Lump Sum Design-build Agreement

LUMP SUM DESIGN-BUILD AGREEMENT


BETWEEN


GREEN PLAINS RENEWABLE ENERGY, INC. ("OWNER")


AND


FAGEN, INC. ("DESIGN-BUILDER")


January 13, 2005


TABLE OF CONTENTS


Page


Article 1 Definitions, Rules of Interpretation................................1


1.1 Rules of Construction.............................................1
1.2 Defined Terms.....................................................2


Article 2 The Project.........................................................6


2.1 Services to be Performed..........................................6
2.2 Extent of Agreement...............................................6
2.3 Conflicting Provisions............................................7


Article 3 Design-Builder Responsibilities.....................................7


3.1 Design-Builder's Services in General..............................7
3.2 Design Development and Service....................................7
3.3 Standard of Care..................................................9
3.4 Government Approvals and Permits..................................9
3.5 Subcontractors....................................................9
3.6 Maintenance of Site..............................................10
3.7 Project Safety...................................................10
3.8 Submission of Reports............................................10
3.9 Training.........................................................11


Article 4 Owner's Responsibilities...........................................11


4.1 Duty to Cooperate................................................11
4.2 Furnishing of Services and Information...........................11
4.3 Financial Information; Cooperation with Lenders; Failure to
Obtain Financial Closing.......................................12
4.4 Owner's Representative...........................................13
4.5 Government Approvals and Permits.................................13
4.6 Owner's Separate Contractors.....................................13
4.7 Security.........................................................13


Article 5 Ownership of Work Product; Risk of Loss............................14


5.1 Work Product.....................................................14
5.2 Owner's Limited License Upon Payment in Full.....................14
5.3 Owner's Limited License Upon Owner's Termination for
Convenience or Design-Builder's Election to Terminate..........15
5.4 Owner's Limited License Upon Design-Builder's Default............15
5.5 Owner's Indemnification for Use of Work Product..................15
5.6 Risk of Loss.....................................................16


Article 6 Commencement and Completion of the Project.........................16


6.1 Work Schedule....................................................16
6.2 Phase I and Phase II Engineering.................................16


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6.3 Notice to Proceed; Commencement..................................17
6.4 Project Start-Up and Testing.....................................17
6.5 Substantial Completion...........................................17
6.6 Final Completion.................................................19
6.7 Post-Completion Support..........................................20


Article 7 Performance Testing and Liquidated Damages.........................20


7.1 Performance Guarantee............................................20
7.2 Performance Testing..............................................21
7.3 Liquidated Damages...............................................22
7.4 Bonds and Other Performance Security.............................22


Article 8 Warranties.........................................................23


8.1 Design-Builder Warranty..........................................23
8.2 Correction of Defective Work.....................................24
8.3 Warranty Period Not Limitation to Owner's Rights.................24


Article 9 Contract Price.....................................................25


9.1 Contract Price...................................................25


Article 10 Payment Procedures................................................25


10.1 Payment at Financial Closing.....................................25
10.2 Progress Payments................................................25
10.3 Final Payment....................................................26
10.4 Failure to Pay Amounts Due.......................................27
10.5 Design-Builder's Payment Obligations.............................27
10.6 Record Keeping and Finance Controls..............................27


Article 11 Hazardous Conditions and Differing Site Conditions................27


11.1 Hazardous Conditions.............................................27
11.2 Differing Site Conditions; Inspection............................28


Article 12 Force Majeure; Change in Legal Requirements.......................29


12.1 Force Majeure Event..............................................29
12.2 Effect of Force Majeure Event....................................29
12.3 Change in Legal Requirements.....................................30
12.4 Effect of Industry-Wide Disruption on Contract Price.............30
12.5 Time Impact and Availability.....................................31


Article 13 Changes to the Contract Price and Scheduled Completion Dates......31


13.1 Change Orders....................................................31
13.2 Contract Price Adjustments.......................................31
13.3 Emergencies......................................................32
13.4 Requests for Contract Adjustments and Relief.....................32


Article 14 Indemnity.........................................................33


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14.1 Tax Claim Indemnification........................................33
14.2 Payment Claim Indemnification....................................33
14.3 Design Builder's General Indemnification.........................33
14.4 Owner's General Indemnification..................................34


Article 15 Stop Work; Termination for Cause..................................34


15.1 Owner's Right to Stop Work.......................................34
15.2 Owner's Right to Perform and Terminate for Cause.................34
15.3 Owner's Right to Terminate for Convenience.......................36
15.4 Design-Builder's Right to Stop Work..............................36
15.5 Design-Builder's Right to Terminate for Cause....................37
15.6 Bankruptcy of Owner or Design-Builder............................37
15.7 Lenders' Right to Cure...........................................38


Article 16 Representatives of the Parties....................................38


16.1 Designation of Owner's Representatives...........................38
16.2 Designation of Design-Builder's Representatives..................39


Article 17 Insurance.........................................................39


17.1 Insurance........................................................39
17.2 Design-Builder's Insurance Requirements..........................40
17.3 Owner's Liability Insurance......................................41
17.4 Owner's Property Insurance.......................................41
17.5 Coordination with Loan Documents.................................43


Article 18 Representations and Warranties....................................43


18.1 Design-Builder and Owner Representations and Warranties..........43
18.2 Design-Builder Representations and Warranties....................44


Article 19 Dispute Resolution................................................44


19.1 Dispute Avoidance and Mediation..................................44
19.2 Arbitration......................................................44
19.3 Duty to Continue Performance.....................................45
19.4 Consequential Damages............................................45


Article 20 Confidentiality of Shared Information.............................45


20.1 Non-Disclosure Obligation........................................45
20.2 Publicity and Advertising........................................46
20.3 Term of Obligation...............................................46


Article 21 Miscellaneous.....................................................46


21.1 Assignment.......................................................46
21.2 Successors.......................................................46
21.3 Governing Law....................................................47
21.4 Severability.....................................................47


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21.5 No Waiver........................................................47
21.6 Headings.........................................................47
21.7 Notice ........................................................47
21.8 No Privity with Design Consultant/Subcontractors.................48
21.9 Amendments.......................................................48
21.10 Entire Agreement.................................................48
21.11 Third-Party Beneficiaries........................................48
21.12 Counterparts.....................................................48
21.13 Survival.........................................................48


SCHEDULE 4.2.1...............................................................50


EXHIBIT A ...................................................................A-1 EXHIBIT B....................................................................B-1 EXHIBIT C....................................................................C-1 EXHIBIT D....................................................................D-1 EXHIBIT E....................................................................E-1 EXHIBIT F....................................................................F-1 EXHIBIT G....................................................................G-1 EXHIBIT H....................................................................H-1 EXHIBIT I....................................................................I-1 EXHIBIT J....................................................................J-1 EXHIBIT K....................................................................K-1 EXHIBIT L....................................................................L-1 EXHIBIT M....................................................................M-1 EXHIBIT N....................................................................N-1


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LUMP SUM DESIGN-BUILD CONTRACT


This LUMP SUM DESIGN-BUILD CONTRACT (the "Agreement") is made as of January 13, 2005, (the "Effective Date") by and between Green Plains Renewable Energy, Inc. an Iowa limited liability company (the "Owner") and Fagen, Inc., a Minnesota corporation (the "Design-Builder").


RECITALS


A. The Owner desires to develop, construct, own and operate a 50 million gallons per year ("MGY") dry grind ethanol production facility located at Shenandoah, Iowa (the "Plant"); and


B. Design-Builder desires to provide design, engineering, procurement and construction services for the Plant.


NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein and for other good and valuable consideration, Owner and Design-Builder agree as follows.


AGREEMENT
Article 1


Definitions; Rules of Interpretation


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


(a) The masculine shall include the feminine and neuter.


(b) References to "Articles," "Sections," "Schedules," or
"Exhibits" shall be to Articles, Sections, Schedules or
Exhibits of this Agreement.


(c) This Agreement was negotiated and prepared by each of the
Parties with the advice and participation of counsel. The
Parties have agreed to the wording of this Agreement and none
of the provisions hereof shall be construed against one Party
on the ground that such Party is the author of this Agreement
or any part hereof.


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


AAA is defined in Section 19.1.


Agreement is defined in the Preamble.


Air Emissions Tester means a third party entity engaged by Owner meeting all required state and federal requirements for such testing entities, to conduct air emissions testing of the Plant in accordance with Exhibit A.


Applicable Law means
(a) any and all laws, legislation, statutes, codes, acts, rules,
regulations, ordinances, treaties or other similar legal
requirements enacted, issued or promulgated by a Governmental
Authority;
(b) any and all orders, judgments, writs, decrees, injunctions,
Governmental Approvals or other decisions of a Governmental
Authority; and
(c) any and all legally binding announcements, directives or
published practices or interpretations, regarding any of the
foregoing in (a) or (b) of this definition, enacted, issued or
promulgated by a Governmental Authority; to the extent, for each of the foregoing in (a), (b) and (c) of this definition, applicable to or binding upon (i) a Party, its affiliates, its shareholders, its members, it partners or their respective representatives, to the extent any such person is engaged in activities related to the Project; or (ii) the property of a Party, its affiliates, its shareholders, its members, its partners or their respective representatives, to the extent such property is used in connection with the Project or an activity related to the Project.


Application for Payment is defined in Section 10.2.1.


As Built Plans is defined in Section 5.2.


Bankrupt Party is defined in Section 15.6.1.


Baseline Index is defined in Section 12.4.1.


CCI is defined in Section 12.4.1.


Certificate of Substantial Completion is defined in Section 6.5.3


Change Order is defined in Section 13.1.1.


Construction Documents is defined in Section 3.2.2.


Contract Documents is defined in Section 2.2.


Contract Price is defined in Section 9.1.


Damages is defined in Section 14.3.1.


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Day or Days shall mean calendar days unless otherwise specifically noted in the Contract Documents.


Design-Builder is defined in the Preamble.


Design-Builder's Representative is defined in Section 16.2.


Design-Builder's Senior Representative is defined in Section 16.2.


Design Consultant is a qualified, licensed design professional that is not an employee of Design-Builder, but is retained by Design-Builder, or employed or retained by anyone under contract with Design-Builder or Subcontractor, to furnish design services required under the Contract Documents.


Differing Site Conditions is defined in Section 11.2.1.


Early Completion Bonus is defined in Section 6.5.4.


Effective Date is defined in the Preamble.


Final Application for Payment is defined in Section 10.3.


Final Completion is defined in Section 6.6.2.


Final Completion Date is the date that is 90 Days after the Substantial Completion Date.


Final Payment is defined in Section 10.3.


Financial Closing means the execution of the Financing Documents by all the parties thereto, and the fulfillment of all conditions precedent thereunder necessary to permit the advance of funds to pay amounts due under this Agreement.


Financing Documents means the final loan documents with the lender or lenders providing financing for the construction or term financing of the Plant.


Force Majeure Event is defined in Section 12.1.


Governmental Approvals are any material authorizations or permissions issued or granted by any Governmental Authority to the Project, its Owner, the Design-Builder, Subcontractors and their affiliates in connection with any activity related to the Project.


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


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Hazardous Conditions are any materials, wastes, substances and chemicals deemed to be hazardous under applicable Legal Requirements, or the handling, storage, remediation, or disposal of which are regulated by applicable Legal Requirements.


ICM is defined in Section 5.2.1.


ICM License Agreement means the license agreement to be executed between Owner and ICM, Inc., substantially in the form attached hereto as Exhibit D.


Indemnified Parties is defined in Section 5.2.


Independent Engineer means Owner's and Lenders' independent engineer.


Industry-Wide Disruption is defined in Section 12.4.


Legal Requirements or Laws are all applicable federal, state and local statutes, laws, codes, ordinances, rules, regulations, judicial decisions, orders, decrees plans, injunctions, permits, tariffs, governmental agreements and governmental restrictions, whether now or hereafter in effect, of any government or quasi-government entity having jurisdiction over the Project or Site, the practices involved in the Project or Site, or any Work, including any consensus standards for materials, products, systems, and services established by ASTM International, any successor organization thereto, or any Governmental Authority.


Lenders means the lenders that are party to the Financing Documents.


Lenders' Agent means an agent or agents acting on behalf of the Lenders.


Manufacturer's Warranty shall mean a warranty provided by the original manufacturer or vendor of equipment used by Design-Builder in the Plant.


MGY is defined in the Recitals.


Notice to Proceed is defined in Section 6.3.


Oversight Items is defined in Section 4.3.


Owner is defined in the Preamble.


Owner Indemnified Parties is defined in Section 14.3.1.


Owner's Representative is defined in Section 16.1.


Owner's Senior Representative is defined in Section 16.1.


Pass Through Warranties mean any warranties provided to Design-Builder by a Subcontractor which are assigned to Owner.


Pay Period means, with respect to a given Application for Payment or Progress Report, the one month period following the last day of the previous Pay Period


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to which the immediately prior Application for Payment or Progress Report is applied; provided that the initial Pay Period shall commence on the date of delivery of the Notice to Proceed and end on the 24th day of the calendar month during which the Notice to Proceed is issued.


Payment Bond is defined in Section 7.4.2.


Performance Bond is defined in Section 7.4.1.


Performance Guarantee Criteria means the criteria listed in Exhibit A.


Performance Tests is defined in Section 7.2.1.


Phase I is defined in Exhibit C.


Phase II is defined in Exhibit C.


Plant is defined in the Recitals.


Preliminary Construction Documents is defined in Section 3.2.1.


Progress Report is defined in Section 3.8.


Project is defined in Section 2.1.


Project Scope is defined in Exhibit B.


Punch List is defined in Section 6.5.3.


Qualified Independent Expert means an expert retained by Owner and approved by Design-Builder pursuant to Section 11.1.2.


Safety Representative is defined in Section 3.7.1.


Schedule of Values is defined in Section 10.2.5.


Scheduled Substantial Completion Date is defined in Section 6.5.1.


Site is the land or premises on which the Project is located.


Subcontractor is any person or entity retained by Design-Builder, or by any person or entity retained directly or indirectly by Design-Builder, in each case as an independent contractor to perform a portion of the Work and shall include materialmen and suppliers.


Substantial Completion is defined in Section 6.5.2.


Work is defined in Section 3.1.


Work Product is defined in Section 5.1.


Work Schedule is defined in Section 6.1.


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Article 2
The Project


2.1 Services to be Performed. Pursuant to this Agreement, Design-Builder shall perform all work and services in connection with the engineering, design, procurement, construction startup, Perfomance Tests, training for the operation and maintenance of the Plant, and provide all material, equipment, tools and labor necessary to complete the Plant in accordance with the terms of this Agreement. The Plant, together with all equipment, labor, services and materials furnished hereunder is defined as the "Project."


2.2 Extent of Agreement. This Agreement consists of the following documents, and all exhibits, schedules, appendices and attachments hereto and thereto (collectively, the "Contract Documents"):


2.2.1 All written modifications, amendments and change orders to this Agreement.


2.2.2 This Agreement, including all exhibits and attachments, executed by Owner and Design-Builder, including those below:


List of Exhibits
Exhibit A Performance Guarantee Criteria
Exhibit B General Project Scope
Exhibit C Owner's Responsibilities
Exhibit D ICM License Agreement
Exhibit E Schedule of Values
Exhibit F Progress Report
Exhibit G Permits Required
Exhibit H Form of Performance Bond
Exhibit I Form of Payment Bond
Exhibit J Work Schedule
Exhibit K Preliminary Construction Documents
Exhibit L Draw (Payment) Schedule
Exhibit M Air Emissions Application or Permit
Exhibit N Phase I and Phase II Engineering Services
Agreement


2.2.3 Preliminary Construction Documents prepared by Design-Builder pursuant to Section 3.2.1 and the Construction Documents to be prepared by Design-Builder pursuant to Section 3.2.2 shall be incorporated in this Agreement.


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2.3 Conflicting Provisions. In the event of any conflict or inconsistency between the body of this Agreement and any Exhibit or Schedule hereto, the terms and provisions of this Agreement, as amended from time to time, shall prevail and be given priority. Subject to the foregoing, the several documents and instruments forming part of this Agreement are to be taken as mutually explanatory of one another and in the case of ambiguities or discrepancies within or between such parts the same shall be explained and interpreted, if possible, in a manner which gives effect to each part and which avoids or minimizes conflicts among such parts. No oral representations or other agreements have been made by the parties except as specifically stated in the Contract Documents.


Article 3
Design-Builder Responsibilities


3.1 Design-Builder's Services in General. Except for services and information to be provided by Owner and specifically s ...