAGEMENT OF SUBCONTRACTORS The Design-Builder shall be responsible for the

management of the Subcontractors in the performance of their work and require

all Subcontractors and third party sub-subcontractors and suppliers, as

necessary, to comply with all of the provisions of the Agreement.

5.4 BINDING OF SUBCONTRACTORS AND MATERIALS SUPPLIERS The Design-Builder agrees

to bind every Subcontractor and Material Supplier (and require every

Subcontractor to so bind its Sub-subcontractors and Material Suppliers) to all

the provisions of this Agreement and the Contract Documents as they apply to the

Subcontractor's and Material Supplier's portions of the Work.

5.5 LABOR RELATIONS As of the date of this Agreement, the Design-Builder is

signatory to the following labor agreements:

1. Northern Operating Engineers

2. Northern Laborers

3. Northern Utility Fitters

ARTICLE 6 - TIME

6.1 DATE OF COMMENCEMENT Time is of the essence. The Date of Commencement is the

effective date of this Agreement as first written in Article 1. The Work shall

proceed in general accordance with the Schedule of Work as such schedule may be

amended from time to time, subject, however, to other provisions of this

Agreement.

6.2 SUBSTANTIAUFINAL COMPLETION Unless the parties agree otherwise, the Date of

Substantial Completion and/or the Date of Final Completion shall be established

in Amendment No. 1 to this Agreement subject to adjustments as provided for in

the Contract Documents. If such dates are not established upon the execution of

this Agreement of such time as a GMP is ______ a Date of Substantial Completion

and/or Date of Final Completion of the Work shall be established in Amendment

No. 1.

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6.2.1 Time limits stated in the Contract Documents are of the essence.

6.2.2 Unless instructed by the Owner in writing, the Design-Builder shall not

knowingly commence the Work before the effective date of insurance that is

required to be provided by the Design-Builder or the Owner.

6.3 DELAYS IN THE WORK

6.3.1 If causes beyond the Design-Builder's control delay the progress of the

Work, then the GMP, compensation for Design Phase Services, the Design-Builder's

Fee and/or the Date of Substantial Completion and/or the Date of Final

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 Others, the Owner preventing the Design-Builder from performing the

Work pending dispute resolution, Hazardous Materials or differing site

conditions. Causes beyond the control of the Design-Builder do not include acts

or omissions on the part of the Design-Builder, Subcontractors,

Sub-subcontractors, Material Suppliers or the Engineer.

6.3.2 To the extent a delay in the progress of the Work is caused by adverse

weather conditions not reasonably anticipated, fire, unusual transportation

delays, general labor disputes impacting the Project but not specifically

related to the Worksite, governmental agencies, or unavoidable accidents or

circumstances, the Design-Builder shall only be entitled to its actual costs

without fee and an extension of the Date of Substantial Completion and/or the

Date of Final Completion.

6.3.3 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 - COMPENSATION

7.1 DESIGN PHASE COMPENSATION

7.1.1 To the extent required by applicable law, the cost of services performed

directly by the Engineer is computed separately and detailed in Exhibit No. C

attached hereto. The Engineer's Design-Phase Compensation is independent from

the Design-Builder's compensation for work or services performed directly by the

Design-Builder; these costs shall be shown as separate items on applications for

payment.

7.12 The Owner shall compensate the Design-Builder for services performed during

the Design Phase As Described in Paragraph 3.1 And Included in Exhibit No. C

executed by the Design-Builder and Engineer, including preparation of a GMP

Proposal as described in Paragraph 3.2, as follows: Time and Material Costs as

outlined in Exhibit No. B for the development of the Owner's Program,

establishing the project requirements, general business planning and other

Information and documentation as may be required to establish the feasibility of

the project, making revisions to the Schematic Design, design Development,

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 a

part of the Work, Preliminary Construction Schedules and Estimates, Construction

Documents forming the basis of the GMP.

7.1.3 Compensation for Design Phase Services, as part of the Work, shall include

the Design-Builder's Fee as established in the Time and Material Costs, Exhibit

No. B, paid in proportion to the services performed, subject to adjustment as

provided in Paragraph 7.4.

7.1.4 For changes in Design Phase services, any additional compensation shall be

adjusted as indicated in the Project Development Agreement signed by the

Design-Builder and Engineer.

7.1.5 Within fifteen (15) days after receipt of each monthly application for

payment, the Owner shall give written notice to the Design-Builder of the

Owner's acceptance or rejection, in whole or in part, of such application for

payment. Within fifteen (15) days after accepting such application, the Owner

shall pay directly to the Design-Builder the appropriate amount for which

application for payment is made, less amounts previously paid by the Owner. If

such application is rejected in whole or in part, the Owner shall indicate the

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reasons for its rejection. If the Owner and the Design-Builder cannot agree on a

revised amount then, within fifteen (15) days after its initial rejection in

part of such application, the Owner shall pay directly to the Design-Builder the

appropriate amount for those items not rejected by the Owner for which

application for payment is made, less amounts previously paid by the Owner.

Those items rejected by the Owner shall be due and payable when the reasons for

the rejection have been removed.

7.1.6 If the Owner fails to pay the Design-Builder at the time payment of any

account becomes due, then the Design-Builder may, at any time thereafter, upon

serving written notice that the Work will be stopped within seven (7) days after

receipt of the notice by the Owner, and after such seven (7) day period,

stop. the Work until payment of the amount owing has been received.

7.1.7 Payments due pursuant to Subparagraph 7.1.5, may bear interest from the

date payment is due at the prime rate prevailing at the location of Project.

7.2 CONSTRUCTION PHASE COMPENSATION

7.2.1 The Owner shall compensate the Design-Builder for work performed following

the commencement of the Construction Phase on the following basis:

.1 the Cost of the Work as allowed in Article 8; and

.2 the Design-Builder's Fee paid in proportion to the services

performed subject to adjustment as provided in Paragraph 7.4.

7.2.2 The compensation to be paid under this Paragraph 7.2 shall be limited to

the GMP established in Amendment No. 1, as the GMP may be adjusted under Article

9.

7.2.3 Payment from Construction Phase Services shall be as set forth in Article

10. If Design Phase Services continue to be provided after construction has

commenced, the Design-Builder shall continue to be compensated as provided in

Paragraph 7.1, or as mutually agreed.

7.3 DESIGN-BUILDER'S FEE The Design-Builder's Fee shall be as follows, subject

to adjustment as provided in Paragraph 7.4, Time and Material Costs per Exhibit

No. B payable each month as provided in Paragraph 7.1.5.

7.4 ADJUSTMENT IN THE DESIGN-BUILDER'S FEE Adjustment in the Design-Builder's

Fee shall be made as follows:

.1 for changes in the Work as provided in Article 9, the

Design-Builder's Fee shall be adjusted as follows: Time and Material

Costs as outlined in Exhibit No. B.

.2 for delays in the Work not caused by the Design-Builder, except as

provided in Subparagraph 6.3.2, there will be an equitable adjustment

in the Design-Builder's Fee to compensate the Design-Builder for

increased expenses; and

.3 if the Design-Builder is placed in charge of managing the

replacement of an insured or uninsured loss, the Design-Builder shall

be paid an additional fee in the same proportion that the

Design-Builder's Fee bears to the estimated Cost of the Work for the

replacement.

The Owner agrees to pay the Design-Builder for the Cost of the Work as defined

in this Article. This payment shall be in addition to the Design-Builder's Fee

stipulated in Paragraph 7.3.

ARTICLE 8 - COST OF THE WORK

8.1 COST ITEMS FOR DESIGN PHASE SERVICES

8.1.1 Compensation for Design Phase Services as provided in Paragraph 7.1.

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8.2 COST ITEMS FOR CONSTRUCTION PHASE SERVICES

8.2.1 Time and Material Costs per Exhibit No. B include but are not limited to:

8.2.2 Wages paid for labor in the direct employ of the Design-Builder in the

performance of the Work.

8.2.3 Salaries of the Design-Builder's employees when stationed at the field

office, in whatever capacity employed and employees engaged on the road

expediting the production or transportation of material and equipment.

8.2.4 Cost of all employee benefits and taxes including but not limited to

workers' compensation, unemployment compensation, Social Security, health,

welfare, retirement and other fringe benefits as required by