Exhibit 10.4
POET
AGREEMENT BETWEEN
OWNER AND DESIGN BUILDER
THIS AGREEMENT
made as of this 3
rd day of April in the year of
2007.
BETWEEN the Owner:
Northern Lights Ethanol, LLC
46416 144” St.
P0 Box 356
Big Stone City SD 57216
And the Design Builder:
POET Design and Construction,
Inc.
4615 North Lewis Avenue
Sioux Fails, SD 57104
For the following
Project:
Additional Corn Storage
The Owner and Design Builder, in
consideration of the mutual covenants hereinafter set forth, agree
as follows:
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ARTICLE I - GENERAL
PROVISIONS
1.1
BASIC DEFINITIONS
1.1.1
The Contract Documents consist of this Agreement the Design
Builder’s Exhibits and written addenda identified in Article
14, the Construction Documents approved by the Owner and
Modifications issued after execution of this Agreement A
Modification is a Change Order or a written amendment to this
Agreement signed by both parties, or a Construction Change
Directive issued by the Owner In accordance with Paragraph
8.3.
1.1.2
The term “Work” means the construction and services
provided by the Design Builder to fulfill the Design
Builder’s obligations.
1.2
EXECUTIONS, CORRELATION AND
INTENT
1.2.1
It is the intent of the Owner and Design Builder that the Contract
Documents include all Items necessary for proper execution and
completion of the Work. The Contract Documents are complimentary
and what Is required by one shall be as binding as If required by
all; performance by the Design Builder shall be required only to
the extent consistent with and reasonably inferable from the
Contract Documents as being necessary to produce the intended
results. Words that have well-known technical or construction
industry meanings are used In the Contract Documents In accordance
with such recognized meanings.
1.2.2
If the Design Builder believes or is advised by another design
professional retained by the Design Builder to provide services on
the Project that implementation of any instruction received from
the Owner would cause a violation of any applicable law, the Design
Builder shall notify the Owner in writing. Neither the Design
Builder nor another design professional retained by the Design
Builder shall be obligated to perform any act which either believes
will violate any applicable law.
1.2.3
Nothing contained in this Agreement shall create a contractual
relationship between the Owner and any person or entity other than
the Design Builder.
1.3
OWNERSHIP AND USE OF
DOCUMENTS
1.3.1
Drawings specifications, and other documents and electronic data
furnished by the Design Builder and other design professionals
retained by the Design Builder, are instruments of service. The
Design Builder and other providers of professional services shall
retain all common law, statutory and other
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reserved rights, including copyright
in those instruments of service furnished by them. Drawings,
specifications, and other documents and electronic data are
furnished for use solely with respect to this Agreement The Owner
shall be permitted to retain copies, including reproducible copies,
of the drawings, specifications, and other documents and electronic
data furnished by the Design Builder for information and reference
in connection with the Project except as provided in Subparagraphs
1.3.2 and 1.3.3.
1.3.2
Drawings, specifications, and other documents and electronic data
furnished by the Design Builder shall not be used by the Owner or
others on other projects, for additions to this Project or for
completion of this Project by others, except by agreement in
writing and with appropriate compensation to the Design
Builder.
1.3.3
Submission or distribution of the Design Builder’s documents
to meet official regulatory requirements or for similar purposes in
connection with the Project is not to be construed as publication
in derogation of the rights reserved in Subparagraph
1.3.1.
ARTICLE 2 - OWNER
2.1
The Owner shall designate a representative authorized to act on the
Owner’s behalf with respect to the Project. The Owner or such
authorized representative shall examine documents submitted by the
Design Builder and shall render decisions In a timely manner and in
accordance with the schedule accepted by the Owner. The Owner may
obtain independent review of the Contract Documents by a separate
architect, engineer, contractor, or cost estimator under contract
to or employed by the Owner. Such independent review shall be
undertaken at the Owner’s expense in a timely manner and
shall not delay the orderly progress of the Work.
2.2
The Owner shall cooperate with the Design Builder In securing
building and other permits, licenses and inspections. The Owner
shall not be required to pay the fees for such permits, licenses
and inspections unless the cost of such fees is excluded from the
Design Builder’s Scope of Services.
2.3
The Owner shall furnish services of land surveyors, geotechnical
engineers, and other consultants for subsoil, air and water
conditions, when such services are deemed necessary by the Design
Builder to properly carry out the design services required by this
Agreement.
2.4
The Owner shall disclose, to the extent known to the Owner, the
results and
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reports of prior tests, inspections
or investigations conducted for the Project involving: structural
or mechanical systems; chemical; air and water pollution; hazardous
materials; or other environmental and subsurface conditions.
The Owner shall disclose all information known to the Owner
regarding the presence of pollutants at the Project’s
site.
2.5
The Owner shall furnish all legal, accounting and insurance
counseling services as may be necessary at any time for the Project
including services as the Owner may require to verify the Design
Builder’s Applications for Payment.
2.6
Those services, information, surveys and reports required by
Paragraphs 2.3 through 2.5 which are within the Owner’s
control shall be furnished at the Owner’s expense. The Design
Builder shall be entitled to rely upon the accuracy and
completeness thereof, except to the extent the Owner advises the
Design Builder to the contrary in writing.
2.7
If the Owner requires the Design Builder to maintain any special
insurance coverage, policy, amendment, or rider, the Owner shall
pay the additional cost thereof, except as otherwise stipulated in
this Agreement.
2.8
If the Owner observes or otherwise becomes aware of a fault of
defect in the Work or nonconformity with the Design Builder’s
Scope of Services or the Construction Documents, the Owner shall
give prompt written notice thereof to the Design
Builder.
2.9
The Owner shall promptly upon the request of the Design Builder,
furnish to the Design Builder reasonable evidence that financial
arrangements have been made to fulfill the Owner’s
obligations under the Contract.
2.10 The
Owner shall communicate with persons or entitles employed or
retained by the Design Builder through the Design Builder, unless
otherwise directed by the Design Builder.
ARTICLE 3 – DESIGN
BUILDER
3.1
SERVICES AND
RESPONSIBILITIES
3.1.1
Standard of Care: Design Builder shall perform or furnish Design
Professional Services and related services in all phases of the
project. The standard of care for all such services performed or
furnished under this Agreement will be the care and skill
ordinarily used by members of the engineering profession practicing
under similar conditions at the same time and locality.
3.1.2
The Design Builder shall be responsible to the Owner for acts
and
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omissions of the Design
Builder’s employees, subcontractors and their agents and
employees, and other persons, including other design professionals,
performing any portion of the Design Builder’s obligations
under this Agreement.
3.2
BASIC SERVICES
3.2.1
The Design Builder’s Basic Services are described below and
in Article 14.
3.2.2
The Design Builder shall designate a representative authorized to
act on the Design Builder’s behalf with respect to the
Project.
3.2.3
The Design Builder, with the assistance of the Owner, shall file
documents required to obtain necessary approvals of governmental
authorities having jurisdiction over the Project.
3.2.4
Unless otherwise provided in the Contract Documents, the Design
Builder shall provide or cause to be provided and shall pay for
design services, labor, materials, equipment, tools, construction
equipment and machinery, water, heat, utilities, transportation and
other facilities and services necessary for proper execution and
completion of the Work, whether temporary or permanent and whether
or not incorporated or to be incorporated in the Work.
3.2.5
Design Builder shall supervise, inspect and direct the Construction
competently and efficiently, devoting such attention thereto and
applying such skills and expertise as may be necessary to provide
the Construction in accordance with the Contract Documents. Design
Builder shall be solely responsible for the means, methods,
techniques, sequences and procedures employed for the provision of
Construction. Design Builder shall be responsible to see that the
complete Construction compiles accurately with the Contract
Documents and shall keep Owner advised as to the quality and
progress of the Construction.
3.2.6
The Design Builder shall keep the Owner informed of the progress
and quality of the Work.
3.2.7
The Design Builder shall be responsible for correcting Work which
does not conform to the Contract Documents.
3.2.8
The Design Builder warrants to the Owner that materials and
equipment furnished under the Contract will be of good quality and
new unless otherwise required or permitted by the Contract
Documents, that the construction will be free from faults and
defects, and that the construction will conform with the
requirements of the Contract Documents. Construction not conforming
to these
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requirements, including
substitutions not properly approved by the Owner, shall be
corrected in accordance with Article 9.
3.2.9
The Design Builder shall pay all state sales, consumer, use and
similar taxes which had been legally enacted prior to the date of
this Agreement, and shall secure and pay for building and other
permits and governmental fees, licenses and inspections necessary
for the proper execution and completion of the Work which are
either customarily secured after execution of a contract for
construction or are legally required prior to the date of this
Agreement.
3.2.10
Laws and Regulations
1.
Design Builder shall give all notices and comply with all Laws and
Regulations of the place of the Project which are applicable to
furnishing and performance of the Work, Except where otherwise
expressly required by applicable Laws and Regulations, Owner shall
not be responsible for monitoring Design Builder’s compliance
with any Laws or Regulations.
2.
If Design Builder performs any Work knowing or having reason to
know that it is contrary to Laws or Regulations, Design Builder
shall bear all costs arising therefrom.
3.
Changes in Laws and Regulations not known or foreseeable on the
date of receipt of Proposals having an effect on the cost or time
of performance may be the subject of a claim under Article
8.
3.2.11
Design Builder shall pay all license fees and royalties and assume
all costs incident to the use in the performance of the Work or the
incorporation In the Work of any invention, design, process,
product or device which is subject of patent rights or copyrights
held by others. If a particular invention, design, process, product
or device is specified in the Conceptual Documents for use in the
performance of the Construction and if to the actual knowledge of
Owner its use is subject to patent rights or copyrights calling for
the payment of any license fee or royalty to others, the existence
of such rights shall be disclosed by Owner in the Conceptual
Documents. To the fullest extent permitted by Laws and
Regulations, Design Builder shall indemnify and hold harmless
Owner, from and against-all claims; costs, losses and damages
(including but not limited to all fees and charges of engineers,
architects, attorneys and other professionals and all court or
arbitration or other dispute resolution costs) arising out of or
resulting from any infringement of patent rights or copyrights
incident to the use In the performance of the Work or resulting
from the incorporation in the Work of any invention, design,
process, product or device not specified in the Conceptual
Documents.
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3.2.12
Use of Site and Other Areas
1.
Design Builder shall confine construction equipment, the storage of
materials and equipment and the operations of construction workers
to those lands and areas permitted by the Owner and other land and
areas permitted by Laws and Regulations, rights-of-way, permits and
easements, and shall not unreasonably encumber the premises with
construction equipment or other materials or equipment, Design
Builder shall assume full responsibility for any damage to any such
land or area, or to the owner or occupant thereof or of any
adjacent land or areas, resulting from the performance of the
Construction. Should any claim be made by any such owner or
occupant because of the performance of the Construction, Design
Builder shall promptly settle with such other party by negotiation
or otherwise resolve the claim by arbitration or other dispute
resolution proceeding or at law. Design Builder shall, to the
fullest extent permitted by Laws and Regulations, indemnify and
hold harmless Owner, Owner’s Consultants and anyone directly
or indirectly employed by any of them from and against all claims,
costs, losses and damages (including, but not limited to, fees of
engineers, architects, attorneys and other professionals and court
and arbitration or other dispute resolution costs) arising out of
or resulting from any claim or action, legal or equitable, brought
by any such owner or occupant against Owner, or any other party
indemnified hereunder to the extent caused by or based upon Design
Builder’s performance of the Construction.
2.
During the performance of the Construction, Design Builder shall
keep the premises free from accumulations of waste materials,
rubbish and other debris resulting from the Construction. At the
completion of the Construction Design Builder shall remove all
waste materials, rubbish and debris from and about the premises as
well as all tools, appliances, construction equipment, temporary
construction and machinery and surplus materials, Design Builder
shall leave the Site clean and ready for occupancy by Owner at
Substantial Completion. Design Builder shall restore to original
condition all property not designated for alteration by the
Contract Documents.
3.
Design Builder shah not load nor permit any part of any structure
to be loaded in any manner that will endanger the structure, nor
shall Design Builder subject any part of the Work or adjacent
property to stresses or pressures that will endanger it.
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3.2.13 The Design Builder shall
notify the Owner when the Design Builder believes that the Work or
an agreed upon portion thereof is substantially completed. if the
Owner concurs, the Design Builder shall issue a Certificate of
Substantial Completion which shall establish the Date of
Substantial Completion, shall state the responsibility of each
party for security, maintenance, heat, utilities, damage to the
Work and insurance, shall include a list of items to be completed
or corrected and shall fix the time within which the Design Builder
shall complete items listed therein. Disputes between the Owner and
Design Builder regarding the Certificate of Substantial Completion
shall be resolved in accordance with provisions of
Article 10.
3.2.14 The Design Builder shall
maintain at the site for the Owner one record copy of the drawings,
specifications, product data, samples, shop drawings, Change Orders
and other modifications, in good order and regularly updated to
record the completed construction. These shall be delivered to the
Owner upon completion of construction and-prior to-final
payment.
3.2.15 Unless otherwise provided in
the Contract Documents, Design Builder shall directly or through
one or more Subcontractors obtain and pay for all permits and
licenses necessary for construction. Owner shall assist Design
Builder, when necessary, in obtaining such permits and licenses.
Design Builder shall pay all governmental charges and inspection
fees necessary for the prosecution of the Construction, which are
applicable on the date of this Agreement The Owner is responsible
for paying any and all utility company connection charges and/or
capital costs related thereto.
3.2.16 Design Builder’s
General Warranty and Guarantee
1.
Design Builder warrants and guarantees to Owner that all
Construction will be in accordance with the Contract Documents and
will not be defective. This warranty shall be effective for a
period of twelve months from the date of substantial completion and
will cover all labor and materials to correct any deficiencies.
Design Builder’s warranty and guarantee hereunder excludes
defects or damage caused by:
a.
Abuse, modification or improper
maintenance or operation by persons other than Design/Builder,
Subcontractors or Suppliers; or
b.
Normal wear and tear under normal
usage.
2.
Design Builder’s obligation to perform and complete the Work
In
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accordance with the Contract
Documents shall be absolute. None of the following will constitute
an acceptance of Work that is not in accordance with the Contract
Documents or a release of Design Builder’s obligation to
perform the Work in accordance with the Contract
Documents:
a.
Observations by Owner:
b.
The making of any progress or final payment;
c.
The issuance of a certificate of Substantial Completion;
d.
Use or occupancy of the Work or any part thereof by
Owner;
e.
Any acceptance by Owner or any failure to do so;
f.
Any review and approval of a Submittal;
g.
Any inspection, test or approval by others; or
h.
Any correction of defective Construction by Owner
3.2.17 Operational Phase: During the
Operations Phase, Design Builder shall:
1.
Provide assistance in connection
with the start-up, testing, refining and adjusting of any equipment
or system.
2.
Assist Owner in training staff to
operate and maintain the Project.
3.
Assist Owner in developing systems
and procedures for control of the operation and maintenance of and
record keeping for the Project.
3.3
ADDITIONAL SERVICES
3.3.1
The-services described in this Paragraph 3.3 are not included in
Basic Services unless so identified in Article 14, and they shall
be paid for by the Owner as provided in this Agreement in addition
to the compensation for Basic Services. The services described in
this Paragraph 3.3 shall be provided only if authorized or
confirmed in writing by the Owner.
3.3.2
Making revisions In drawings, specifications, and other documents
or
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electronic data when such revisions
are required by the enactment or revision of codes, laws on
regulations subsequent to the preparation of such documents or
electronic data.
3.3.3
Providing consultation concerning replacement of Work damaged by
fire or other cause during construction, and furnishing services
required in connection with the replacement of such
Work.
3.3.4
Providing services in connection with a public hearing, arbitration
proceeding or legal proceeding, except where the Design Builder is
a party thereto.
3.3.5
Providing coordination of construction performed by the
Owner’s own forces or separate contractors employed by the
Owner, and coordination of services required in connection with
construction performed and equipment supplied by Owner.
3.3.6
Submitting Construction Documents for review and approval by the
Owner. Construction Documents may include drawings, specifications,
and other documents and electronic data setting forth in detail the
requirements for construction of the Work.
3.3.7
Preparing a set of reproducible record documents or electronic data
showing significant changes in the Work made during
construction.
3.3.8
Providing additional assistance for training personnel, preparing
manuals or consulting during operation outside of the Scope of
Basic Services.
ARTICLE 4 -TIME
4.1
Unless otherwise indicated, the
Owner and the Design Builder shall perform their respective
obligations as expeditiously as is consistent with reasonable skill
and care and the orderly progress of the Project.
4.2
Time limits stated in the Contract
Documents are of the essence, The Work to be performed under this
Agreement shall commence on March 28, 2007 unless otherwise agreed
and, subject to authorized Modifications, Substantial Completion
shall be achieved on or before the date established in Article
14.
4.3
Substantial Completion is the stage
in the progress of the Work when the Work or designated portion
thereof is sufficiently complete in accordance with the Contract
Documents so the Owner can occupy or utilize the Work for its
intended use.
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4.4
Based on the Design Builder’s
Scope of Services, a construction schedule shall be provided
consistent with Paragraph 4.2 above.
4.5
If the Design Builder is delayed at
any time in the progress of the Work by an act or neglect of the
Owner, Owner’s employees, or separate contractors employed by
the Owner, or by changes ordered in the Work, or by labor disputes,
fire, unusual delay in deliveries, adverse weather conditions not
reasonably anticipatable, unavoidable casualties or other causes
beyond the Design Builder’s control, or by delay authorized
by the Owner pending arbitration, or by other causes which the
Owner and Design Builder agree may justify delay, then Contract
Time shall be reasonably extended by Change Order.
ARTICLE 5 -
PAYMENTS
5.1
PROGRESS PAYMENTS
5.1.1
The Design Builder shall deliver to the Owner itemized Applications
for Payment in such detail as indicated in Article 14.
5.1 .1.1
Application shall be made on AIA forms 0702 and 0703 or similar
documents. Two percent retainage shall be held by the owner on up
to fifty percent value of the original contract value after which
no additional retainage will be held.
5.1.2
Within ten (10) days of the Owner1s receipt of a properly submitted
and correct Application for Payment, the Owner shall make payment
to the Design Builder.
5.1.3
The Application for Payment shall constitute a representation by
the Design Builder to the Owner that the design and construction
have progressed to the point indicated; the quality of Work covered
by the application is in accordance with the Contract Documents;
and the Design Builder is entitled to payment in the amount
requested.
5.1.4
Upon receipt of payment from the Owner, the Design Builder shall
promptly pay the other design professionals and each contractor the
amount to which each is entitled in accordance with the terms of
their respective contracts.
5.1.5
The Owner shall have no obligation under this Agreement to pay or
to be responsible in any way for payment to another design
professional, or a contractor performing portions of the
Work.
5.1.6
Neither progress payment nor partial or entire use or occupancy of
the
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Project by the Owner shall
constitute acceptance of Work not in accordance with the Contract
Documents.
5.1.7
The Design Builder warrants that title to all construction covered
by an Application for Payment will pass to the Owner no later than
the time of payment. The Design Builder further warrants that upon
submittal of an Application for Payment all construction for which
payments have been received from the Owner shall be free and clear
of liens, claims, security interests or encumbrances in favor of
the Design Builder or any other person or entity performing
construction at the site or furnishing materials or equipment
relating to the construction.
5.1.8
Upon substantial completion, the Owner shall pay the Design Builder
the retainage, if any less the reasonable cost to correct or
complete incorrect or incomplete Work. Final payment of such
withheld sum shall be made upon correction or completion of such
Work.
5.2.
FINAL PAYMENT
5.2.1
When the Work has been completed and the contract fully performed,
the Design Builder shall submit a final application for payment to
the Owner, who shall make final payment within ten (10) days of
receipt.
5.2.2
The making of final payment shall constitute a waiver of claims by
the Owner except those arising from:
5.2.2.1
liens, claims, security interests or encumbrances arising out of
the Contract and unsettled;
5.2.2.2
failure of the Work to comply with the requirements of the Contract
Documents; or
5.2.2.3
terms of special warranties required by the Contract
Documents
5.2.3
Acceptance of final payment shall constitute a waiver of all claims
by the Design Builder except those previously made in writing and
identified by the Design Builder as unsettled at the time of final
Application for Payment.
5.3
INTEREST PAYMENTS
5.3.1
Payments due to the Design Builder under this Agreement which are
not paid when due shall bear interest from the date due at the rate
specified in Article 13, or in the absence of a specified rate, at
the legal rate prevailing where the Project is located.
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ARTICLE 6 - PROTECTION OF PERSONS
AND PROPERTY
6.1
The Design Builder shall be
responsible for initiating, maintaining and providing supervision
of safety precautions and programs in connection with the
performance of this Agreement.
6.2
The Design Builder shall take
reasonable precautions for the safety of, and shall provide
reasonable protection to prevent damage, injury or loss to: (1)
employees on the Work and other persons who may be affected
thereby; (2) the Work and materials and equipment to be
incorporated therein, whether in storage on or off the site, under
care, custody, or control of the Design Builder or the Design
Builder’s contractors; and (3) other property at or adjacent
thereto, such as trees, shrubs, lawns, walks, pavements, roadways,
structures and utilities not designated for removal relocation, or
replacement in the course of construction.
6.3
The Design Builder shall give
notices and comply with applicable laws, ordinances, rules,
regulations and lawful orders of public authorities bearing on the
safety of persons or property or their protection from damage,
injury or loss.
6.4
The Design Builder shall promptly
remedy damage and loss (other than damage or loss insured under
property insurance provided or required by the Contract Documents)
to property at the site Agreement Between Owner and Design caused
in whole or in part by the Design Builder, a contractor of the
Design Builder or anyone directly or indirectly employed by any of
them, or by anyone for whose acts they may be liable.
ARTICLE 7 - INSURANCE AND
BONDS
7.1
PERFORMANCE, PAYMENT AND OTHER
BONDS
7.1.1
If it is required by the Primary Lender, Design Builder shall
furnish performance and payment Bonds, each in an amount at least
equal to the Contract Price as security for the faithful
performance and payment of all Design Builder’s obligations
to furnish, provide and pay for Construction and related materials
under the Contract Documents. These Bonds shall remain in effect at
least until one year after the date when final payment becomes due,
except as provided otherwise by Laws or Regulations or by the
Contract Documents. Design Builder shall also furnish such other
Bonds as are required by Article 14. All Bonds shall be In the form
prescribed by the Contract Documents except as provided otherwise
by Laws or Regulations, and shall be executed by such sureties as
are named in the current list of “Companies Holding
Certificates of Authority as Acceptable Surety Companies” as
published in Circular 570 (amended) by the Audit Staff, Bureau
of
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Government Financial Operations,
U.S. Treasury Department All Bonds signed by an agent must be
accompanied by a certified copy of such agent’s authority to
act. The cost of the performance and payment bonds shall be paid by
the Owner.
7.1.2
If the surety on any Bond furnished by Design Builder is declared
bankrupt or becomes insolvent or its right to do business is
terminated in any state where any part of the Project is located or
It ceases to meet the requirements of paragraph 7.1.1, Design
Builder shall within thirty days thereafter substitute another Bond
and surety meeting the requirements of paragraphs 7.1.1 and
7.9.
7.2
DESIGN/BUILDER’S LIABILITY
INSURANCE
7.2.1
The Design Builder shall purchase from and maintain, in a company
or companies lawfully authorized to do business in the jurisdiction
In which the Project is located, such insurance as will protect the
Owner and Design Builder from claims set forth below which may
arise out of or result from operations under this Agreement by the
Design Builder.
7.2.1.1 Claims under
workers’ compensation, disability benefits and other similar
employee benefit acts;
7.2.1.2 Claims for damages
because of bodily injury, occupational sickness or disease, or
death of Design Builder’s employees;
7.2.1.3 Claims for damages
because of bodily injury, sickness or disease, or death of any
person other than Design Builder’s employees;
7.2.1.4 Claims for damages
insured by customary personal injury liability coverage which are
sustained (I) by any person as a result of an offense directly or
indirectly related to the employment of such person by Design
Builder, or (ii) by any other person for any other
reason;
7.2.1.5 Claims for damages, other
than to the Work itself, because of injury to or destruction of
tangible pro
