Form of Phase I and Phase II Engineering Services Agreement

Exhibit 10.17

Form of Phase I and Phase II Engineering Services Agreement

THIS FORM OF PHASE I AND PHASE II ENGINEERING SERVICES AGREEMENT (the “ Agreement ”) is made as of February      , 2006, (the “ Effective Date ”) by and between                              , a Delaware limited liability company (the “ Client ”) and Fagen Engineering, LLC a Minnesota Limited Liability Company (the “ Engineer ”). Each of the Client and Engineer are referred to herein individually as a “ Party ” and collectively as the “ Parties .”

RECITALS

WHEREAS , Client is developing a 100 million gallons per year dry grind ethanol production facility to be located in                      (the “ Plant ”) to be owned and operated by Client; and

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

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

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

Article 1

Definitions; Rules of Interpretation

1.1 Rules of Construction.

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

1.2 Defined Terms.

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

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

Applicable Law means

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

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

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

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

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

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

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

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

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

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

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

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

Phase I Design Package will have the meaning given to such term in Section 3.1.

Phase II Design Package will have the meaning given to such term in Section 3.1.

Phase II Final Civil Design Plan will mean the Client’s Deliverable Site obligations pursuant to Exhibit C attached to this Agreement.

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

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

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

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

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

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

Article 2

Retention of the Agent

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

Article 3

Engineer Responsibilities

3.1 Services. Engineer shall perform the engineering services necessary to satisfy the requirements of the Phase I Deliverable Site (“ Phase I Design Package ”) and the Phase II-Final Civil Design Plans (“ Phase II Design Package ”) engineering services required under the Design-Build Agreement (collectively, “ Services ”).

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

Plan sets along with a Bid Tabulation Sheet will be supplied to the Client so all contractors bid the same quantities. A telephone conference call for a Phase I pre-bid meeting will be provided upon Client’s request. Engineer shall also coordinate with Client’s consultants regarding the interconnection of utilities to be provided to the Plant Site by the Client and the layout of utilities.

3.3 Delivery of Phase I Design Package. Engineer shall deliver the completed Phase I Design Package no later than 60 days after the receipt of all Client deliverables pursuant to Article 4 of this Agreement.

3.4 Phase II Design Package. The Phase II Design Package to be provided by Engineer shall provide the engineering and design of Site work and utilities for the Plant, all within the property line of Plant, and shall consist of the following:

A telephone conference call for a Phase 2 pre-bid meeting will be provided upon Client’s request.

3.5 Delivery of Phase II Design Package. Engineer shall deliver the completed Phase II Design Package no later than 60 days after the receipt of all Client deliverables pursuant to Article 4 of this Agreement.

3.6 Delays. The Parties agree that Engineer shall not be responsible for delays in providing the Services under this Agreement due to factors beyond Engineer’s control.

3.7 Utility Routing and Design Services Limited. The Parties agree that Engineer shall provide the routing and design for the utilities necessary for the Plant only within the Plant property line and up to the Plant property line, and that, for purposes of this Agreement, Engineer assumes a tie-in point to a city utility. The Parties agree that, if there is no city tie-in point, Engineer will route the utilities to the Plant property line and stop. Any special tie-in requirements necessary to connect the utilities at the Plant property line are not included in the compensation or the scope of this Agreement and shall only be designed and Engineered by Engineer as change in the Project which affects the Services hereunder.

Article 4

Client Responsibilities

4.1 Client’s Representative. Client shall, prior to the commencement of Services by Engineer, name a representative (“ Client’s Representative ”) with authority to receive information and transmit instructions for Client. Client’s Representative shall be vested with authority to act on behalf of Client and Engineer shall be entitled to rely on Client’s Representative’s communications with regard to the Services.

4.2 Client’s Requirements. Client shall, prior to the commencement of Services by Engineer, provide Engineer with Client’s requirements for the Project, including objectives and constraints, design and construction standards, bonding and insurance requirements, and contract forms.

4.3 Other Information. Prior to the commencement of Services by Engineer, Client shall provide Engineer with all other information available to Client and pertinent to the Project and the Services including, but not limited to, all items required pursuant to Exhibit C. The items required by Client pursuant to this Section 4.3 shall be furnished at Client’s expense, and Engineer shall be entitled to rely upon the accuracy and completeness thereof.

4.4 Access to Property. Prior to the commencement of Services and as necessary during the performance of Services, Client shall arrange for access by Engineer upon public and private property, as required for the performance of the Services under this Agreement.

4.5 Review of Documents. As related to the performance of Services hereunder, Client shall examine documents presented by Engineer, obtain legal and other advice as Client deems appropriate, and render written decisions within reasonable time. The items required by Client pursuant to this Section 4.5 shall be furnished at Client’s expense, and Engineer shall be entitled to rely upon the accuracy and completeness thereof.

4.6 Consents, Approvals, Licenses and Permits. Prior to the commencement of Services and as necessary during the performance of the Services, Client shall obtain all consents, approvals, licenses, permits, and other Governmental Approvals necessary for the performance of the Services, with the exception of professional licenses required of Engineer or its subcontractors under Applicable Laws. The items required by Client pursuant to this Section 4.6 shall be furnished at Client’s expense, and Engineer shall be entitled to rely upon the accuracy and completeness thereof.

4.7 Bids. Client shall advertise for and open bids when scheduled.

4.8 Other Services Client shall furnish all legal, accounting and insurance counseling services as may be necessary with respect to third party agreements for which Client is responsible pursuant to this Agreement and for auditing services the Client may require to verify the monthly invoices or to ascertain how or for what purposes the Engineer and/or Subcontractors have used the money paid by or on behalf of the Client.

4.9 Service Outside Scope of Engineer’s Services. Client shall, at its own expense, as necessary for the performance and completions of the Services, provide any additional services necessary for Project that are outside scope of the Services provided by Engineer under this Agreement. Engineer shall be entitled to rely upon, as applicable, the completeness and accuracy of such additional services.

4.10 Deviation from Design. Client shall indemnify and hold harmless Engineer, its employees, its agents, its affiliates, and any other persons or entities within its control or for whom Engineer would otherwise be responsible (“ Engineer Responsible Parties ”) against claims arising out of Engineer’s design, if there has been, in the completion of the Phase I Deliverable

Site and the Phase II Final Civil Design Plan, a failure, other than by an affiliate of Engineer, to follow Engineer’s written recommendation and such deviation or failure caused the claims.

4.11 Developments Affecting Scope or Timing of Services. Client shall promptly notify Engineer, in writing, when Client learns of contractor error or any development that affects scope or timing of Engineer’s Services.