Exhibit A

to

Agreement Between Owner and Design/Builder

On the Basis of a Stipulated Price

Performance Criteria:

DESIGN/BUILDER represents and warrants to OWNER that the completed Project will achieve each of the following performance criteria.  After DESIGN/BUILDER determines the Plant is ready for start-up, DESIGN/BUILDER, with OWNER’s labor forces, will start-up the Plant and conduct a seven-day performance test to establish compliance with each of the performance criteria except the atmospheric emissions.  Compliance shall be measured simultaneously for all criteria, and computed on the average over the seven-day performance test.  If the Project fails to reach any performance criterion, then DESIGN/BUILDER shall (at no additional cost to OWNER) make such changes in design, construction, or equipment as required to meet the criteria, and conduct another seven day performance test.  Upon successful completion of a seven-day performance test, the Plant shall be considered to have achieved the performance criteria listed below (other than the atmospheric emissions criteria) for purposes of the foregoing representation and warranty of DESIGN/BUILDER.

Table 1  ethanol plant criteria  40 MGY capacity

 

 

 

 

 

 

OWNER’s failure to materially comply with the operating procedures issued by DESIGN/BUILDER shall void the foregoing performance criteria and all other guarantees and warranties set forth in the Contract Documents.

OWNER understands that the startup of the plant requires resources and cooperation of OWNER, vendors and other suppliers to the Project.  DESIGN/BUILDER disclaims any liability and OWNER indemnifies DESIGN/BUILDER for non-attainment of the foregoing performance criteria directly or indirectly caused by the material non-performance or negligence of third parties not retained by DESIGN/BUILDER.

 

 

 

 

 

Exhibit B
to
Agreement Between Owner and Design/Builder
On the Basis of a Stipulated Price

General Project Scope:

Construct a no less than forty (40) million gallon per year (MGY) dry mill fuel-grade ethanol plant located in or near Aberdeen, South Dakota.  The plant will grind approximately 14.3 million bushels per year to produce approximately forty (40) MGY of fuel-grade ethanol denatured with five percent gasoline (or a similar product).  The plant will also produce not less than 202,000 tons per year of 67% moisture Wet Distillers Grains with Solubles (WDGS), and approximately 115,000 tons per year of raw carbon dioxide (CO 2 ) gas.

OWNER to provide DESIGN/BUILDER a level site and which shall have a soil load bearing capacity  as specified in the attached table.

Ground grain will be mixed in a slurry tank and routed through a working system consisting of a hydroheater, cook tube, and flash tank.  The mash will continue through liquefaction and associated heat exchangers to fermentation.  Simultaneously, propagated yeast will be added to the mash as the fermenter is filling.  After batch fermentation is complete, the beer will be pumped to the beer well and then to the beer column to vaporize the alcohol from the mash.

Alcohol streams are dehydrated in the distillation column, the side stripper and the molecular sieve system.  Two hundred proof alcohol is pumped to the tank farm shift tanks and blended with five percent denaturant as the product is being pumped into a final storage tank.

Corn mash from the beer stripper is dewatered by decanter type centrifuge.  Wet cake from the centrifuge is conveyed to the wetcake pad or drying system.  Water in the thin stillage can be evaporated and recycled by the Bio-Methanation system.

Fresh water for the boilers, cooking and other processes will be obtained from area process wells or city water system that supply the needs of the plant.  Boiler water may be conditioned in regenerative softeners will be pumped through a deaerator scrubber and into a deaerator tank.  Appropriate boiler chemicals will be added as preheated water is sent to the boiler.

DESIGN/BUILDER will provide its standard design for the fire pump house and water treatment space.  Procurement and construction of fire protection package will be provided by owner.

The design includes a compressed air system consisting of compressors, a receiver tank, pre-filter, coalescing filter and air dryer.

The design also incorporates the use of a clean-in-place (CIP) system for cleaning cook, fermentation, distillation, evaporation, centrifuges and other systems.  Fifty percent caustic soda is received by truck and stored in a tank.  The CIP system uses tanks for receiving, make-up, CIP return and CIP waste which is fed to the methanator.  The CIP system includes a CIP Tank, a 50% Caustic tank, and a Waste CIP tank.  A screen is used to remove the solids.

Under normal operating circumstances, the Plant will not have any wastewater discharges that have been in contact with corn and sorghum mash, cleaning system or contact process water.  A bio-methanator manufactured by DESIGN/BUILDER/Phoenix will reduce the organic acids in process water allowing complete reuse within the Plant and is included in the Contract Price.  The

 

 

 

 

Plant will have blowdown discharges from the cooling tower, water softeners, and Reverse Osmosis system.  OWNER is responsible for all permits, purchase and installation of pumps, waterline construction, sanitary sewer construction, necessary to discharge the blowdown from the cooling tower, water softeners, and Reverse Osmosis system.

Carbon Dioxide (CO2) is a co-product of the fermentation process.  CO2 is allowed under current Laws and Regulations to be vented to the atmosphere.  Installation of a plant or system to capture, clean and compress the CO2 is not included in the Work.  OWNER, at its cost, may add a blower, certain associated equipment and a small amount of piping to move the CO2 from the fermenter to a collection point for sale or further processing.

Most of the processes within the Plant will be computer controlled by a Siemens/Moore APACS distributed control system with graphical user interface and three workstations all located in the plant control room, which is included in the Contract Price.  No workstation is provided for the administrative building or any other location.  It is estimated that the system will consist of 200 discrete inputs, 200 discreet outputs, 175 analog inputs and 120 analog outputs.  Programmable logic controllers (PLCs) will control certain process equipment.

*[Optional:  A description of the scope of work relating to the grain handling system is attached to the Agreement as Exhibit B-1 and incorporated herein.]

The Work provided by DESIGN/BUILDER will meet specifications, criteria, and allowances as provided in the Construction Permit and all other applicable Laws and Regulations enacted as of the Effective Date.

 

 

 

 

[OPTIONAL]
Exhibit B-1
to
Agreement Between Owner and Design/Builder
On the Basis of a Stipulated Price

SCOPE OF WORK FOR HEARTLAND GRAIN FUELS, LP GRAIN HANDLING SYSTEM

Whole Grain Transfer — (Heartland Grain Scope)

·                   OWNER is responsible for all items required to transfer the whole grain from the OWNER’S existing grain facilities to the inlet of the proposed grinding bin above the hammermills.  OWNER shall be responsible for all design, procurement, and installation of any required equipment, structural, electrical, and all other required items associated with the whole grain transfer system.  Transfer rate of whole grain to be mutually agreed by OWNER and DESIGN/BUILDER prior to design.

Dust Control System — Whole Grain Transfer system (Heartland Grain Scope)

·                   The dust control system will pick-up dust laden air at the grinder bin, or as required.

·                   One dust filter with fan, sized to meet the air permit requirements, will receive dust laden air from the ducting at the grain handling system and will discharge the collected dust into the receiving transfer drag conveyor.

Grinding System (ICM scope)

·                   One steel structure will support the grinder bin and related equipment.

·                   One rotary scalper/screener rated at 3000 BPH will receive grain from the receiving and reclaim legs and discharge to the grinding bin

·                   One 5000 BU steel grinding bin will feed the hammer mills.

·                   Two 1,200 BPH hammer mills will grind the grain.

·                   One dust filter with fan, sized to meet the air permit requirements, will collect dust from the hammer mills and discharge to the ground grain conveyor.

Ground Grain Transfer to Plant (ICM scope)

·                   The ground grain will be transferred from the hammer mills to the ethanol plant at 3,000 BPH, using belt or drag conveyors.

DDG Transfer - Dryer to Flat Storage (ICM scope)

·                   DESIGN/BUILDER to provide and install the ductwork and supports required for the transfer of DDG from the dryer to the existing flat storage cooling cyclone inlet flange.  If any additional equipment is required to transfer the DDG to the existing flat storage, OWNER will enter into a Change Order with DESIGN/BUILDER to provide and install the required equipment.

DESIGN/BUILDER reserves the right to change, modify, or otherwise re-design any part of the proposed grain handling system at the sole discretion of DESIGN/BUILDER on the basis of safety, performance, or any other consideration deemed necessary by DESIGN/BUILDER.

 

 

 

 

Exhibit C
to
Agreement Between Owner and Design/Builder
On the Basis of a Stipulated Price

Buildings and Structures by DESIGN/BUILDER:

Construction of buildings and structures, as listed in Table 2 and Table 3, is included in the Contract Price.

Table 2 Ancillary Buildings and Structures by DESIGN/BUILDER

Building		Type		Preliminary Dimensions		Addition Info
MCC Buildings		CMU block wall, insulated, climate controlled		20’ x 10’		Located near cooling tower and grain storage silos or milling building.
Cooling Tower		Douglas Fir Structure Induced Draft Counter Flow		34’ x 90’		Includes three (3) cooling tower cells
Admin Building Scale		Above ground, Grain supply trucks		Owners Responsibility		Located near Admin. Bldg.
Wetcake Pad		Cast-in-Place Concrete Structure		100’ x 100’

 

Table 3 Buildings and Structures by DESIGN/BUILDER

Building		Type		Preliminary Dimensions		Addition Info
Process		Structural steel, steel siding - Insulated		60’ x 140’ x 35’		Includes laboratory, control room & offices, MCC room
Energy Center		Structural steel, steel siding - Insulated		90’ x 100’ x30’		Includes centrifuge area, office, MCC room
Evaporation		Structural steel, steel siding - Insulated		50’ x 45’ x 35’
Grain Receiving		Structural Steel, steel siding, roof insulation only		Owners Responsibility

 

 

 

 

 

Exhibit D
to
Agreement Between Owner and Design/Builder
On the Basis of a Stipulated Price

Administration Building by OWNER:

The Contract Price does not include the cost of the following additional items:

Table 4 Administration Building

Description		Additional Description		Est. Amount
Administration Building		Free standing (37’ x 70’ x 10’)		$	300,000
Office Computer System		Microsoft Windows 2000 network server and five personal computers, one laser printer. Includes setup, software and labor.		$	40,000
Telephone System		Digital phone system with voice mail for office and plant.		$	15,000
Office Copier & fax machine		Black & white with sheet feeder and collator. Plain paper fax machine.		$	10,000
Office Furniture		Office desks, chair & side chairs, conference room table & chairs, three four-drawer filing cabinets, and 10 two-drawer filing cabinets.		$	25,000

 

 

 

 

 

Exhibit E
to
Agreement Between Owner and Design/Builder
On the Basis of a Stipulated Price

OWNER’S Required Permits and Services List:

OWNER shall provide all of the permits, authorizations and services, including but not limited to:

1)               Land and Grading — Land and Grading — OWNER shall provide the Site near or in Aberdeen, South Dakota.  OWNER shall obtain all legal authority to use the Site for its intended purpose and perform technical due diligence for DESIGN/BUILDER to perform including but not limited to proper zoning approvals, elevation restrictions, soil tests, and water tests. The Site shall be rough graded per DESIGN/BUILDER specifications and be within six inches of final grade including the rough grading for Site roadways.  The Site soils shall be modified as required to provide a minimum allowable soil bearing pressure as specified in the attached table for all foundation elements.  The site soils shall be modified as required to provide a minimum allowable soil bearing pressure of 4,500 pounds per square foot in the fermenter area, 6,500 pounds per square foot in the grain storage concrete silos area and 3,000 pounds per square foot for all other foundation elements.  The soils beneath the foundation elements shall not exceed the total or differential settlements such that the Plant is unable to perform its intended purpose.  If the existing soil conditions are such that over-excavation and re-compaction or pilings are required, OWNER will be responsible for this work.  OWNER is also responsible for any dewatering required at the site during construction.

Other items to be provided by the OWNER include, but are not limited to, the following: initial site survey (boundary and topographic) as required by the design engineers, layout of the property corners including two construction benchmarks, soil borings and subsequent geotechnical report (the results of which are acceptable to DESIGN/BUILDER and consistent with the specifications set forth herein) describing recommendation for roads, foundations and if required, soil stabilization/remediation, site engineering and detailed drawings (to the extent not provided by DESIGN/BUILDER), land disturbance permit, erosion control permit, site grading as described above with minimum soil standards, placement and maintenance of erosion control measures, access road from a city, county, state or federal road designed to meet city or local county road standards (provided that such road must contain a minimum of twelve (12) inches of crushed rock with geo-fabric and compacted base), storm and sanitary sewers, water main branches, to be within five (5) feet of the designated building locations, roads as specified and designed for the permanent elevations and effective depth, paving, “construction” grading plan as drawn (including site retention pond), all site seeding, landscaping, rock, plant water well and associated permit(s), environmental monitoring, environmental monitoring equipment, environmental testing for both air and water, chemicals, corn or other feedstock, enzymes, a risk management plan, laboratory equipment specified by DESIGN/BUILDER, and all start-up supplies, including, but not limited to hoses, equipment labels, and other items specified by DESIGN/BUILDER,

2)               Roads — OWNER shall provide or have provided an access road of sufficient quality to withstand semi-truck traffic of 25,000+ annual loads with weight of 80,000 lbs each.

 

 

 

 

3)               Air Quality Permit   — A permit for construction shall be obtained from the proper authorities prior to the issuance of the Notice to Proceed.  OWNER shall obtain an Operating Permit in timely manner to allow startup of the Plant as scheduled by DESIGN/BUILDER.

4)               Storm Water Runoff Permit — OWNER shall obtain the permanent industrial storm water runoff permit.  DESIGN/BUILDER shall obtain the construction storm water runoff permit.

5)               Natural Gas Supply and Service Agreement — Continuous supply of natural gas of at least 1.2 billion cubic feet per year, at a rate of 135 MMBtu per hour and at a minimum pressure of 60 psig at a location specified by DESIGN/BUILDER. OWNER shall provide supply meter and regulators to provide burner tip pressures as specified by DESIGN/BUILDER. OWNER will be responsible for the design, procurement, fabrication and installation of any and all equipment necessary to deliver the gas to all locations specified by DESIGN/BUILDER.

6)               Electrical Service — Continuous supply of 12,000 kVA, 12,400-volt electrical energy or more to a point immediately adjacent to the site.  OWNER shall supply a high voltage switch and, if required, a substation.  OWNER shall supply metering as specified by the power company.  This electrical capacity will be sufficient to support the operations of the Plant as specified by DESIGN/BUILDER. OWNER will be responsible to design, provide, and install electricity connections to all locations specified by DESIGN/BUILDER (including the high-voltage permanent power loop, transformers and pads).

7)               Water Supply and Service Agreement — For process (contact and non-contact) and sanitary purposes, OWNER shall design, procure, fabricate and install all equipment for the supply of fresh water, and supply such water to all locations specified by DESIGN/BUILDER.  The water augmentation plan and all associated fees, forms, permits and incidental requirements is the responsibility of OWNER. OWNER shall make such water supply available at the Site, and shall provide DESIGN/BUILDER with a water sample from such supply, at least two (2) months prior to the commencement of Construction.

8)               Wastewater Discharge Permit - For discharges of cooling tower blowdown, water softening, and RO system blowdown under normal operating procedures.  Process wastewater discharges during emergency failure of wastewater treatment plant to treat all process wastewater.

9)               Railroad —  OWNER shall design, procure, fabricate and install any railroad track siding to the Site, at grades specified by DESIGN/BUILDER, including all necessary earth work to properly locate the track, preparation of the railroad track bed, and track, ties and ballast to railroad company specifications and all required permits.

10)         Regulatory Contingency — Until satisfactory atmospheric emissions compliance, OWNER shall maintain a fund of no less than Two Hundred Fifty Thousand Dollars ($250,000) to cover any unforeseen governmental regulation changes implemented after the Effective Date of the Agreement.  This contingency is not part of the Contract Price, and its use may be authorized only by agreement of OWNER and DESIGN/BUILDER.

 

 

 

 

11)         Water treatment — OWNER shall design, procure, fabricate and install all water treatment equipment as deemed necessary by DESIGN/BUILDER. This might include reverse osmosis, softening equipment, iron removal, sulfate removal, or other items specified by DESIGN/BUILDER.  OWNER to contract with DESIGN/BUILDER to complete water treatment work.  All costs to complete work on water treatment are not included in base contract price, and will be billed to the Owner at cost plus 15%.

12)         Road Paving — After Substantial Completion, OWNER will be responsible for paving of all roads.

13)         BATF Application/Misc Permits — OWNER will be responsible for completing, submitting and obtaining Bureau of Alcohol Tobacco and Firearms permitting to produce fuel grade alcohol, tank farm permits, discharge permits required by hydro testing the Plant, and an SPCC Plan.

14)         Office Equipment — With the exception of the DCS control systems, OWNER will be responsible for office furnishings, computers and software to run the day-to-day operations of the Plant.

15)         Construction Power — OWNER will provide and pay for all electricity needed during the Construction, including the permanent power loop required by DESIGN/BUILDER, by contracting with DESIGN/BUILDER for the installation of the same and which will be billed to OWNER as an additional cost, and not part of, the Contract Price.

16)         Fire water system — OWNER shall be responsible for the design, procurement, fabrication and installation of the fire water system including, without limitation: fire water pump station, fire water loop with hydrants, deluge systems, fire alarm panels, smoke and heat detection in any building or MCC room, as required by Laws and Regulations and the insurance company(ies) which provide insurance pursuant to the Contract Documents.  OWNER to contract with DESIGN/BUILDER to complete fire water system.  All costs to complete work on fire water system are not included in base contract price, and will be billed to the Owner at cost plus 15%.

17)         Prior to start-up of the Plant, OWNER shall furnish to DESIGN/BUILDER  the following:

a)             Fully executed copies of all permits required to operate the Plant;

b)            Fully executed Certificate of Substantial Completion; and

c)             Preliminary Punchlist pursuant to paragraph 13.05 of the General Conditions.

In the event OWNER desires that DESIGN/BUILDER perform all or any part of the foregoing obligations of OWNER, and DESIGN/BUILDER agrees to perform such obligations, the Contract Price shall be increased by the amount determined pursuant to paragraph 10.02 of the General Conditions unless otherwise agreed by the parties.

 

 

 

Exhibit F
to
Agreement Between Owner and Design/Builder
On the Basis of a Stipulated Price

LICENSE AGREEMENT

THIS LICENSE AGREEMENT (this “License Agreement”) is entered into and made effective as of the _____ day of _____________________, 200____ (“Effective Date”) by and between Heartland Grain Fuels, LP a South Dakota limited partner company (“OWNER”), and ICM, Inc., a Kansas corporation (“ICM”).

WHEREAS, OWNER and ICM have entered into that certain AGREEMENT BETWEEN OWNER AND DESIGN/BUILDER ON THE BASIS OF A STIPULATED PRICE dated ____________________, 200_____ (the “Contract”), under which ICM is to design and construct forty (40) million gallons per year ethanol plant for OWNER to be located in or near Aberdeen, South Dakota (the “Plant”);

WHEREAS, ICM will use proprietary technology and information of ICM in the design and construction of the Plant; and

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

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

1.             Upon substantial completion of the Plant by ICM pursuant to the terms of the Contract or, if later, payment by OWNER of all amounts due and owing to ICM under the Contract, ICM agrees to grant to OWNER a limited license to use the Proprietary Property (hereinafter defined) solely in connection with the ownership, operation, maintenance and repair of the Plant, subject to the limitations provided herein (the “Purpose”).

2.             The “Proprietary Property” means, without limitation, documents, Operating Procedures (hereinafter defined), materials and other information that are furnished by ICM to OWNER in connection with the Purpose whether orally, visually, in writing, or by any other means, whether tangible or intangible, directly or indirectly and in whatever form or medium including, without limitation, the design, arrangement, configuration, and specifications of (i) the combinations of distillation, evaporation, and alcohol dehydration equipment (including, but not limited to, pumps, vessels, tanks, heat exchangers, piping, valves and associated electronic control equipment) and all documents supporting those combinations; (ii) the combination of the distillers grain drying (DGD), and heat recovery steam generation (HRSG) equipment (including, but not limited to, pumps, vessels, tanks, heat exchangers, piping and associated electronic control equipment) and all documents supporting those combinations; and (iii) the computer system, known as the distributed control system (DCS and/or PLC) (including, but not limited to, the software configuration, programming, parameters, set points, alarm points, ranges, graphical interface, and system hardware connections) and all documents supporting that system.  The “Operating Procedures” means, without limitation, the process equipment and specifications manuals, standards of quality,

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service protocols, data collection methods, construction specifications, training methods, engineering standards and any other information prescribed by ICM from time to time concerning the Purpose.  Proprietary Property shall not include any information or materials that OWNER can demonstrate by written documentation:  (i) was lawfully in the possession of OWNER prior to disclosure by ICM; (ii) was in the public domain prior to disclosure by ICM; (iii) was disclosed to OWNER by a third party having the legal right to possess and disclose such information or materials; or (iv) after disclosure by ICM comes into the public domain through no fault of OWNER or its members, directors, officers, employees, agents, contractors, consultants or other representatives (hereinafter collectively referred to as “Representatives”).  Information and materials shall not be deemed to be in the public domain merely because such information is embraced by more general disclosures in the public domain, and any combination of features shall not be deemed to be within the foregoing exceptions merely because individual features are in the public domain if the combination itself and its principles of operation are not in the public domain.

3.             OWNER shall not use the Proprietary Property for any purpose other than the Purpose.  OWNER shall not use the Proprietary Property in connection with any expansion or enlargement of the Plant.  ICM and its Representatives shall have the express right at any time to enter upon the premises of the Plant to inspect the Plant and its operation to ensure that OWNER is complying with the terms of this License Agreement.

4.             OWNER’s failure to materially comply with the Operating Procedures shall void all guarantees, representations and warranties, whether expressed or implied, if any, that were given by ICM to OWNER in the Contract concerning the performance of the Plant.  OWNER agrees to indemnify, defend and hold harmless ICM and ICM’s Representatives from any and all losses, damages and expenses including, without limitation, reasonable attorneys’ fees resulting from, relating to or arising out of OWNER’s or its Representatives’ (i) failure to materially comply with the Operating Procedures or, (ii) negligent use of the Proprietary Property.

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

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

7.             OWNER shall pay no license fee or royalty to ICM for OWNER’s use of the Proprietary Property pursuant to the limited license granted to OWNER, the consideration for this limited license is included in the amounts payable by OWNER to ICM for the construction of the Plant under the Contract.

8.             OWNER may not assign the limited license granted herein, in whole or in part, without the prior written consent of ICM, which will not be unreasonably withheld or delayed.  Prior to any assignment, OWNER shall obtain from such assignee a written instrument, in form and substance reasonably acceptable to ICM, agreeing to be bound by all the terms and

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provisions of this License Agreement.  Any assignment of this License Agreement shall not release OWNER from (i) its duties and obligations hereunder concerning the disclosure and use of the Proprietary Property, or (ii) damages to ICM resulting from, or arising out of, a breach of such duties or obligations by OWNER or its Representatives.  ICM may assign its right, title and interest in the Proprietary Property, in whole or part, subject to the limited license granted herein.

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

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

11.           The duties and obligations of OWNER under this License Agreement, and all provisions relating to the enforcement of such duties and obligations shall survive and remain in full

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force and effect notwithstanding any termination or expiration of the Contract or this License Agreement.

12.           ICM may terminate the limited license granted to OWNER herein upon written notice to OWNER if OWNER willfully or wantonly uses the Proprietary Property for any purpose, or discloses the Proprietary Property to anyone, other than permitted herein.  Upon termination of the license, OWNER shall cease using the Proprietary Property for any purpose (including the Purpose) and, upon request by ICM, shall promptly return to ICM all documents or other materials in OWNER’s or its Representatives’ possession that contain Proprietary Property in whatever format, whether written or electronic, including any and all copies or reproductions of the Proprietary Property.  OWNER shall permanently delete all such Proprietary Property from its computer hard drives and any other electronic storage medium (including any backup or archive system).  OWNER shall deliver to ICM a written certificate which certifies that all electronic copies or reproductions of the Proprietary Property have been permanently deleted.

13.           The laws of the State of Kansas, United States of America, shall govern the validity of the provisions contained herein, the construction of such provisions, and the interpretation of the rights and duties of the parties.  Any legal action brought to enforce or construe the provisions of this License Agreement shall be brought in the federal or state courts located in Kansas, and the parties agree to and hereby submit to the exclusive jurisdiction of such courts and agree that they will not invoke the doctrine of forum non conveniens or other similar defenses in any such action brought in such courts.  Notwithstanding the foregoing, nothing in this License Agreement will affect any right ICM may otherwise have to bring any action or proceeding relating to this Agreement against OWNER or its properties in the courts of any jurisdiction.

14.           OWNER hereby agrees to waive all claims against ICM and ICM’s Representatives for any consequential damages that may arise out of or relate to this License Agreement, the Contract or the Proprietary Property whether arising in contract, warranty, tort (including negligence), strict liability or otherwise, including but not limited to losses of use, profits, business, reputation or financing.  OWNER agrees that the aggregate amount OWNER (and anyone claiming by or through OWNER) may collectively recover from ICM (and its Representatives), for the Plant as a whole under the Contract and this License Agreement shall be limited to One Million Dollars ($1,000,000.00)

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

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

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set forth in this paragraph.

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

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

19.           The waiver by any party hereto of the breach of any term, covenant, agreement or condition herein contained shall not be deemed a waiver of any subsequent breach of the same or any other term, covenant, agreement or condition herein, nor shall any custom, practice or course of dealings arising among the parties hereto in the administration hereof be construed as a waiver or diminution of the right of any party hereto to insist upon the strict performance by any other party of the terms, covenants, agreement and conditions herein contained.

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

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

OWNER:		ICM:
Heartland Grain Fuels, LP		ICM, Inc.
By:		Dave VanderGriend By:
Title:		Title: President
Date Signed:		Date Signed:
Address for giving notices:		Address for giving notices:
		301 N First Street Colwich, KS 67030

 

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Exhibit G
to
Agreement Between Owner and Design/Builder
On the Basis of a Stipulated Price

ICM Training:

The Contract Price includes a commitment by DESIGN/BUILDER to perform certain training for certain personnel of OWNER at OWNER’s ethanol plant, which is located in Aberdeen, South Dakota.

Employee training will be coordinated by operational personnel of DESIGN/BUILDER with the support of personnel of OWNER on location at OWNER’s ethanol plant. Vendor training will also occur in conjunction with this training. The specific schedule, attendees and training detail will be provided as Plant start up date is determined.

Such personnel of OWNER will have the opportunity to operate the ethanol plant under the supervision of operators of DESIGN/BUILDER. It is anticipated that personnel participating in such training will include the plant manager, laboratory manager and shift supervisors who will work at the Plant for a period of 1-3 weeks. DESIGN/BUILDER will not charge any fee to OWNER for this startup training and DESIGN/BUILDER will provide all training materials.  Expenses for OWNER’s employees such as travel, salaries, rooms and meals of the participants will be the responsibility of OWNER.

 

Exhibit H
to
Agreement Between Owner and Design/Builder
On the Basis of a Stipulated Price

INSURANCE

DESIGN/BUILDER’S Employers’ Liability, Business Automobile Liability, and Commercial General Liability policies, as required in General Conditions paragraph 5.02 shall be written with at least the following limits of liability:

1.             Employers’ Liability Insurance

a.     $ 1,000,000

Bodily Injury by Accident

Each Accident

b.               $1,000,000

Bodily Injury by Disease

Policy Limit

c.                $1,000,000

Bodily Injury by Disease

Each Employee

2.             Business Automobile Liability Insurance

a.                $1,000,000

Each Accident

3.             Commercial General Liability Insurance

       a.      $1,000,000

Each Occurrence

b.               $2,000,000

General Aggregate

c.                $2,000,000

 Products/Completed

                Operations Aggregate

       d.      $1,000,000

                Personal and Advertising

                Injury Limit

4.             Liability Umbrella policy:  $10,000,000 (in addition to the underlying limits).

5.             Professional Errors & Omissions policy.  $1,000,000 per policy year.

 

*Portions omitted pursuant to a request for confidential treatment and filed separately with the SEC.

Exhibit I
to
Agreement Between Owner and Design/Builder
On the Basis of a Stipulated Price

Equipment Warranty:

The warranty for Plant production rates, product quality, efficiencies and emissions standards is covered in Exhibit A.  This Exhibit I specifically defines DESIGN/BUILDER’s operating warranty for Plant equipment inside the battery limit .

DESIGN/BUILDER reserves the right at its own discretion, to void any and all warranty if the operation of the Plant and/or its subsystems, exceeds nameplate capacity by [*] or more.

DESIGN/BUILDER is OWNER’s first point of contact for any claim of warranty by OWNER against DESIGN/BUILDER concerning Plant equipment, during the warranty period.

The cost of labor performed by vendors other than DESIGN/BUILDER to settle a warranty claim situation, without written permission from DESIGN/BUILDER, will not be covered under any warranty expressed or implied by DESIGN/BUILDER.

What is furnished under the warranty:

The warranty will furnish replacement consumables and parts covered under the warranty.  Labor will only be furnished by DESIGN/BUILDER to repair items warranted for workmanship and originally designed and built by DESIGN/BUILDER.

What is covered by the warranty:

Workmanship and materials on all plant equipment including pumps, instruments, controls, DCS, switchgear, wiring, conveyors, gearboxes, auger flighting, valves 2” size and above, valve actuators, tanks, vessels, air compressors, boilers, cooling towers, motors, couplers, belts, sheaves, chains, sprockets, heat exchangers, agitators, centrifuges, fans, blowers, Hvac units, and other related equipment.

Warranty will cover failures of seals for lack of coolant flush during the seven (7) day performance test described in Exhibit A.

Warranty will cover failure of seals and couplers caused by misalignment during the seven (7) day performance test described in Exhibit A.

Warranty will cover failure of pump seals caused by product misapplication.

Warranty will cover labor and parts to repair all leakage from pipes, exchangers and valves during the seven (7) day performance test described in Exhibit A.

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What is not covered by the warranty:

Warranty does not cover damage to process equipment of any kind, from, improper maintenance, improper operation, operator negligence or abuse.

Warranty does not cover catastrophic failures of the critical path equipment by chain reaction, from improper operation, abuse or neglect of other equipment or procedures in the process equipment critical path and/or acts of God, whether upstream or downstream.

Warranty does not cover damage caused by customer modification of equipment included in the warranty list during the warranty period, without the written consent of DESIGN/BUILDER.

Warranty does not cover pipe gaskets, sight glasses, valves under 2” in size, door knobs, walk in doors and closers, pipe and border painting, man-way gaskets, countertops and window glasses after the seven (7) day performance test described in Exhibit A.

Warranty does not cover pump seals, pump motors and bearings that fail for lack of coolant flush after the seven (7) day performance test described in Exhibit A.

Warranty does not cover pump seals or couplers after the seven (7) day performance test described in Exhibit A that fail from misalignment.

Warranty will not cover failure of any size valve when failure is determined to be a result of owner welding on or near the valve.

Warranty will not cover failure of any equipment due to improper grounding of welding equipment.

Warranty will not cover any equipment damaged by lightning strikes, power surges, power outages or poor quality power from the electricity supplier.

Warranty will not cover leaking plate and frame exchangers after the seven (7) day performance test described in Exhibit A.

Procedure for warranty claim:

DESIGN/BUILDER does not expect OWNER to remain out of service with equipment that has failed during the warranty period while trying to settle the warranty claim.  Whether covered by warranty or not the plant must operate.

Consumable items such as motors, gearboxes, seals, switchgear and similar equipment should be replaced and the damaged unit returned to DESIGN/BUILDER or made available for inspection by DESIGN/BUILDER. DESIGN/BUILDER reserves the right to return the item to the manufacturer for evaluation before settling a warranty issue.

Failure to return or produce for inspection the damaged parts or equipment will void any warranty expressed or implied.

2

 

1.                The first step by OWNER to satisfy a warranty question is to call DESIGN/BUILDER’s project manager (or the delegated alternate) and notify that person of the claim.  Provide the following information:

A.             Item nomenclature

B.               Equipment or part number

C.               Description of failure

D.              Corrective action taken

E.                Location and disposition of failed item

2.                Fill out the electronic form provided by DESIGN/BUILDER and send the form by mail or email to the Project manager or his designate.

3.                Project manager or delegate will respond within one (1) working day to acknowledge the claim and documentation, by phone and follow up with email.

4.                Determination of settlement will be made in forty-five (45) days or less by DESIGN/BUILDER.  If conflict arises from the determination between OWNER and DESIGN/BUILDER, such conflict will be resolved under the dispute resolution procedure set forth in Article 15 of the General Conditions.

Warranty Period:

The warranty period is the twelve (12) month period commencing on the date of Substantial Completion and ending on the date that is 12 months immediately thereafter.  In order for OWNER to make a warranty claim the deficiency must be discovered, and OWNER must notify DESIGN/BUILDER in writing of such deficiency within this warranty period.

 

3

 

*Portions omitted pursuant to a request for confidential treatment and filed separately with the SEC.

Exhibit J
to
Agreement Between Owner and Design/Builder
On the Basis of a Stipulated Price

 

[*]

 

*Portions omitted pursuant to a request for confidential treatment and filed separately with the SEC.

Exhibit K
to
Agreement Between Owner and Design/Builder
On the Basis of a Stipulated Price

 

[*]

 

*Portions omitted pursuant to a request for confidential treatment and filed separately with the SEC.

Exhibit L
to
Agreement Between Owner and Design/Builder
On the Basis of a Stipulated Price

 

[*]

 

 

GENERAL CONDITIONS OF THE
CONTRACT BETWEEN
OWNER AND DESIGN/BUILDER

ARTICLE 1—DEFINITIONS

1.01       Defined Terms

A.  Wherever used in these General Conditions or in the other Contract Documents the following terms have the meanings indicated which are applicable to both the singular and plural thereof:

1.       Agreement— The Agreement Between Owner and Design/Builder on the Basis of a Stipulated Price covering the Work.  Other Contract Documents are incorporated into the Agreement and made a part thereof as provided therein.

2.       Application for Payment— The form that is substantially similar to Exhibit J which is to be used by DESIGN/BUILDER in requesting progress or final payments and which is to be accompanied by such supporting documentation as is required by the Contract Documents.

3.       Asbestos— Any material that contains more than one percent (1%) asbestos and is friable or is releasing asbestos fibers into the air above current action levels established by the United States Occupational Safety and Health Administration.

4.       Bond— Performance or payment bond or other instrument of security.

5.       Change Order— A written order which is signed by DESIGN/BUILDER and OWNER which authorizes an addition, deletion or revision in the Work, or an adjustment in the Contract Price or the Contract Times, issued on or after the Effective Date of the Agreement.

6.      Construction —The performing or furnishing of labor, the furnishing and incorporating of materials and equipment into the Work and the furnishing of services (other than Design Professional Services) and documents, all as required by the Contract Documents.  Construction includes the materials and equipment incorporated into the Project.

7.      Construction Subagreement —A written agreement between DESIGN/BUILDER and a construction contractor for provision of Construction.

8.      Contract Documents —The Agreement and related exhibits, the Notice to Proceed, these General Conditions, the Specifications and the Drawings together with all Change Orders, and Written Amendments, issued on or after the Effective Date of the Agreement.

9.     Contract Price— The moneys payable by OWNER to DESIGN/BUILDER for completion of the Work in accordance with the Contract Documents.

10.    Contract Times —The number of days or the dates stated in the Agreement (i) to achieve Substantial Completion, and (ii) to complete the Work so that it is ready for final payment in accordance with paragraph 13.08.

11.    defective —An adjective which when modifying the term Construction refers to Construction that is unsatisfactory, faulty or deficient, in that it does not conform to the

1

 

Contract Documents, or does not meet the requirements of any inspection, reference standard, test or approval referred to in the Contract Documents, or has been damaged prior to OWNER’s final payment.

12.     DESIGN/BUILDER— ICM, Inc., a Kansas corporation.

13.     Design Subagreement— A written agreement between DESIGN/BUILDER and a design professional for provision of Design Professional Services.

14.     Design Professional Services— Services provided by or for licensed design professionals during Construction, or operational phases of the Project, including the development of drawings, Specifications, and other design submittals specified by the Contract Documents and required to be performed by licensed design professionals.

15.     Drawings— Those portions of the Contract Documents prepared by or for DESIGN/BUILDER and approved by OWNER consisting of drawings, diagrams, illustrations, schedules and other data which show the scope, extent, and character of the Work.

16.     Effective Date of the Agreement— The date indicated in the Agreement on which it becomes effective, but if no such date is indicated it means the date on which the Agreement is signed and delivered by the last of the two parties to sign and deliver.

17.     Engineer— A duly licensed individual or entity designated by DESIGN/BUILDER to perform or furnish specified Design Professional Services in connection with the Work.

18.    Hazardous Condition —The presence at the Site of Asbestos, Hazardous Waste, PCB’s, Petroleum Products or Radioactive Materials in such quantities or circumstances that there is a danger to persons or property.

19.    Hazardous Waste —The term Hazardous Waste shall have the meaning provided in Section 1004 of the Solid Waste Disposal Act (42 USC Section 6903).

20.    Laws and Regulations; Laws or Regulations —Any and all applicable laws, rules, regulations, ordinances, codes, permits, and orders of any and all governmental bodies, agencies, authorities and courts having jurisdiction.

21.    Liens —Charges, security in