Automated build of BizTalk 2009 project fails in TFS 2010 beta 2 Build Server by JarinK

I'm getting compilation errors due to the conflicts in .NET Framework versions 2.0 and 4.0 when building BizTalk 2009 project using TFS 2010 beta 2 Build Server. I could not find a way to force build to use only .net framework 2.0 assemblies.

Here is a snippet from the build log:
CoreCompile:
C:\Windows\Microsoft.NET\Framework\v3.5\Csc.exe /noconfig /nowarn:1701,1702 /errorreport:prompt /warn:4 /define:TRACE /reference:C:\Windows\Microsoft.NET\Framework\v2.0.50727\System.Configuration.dll /reference:C:\Windows\Microsoft.NET\Framework\v2.0.50727\System.dll /reference:C:\Windows\Microsoft.NET\Framework\v2.0.50727\System.Xml.dll /reference:"C:\Program Files\Microsoft BizTalk Server 2009\Microsoft.XLANGs.RuntimeTypes.dll" /reference:"C:\Program Files\Microsoft BizTalk Server 2009\Microsoft.BizTalk.Interop.Agent.dll" /reference:"C:\Program Files\Microsoft BizTalk Server 2009\Microsoft.BizTalk.Messaging.dll" /reference:"C:\Program Files\Microsoft BizTalk Server 2009\Microsoft.XLANGs.Engine.dll" /reference:"C:\Program Files\Microsoft BizTalk Server 2009\Microsoft.XLANGs.BizTalk.Engine.dll" /reference:"C:\Program Files\Common Files\Microsoft BizTalk\Microsoft.RuleEngine.dll" /reference:"C:\Program Files\Microsoft BizTalk Server 2009\Microsoft.XLANGs.BizTalk.ProcessInterface.dll" /reference:C:\Windows\Microsoft.NET\Framework\v4.0.21006\System.dll /reference:C:\Windows\Microsoft.NET\Framework\v4.0.21006\System.Xml.dll /reference:C:\Windows\Microsoft.NET\Framework\v4.0.21006\System.Data.dll /reference:C:\Windows\Microsoft.NET\Framework\v4.0.21006\System.Web.Services.dll /reference:"C:\Program Files\Common Files\Microsoft BizTalk\Microsoft.BizTalk.TOM.dll" /debug:pdbonly /keyfile:somekey.snk /optimize+ /out:obj\Release\TestSchemas.dll /target:library /warnaserror- Properties\AssemblyInfo.cs "C:\Builds\2\Test Project\Test Build\Sources\TestBizTalkApp\TestSchemas\SomeSchema.xsd.cs" "C:\Builds\2\Test Project\Test Build\Sources\TestBizTalkApp\TestSchemas\PropertySchema.xsd.cs"
CSC : warning CS1685: The predefined type 'System.Runtime.InteropServices.DefaultParameterValueAttribute' is defined in multiple assemblies in the global alias; using definition from 'c:\Windows\Microsoft.NET\Framework\v2.0.50727\System.dll' [C:\Builds\2\Test Project\Test Build\Sources\TestBizTalkApp\TestSchemas\TestSchemas.btproj]
PropertySchema.xsd.cs(64,35): error CS0433: The type 'System.Xml.XmlQualifiedName' exists in both 'c:\Windows\Microsoft.NET\Framework\v2.0.50727\System.XML.dll' and 'c:\Windows\Microsoft.NET\Framework\v4.0.21006\System.XML.dll' [C:\Builds\2\Test Project\Test Build\Sources\TestBizTalkApp\TestSchemas\TestSchemas.btproj]
PropertySchema.xsd.cs(72,36): error CS0433: The type 'System.Xml.XmlQualifiedName' exists in both 'c:\Windows\Microsoft.NET\Framework\v2.0.50727\System.XML.dll' and 'c:\Windows\Microsoft.NET\Framework\v4.0.21006\System.XML.dll' [C:\Builds\2\Test Project\Test Build\Sources\TestBizTalkApp\TestSchemas\TestSchemas.btproj]
Done Building Project "C:\Builds\2\Test Project\Test Build\Sources\TestBizTalkApp\TestSchemas\TestSchemas.btproj" (default targets) -- FAILED.
Done Building Project "C:\Builds\2\Test Project\Test Build\Sources\TestBizTalkApp\TestBizTalkApp.sln" (default targets) -- FAILED.
Done Building Project "C:\Builds\2\Test Project\Test Build\BuildType\TFSBuild.proj" (CompileSolution target(s)) -- FAILED.
Done Building Project "C:\Builds\2\Test Project\Test Build\BuildType\TFSBuild.proj" (CompileConfiguration target(s)) -- FAILED.
Done Building Project "C:\Builds\2\Test Project\Test Build\BuildType\TFSBuild.proj" (CoreCompile target(s)) -- FAILED.