EX-10.3 3 ex10-3.txt PHASE 2 COOPERATION AGREEMENT EXHIBIT 10.3 DELTA-T CORPORATION CONFIDENTIAL INFORMATION PHASE 2 COOPERATION AGREEMENT BETWEEN NEDAK ETHANOL, LLC AND DELTA-T CORPORATION THIS AGREEMENT is entered into and becomes effective as of the 15 day of November, 2005 (the "Contract Date"), by and between Delta-T Corporation, a corporation organized and operating under the laws of the Commonwealth of Virginia, USA located at 323 Alexander Lee Parkway, Williamsburg, Virginia 23185 ("DTC"), and NEDAK ETHANOL LLC, a company organized and operating under the laws of NEBRASKA located at 302 NORTH MAIN STREET, P. O. BOX 391, ATKINSON, NEBRASKA 68713 ("Client"), which parties may be referred to individually as a "Party" or jointly as the "Parties." WITNESSETH WHEREAS, Client intends to develop, own and operate an ethanol plant having the capacity to produce 30 MILLION GALLONS PER YEAR (hereinafter the "Plant") at a site to be located in HOLT COUNTY, NEBRASKA (hereinafter the "Site"); and WHEREAS, DTC is in the business of developing, designing, and supplying commercial technologies, equipment and manufacturing facilities to perform a wide range of process industry applications, including, without limitation, grain processing, ethanol production, evaporation, distillation, dehydration, adsorption, solvent recovery and waste treatment; and WHEREAS, DTC has entered into a strategic alliance with TIC - The Industrial Company, a Delaware corporation, located at 2211 Elk river Road, Steamboat Springs, Colorado 80477 (hereinafter "TIC"), that is in the business of providing construction and certain additional engineering services, for the purpose of providing complete design/build services; and WHEREAS, Client wishes to retain DTC to provide professional advice, business and technical information, design and engineering, and related services in order to assist Client in assembling all of the information, permits, agreements and resources necessary to complete project development, obtain financing and proceed with construction of the Plant (hereinafter "Project"), and DTC is willing to provide such services for a fixed fee, provided that Client enters into an exclusive relationship with DTC to design and build the Plant through an Engineering, Procurement and Construction Contract ("EPC Contract") under which a mutually agreed upon general contractor or TIC (or DTC) will perform construction and certain other services, and on the terms and conditions set forth herein; and WHEREAS, Client recognizes that DTC is foregoing other significant business opportunities in order to provide such services and that the payments to be made to DTC under this Agreement are inadequate to fairly compensate DTC for the services to be provided and that DTC is agreeing to perform such services in exchange for the right to enter into the EPC Contract, and that the provisions of this Agreement concerning exclusivity are essential to this Agreement and that DTC would not be willing to enter into this Agreement without those provisions; 1 NOW THEREFORE, IN CONSIDERATION of the mutual terms and conditions of this Agreement, Client and DTC agree as follows: ARTICLE I SCOPE OF SERVICES 1.1 STAGE II SERVICES: Upon written notice to proceed from Client, DTC shall provide, either directly or under a subcontract with TIC, the services described in this Section 1 to move the Project towards execution of a final EPC Contract between Client and DTC for the purpose of performing complete design/build services for the Plant (the "Stage II Services"), as follows: 1.1.1 See Exhibits D and E from DTC Letter dated October 13, 2005. 1.2 CLIENT'S RESPONSIBILITIES: The entity that will own the Project, whether it is the Client or another entity, is referred to in this Agreement as "Owner". Client shall perform, or cause Owner to perform, the following tasks to assure development of the Project, and such other tasks as may be required to achieve funding for the Project: 1.2.1 Promptly provide to DTC key Project design parameters, as DTC may reasonably request from time to time; 1.2.2 Continuously update a Project development strategy and timeline, in cooperation with DTC, for the purposes of fully defining the Project specifications to include all major activities and milestones necessary for successful Project financing. Client shall exercise its best efforts to obtain financing as rapidly as possible and shall provide weekly updates to DTC of the current status of Client's efforts to obtain such financing; 1.2.3 Provide DTC with monthly status reports, directed to DTC's Vice President of Marketing, setting forth Client's assessment and opinion of services rendered by DTC, as set froth in Sections 1 above, in the form set forth in Exhibit B; failure by Client to provide DTC such monthly status reports shall be deemed acceptance and complete satisfaction with all services performed by DTC, as set forth in Sections 1 above; 1.2.4 Cooperate with DTC to define final Project goals, specifications, and Project roles and resource requirements; 1.2.5 Develop a business plan, in cooperation with DTC, based on the templates, financial models and information provided by DTC under Section 1.1 above and other resources; and 1.2.6 Otherwise cooperate with DTC and other Project stakeholders in the development of the Project as mutually agreed to between the Parties and execute the Project development plans and in accordance wit the Project schedule in a diligent manner. 1.2.7 Keep DTC fully advised of developments under the Project development strategy, advise DTC of all meetings of Client's board or other governing body or committee related to the matters covered by this Agreement, and permit DTC to address such board or committee as DTC may reasonably request. 2 Client, or Owner, shall perform such tasks within sufficient time to allow DTC to fulfill its obligations under Section 1 above, as applicable, in a timely manner. Client shall designate Robin Olson, an individual, to serve as DTC's primary contact for the work to be performed under this Agreement. DTC shall be entitled to rely on, and shall proceed according to the directions of, that individual, or such other individual as Client may from time to time appoint in writing with respect to this Agreement. 1.4 PROJECT CONTROL RESPONSIBILITIES: Client shall notify DTC promptly of any plan or intent on the part of any actual or potential investors in the Project to form an Owner, or alter the equity or voting structure of Client or in Owner, in such a way that Client would not have sufficient control over such Owner to require it to perform the obligations of Client described in this Agreement, and shall assist DTC in causing such Owner to become a party to this Agreement, or another similar agreement acceptable to DTC, and that Client shall not participate in any way with any Owner toward development of the Plant unless Owner has done so. Client agrees that it shall not assist Owner in any way, directly or indirectly, in working with anyone other than DTC in connection with the Project, except as expressly permitted under this Agreement. Client acknowledges that if it were to provide any Confidential Information (as described in Article II below) provided by DTC or TIC to any Owner over which it did not have control, that such Owner would benefit significantly from such information, and Client acknowledges that it understands and will comply strictly with the prohibitions on such disclosures as set forth in Article II below. ARTICLE II CONFIDENTIAL INFORMATION 2.1 DEFINED: "Confidential Information" shall mean (i) all inventions, whether patentable or not, all processes, designs, know-how, copyrights and any and all other intellectual property of any kind (hereinafter "Intellectual Property") and financial and other business information provided at any time (including before the execution of this Agreement) by DTC, either directly or indirectly or through DTC, to Client in connection with the Project, which shall be deemed Confidential Information of DTC or TIC, as the case may be, and (ii) all business plans, drawings and other sensitive information about the Project disclosed by Client to DTC, which shall be deemed Confidential Information of Client (except to the extent that it consists of Confidential Information of DTC). 2.2 NO USE OR DISCLOSURE: Neither Party shall (i) use any Confidential Information of the other except for development of the Project as provided under this Agreement, or (ii) disclose any part of the Confidential Information of the other to any person or entity other than to its employees who need to have access to such data and who are bound to comply with the confidentiality terms of this Agreement, and as otherwise authorized by the Party providing the Confidential Information. In particular, but without limitation, under no circumstances may Client use any of the Confidential Information to assist it in negotiating or entering an agreement of any kind with any third party to provide any services, materials or technology related to the Project in violation of this Agreement. Notwithstanding the foregoing, Client may disclose information of the type provided by DTC under Section 1.1 above to any third party to whom it needs to disclose such information to develop the Project only after such party executes a confidentiality agreement directly with DTC, as may be appropriate, generally in the form attached as Exhibit C or such other form as DTC may accept. Client shall provide a copy of each such agreement to DTC and TIC promptly upon execution of the same and prior to the disclosure of any Confidential Information to such third party. Furthermore, Client may disclose Confidential Information, if any, that it needs to disclose in order to comply with any applicable law, rule or regulation, PROVIDED THAT it takes whatever steps are necessary to protect the confidentiality of such Confidential Information to the full extent allowed by such law, rule or regulation. 3 2.3 DISCLOSURES REQUIRED BY COURT ORDER: Neither Party shall disclose any Confidential Information of the other pursuant to court order or other legal process unless: (i) it is advised by its legal counsel that it is legally required to do so, (ii) it has promptly given the other Party notice of such order or process so that the other Party can obtain a secrecy order or other applicable remedy, and (iii) it has used all other reasonable means to ensure the confidential treatment of such information, other than seeking a judicial order or other judicial relief. 2.4 EXCLUSIONS: Notwithstanding anything set forth in this Article II, however, neither Party shall have any obligation hereunder with respect to Confidential Information that fall sunder one or more of the following exclusions: (a) that such information was in its possession prior to receipt from the disclosing Party; (b) such information was in the public domain at the time of disclosure or thereafter enters into the public domain through no breach of this Agreement by the receiving Party or is in general use in the trade without violation by the receiving Party of this Agreement, or violation by any other party of an obligation not to disclose it; or (c) the information is disclosed to the receiving Party by a third party who is under no obligation not to disclose it. 2.5 OBLIGATIONS: The provisions of this Article II shall survive termination of this Agreement until such time, if ever, that such information falls under one or more of the exclusions set forth in Section 2.4 above. Each Party providing Confidential Information pursuant to the terms of this Agreement shall have the right to enforce the terms of this Agreement directly against any party. ARTICLE III LIMITED LICENSE OF DTC CONFIDENTIAL INFORMATION DTC is, and shall remain, the sole owner of the Confidential Information provided by DTC under the terms of this Agreement. DTC hereby grants Client a limited, non-exclusive, non-transferable license, without right to sublicense, to use the provided Confidential Information solely for Client's use in connection with the development and financing of the Project during the term of this Agreement. DTC reserves to itself all rights not expressly granted under this Article III. In particular, but without limitation, the license granted by the terms of this Article DOES NOT INCLUDE the right to use any of the Confidential Information to procure bids for the development, design or construction of the Plant or any aspect of the Plant, or to design or operate any other plant or facility based, in whole or in part, on any of such Confidential Information, or to assist Owner in developing the Plant unless Owner has become a party to this Agreement, or a similar agreement with DTC. ARTICLE IV COMPENSATION 4.1 STAGE II SERVICES: For the Stage II Services, as described in Section 1 above, Client shall pay DTC a fixed fee of Six Hundred Thousand Dollars ($600,000). Client shall pay to DTC the first Three Hundred Thousand Dollars ($300,000) of such fee upon issuance of its notice to proceed to DTC, as set forth in Section 1 above. Client shall thereafter pay to DTC One Hundred 4 Thousand Dollars ($100,000) thirty (30) days after issuance of its notice to proceed to DTC, One Hundred Thousand Dollars ($100,000) thirty (30) days after that, and the remaining One Hundred Thousand Dollars ($100,000) ten (10) days after delivery by DTC of a complete EPC Contract draft, as provided in Section 1 above. Failure to reach final agreement by the Parties with respect to terms and conditions contained in the EPC Contract shall not be deemed a failure to provide such a draft EPC Contract or relieve Client from payment of such final payment. In addition to the foregoing, Client shall bear the cost of all travel, room and board and related expenses incurred by DTC in connection with providing such Stage II Services, with reimbursements based on actual costs. 4.2 LATE PAYMENT PENALTY: Client shall pay DTC a late charge at the lesser of one percent (1%) per month or the highest amount permitted by applicable law on all payments past due. ARTICLE V EPC CONTRACT, EXCLUSIVITY AND BREAKAWAY DAMAGES 5.1 EPC CONTRACT: As soon as reasonably possible after a firm financing commitment is received by Client, or at such earlier time as Client and DTC may agree, Client and DTC shall enter into an EPC Contract pursuant to which DTC shall provide the entire Plant under mutually agreeable terms. For purposes of clarity and understanding between the Parties, which is hereby acknowledged, the terms of the EPC Contract shall be based upon the Plant specifications, scope of work definitions and commercial terms set forth in Exhibit A. 5.2 EXCLUSIVITY: During the term of this Agreement, Client shall not, and shall not permit Owner or any other party associated with the Project, to enter into, negotiate toward, or take any other action in furtherance of entering into any agreement by which any other party would provide the technology, engineering, construction, or equipment procurement services to be provided by DTC under this Agreement or under the EPC Contract. 5.3 BREAKAWAY DAMAGES: If, during the term of this Agreement, or within Seven Hundred Twenty (720) days after the termination of this Agreement, Client or Owner begins the design and/or construction of the Plant without entering into an EPC Contract with DTC or enters into any agreement with any other party to provide the technology, engineering, construction or equipment procurement services of all or any portion of the Project, Client shall pay a liquidated damage amount to DTC in the amount of five percent (5%) of the Price set forth in Section 5.2 above (hereinafter the "Breakaway Damages"). Such fee shall be due and payable within thirty (30) days of the earliest of when Client shall enter into an agreement with a third party for the provision of technology, engineering, construction or equipment procurement services for the Project or any form of such services related to the Project shall commence. The Parties acknowledge and agree that because of the unique nature of the services to be provided pursuant to this Agreement, it is difficult or impossible to determine with precision the amount of damages that would or might be incurred by DTC as a result of Client's election not to enter into an EPC Contract with DTC to provide complete design/build services for the Plant and that an election by Client to proceed with the Project without entering into such an agreement with DTC will cause damage to DTC which may be difficult or impossible to determine with precision; and that any sums which would be payable under this Section 5.4 are in the nature of liquidated damages, and not a penalty, and are fair and reasonable and such payment represents a reasonable estimate by the Parties of fair compensation for the losses that may reasonably be anticipated from such termination. 5 ARTICLE VI INDEPENDENT CONTRACTOR Nothing in this Agreement shall be deemed to make either Party an agent or partner of the other, or to give either Party the right to bind the other in any way. ARTICLE VII TERM AND TERMINATION This Agreement shall commence on the Contract Date and shall continue for a period of five (5) years unless earlier terminated as provided in this Article VII. This Agreement may be terminated: (a) at the election of the non-breaching Party, after giving thirty (30) days written notice of a material breach of this Agreement, if such breach is not cured within such 30-day period, or such longer time as is reasonably necessary to cure such breach; (b) at the election of DTC, at any time after one (1) year from the Contract Date, if Project financing has not been obtained by that date, and provided that notice of termination is given prior to the date on which Financing for the Project is obtained; (c) upon the mutual agreement of the Parties; (d) upon the execution of an EPC Contract; or (e) upon payment to DTC of the Breakaway Damages pursuant to the terms of Section 5.4 above. Upon termination of this Agreement for any reason, the license granted under Article III above shall immediately cease, and each Party shall (i) immediately cease use of all Confidential Information provided by the other, (ii) immediately deliver to the disclosing Party all Confidential Information provided to it, including all copies of the same, and destroy all materials developed by it or any third parties to whom it disclosed such information which was based upon such information, and (iii) certify to the disclosing Party that it has done so. In particular, but without limitation, Client shall promptly advise all actual and potential investors and lenders for the Project and all regulatory authorities to which Confidential Information provided to Client under the terms of this Agreement was previously provided, of the termination of this Agreement, and shall withdraw any applications for financing or permits that were based on the use of such Confidential Information. ARTICLE VIII DISPUTE RESOLUTION In the event of any dispute arising under or in connection with this Agreement or with the existence, validity, interpretation, breach or enforcement thereof, either before or after the termination or expiration of this Agreement, the Parties shall, upon the written request of either of them, enter into mediation of such dispute pursuant to the applicable rules of the American Arbitration Association, or such other rules or procedures as they may agree. Neither Party shall file suit unless it has first complied with this provision and attempted to resolve such dispute for a period of at least thirty (30) days. Nothing contained herein, however, shall be deemed to prevent either Party from seeking injunctive relief from any court of competent jurisdiction, without necessity of posting bond, in case of a breach of Articles II or III above. If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing Party shall be entitled to recover reasonable attorney's fees and costs from the other Party, which fees and costs may be set by the court in the trial of such action, or may be enforced in a separate action and brought for that purpose, and which fees and costs shall be in addition to any other relief which may be afforded. 6 ARTICLE IX LIMITATION OF DAMAGES AND REMEDY Client's sole remedy with respect to any uncured breach by DTC of any provision of this Agreement (other than a breach of Article II), including, without limitation, any breach with respect to services performed by DTC under Section 1, shall be the termination of this Agreement and, for purposes of services provided under Section 1 above, the refund to Client of the portion of the compensation payable to DTC pursuant to the terms of Section 4.2 above, if any, allocable to services not properly performed. In no case shall DTC be liable for any other damages of any kind, whether direct, indirect, incidental, consequential, reliance, exemplary or otherwise, with respect to any services performed by it, or to its failure to perform services, under this Agreement. ARTICLE X GENERAL TERMS 10.1 WAIVER: The failure of either Party to insist on strict performance of any of the provisions of this Agreement or to exercise any right pursuant to it, will not be construed as a relinquishment of any right or a waiver of any provision of this Agreement. No waiver of any provision or right shall be valid unless it is in writing and signed by a duly authorized representative of the Party granting the waiver. 10.2 NO ASSIGNMENT: Neither Party may assign or convey this Agreement or its obligations under it without the other's prior written consent, except that either Party may assign this Agreement to a purchaser of a controlling interest in its capital stock or of substantially all of its assets as long as the purchaser agrees to comply with all the selling Party's obligations set forth herein. 10.3 GOVERNING LAW: This Agreement shall be governed and construed in accordance with the laws of the state in which the Plant is to be constructed, without regard to its choice of law rules. 10.4 NOTICES: Notices and other communications required or allowed by this Agreement shall be in writing and sent by U.S. mail, express carrier, by hand, or by facsimile transmission (with confirmation of transmission) as follows: If to DTC, to: Delta-T Corporation 323 Alexander Lee Parkway Williamsburg, Virginia 23185 Fax: 757-229-1705 Attn: Robert L. Swain, Vice President If to Client, to: NEDAK Ethanol, LLC P. O. Box 391 302 North Main Street Fax: __________________ Attn: Robin Olson 7 or such other addresses as a Party may specify by proper notice. Each notice so given shall be deemed delivered, if by mail, upon the third (3rd) business day after mailing, if by courier, upon delivery by the courier, and otherwise upon receipt by the Party to whom notice is sent. 10.5 SURVIVAL: The provisions of Articles II, VIII, IX and Section 5.4 above shall survive termination or expiration of this Agreement. 10.6 SEVERABILITY: If a court of competent jurisdiction determines that any portion of this Agreement is illegal, unenforceable or invalid, then that portion shall be considered to be removed from this Agreement, the remainder shall remain in full force and effect, and the Parties shall cooperate to modify this Agreement to cause it to conform to the original language of this Agreement to the extent consistent with the finding of the court. 10.7 COUNTERPARTS: This Agreement may be executed in any number of counterparts, each of which shall for all purposes be deemed an original. 10.8 ENTIRE AGREEMENT: This Agreement constitutes the entire agreement between the Parties relating to its subject matter, and supercedes all prior representations, understandings and agreements, written or oral, express or implied. This Agreement may be modified only by written agreement executed by authorized representatives of each Party. IN WITNESS WHEREOF the Parties have executed this Agreement on the dates set forth below. DELTA-T CORPORATION NEDAK ETHANOL LLC By: By: ------------------------------ ------------------------------ Printed Printed Name: Name: ------------------------------ ------------------------------ Title: Title: ------------------------------ ------------------------------ Date: Date: ------------------------------ ------------------------------ 8 EXHIBIT A PLANT SPECIFICATIONS, SCOPE OF SERVICES AND COMMERCIAL TERMS BASELINE TERM SHEET This Term Sheet contains the basic terms upon which DTC and Client (each of which may be referred to as a "Party" or jointly as "Parties") agree to negotiate a complete design/build Engineering, Procurement and Construction Contract ("EPC Contract") pursuant to Section 5.1 of the Agreement. Neither DTC nor Client shall have any legally binding obligations or liabilities to the other under this Term Sheet, including but not limited to a legal duty to continue negotiations or to reach a definitive agreement. No other binding obligations or rights will be created, implied or inferred, until a definitive EPC Contract that is mutually acceptable to the Parties is fully executed by both Parties. A.1 BASE CONTRACT PROJECT DESCRIPTION, BATTERY LIMITS AND APPROACH: A.1.1 PROJECT DESCRIPTION: The Plant will be a dry mill ethanol plant with a design capacity of 30 million gallons per year of undenatured anhydrous ethanol, with a design basis for operating twenty-four (24) hours per day for three hundred fifty (350) days per year. A.1.2 SCOPE BATTERY LIMITS: The baseline scope battery limits of the Plant will be comprised of: A.1.2.1INSIDE BATTERY LIMITS: The Inside Battery Limits ("IBL") scope for the Project includes the scope items that DTC typically provides from project to project. Such items are indicated in the Project Scope Overview, Section A.3 of this Exhibit A, as being provided by "DELTA-T". Such items are the basis upon which the Price for the EPC Contract, as set forth in Section 5.1, is determined. A.1.2.2OUTSIDE BATTERY LIMITS: The Outside Battery Limits ("OBL") scope for the Project are the scope items that Client or Owner often prefers to provide, at its discretion. Such items are indicated in the Project Scope Overview, Section A.3 of this Exhibit A, as being provided by "CLIENT". Exclusion of such items is the basis upon which the Price for the EPC Contract, as set forth in Section 5.1, is determined. The Parties may agree to shift items from IBL to OBL or vice versa during discussions, finalization efforts regarding Plant specifications and design, and during final EPC Contract negotiations. A.1.3 PROJECT APPROACH: DTC shall act as the Prime Contractor on the Project with subcontractor(s) performing all construction services necessary to construct the Plant for a fixed fee. A.1.3.1Unless specifically noted otherwise, DTC's basis of design assumes conformance to the applicable sections and parts of the codes and standards set forth below, including the most recent revisions and supplements at the time of the execution of the EPC Contract. 9 Applicable Standards Federal, State, Local, OSHA, Air quality (or appropriate government codes) Building Codes UBC Cable Marking ICEA (Insulated Cable Engineers Association) Concrete ACI (American Concrete Institute) Corrosion NACE (National Association of Corrosion Engineers) Electrical/Instrumentation NEMA (National Electrical Manufacturers Association) NEC (National Electrical Code) ISA (Instrument Society of America) Electrical Components UL (Underwriters Laboratories) CSA (Canadian Standards Association) Flanges ANSI standard Fire Protection NFPA Heat Exchanger TEMA (Tubular Exchanger Manufacturers Association) Nuts, Bolts, Fittings & Line Components ASTM (American Society of Testing Materials) SAE (Society of Automotive Engineers) Painting SSPC (Steel Structure Painting Council) Personnel Safety OSHA (Occupational Safety and Health Association) Piping, pumps ANSI (American National Standards Institute) Structural Steel AISC (American Institute of Steel Construction) Tanks API (American Petroleum Institute) Valves and Fittings MSS (Manufacturers Standardization Society) Vessels (Where required) ASME (American Society of Mechanical Engineers) Welding AWS (American Welding Society) 10 A.2 EPC AGREEMENT STANDARD TERMS: ------------------------------------- ------------------------------------------ DELTA-T'S SCOPE OF WORK DTC will provide those IBL services set forth in Section A.3 below, which may be adjusted or revised based upon mutual agreement of the Parties. ------------------------------------- ------------------------------------------ INFORMATION, GOODS AND SERVICES TO Client shall provide all OBL services set BE PROVIDED BY CLIENT forth in Section A.3 below and otherwise set forth in the EPC Contract, which may be adjusted or revised based upon mutual agreement of the Parties. ------------------------------------- ------------------------------------------ SCHEDULE Upon receipt by DTC of Client's notice toproceed with Plant construction, a targeted maximum schedule for completion of 13 months will be developed, with guaranteed Mechanical Completion to occur within 15 months after which delay damages in the amount of $5,000 per day shall apply, up to DTC's limitation of liability. In the event of delays caused by Client, DTC shall be entitled to reimbursement of unavoidable costs. ------------------------------------- ------------------------------------------ FINAL ACCEPTANCE Upon Mechanical Completion, DTC and Client shall startup the Plant and begin one or more 72-hour Performance Test(s), in accordance with agreed upon procedures, of the Plant to ensure the Plant meets specified performance guarantees. Failure to meet such performance guarantees 6 months from performance of the initial Performance Test will result in payment of liquidated damages to Client by DTC up to DTC's limitations of liability. ------------------------------------- ------------------------------------------ PAYMENT Client shall pay DTC a fixed fee based upon mutually agreed upon specifications, design and scopes of work between Client and DTC. Such fee shall include a license fee for use of DTC Technology. Payments shall be made pursuant to a monthly payment application. Such application will reflect the completed progress of an agreed upon schedule of values for identifiable Plant areas. DTC shall provide Client with waivers of mechanic's liens. ------------------------------------- ------------------------------------------ RIGHTS OF CLIENT AND DELTA-T TO Both Client and DTC shall have the right SUSPEND OR TERMINATE WORK to terminate the EPC Contract as a result of bankruptcy or material breach by the other. In addition, DTC shall have a right to suspend work due to Client's failure to make payments when due. ------------------------------------- ------------------------------------------ PROJECT EXECUTION DTC shall keep a project manager assigned to the Project all times and a site manager on site during construction. DTC will provide Client with project progress reports upon request. ------------------------------------- ------------------------------------------ WARRANTY EQUIPMENT: DTC will warrant that all equipment is free from mechanical defect and defect in material and workmanship until the earlier of 12 months from completion of the Performance Test, 18 months from mechanical completion or 24 months from delivery of that component to the site. Client's sole remedy shall be repair or replacement of the defective material or equipment. DESSICANT: DTC shall warrant that the molecular sieve desiccant will not deteriorate due to mechanical abrasion to such an extent as to reduce the dehydration capacity of the molecular sieve below the specified performance guarantee levels for a period of 5 years from the earlier of 12 months from 11 Performance Test completion or 18 months from Mechanical Completion. Client's sole remedy will be replacement of the dessicant material, at no cost to Client, within 1 year after Final Acceptance or a pro rata share, on the basis of the number of days remaining in the last 4 years of the warranty period. SERVICES: DTC shall warrant that services provided will be of the reasonable skill and care of the type normally provided by design professionals for a period of 1 year after final acceptance or the last date on which DTC performed work. Client's sole remedy shall be to have DTC reperform the services. PROCESS: DTC will warrant that the Plant will perform as designed during the Performance Test. Client's sole remedy is payment of liquidated damages by DTC up to DTC's limitations of liability. NO OTHER WARRANTIES SHALL BE PROVIDED ------------------------------------- ------------------------------------------ INSURANCE Each Party shall provide Worker's Compensation, as required by law, Comprehensive Automobile Liability and Comprehensive General or Commercial Liability Insurance at limits that shall be mutually agreed upon by the Parties. DTC shall provide Professional Liability Insurance at the limits of $2,000,000 per occurrence and in the aggregate. Client shall provide Property Insurance and All Risk Builder's Risk Insurance in an amount not less than the value of the work. ------------------------------------- ------------------------------------------ INDEMNITIES Each Party shall indemnify the other for personal injuries and property damage resulting from the negligent acts or omissions of each respective Party. In addition, DTC shall warrant and indemnify Client from infringement of United States patents or trade secret actions based upon DTC Technology. ------------------------------------- ------------------------------------------ LIMITATIONS OF LIABILITY Neither Party shall have any liability to the other for indirect or consequential type damages, except in case of breach by Client of the Confidentiality provisions contained in the EPC Contract. DTC's cumulative liability, including liquidated damages shall not exceed 10% of the contract price. ------------------------------------- ------------------------------------------ CONFIDENTIALITY Client shall not use any confidential information provided to it by DTC for any other purpose other than those permitted under the EPC Contract. DTC shall remain the sole owner of the DTC Technology and of all copyrights in drawings and other documents provided by DTC under the EPC Contract. DTC shall grant Client a non-exclusive, paid-up, non-transferable right to use in perpetuity the DTC Technology, without right to grant to others, solely for the purpose of use at the Plant and for maintenance, optimization or enhancement of the Plant. Client shall not disclose any DTC Technology for the purpose of maintenance or repair of the Plant to anyone other than its employees, unless Client first gives DTC written notice of the need for maintenance or repair and sufficient time for DTC to respond. ------------------------------------- ------------------------------------------ PERFORMANCE GUARANTEES ANHYDROUS FUEL ETHANOL PRODUCTION RATE: DTC shall guarantee a minimum production rate, based on a formula of final Plant nominal yearly production rate / 350 days / 24 hours per day, of undenatured gallons per hour based on a minimum feedstock specification of 56 lb/bushel test weight corn containing a maximum of 15% moisture (by weight), a minimum of 70% dry starch (by weight) and a max of 1% foreign material (by weight). Such undenatured ethanol shall meet specifications for fuel ethanol per ASTM D4806-01 approved 10AUG01. 12 ANHYDROUS FUEL ETHANOL YIELD: DTC shall guarantee a minimum yield, based on final Plant specifications, of 0.51 pounds of anhydrous undenatured ethanol (average) to be produced from each 1.0 pounds of convertible starch content in the corn feed to the Plant based on a corn specification of #2 Yellow Dent corn, minimum 56 lb/bushel, maximum 15% (wgt) moisture, minimum 70% (wgt dry, trash-free) starch, maximum 1% (wgt) trash. NATURAL GAS(1): DTC shall guarantee a maximum natural gas consumption rate, based on final Plant specifications, of 39,000 BTU's per gallon to operate the boiler and DDGS dryer to produce undenatured fuel ethanol at a minimum gas quality of 939 BTU per standard cubic foot (1 atm, 70(degree)F), 12% maximum (weight) moisture content, and minimum boiler thermal efficiency of 82%. PROCESS ELECTRICAL CONSUMPTION(2): DTC shall guarantee a maximum process electrical consumption, based on final Plant specifications, of 1.0 kWh per gallon (average) of undenatured fuel ethanol produced. ------------------------------------- ------------------------------------------ (1) The natural gas consumption rate indicated does not take into account inclusion of an RTO. In the event that Client requires an RTO, such rate shall be 41,000 BTU's per gallon. An adjustment will be made in the event a DDGS dryer is not included in the Project. (2) The process electrical consumption rate includes consumption for the entire facility and ISBL items, but does not take into account inclusion of an RTO. In the event that Client requires an RTO, such rate shall be 1.1 kWh per gallon (average) of undenatured fuel ethanol produced. An adjustment will be made in the event a DDGS dryer is not included in the Project.
A.3 PROJECT SCOPE OVERVIEW: ------------------------------------------------------------ ------------- ---------- --------------- ENGINEERING & SUPPORT SERVICES UNIT QTY/SIZE PROVIDED BY ------------------------------------------------------------ ------------- ---------- --------------- Process design, know how and technology license Lump Sum - DELTA-T ------------------------------------------------------------ ------------- ---------- --------------- Technical data for environmental permits Lump Sum - DELTA-T ------------------------------------------------------------ ------------- ---------- --------------- Detailed engineering design necessary for all IBL items Lump Sum - DELTA-T to be provided by DELTA-T ------------------------------------------------------------ ------------- ---------- --------------- Provide Plant operations and maintenance manuals for Lump Sum - DELTA-T all IBL items to be provided by DELTA-T ------------------------------------------------------------ ------------- ---------- --------------- Provide Plant personnel training and startup support Lump Sum 100 man DELTA-T days ------------------------------------------------------------ ------------- ---------- --------------- Prepare and file for environmental permits Lump Sum - CLIENT ------------------------------------------------------------ ------------- ---------- --------------- Prepare/file all required federal/state/local permits Lump Sum - CLIENT ------------------------------------------------------------ ------------- ---------- --------------- Detailed engineering for OBL items - - CLIENT ------------------------------------------------------------ ------------- ---------- --------------- Performance Bonds for Construction/Equipment Supply - - - ------------------------------------------------------------ ------------- ---------- --------------- ------------------------------------------------------------ ------------- ---------- --------------- SITE SERVICES ------------------------------------------------------------ ------------- ---------- --------------- Provide soils testing and geotechnical evaluation - - CLIENT ------------------------------------------------------------ ------------- ---------- --------------- Provide topographic and legal surveys - - CLIENT ------------------------------------------------------------ ------------- ---------- --------------- Provide cleared, leveled, ready to build site(1) - - CLIENT ------------------------------------------------------------ ------------- ---------- --------------- Provide all temporary power and other services - - CLIENT necessary for construction ------------------------------------------------------------ ------------- ---------- --------------- Provide all metered utility services to within 5 ft. of - - CLIENT Plant battery limits (gas, power, water, sewers) ------------------------------------------------------------ ------------- ---------- --------------- Provide for all necessary work related to pre-existing - - CLIENT or unknown site conditions ------------------------------------------------------------ ------------- ---------- --------------- 13 Site grading and earthwork for IBL items Lump Sum - DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Concrete Work including foundations/slabs for IBL Lump Sum - DELTA-T items(2) ------------------------------------------------------------ ------------- ---------- ------------ Septic tank and/or sanitary sewer system - - CLIENT ------------------------------------------------------------ ------------- ---------- ------------ Gravel roadways at plant site: ------------------------------------------------------------ ------------- ---------- ------------ Total Length Max linear ft 2000 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Roadbed Preparation Max linear ft 2000 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Roadbed Maintenance during construction Max linear ft 2000 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Asphalt Overlay (if installed) Max linear ft 0 CLIENT ------------------------------------------------------------ ------------- ---------- ------------ Rail spur: ------------------------------------------------------------ ------------- ---------- ------------ Rail Spur Est linear ft CLIENT ------------------------------------------------------------ ------------- ---------- ------------ Rail Weigh Scale EACH CLIENT ------------------------------------------------------------ ------------- ---------- ------------ Main rail switch(es) EACH CLIENT ------------------------------------------------------------ ------------- ---------- ------------ Spur Switch(es) EACH CLIENT ------------------------------------------------------------ ------------- ---------- ------------ Rail Cars stacked at each loading point Lump Sum CLIENT ------------------------------------------------------------ ------------- ---------- ------------ Other Services: ------------------------------------------------------------ ------------- ---------- ------------ Truck Weigh Scale EACH 1 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ CO2 Plant (Client's option) PKG None - ------------------------------------------------------------ ------------- ---------- ------------ LPG Storage & Equipment PKG 1 CLIENT ------------------------------------------------------------ ------------- ---------- ------------ Permanent fencing and security - - CLIENT ------------------------------------------------------------ ------------- ---------- ------------ Solid waste disposal - - CLIENT ------------------------------------------------------------ ------------- ---------- ------------ ------------------------------------------------------------ ------------- ---------- ------------ EQUIPMENT ------------------------------------------------------------ ------------- ---------- ------------ All required process equipment for IBL items Lump Sum - DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Process equipment installation and consumables for IBL Lump Sum - DELTA-T items ------------------------------------------------------------ ------------- ---------- ------------ Utility equipment & systems ------------------------------------------------------------ ------------- ---------- ------------ Boiler Pkg. % of Design 150 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Cooling Tower and Water Treatment Pkg. % of Design 120 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Air Compressors Pkg. % of Design 200 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Cogen Pkg. (supply and install [S&I]) % of Design None CLIENT ------------------------------------------------------------ ------------- ---------- ------------ Main electrical switchgear/transformers (S&I) % of Design 150 CLIENT ------------------------------------------------------------ ------------- ---------- ------------ Feeders from switchgear to MCCs (S&I) % of Design 150 CLIENT ------------------------------------------------------------ ------------- ---------- ------------ Utility equipment installation for IBL items Lump Sum - DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Piping materials (incl fittings, flanges, etc.) for IBL Lump Sum - DELTA-T items ------------------------------------------------------------ ------------- ---------- ------------ Piping installation labor and supplies for IBL items Lump Sum - DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Electrical & instrumentation materials and supplies for Lump Sum - DELTA-T IBL items ------------------------------------------------------------ ------------- ---------- ------------ Electrical & instrumentation installation for IBL items Lump Sum - DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Control System hardware and panels for IBL items Lump Sum - DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Control system software and programming for IBL items Lump Sum - DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Main fire loop w/ water storage, pump house, pump for Lump Sum - DELTA-T IBL items ------------------------------------------------------------ ------------- ---------- ------------ Fire sprinkler systems per applicable codes for IBL items Lump Sum - DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Backup Power Supply (Client's Option) % of Design 120 CLIENT ------------------------------------------------------------ ------------- ---------- ------------ Backup Fuel (Client's Option) Days 2 CLIENT ------------------------------------------------------------ ------------- ---------- ------------ 14 ------------------------------------------------------------ ------------- ---------- ------------ BUILDINGS ------------------------------------------------------------ ------------- ---------- ------------ Administration Sq. ft 2000 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Maintenance Sq. ft 3000 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ All other buildings as needed per IBL process design Sq. ft Varies DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ ------------------------------------------------------------ ------------- ---------- ------------ STORAGE CAPACITY (AT NOMINAL DESIGN OPERATING RATE) ------------------------------------------------------------ ------------- ---------- ------------ Grain storage Days 10 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Ethanol Storage: ------------------------------------------------------------ ------------- ---------- ------------ Main product tankage Days 10 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Day tank Hrs 24 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Rerun tank Hrs 24 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Denaturant tank Days 14 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ DDGS storage Days 10 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Wet Cake Pad Sq. Ft 5,000 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Condensed solubles (syrup) Tanks Days 2 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Process surge tanks Hrs 6 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Backup diesel generator/fire pump fuel storage tank Days 3 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Chemicals: ------------------------------------------------------------ ------------- ---------- ------------ Enzymes Days 14 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Sodium hydroxide Days 14 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Sulfuric Acid Days 14 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ Aqueous Ammonia Days 14 DELTA-T ------------------------------------------------------------ ------------- ---------- ------------ ------------------------------------------------------------ ------------- ---------- ------------ GENERAL CAPABILITIES ------------------------------------------------------------ ------------- ---------- ------------ Feedstock handling data: ------------------------------------------------------------ ------------- ---------- ------------ Design basis feedstock Corn - ------------------------------------------------------------ ------------- ---------- ------------ Ability to separately store multiple feedstocks No - ------------------------------------------------------------ ------------- ---------- ------------ Separately store DDGS from multiple feedstocks No - ------------------------------------------------------------ ------------- ---------- ------------ Ability to feed wet grain from wet pad to dryer Yes - ------------------------------------------------------------ ------------- ---------- ------------
(1) Site shall be graded to a slope of +/- one inch in the IBL building system areas. (2) Soil to meet or exceed 3500 psf bearing capacity. Client shall be responsible for additional costs incurred in the event soil fails to meet such minimum standards. Quantities and size information is subjective. They will be finalized, along with plant options and cost, during negotiations. 15 EXHIBIT B MONTHLY SERVICE PERFORMANCE REPORT Delta-T Corporation TO: Vice President - Marketing PERIOD: TO ---------------------------- ------------------------- FROM: PROJECT: ---------------------------- -------------------------
--------------------------------------------------------- -------------- ------------ ------------- Does Not SERVICES PROVIDED Meet Meets Exceeds Expectations Expectations Expectations --------------------------------------------------------- -------------- ------------ ------------- STAGE II SERVICES --------------------------------------------------------- -------------- ------------ ------------- Detailed Cost Budget --------------------------------------------------------- -------------- ------------ ------------- Engineering SCHEDULE --------------------------------------------------------- -------------- ------------ ------------- Master Project SCHEDULE --------------------------------------------------------- -------------- ------------ ------------- Engineering Document List --------------------------------------------------------- -------------- ------------ ------------- Identify and assign responsibility for required permits --------------------------------------------------------- -------------- ------------ ------------- System Design Specifications --------------------------------------------------------- -------------- ------------ ------------- Process Description --------------------------------------------------------- -------------- ------------ ------------- Plot Plan --------------------------------------------------------- -------------- ------------ ------------- Site Arrangement --------------------------------------------------------- -------------- ------------ ------------- Facility Process Block Flow Diagram --------------------------------------------------------- -------------- ------------ ------------- Facility Mass and Energy Balances --------------------------------------------------------- -------------- ------------ ------------- Process Areas Flow Diagrams --------------------------------------------------------- -------------- ------------ ------------- Process Areas Mass and Energy Balances --------------------------------------------------------- -------------- ------------ ------------- Production & Utility Consumption --------------------------------------------------------- -------------- ------------ ------------- Piping & Instrument Diagrams --------------------------------------------------------- -------------- ------------ ------------- Major Equipment List --------------------------------------------------------- -------------- ------------ ------------- Major Equipment Data Sheets --------------------------------------------------------- -------------- ------------ ------------- Motor List --------------------------------------------------------- -------------- ------------ ------------- Instrument and Input/Output List --------------------------------------------------------- -------------- ------------ ------------- Valve List --------------------------------------------------------- -------------- ------------ ------------- Pipeline List --------------------------------------------------------- -------------- ------------ ------------- Instrument Data Sheets --------------------------------------------------------- -------------- ------------ ------------- Major Process Equipment Procurement Technical Specifications & Outline Drawings --------------------------------------------------------- -------------- ------------ ------------- Plant Process Equipment and Skid Procurement Technical Specifications --------------------------------------------------------- -------------- ------------ ------------- Plant Process Equipment Bid Evaluation, Vendor Recommendation, Vendor Drawing Review --------------------------------------------------------- -------------- ------------ ------------- Plant Process Equipment Bid Packages --------------------------------------------------------- -------------- ------------ ------------- 16 --------------------------------------------------------- -------------- ------------ ------------- Structural Steel Arrangements --------------------------------------------------------- -------------- ------------ ------------- Structural Steel Design --------------------------------------------------------- -------------- ------------ ------------- Structural Steel Fabrication & Installation Technical Specifications --------------------------------------------------------- -------------- ------------ ------------- Foundation Design --------------------------------------------------------- -------------- ------------ ------------- Site Geotechnical Data --------------------------------------------------------- -------------- ------------ ------------- Site Preparation --------------------------------------------------------- -------------- ------------ ------------- Construction packages for civil, concrete work --------------------------------------------------------- -------------- ------------ ------------- Finalized contract for complete engineering, procurement, construction and startup --------------------------------------------------------- -------------- ------------ ------------- Support to NEDAK in financing and permitting --------------------------------------------------------- -------------- ------------ -------------
ADDITIONAL COMMENTS: ----------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- BY: ------------------------------------ PRINTED NAME: ------------------------------------ TITLE: ------------------------------------ DATE: ------------------------------------ 17 EXHIBIT C NON-DISCLOSURE AGREEMENT THIS AGREEMENT is entered into this 15 day of November, 2005 by and between DELTA-T CORPORATION, A VIRGINIA CORPORATION] ("Company"), and NEDAK Ethanol LLC, a Nebraska corporation ("Recipient"). Delta-T and the Recipient may be referred to herein individually as a "Party" and collectively as "Parties". WHEREAS, Company is in the business of designing, developing and constructing equipment and facilities which perform a wide range of chemical process applications including, without limitation, ethanol production and refining, fermentation, evaporation, distillation, dehydration, adsorption, chemical separations, membrane filtration and waste treatment, and WHEREAS, Recipient is in the business of __________________________________, and has, or plans to, enter into a contract with _______________________ ("Customer") to invest in, or provide certain goods or services in connection with an ethanol plant being built by Customer, and WHEREAS, the plant being built by Customer is based on certain propriety information provided by Company and Recipient needs to have access to such information in connection with its contract with Customer, and Customer is not permitted to disclose any of such information to Recipient without benefit of this Agreement, IN CONSIDERATION of the mutual terms and conditions of this Agreement, and other good and valuable consideration receipt of which is hereby acknowledged, Company and Recipient agree as follows: 1. CONFIDENTIAL INFORMATION: 1.1 DEFINITION OF CONFIDENTIAL INFORMATION: "Confidential Information" shall mean (a) all information about or related to the business of Company, including without limitation, plans, proposals, customers or customer lists, operating costs, prices it has offered or obtained for its products or technology, and (b) all technical information, including without limitation, processes, inventions, designs, drawings, methods, systems, test data, and specifications, which is disclosed by Company to Recipient, whether disclosed orally, visually or in written or other tangible form. 1.2 EXCLUSIONS: "Confidential Information" shall not, however, include information which a Recipient, claiming the exclusion, can demonstrate by documentary evidence: (a) was in its possession prior to receipt from Company; (b) was in the public domain at the time of disclosure or thereafter enters into the public domain through no breach of this Agreement by Recipient or is in general use in the trade without violation by Recipient of this Agreement, or violation by any other party of an obligation not to disclose it; or (c) is disclosed to Recipient by a party other than Company who is under no obligation not to disclose it. 18 2. NO USE OR DISCLOSURE: 2.1 RESTRICTIONS ON COPYING, USE AND DISCLOSURE: Recipient shall not, without Company's prior consent: (a) divulge, disclose or communicate any Confidential Information to anyone other than employees of the Recipient who have a need to have access to such information in order to fulfill the purpose set forth above; (b) make any copy of any such information; or (c) use any Confidential Information for any purpose other than the purposes set forth above. Recipient shall take all reasonable steps to protect Confidential Information from improper use or disclosure, and shall in no case use less care to protect Confidential Information than it uses to protect its own proprietary or confidential information. 2.2 DISCLOSURES REQUIRED BY COURT ORDER: If any Recipient is required to disclose any Confidential Information by applicable law, regulation or legal process, Recipient shall notify Company of such request or requirement and copies of all documents relevant to the request or requirement. Recipient shall give such notice promptly, and in sufficient time to allow Company to seek a protective order or other applicable remedy. Recipient shall not disclose any Confidential Information due to a requirement of law, regulation or legal process unless: (a) it has first given the notice required by this Section 2.2 and Company has either given Recipient written permission to disclose it, or Company has failed to respond to Recipient's notice at least 24 hours prior to the time that Recipient is required to make such disclosure; (b) it is advised by written opinion of its counsel that it is legally required to disclose such information; and (c) it has used its best efforts to obtain all reasonable assurances from the party or parties to whom the information is to be disclosed that the information will not be used or disclosed for any purpose other than the purpose for which the applicable law, regulation or legal process requires its disclosure. 3. DESIGNATION OF PERSON WITH ADMINISTRATIVE RESPONSIBILITY: Recipient shall designate one of its employees or representatives to be responsible for fulfilling its obligations under this Agreement and shall advise Company in writing of such employee's name and title within four (4) business days of any change of such designation. Until further notice, the individual so designated is as follows: NAME ________________________ TITLE ________________________ 4. TERM AND TERMINATION: The term of this Agreement shall commence on the date first written above and continue until terminated by written notice of either Party to the other, but Recipient's obligations under Section 2 of this Agreement shall survive until such time, if ever, that the Confidential Information falls within one or more of the exclusions set forth at Section 1.2 above. Within thirty (30) calendar days of termination of this Agreement, Recipient shall, without request by Company, deliver to Company all of the Confidential Information that it received from Company in tangible form, and all copies thereof, and shall destroy all documents and other tangible items containing any of such Confidential Information and shall certify to Company in writing that it has done so. 5. NO LICENSE OR OTHER RIGHTS: Nothing in this Agreement shall constitute or otherwise be construed as granting to Recipient any interest or license in any Confidential Information, or creating any obligation on the part of any Party hereto to enter into any further agreement or business arrangement. 6. REMEDIES FOR BREACH: Recipient agrees that any breach of this Agreement shall cause Company irreparable harm. Accordingly, and in addition to any other remedies that Company may have at law or in equity, Company shall be entitled to obtain injunctive relief against Recipient to prevent any continuing breach, and without posting or filing any bond or other security. All costs, expenses and attorney's fees resulting from the litigation or arbitration of any claim under this Agreement shall be paid by the losing party to the prevailing party. 19 7. EXPORT CONTROL: Recipient agrees that, except as allowed under applicable U.S. Export license provisions, no technical information furnished to it hereunder shall be disclosed by it to any non-U.S. national, firm, or country, including foreign nationals employed by or associated with such party, nor shall such party allow any re-export of any technical information without first complying with all applicable U.S. Government export control laws and regulations. 8. GENERAL PROVISIONS: 8.1 ASSIGNMENT: This Agreement may not be assigned by Recipient to any other party. 8.2 CHOICE OF LAW: This Agreement shall be governed by and construed under the laws of the Commonwealth of Virginia, without regard to the choice of law provisions thereof. 8.3 NOTICES: Any notice required or permitted to be given under this Agreement shall be given in writing and shall be addressed: If to Company, to: Delta-T Corporation 323 Alexander Lee Parkway Williamsburg, Virginia 23185 Attn: Rob Swain If to Recipient, to: ___________________ ___________________ Attn.: ______________ 8.4 SEVERABILITY: If for any reason a court of competent jurisdiction or an award in arbitration finds any provision of this Agreement to be unenforceable, the Parties hereto agree that they shall amend this Agreement to allow for enforcement to the maximum extent enforceable and the remainder of this Agreement shall continue in full force and effect. 8.5 HEADINGS AND CAPTIONS: The headings and captions in this Agreement are for convenience only and are not to be considered in construing this Agreement. All references to any article, section or paragraph numbers shall be deemed to be references to an article, section or paragraph of this Agreement unless otherwise expressly stated. 8.6 SURVIVAL OF TERMS: The obligations of Recipient under Section 2 of this Agreement shall survive as provided in Section 4 above, and the Parties' obligations under Section 6 of this Agreement shall survive termination of this Agreement. 8.7 ENTIRE AGREEMENT: This Agreement sets forth the entire agreement among the Parties with respect to the subject matter hereof and supersedes any prior agreement related to thereto. No addition or amendment may be made to this Agreement except by a writing signed by all Parties. 20 8.8 NO WAIVER: Failure by any party to this Agreement to enforce any provision of this Agreement with respect to any breach thereof, shall not be deemed a waiver of any right to enforce any other breach of this Agreement. IN WITNESS WHEREOF, the Parties have executed this Agreement by their authorized representatives. COMPANY CUSTOMER / CLEINT NAME By: By: --------------------------- ------------------------------- Printed Printed Name: Name: --------------------------- ------------------------------- Title: Title: --------------------------- ------------------------------- Date: Date: --------------------------- ------------------------------- 21 EXHIBIT D - SCOPE OF SERVICES FOR PHASE II ENGINEERING PREPARATION TASK/DELIVERABLE DESCRIPTION ESPONSIBILITY Detailed Cost Budget DELTA-T Engineering SCHEDULE DELTA-T Master Project SCHEDULE DELTA-T Engineering Document List DELTA-T Identify and assign responsibility for required permits DELTA-T System Design Specifications DELTA-T Process Description DELTA-T Plot Plan OWNER Site Arrangement DELTA-T Facility Process Block Flow Diagram DELTA-T Facility Mass and Energy Balances DELTA-T Process Areas Flow Diagrams DELTA-T Process Areas Mass and Energy Balances DELTA-T Production & Utility Consumption DELTA-T Piping & Instrument Diagrams DELTA-T Major Equipment List DELTA-T Major Equipment Data Sheets DELTA-T Motor List DELTA-T Instrument and Input/Output List DELTA-T Valve List DELTA-T Pipeline List DELTA-T Instrument Data Sheets DELTA-T Major Process Equipment Procurement Technical Specifications & DELTA-T Outline Drawings Plant Process Equipment and Skid Procurement Technical DELTA-T Specifications Plant Process Equipment Bid Evaluation, Vendor Recommendation, DELTA-T Vendor Drawing Review Plant Process Equipment Bid Packages DELTA-T Structural Steel Arrangements DELTA-T Structural Steel Design DELTA-T Structural Steel Fabrication & Installation Technical Specifications DELTA-T Foundation Design DELTA-T Site Geotechnical Data OWNER Site Preparation OWNER Construction packages for civil, concrete work DELTA-T Finalized contract for complete engineering, procurement, DELTA-T construction and startup Support to NEDAK in financing and permitting DELTA-T 22 EXHIBIT E: PHASE II PRELIMINARY SCHEDULE ID Task Name Start 1 2 3 Phase II Notice to Proceed Mon. 10/31/05 - October 31, 2005 4 Process Engineering Tue. 11/1/05 - March 2006 5 Civil Engineering Tue. 11/1/05 - March 2007 6 Concrete Design Tue. 11/29/05 - April 2006 7 Concrete Foundations Tue. 4/4/06 - September 2006 8 Building Erection Mon. 6/5/06 - October 2006 9 Mechanical Mon. 5/1/06 - December 2006 10 Piping Mon. 5/1/06 - Feb 2007 11 Electrical & Istrumentation Mon. 5/1/06 - March 2007 12 Startup & Commissioning Mon. 1/1/07 - April 2007 13 Owner Production Ethanol Mon. 4/23/07 - April 23, 2007