EXHIBIT 10.49
- --------------------------------------------------------------------------------
AIA Document A191 - Electronic Format
Standard Form of Agreements Between
Owner and Design/Builder
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS USE, COMPLETION OR MODIFICATION. AUTHENTICATION
OF THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT
D40l
1996 EDITION
- --------------------------------------------------------------------------------
TABLE OF ARTICLES
PART 1 AGREEMENT
1. Design/Builder
2. Owner
3. Ownership and Use of Documents and Electronic Data
4. Time
5. Payments
6. Dispute Resolution -- Mediation and Arbitration
7. Miscellaneous Provisions
8. Termination of the Agreement
9. Basis of Compensation
10. Other Conditions and Services
PART 2 AGREEMENT
1. General Provisions
2. Owner
3. Design/Builder
4. Time
5. Payments
6. Protection of Persons and Property
7. Insurance and Bonds
8. Changes in the Work
9. Correction of Work
10. Dispute Resolution -- Mediation and Arbitration
11. Miscellaneous Provisions
12. Termination of the Agreement
13. Basis of Compensation
14. Other Conditions and Services
1
- --------------------------------------------------------------------------------
AIA Document A191 -- Electronic Format
Standard Form of Agreements Between
Owner and Design/Builder
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS USE, COMPLETION OR MODIFICATION. AUTHENTICATION
OF THE ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT
D401.
This document comprises two separate Agreements: Part 1 Agreement and Part 2
Agreement. Before executing Part 1 Agreement, the parties should reach
substantial agreement on the Part 2 Agreement. To the extent referenced in these
Agreements, subordinate parallel agreements to A191 consist of AIA Document
A491, Standard Form of Agreements Between Design/Builder and Contractor, and AIA
Document B901, Standard Form of Agreements Between Design/Builder and Architect.
Copyright 1985, (C)1996 The American Institute of Architects, 1735 New York
Avenue, NW, Washington, DC 2006-5292. Reproduction of the material herein or
substantial quotation of its provisions without the written permission of the
AIA violates the copyright laws of the United States and will subject the
violator to legal prosecution.
PART 1 AGREEMENT
1996 EDITION
- --------------------------------------------------------------------------------
AGREEMENT
made as of the 24th day of August in the year of 2001
(In words, indicated day, month and year)
BETWEEN the Owner:
(Name and address)
Neose Technologies, Inc., 102 Witmer Road, Horsham, PA 19044
and the Design/Builder
(Name and address)
IPS, 2001 Joshua Road, Lafayette Hill, PA 19444
For the following Project:
Include Project name, location and a summary description.)
GAF Plant Renovation, Horsham, PA.
The architectural services described in Article 1 will be provided by the
following person or entity who is lawfully licensed to practice architecture:
(Name and address) (Registration Number) (Relationship to Design/Builder)
IPS, 2001 Joshua Road, Lafayette Hill, PA 19444 Self Performed
- -----------------------------------------------------------------------------------------------------------------
Normal structural, mechanical and electrical engineering services will be
provided contractually through the Architect except as indicated below:
(Name, address and discipline) (Registration Number) (Relationship to Design/Builder)
IPS, 2001 Joshua Road, Lafayette Hill, PA 19444 Self Performed
- -----------------------------------------------------------------------------------------------------------------
The Owner and the Design/Builder agree as set forth below.
2
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS --- PART 1 AGREEMENT
- --------------------------------------------------------------------------------
ARTICLE 1
DESIGN/BUILDER
1.1 SERVICES
1.1.1 Preliminary design, budget, and schedule comprise the services
required to accomplish the preparation and submission of the
Design/Builder's Proposal as well as the preparation and submission
of any modifications to the Proposal prior to execution of the
Part 2 Agreement.
1.2 RESPONSIBILITIES
1.2.1 Design services required by this Part 1 Agreement shall be performed
by qualified architects and other design professionals. The
contractual obligations of such professional persons or entities are
undertaken and performed in the interest of the Design/Builder and
the Owner.
1.2.2 The agreements between the Design/Builder and the persons or
entities identified in this Part 1 Agreement, and any subsequent
modifications, shall be in writing. These agreements, including
financial agreements with respect to this Project, shall be promptly
and fully disclosed to the Owner upon request.
1.2.3 Construction budgets shall be prepared by qualified professionals,
cost estimators or contractors retained by and acting in the
interest of the Design/Builder.
1.2.4 The Design/Builder shall be responsible to the Owner for acts and
omissions of the Design/Builder's employees, subcontractors and
their agent and employees, and other persons, including the
Architect and other design professionals, performing any portion of
the Design/Builder's obligations under this Part 1 Agreement.
1.2.5 If the Design/Builder believes or is advised by the Architect or by
another design professional retained 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 the Architect shall be obligated to perform any
act which either believes will violate any applicable law.
1.2.6 Nothing contained in this Part 1 Agreement shall create a
contractual relationship between the Owner and any person or entity
other than the Design/Builder, however, it is understood and agreed
that Owner is an intended third party beneficiary of all contracts
for design or engineering services, all subcontracts, purchase
orders and other agreements between the Design/Builder and third
parties.
1.3 BASIC SERVICES
1.3.1 The Design/Builder shall provide a preliminary evaluation of the
Owner's program and project budget requirements, each in terms of
the other.
1.3.2 The Design/Builder shall visit the site, become familiar with the
local conditions, and correlate observable conditions with the
requirements of the Owner's program, schedule, and budget.
1.3.3 The Design/Builder shall review laws applicable to design and
construction of the Project, correlate such laws with the Owner's
program requirements, and advise the Owner if any program
requirements may cause a violation of such laws. Necessary changes
to the Owner's program shall be accomplished by appropriate written
modification or disclosed as described in paragraph 1.3.5.
1.3.4 The Design/Builder shall review with the Owner alternative
approaches to design and construction of the Project.
1.3.5 The Design/Builder shall submit to the Owner a Proposal including
the completed Preliminary Design Documents, a statement of the
proposed contract sum, and a proposed schedule for completion of the
Project. Preliminary Design Documents shall consist of preliminary
design drawings, outline specifications or other documents
sufficient to establish the size, quality and character of the
entire Project, its architectural, structural, mechanical and
electrical systems, and the materials and such other elements of the
Project as may be appropriate. Deviations from the Owner's program
shall be disclosed in the Proposal. If the Proposal is accepted by
the Owner, the parties shall then execute the Part 2 Agreement. A
modification to the Proposal before execution of the Part 2
Agreement shall be recorded in writing as an addendum and shall be
identified in the Contract Documents of the Part 2 Agreement.
1.4 ADDITIONAL SERVICES
1.4.1 The Additional Services described under this Paragraph 1.4 shall be
provided by the Design/Builder and paid for by the Owner only if
authorized in writing by the Owner before any such additional
services are provided.
1.4.2 Making revisions in the Preliminary Design Documents, budget or
other documents when such revisions are:
1. inconsistent with approvals or instructions previously given
by the Owner, including revisions made necessary by
adjustments in the Owner's program or Project budget;
2. required by the enactment or revision of codes, laws or
regulations subsequent to the preparation of such documents;
or
3
3. due to changes required as a result of the Owner's failure to
render decisions in a timely manner.
1.4.3 Providing more extensive programmatic criteria than that furnished
by the Owner as described in Paragraph 2.1. When authorized, the
Design/Builder shall provide professional services to assist the
Owner in the preparation of the program. Programming services may
consist of:
1. consulting with the Owner and other persons or entities not
designated in this Part 1 Agreement to define the program
requirements of the Project and to review the understanding of
such requirements with the Owner; 2. documentation of the
applicable requirements necessary for the various Project
functions or operations;
2. documentation of the applicable requirements necessary for the
various Project functions or operations;
3. providing a review and analysis of the functional and
organizational relationships, requirements, and objectives for
the Project.
4. setting forth a written program of requirements for the
Owner's approval which summarizes the Owner's objectives,
schedule, constraints, and criteria.
1.4.4 Providing financial feasibility or other special studies.
1.4.5 Providing planning surveys, site evaluations or comparative studies
of prospective sites.
1.4.6 Providing special surveys, environmental studies, and submissions
required for approvals of governmental authorities or others having
jurisdiction over the Project.
1.4.7 Providing services relative to future facilities, systems and
equipment.
1.4.8 Providing services at the Owner's specific request to perform
detailed investigations of existing conditions or facilities or to
make measured drawings thereof.
1.4.9 Providing services at the Owner's specific request to verify the
accuracy of drawings or other information furnished by the Owner.
1.4.10 Coordinating services in connection with the work of separate
persons or entities retained by the Owner, subsequent to the
execution of this Part 1 Agreement.
1.4.11 Providing analyses of owning and operating costs.
1.4.12 Providing interior design and other similar services required for or
in connection with the selection, procurement or installation of
furniture, furnishings and related equipment.
1.4.13 Providing services for planning tenant or rental spaces.
1.4.14 Making investigations, inventories of materials or equipment, or
valuations and detailed appraisals of existing facilities.
ARTICLE 2
OWNER
2.1 RESPONSIBILITIES
2.1.1 The Owner shall provide full information in a timely manner
regarding requirements for the Project, including a written program
which shall set forth the Owner's objectives, schedule, constraints
and criteria.
2.1.2 The Owner shall establish and update an overall budget for the
Project, including reasonable contingencies. This budget shall not
constitute the contract sum.
2.1.3 The Owner shall designate a representative authorized to act on the
Owner's behalf with respect to the Project. The Owner may obtain
independent review of the 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 Design/Builder's services.
2.1.4 The Owner shall furnish surveys describing physical characteristics,
legal limitations and utility locations for the site of the Project,
and a written legal description of the site. The surveys and legal
information shall include, as applicable, grades and lines of
streets, alleys pavements, and adjoining property and structures;
adjacent drainage; right-of-way, restrictions, easements,
encroachments, zoning, deed restrictions, boundaries and contours of
the site; locations, dimensions and other available data pertaining
to existing buildings, other improvements and trees; and information
concerning available utility services and lines, both public and
private, above and below grade, including inverts and depths. All
the information on the survey shall be referenced to a Project
benchmark.
2.1.5 The Owner shall furnish the services of geotechnical engineers when
such services are stipulated in this Part 1 Agreement.
2.1.6 The Owner shall disclose, to the extent known to the Owner, the
results and 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
4
conditions. The Owner shall disclose all information known to the
Owner regarding the presence of pollutants at the Project's site.
The Owner's disclosure of information require by this subparagraph,
or failure to do so, shall not limit or modify the Design/Builder's
obligations under this Agreement.
2.1.7 The Owner shall furnish all legal, accounting and insurance
counseling services as my be necessary at any time for the Project,
including such auditing services as the Owner my require to verify
the Design/Builder's Applications for Payment.
2.1.8 The Owner shall promptly obtain easements, zoning variances and
legal authorizations except building permits necessary for sitework
and construction regarding site utilization where essential to the
execution of the Owner's program.
2.1.9 Those services, information, surveys, and reports required by
Paragraphs 2.1.4 through 2.1.8 which are within the Owner's control
shall be furnished at the Owner's expense, and 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.
2.1.10 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
Part 1 Agreement.
2.1.11 The Owner shall communicate with persons or entities employed or
retained by the Design/Builder through the Design/Builder, unless
otherwise directed by the Design/Builder.
ARTICLE 3
OWNERSHIP AND USE OF DOCUMENTS' AND ELECTRONIC DATA
3.1 Drawings, specifications, and other documents and electronic data
furnished by the Design/Builder are instruments of service. The
Design/Builder's Architect and other providers of professional
services shall retain all common law, statutory and other 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
Part 1 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 Paragraph 3.2 and 3.3.
3.2 If the Part 2 Agreement is not executed, the Owner shall not use the
drawings, specifications, and other documents and electronic data
furnished by the Design/Builder without the written permission of
the Design/Builder. Drawings, specifications, and other documents
and electronic data 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, unless the
Design/Builder is adjudged to be in default under this Part 1
Agreement or under any other subsequently executed agreement, or by
agreement in writing.
3.3 If the Design/Builder defaults in the Design/Builder's obligations
to the Owner, the Architect shall grant a license to the Owner to
use the drawings, specifications, and other documents and electronic
data furnished by the Architect to the Design/Builder for the
completion of the Project, conditioned upon the Owner's execution of
an agreement to cure the Design/Builder's default in payment to the
Architect for services previously performed and to indemnify the
Architect with regard to claims arising from such reuse without the
Architect's professional involvement.
3.4 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 Paragraph 3.1.
ARTICLE 4
TIME
4.1 Upon the request of the Owner, the Design/Builder shall prepare a
schedule for the performance of the Basic and Additional Services
which shall not exceed the time limits contained in Paragraph 10.1
and shall include allowances for periods of time required for the
Owner's review and for approval of submissions by authorities having
jurisdiction over the Project.
4.2 If the Design/Builder is delayed in the performance of services
under this Part 1 Agreement through no fault of the Design/Builder,
any applicable schedule shall be equitably adjusted.
ARTICLE 5
PAYMENTS
5.1 The initial payment provided in Article 9 shall be made upon
execution of this Part 1 Agreement and credited to the Owner's
account as provided in Subparagraph 9.1.2.
5.2 Subsequent payments for Basic Services, Additional Services, and
Reimbursable Expenses provided for in this Part 1 Agreement shall be
made monthly on the basis set forth in Article 9.
5.3 Within thirty (30) days of the Owner's receipt of a properly
submitted and correct Application for Payment, the Owner shall make
payment to the Design/Builder.
5.4 Payments due the Design/Builder under this Part 1 Agreement which
are not paid when due shall bear interest from the date due at the
rate specified in Paragraph 9.5, or in the absence of a specified
rate, at the legal rate prevailing where the Project is located.
5
ARTICLE 6
DISPUTE RESOLUTION -- MEDIATION AND ARBITRATION
6.1 Claims, disputes or other matters in question between the parties to
this Part 1 Agreement arising out of or relating to this Part 1
Agreement or breach thereof shall be subject to and decided by
mediation or arbitration. Such mediation or arbitration shall be
conducted in accordance with the Construction Industry Mediation or
Arbitration Rules of the American Arbitration Associations currently
in effect.
6.2 In addition to and prior to arbitration, the parties shall endeavor
to settle disputes by mediation. Demand for mediation shall be filed
in writing with the other party to this Part 1 Agreement and with
the American Arbitration Association. A demand for mediation shall
be made within a reasonable time after the claim, dispute or other
matter in question has arisen. In no event shall the demand for
mediation be made after the date when institution of legal or
equitable proceedings based on such claim, dispute or other matter
in question would be barred by the applicable statute of repose or
limitations.
6.3 Demand for arbitration shall be filed in writing with the other
party to this Part 1 Agreement and with the American Arbitration
Association. A demand for arbitration shall be made within a
reasonable time after the claim, dispute or other matter in question
has arisen. In no event shall the demand for arbitration be made
after the date when institution of legal or equitable proceedings
based on such claim, dispute or other matter in question would be
barred by the applicable statutes of repose or limitations.
6.4 An arbitration pursuant to this Paragraph may be joined with an
arbitration involving common issues of law or fact between the
Design/Builder or Owner and any person or entity with whom the
Design/Builder or Owner has a contractual obligation to arbitrate
disputes. Design/Builder and Owner agree that all parties necessary
to resolve a claim shall be parties to the same arbitration
proceeding.
6.5 The award rendered by the arbitrator or arbitrators shall be final,
and judgement may be entered upon it in accordance with applicable
law in any court having jurisdiction thereof.
6.6 Unless otherwise agreed in writing, the Design/Builder shall
continue to provide services and shall maintain progress during any
mediation or arbitration proceedings, and the Owner shall continue
to make payments to the Design/Builder in accordance with Articles 5
and 9, but the Owner shall be under no obligation to make payments
on or against any claims or amounts in dispute during the pendency
of any mediation or arbitration proceeding to resolve those claims
or amounts in dispute.
6.7 As Article 6 shall survive completion or termination of Part 1.
ARTICLE 7
MISCELLANEOUS PROVISIONS
7.1 Unless otherwise provided, this Part 1 Agreement shall be governed
by the law of the place where the Project is located.
7.2 The Owner and the Design/Builder, respectively, bind themselves,
their partners, successors, assigns and legal representatives to the
other party to this Part 1 Agreement and to the partners, successors
and assigns of such other party with respect to all covenants of
this Part 1 Agreement. Neither the Owner nor the Design/Builder
shall assign this Part 1 Agreement without the written consent of
the other.
7.3 Unless otherwise provided, neither the design for nor the cost of
remediation of hazardous materials shall be the responsibility of
the Design/Builder.
7.4 This Part 1 Agreement represents the entire and integrated agreement
between the Owner and the Design/Builder and supersedes all prior
negotiations, representations or agreements, either written or oral.
This Part 1 Agreement may be amended only by written instrument
signed by both the Owner and the Design/Builder.
7.5 Prior to the termination of the services of the Architect or any
other design professional designated in this Part 1 Agreement, the
Design/Builder shall identify to the Owner in writing another
architect or design professional with respect to whom the Owner has
no reasonable objection, who will provide the services originally to
have been provided by the Architect or other design professional
whose services are being terminated.
ARTICLE 8
TERMINATION OF THE AGREEMENT
8.1 This Part 1 Agreement may be terminated by either party upon seven
(7) days' written notice should the other party fail to perform
substantially in accordance with its terms through no fault of the
party initiating the termination.
8.2 This Part 1 Agreement may be terminated by the Owner without cause
upon at least seven (7) days' written notice to the Design/Builder.
8.3 In the event of termination not the fault of the
6
Design/Builder, the Design/Builder shall be compensated for services
performed to the termination date, together with Reimbursable
Expenses then due and Termination Expenses.
Termination Expenses are expenses directly attributable to
termination, including a reasonable amount for overhead and profit,
for which the Design/Builder is not otherwise compensated under this
Part 1 Agreement.
7
ARTICLE 9
BASIS OF COMPENSATION
The Owner shall compensate the Design/Builder in accordance with Article 5,
Payments, and the other provisions of this Part 1 Agreement as described below.
9.1 COMPENSATION FOR BASIC SERVICES
9.1.1 FOR BASIC SERVICES, compensation shall be as follows:
Engineering Services, as proposed 02/26/01 $650,000.00
Total $650,000.00
9.1.2 AN INITIAL PAYMENT of Dollars ($) shall be made upon execution of
this Part 1 Agreement and credited to the Owner's account as
follows:
9.1.3 SUBSEQUENT PAYMENTS shall be as follows:
Progress payments based on work performed.
9.2 COMPENSATION FOR ADDITIONAL SERVICES
9.2.1 FOR ADDITIONAL SERVICES, compensation shall be in agreement with the
SAN Procedure.
9.3 REIMBURSABLE EXPENSES
9.3.1 Reimbursable Expenses are in addition to Compensation for Basic and
Additional Services, and include actual verifiable expenditures made
by the Design/Builder and the Design/Builder's employees and
contractors in the interest of the Project, and at the Owner's
request and are limited to the following: The present reimbursable
rate.
9.3.2 FOR REIMBURSABLE EXPENSES, compensation shall be a multiple of one
(1.0) times the amounts expended.
9.4 DIRECT PERSONNEL EXPENSE is defined as the direct salaries of
personnel engaged on the Project, and the portion of the cost of
their mandatory and customary contributions and benefits related
thereto, such as employment taxes and other statutory employee
benefits, insurance, sick leave, holidays, vacations, pensions and
similar contributions and benefits.
9.5 INTEREST PAYMENTS
9.5.1 The rate of interest for past due payments shall be as follows:
Prime plus 1%
(Usury laws and requirements under the Federal Truth in Lending Act,
similar state and local consumer credit laws and other regulations
at the Owner's and Design/Builder's principal places of business, at
the location of the Project and elsewhere may affect the validity of
this provision. Specific legal advice should be obtained with
respect to deletion, modification or other requirements, such as
written disclosures or waivers.
9.6 IF THE SCOPE of the Project is changed materially, the amounts of
compensation shall be equitably adjusted. All changes shall be
submitted in the form of an SAN and approved by the client before
executing the work.
9.7 The compensation set forth in this Part 1 Agreement shall be
equitably adjusted if through no fault of the Design/Builder the
services have not been completed within (to be determined) months of
the date of this Part 1 Agreement.
8
ARTICLE 10
OTHER CONDITIONS AND SERVICES
10.1 The Basic Services to be performed shall be commenced on and,
subject to authorized adjustments and to delays not caused by the
Design/Builder, shall be completed in (to be determined) calendar
days. The Design/Builder's Basic Services consist of those described
in Paragraph 1.3 as part of Basic Services, and include normal
professional engineering and preliminary design services, unless
otherwise indicated.
10.2 Services beyond those described in Paragraph 1.4 are as follows:
(Insert descriptions of other services, identify Additional Services
included within Basic Compensation and modifications to the payment
and compensation terms included in this Agreement.)
In accordance with attached IPS BOD Basis of Design dated 8/22/01,
GMP Estimate dated July 24, 2001 Revision O Final. See Article 14.2.
10.3 The Owner's preliminary program, budget and other documents, if any,
are enumerated as follows:
Title Date 10-29-01
------------------------------- -----------------------------
This Agreement entered into as of the day and year first written
above.
/s/ P. SHERRILL NEFF /s/ ANTHONY J. MACCHIA
------------------------------- -----------------------------
OWNER (Signature) DESIGN/BUILDER (Signature)
P. SHERRILL NEFF ANTHONY J. MACCHIA
------------------------------- -----------------------------
PRESIDENT & CHIEF OPERATING OFFICER VICE PRESIDENT FINANCE
9
- --------------------------------------------------------------------------------
AIA Document A191 -- Electronic Format
Standard Form of Agreement Between
Owner and Design/Builder
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH AN ATTORNEY IS
ENCOURAGED WITH RESPECT TO ITS USE, COMPLETION OR MODIFICATION. AUTHENTICATION
OF THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT
D401.
This document comprises two separate Agreements: Part 1 Agreement and Part 2
Agreement. To the extent referenced in these Agreements, subordinate parallel
agreements to A191 consist of AIA document A491, Standard Form of Agreements
Between Design/Builder and Contractor, and AIA Document B901, Standard Form of
Agreements Between Design/Builder and Architect.
Copyright 1985, (C)1996 The American Institute of Architects, 1735 New York
Avenue, NW, Washington, DC 20006-5292, Reproduction of the material herein or
substantial quotation of its provisions without the written permission of the
AIA violates the copyright laws of the United States and will subject the
violator to legal prosecution.
PART 2 AGREEMENT
1996 EDITION
- --------------------------------------------------------------------------------
AGREEMENT
made as of the 24th day of August in the year of 2001
(In words, indicate day, month and year.)
BETWEEN the Owner:
(Name and address)
Neose Technologies, Inc., 102 Witmer Road, Horsham, PA. 19044
and the Design/Builder:
(Name and address)
IPS, 2001 Joshua Road, Lafayette Hill, PA. 19444
For the following Project:
Include Project name, location and a summary description.)
GAF Plant Renovation, Horsham, PA
The architectural services described in Article 3 will be provided by the
following person or entity who is lawfully licensed to practice architecture:
(Name and address) (Registration Number) (Relationship to Design/Builder)
IPS, 2001 Joshua Road, Lafayette Hill, PA. 19444 Self Performed
- -----------------------------------------------------------------------------------------------------------------
Normal structural, mechanical and electrical engineering services will be
provided contractually through the Architect except as indicated below:
(Name, address and discipline) (Registration Number) (Relationship to Design/Builder)
IPS, 2001 Joshua Road, Lafayette Hill, PA. 19444 Self Performed
- -----------------------------------------------------------------------------------------------------------------
The Owner and the Design/Builder agree as set forth below.
10
- --------------------------------------------------------------------------------
TERMS AND CONDITIONS -- PART 2 AGREEMENT
- --------------------------------------------------------------------------------
ARTICLE 1
GENERAL PROVISIONS
1.1 BASIC DEFINITIONS
1.1.1 The contract Documents consist of the Part 1 Agreement to the extent
not modified by this Part 2 Agreement, this Part 2 Agreement, the
Design/Builder's Proposal and written addenda to the Proposal
identified in Article 14, the Construction Documents approved by the
Owner in accordance with Subparagraph 3.2.3 and Modifications issued
after execution of this Part 2 Agreement. A modification is a Change
Order or a written amendment to this Part 2 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 EXECUTION, 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 complementary,
and what is required by one shall be as binding as if required by
shall; 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 and to complete the Project in a satisfactory manner, ready
for use, occupancy or operation by the Owner. 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 the Architect or by
another design professional retained 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 the Architect shall be obligated to perform any
act which either believes will violate any applicable law.
1.2.3 Nothing contained in this Part 2 Agreement shall create a
contractual relationship between the Owner and any person or entity
other than the Design/Builder, except it is understood and agreed
that the Owner's is an intended third-party beneficiary of all
contracts with design professionals, subcontract, purchase orders
and other agreements between the Design/Builder and third parties.
The Design/Builder shall incorporate the obligations of this
contract with the Owner in its respective contracts with design
professional, subcontracts, change agreements, purchase orders, and
other agreements.
1.2.4 The Contract Documents shall be interpreted on the basis of the
following priorities in the event of any discrepancy, conflict or
dispute.
1. Written amendments to the Owner-Design/Builder Agreement
signed by both parties -- those of a later date shall take
precedence over those of an earlier date;
2. Change Orders -- those of a later date shall take precedence
over those of an earlier date;
3. The Owner-Design/Builder Agreement;
4. Supplementary Conditions; and
5. Drawings and Specifications. Among drawings, large scale
details shall control over small scale details shall control
over Drawings not dimensioned.
1.2.5 Any matters contained in the Specifications which may have been
omitted from the Drawings or vice-versa, shall be construed as
though contained in both. In the event of any duplication, conflict,
inconsistency or discrepancy among or within the Drawings and the
Specifications (or among or within other portions of the Contract
Documents so far as the same pertain to the Drawings or the
Specifications) the matter shall promptly be brought to the
attention of the Owner for instructions.
1.3 OWNERSHIP AND USE OF DOCUMENTS
1.3.1 The Drawings, Specifications and other design documents prepared by
the Design/Builder for the Project are instruments of the
Design/Builder's service and unless otherwise provided, the
Design/Builder shall be deemed the author of such documents, as
applicable and shall retain all common law, statutory and other
reserved rights, including the copyrights. However, the
Design/Builder shall not use the drawings, specifications or other
Project design documents for any purpose not relating to the Project
without the Owner's prior written consent.
11
1.3.2 The owner shall have a fully-paid royalty-free right and license
(the "License") to retain copies, including reproducible copies and
copies of computer disks or other computer memory storage devices,
of the Drawings, Specifications and other Project design documents,
and to use all of the aforesaid for any purposes in connection with
the construction, reconstruction, renovation, repair, maintenance,
use and occupancy of the Project. Without limitation, the word
"Drawings" as used herein includes graphic images of the Drawings
contained in computer files, stored on computer disks, tapes or
other computer memory storage media, and the License includes the
right to receive in the form of such computer memory storage media
and to retain and use, copies of the Design/Builder's CAD Drawings
as maintained in the Design/Builder's computer files. The
Design/Builder hereby consents to the transfer of the License to any
assignee of the Owner. Upon completion of the design services in
connection with the Project, the Design/Builder's assignment of any
or all Subcontracts to the Owner, or earlier termination of this
Agreement for any reason, the License shall be irrevocable and
perpetual.
1.3.3. If the Design/Builder defaults in the Design/Builder's obligations
to the Owner, the Architect shall grant a license to the Owner to
use the drawings, specifications, and other documents and electronic
data furnished by the Architect to the Design/Builder for the
completion of the Project. The Design/Builder shall not be
responsible for changes made in the Drawings, Specifications or
other Project design documents prepared by the Design/Builder, by
anyone other than the Design/Builder or for use of such documents by
Owner for anything except this Project; and the Owner or its
assignee as the case may be, shall indemnify and hold harmless the
Design/Builder anyone acting on it's behalf from any claim,
liability, or cost arising out of any such changes to or other use
of the Drawings, Specifications or other Project design documents.
The Design/Builder agrees that the rights and responsibilities of
the Owner and the Design/Builder hereunder shall be set forth in all
Subcontracts.
1.3.4 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.
1.3.5. Except for the Drawings, Specifications and other Project design
documents prepared by the Design/Builder described above, all
reports and other materials furnished to the Owner pursuant to this
Agreement shall become property of the Owner and may be used by the
Owner or such parties as the Owner may designate thereafter, in such
manner and for such purposes as the Owner or such parties may deem
advisable without further employment of or additional compensation
to the Design/Builder, provided however, to the extent any such
materials are used for other purposes other than this Project. Owner
or its assignee as the case may be, shall indemnify and hold
harmless, the Design/Builder from any claim, liability, or cost
arising out of any such use. The Design/Builder shall not release or
disclose to any third party any report or other material produced
for the Owner without obtaining the Owner's prior written consent.
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 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 option and expense and if the Owner elects
to do so, then in a timely manner and shall not delay the orderly
progress of the Work.
2.2 The Owner may appoint an on-site project representative to observe
the Work and to have such other responsibilities as the Owner and
Design/Builder agree in writing.
2.3 The Design/Builder shall secure all building and other permits,
licenses and inspections and shall pay the fees for such permits,
licenses and inspections as part of its contract price.
2.4 INTENTIONALLY OMITTED.
2.5 The Owner shall disclose, to the extent known to the Owner, the
results and 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. The Owner's disclosure of
information required by this subparagraph, or failure to do so shall
not limit or modify the Design/Builder's obligations under this
Agreement.
2.6 The Owner shall furnish all legal, accounting and
12
insurance counseling services as may be necessary at any time
for the Project, including such auditing services as the Owner may
require to verify the Design/Builder's Applications for payment.
2.7 Those services, information, surveys and reports required by
Paragraphs 2.4 through 2.6 which are within the Owner's control
shall be furnished at the Owner's expense, and 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.
2.8 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
Part 2 Agreement.
2.9 INTENTIONALLY OMITTED.
2.10 The Owner shall, at the request of the Design/Builder, prior to
execution of this Part 2 Agreement and promptly upon request
thereafter, furnish to the Design/Builder reasonable evidence that
financial arrangements have been made to fulfill the Owner's
obligations under the Contract.
2.11 The Owner shall communicate with persons or entities employed or
retained by the Design/Builder through the Designer/Builder, unless
otherwise directed by the Design/Builder.
ARTICLE 3
DESIGN/BUILDER
3.1 SERVICES AND RESPONSIBILITIES
3.1.1 Design services required by this Part 2 Agreement shall be performed
by qualified architects and other design professionals. The
contractual obligations of such professional persons or entities are
undertaken and performed in the interest of the Design/Builder,
except it is understood and agreed that the Owner is an intended
third party beneficiary of all contracts with design professionals,
subcontracts, purchase orders, and other agreements between the
Design/Builder and third parties. The Design/Builder shall
incorporate the obligations of this contract with the Owner in its
receptive contracts with design professionals, subcontracts, supply
agreements, purchase orders, and other agreements.
3.1.2 The agreements between the Design/Builder and the persons or
entities identified in this Part 2 Agreement, and any subsequent
modifications, shall be in writing. These agreements, including
financial arrangements with respect to this project, shall be
promptly and fully disclosed to the Owner upon request.
3.1.3 The Design/Builder shall be responsible to the Owner for acts and
omissions of the Design/Builder's employees, subcontractors and
their agents and employees, and other persons, including the
Architect and other design professionals, performing and portion of
the Design/Builder's obligations under this Part 2 Agreement
including the Scope of Work as described in each Bid Package for the
project.
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 shall submit 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, and shall:
1. be consistent with the intent of the Design/Builder's
Proposal;
2. provide information for the use of those in the building
trades; and
3. include documents required for regulatory agency approvals.
3.2.4. 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.
3.2.5 The Design/Builder shall provide or cause to be provided and shall
pay for all 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.
3.2.6 The Design/Builder shall be responsible for all construction means,
methods, techniques, sequences and procedures, and for coordinating
all portions of the Work under this Part 2 Agreement.
3.2.7 The Design/Builder shall keep the Owner informed of the progress and
quality of the Work.
3.2.8 The Design/Builder shall be responsible for correcting Work which
does not conform to the Contract Documents.
3.2.9 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 form faults and
defects, and that the construction will conform with the
requirements of the Contract Documents and be in accordance with all
applicable laws, ordinances, rules, orders and regulations,
including without
13
limitation, the Americans With Disabilities Act. Construction not
conforming to these requirements, including substitutions not
properly approved by the Owner, shall be corrected in accordance
with Article 9.
3.2.10 The Design/Builder shall pay all sales, consumer, use and similar
taxes which had been legally enacted at the time the
Design/Builder's Proposal was first submitted to the Owner, 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 at the time the Design/Builder's Proposal was first
submitted to the Owner.
3.2.11 The Design/Builder shall comply with and give notices required by
laws, ordinances, rules, regulations and lawful orders of public
authorities relating to the Project.
3.2.12 The Design/Builder shall pay royalties and license fees for patented
designs, processes or products. The Design/Builder shall defend
suits or claims for infringement of patent rights and shall hold the
Owner harmless from loss on account thereof, but shall not be
responsible for such defense or loss when a particular design,
process or product of a particular manufacturer is required by the
Owner. However, if the Design/Builder has reason to believe the use
of a required design, process or product is an infringement of a
patent, the Design/Builder shall be responsible for such loss unless
such information is promptly furnished to the Owner.
3.2.13 The Design/Builder shall keep the premises and surrounding area free
from accumulation of waste materials or rubbish caused by operations
under this Part 2 Agreement. At the completion of the Work, the
Design/Builder shall remove from the site waste materials, rubbish,
the Design/Builder's tools, construction equipment, machinery and
surplus materials.
3.2.14 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 may, at the Owner's election,
be resolved in accordance with provisions of Article 10. Warranties
required by the Contract Documents shall commence upon Final
Completion, except warranties for equipment shall commence upon the
Owner's beneficial use of such equipment.
3.2.15 The Design/Builder shall maintain at this 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.
3.3 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 Part 2 Agreement, in
addition to the compensation for Basic Services. The services
described in this Paragraph 3.3 shall be provided only if authorized
before any such additional services are provided in writing by the
Owner.
3.3.2 Making revisions in drawings, specifications, and other documents or
electronic data when such revisions are required by the enactment or
revision of codes, laws or 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 the Owner.
3.3.6 Preparing a set of reproducible record documents or electronic data
showing significant changes in the Work made during construction.
3.3.7 Providing assistance in the utilization of equipment or systems such
as preparation of operation and maintenance, manuals, training
personnel for operation and maintenance, and construction during
operation.
ARTICLE 4
TIME
4.1 The Design/Builder shall perform it's obligations 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 Part 2 Agreement shall commence upon
receipt of a notice to proceed 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
14
Documents so the Owner can occupy or utilize the Work for its
intended use and only minor punchlist items remain to be completed.
4.4 Not more than seven (7) days the execution of the Part 2 Agreement,
Design/Builder shall submit a progress schedule indicating each
major category or unit of Work to be performed at the site, properly
sequenced and coordinated, and showing completion of the Work within
the time period established in Article 14. The Design/Builder shall
provide the Owner with monthly, or more frequently if required by
the Owner, updates of the progress schedule indicating completed
activities and any changes in sequencing or activity durations.
4.5 If the Design/Builder is delayed in the performance of the Project
by any act or neglect of the Owner or an employee, agent, or
representative of the Owner, or by changes in the work ordered by
the Owner that were not caused or required by design problems or
discrepancies, or by the combined action of the Owner and any of its
employees, agents, or representatives that in no way is caused by or
results from default on the part of the Design/Builder, or by any
other cause that the Design/Builder could not reasonably control or
circumvent, then the Scheduled Completion Date shall be extended for
a period equal to the length of such delay, if within ten (10) days
after the beginning of any such delay, the Design/Builder delivers
to the Owner a request for extension for such delay and such request
is approved by the Owner. The Owner's exercise of any of its
remedies of suspension of the Work or requirement of correction of
re-execution of any defective Work shall not under any circumstances
be construed as intentional interference with the Design/Builder's
performance of the Work.
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. Prior to
submitting the First Pay Application, the Design/Builder shall
submit a Schedule of Values containing such detail as required by
the Owner. The Schedule of Values shall proportionately allocate the
contract price throughout the various work activities necessary to
construct the Project. The Design/Builder's submittal of a Schedule
of Values acceptable to the Owner is a condition precedent to the
Owner's obligation to make payments to the Design/Builder.
5.1.2 The Owner will, within Thirty (30) days after receipt of the
Design/Builder's Application for Payment, either pay for such amount
as the Owner determines is properly due, or notify the
Design/Builder in writing of the Owner's reasons for withholding
payment in whole or in part as provided in this Subparagraph 5.1.2.
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 the 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 Architect, other design professionals and each
contractor the amount to which each is entitled in accordance with
the terms of their respective contracts. The Design/Builder shall,
by appropriate agreement with each Contractor, require each
Contractor to make payments to subcontractors in a similar manner.
5.1.5 The Owner shall have no obligation under this Part 2 Agreement to
pay or to be responsible in any way for payment to the Architect,
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 Project by the Owner shall constitute an 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 At the time of 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.
15
5.2 FINAL PAYMENT
5.2.1 Upon receipt of written notice that the work is ready for final
inspection and acceptance, and upon receipt of a final Application
for Payment, the Owner will promptly make such inspection and when
the Owner finds the Work acceptable under the Contract Documents and
the Contract fully performed, the Owner will within (30) days pay
the Design/Builder in accordance with this Paragraph 5.2. The
Owner's final payment hereunder, will constitute the Owner's
Reliance on the Design/Builder's representation that the
conditions listed in Subparagraph 5.2.2 as precedent to the
Design/Builder's being entitled to final payment have been
fulfilled.
5.2.2 Prior to, and as a condition precedent to Final Completion, all of
the following matters shall have been resolved and documents and
items shall have been delivered to the Owner, subject to the
additional requirements of the Owner, if any:
1. Final documents of similar nature to those required by the
Contract Documents in connection with any Application for
Payment hereunder.
2. All final permits, approvals (including without limitation,
the approval of the Owner's insurance company, if required),
certificates and affidavit (including without limitation,
certificates in respect of elevator, plumbing, sprinklers
electrical systems and life safety systems, required by
governmental authorities) and authorizations for use and
occupancy of the Project required by any authority having
jurisdiction, including an unconditional permanent and full
Certificate of Occupancy and any other necessary occupancy and
use permits.
3. All operating and maintenance manuals as required by the
Contract Documents, parts lists, the final version of the
Project Directory, and repair source lists.
4. All guarantees and warranties to which the Owner is entitled
hereunder.
5. Satisfactory proof that all claims arising out of the Work and
any liens arising out of the same which shall have been filed
or recorded, have been released or bonded.
6. The Design/Builder's certificate certifying that the Work is
complete, and that all payrolls, bills for materials and
equipment and other indebtedness connects with the work has
been paid.
7. A satisfactory report by the Design/Builder which is approved
by the Owner that all mechanical systems have been and are,
properly balanced.
8. Delivery of all spare parts required to be submitted
pursuant to the Contract Documents.
5.2.3 If the final documentation submitted by the Design/Builder is not
deemed complete by the Owner, or if the Owner deems the Work
incomplete in any respect, the Design/Builder shall promptly
resubmit the final documentation. The making of final payment shall
constitute a waiver of claims by the Owner except those arising
from:
1. liens, claims, security interests or encumbrances arising out
of the Contract and unsettled;
2. failure of the Work to comply with the requirements of the
Contract Documents; or
3. terms of special warranties required by the Contract
Documents.
5.2.4 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 the Design/Builder under this Part 2 Agreement which
are not paid when due shall bear interest from the date due at the
rate specified in Article 13.
ARTICLE 6
PROTECTION OF PERSONS AND PROPERTY
6.1 The Design/Builder shall be solely responsible for initiating,
maintaining and providing supervision of all safety precautions and
programs in connection with the performance of this Part 2
Agreement.
16
6.2 The Design/Builder shall take reasonable precautions for the safety
of, all 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 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 DESIGN/BUILDER'S LIABILITY INSURANCE
7.1.1 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
Design/Builder from claims set forth below which may arise out of or
result from operations under this Part 2 Agreement by the
Design/Builder or by a contractor of the Design/Builder, or by
anyone directly or indirectly employed by any of them, or by anyone
for whose acts any of them may be liable:
1. claims under workers' compensation, disability benefit and
other similar employee benefit laws that are applicable to the
Work to be performed;
2. claims for damages because of bodily injury, occupational
sickness or disease, or death of the Design/Builder's
employees;
3. claims for damages because of bodily injury, sickness or
disease, or death of persons other than the Design/Builder's
employees;
4. claims for damages covered by usual personal injury liability
coverage which are sustained (1) by a person as a result of an
offense directly or indirectly related to employment of such
person by the Design/Builder or (2) by another person;
5. claims for damages, other than to the Work itself, because of
injury to or destruction of tangible property, including loss
of use resulting therefrom;
6. claims for damages because of bodily injury, death of a person
or property damage arising out of ownership, maintenance or
use of a motor vehicle; and
7. claims involving contractual liability insurance applicable to
the Design/Builder's obligations under Paragraph 11.5
7.1.2 The insurance required by Subparagraph 7.1.1 shall be written for
not less than limits of liability specified in this Part 2 Agreement
or required by law, whichever coverage is greater. Coverages,
whether written on an occurrence or claims-made basis, shall be
maintained without interruption from date of commencement of the
Work until date of final payment and termination of any coverage
required to be maintained after final payment. Owner shall be named
as an additional insured on the policy or policies. Professional
liability shall not be an exclusion to coverage.
7.1.3 Certificates of Insurance acceptable to the Owner shall be delivered
to the Owner immediately after execution of this Part 2 Agreement.
These Certificates and the insurance policies required by this
Paragraph 7.1 shall contain a provision that coverages afforded
under the policies will not be cancelled or allowed to expire or
amended until at least 30 days' prior written notice has been given
to the Owner. If any of the foregoing insurance coverages are
required to remain in force after final payment, an additional
certificate evidencing continuation of such coverage shall be
submitted with the application for final payment. Information
concerning reduction of coverage shall be furnished by the
Design/Builder with reasonable promptness in accordance with the
Design/Builder's information and belief.
7.2 OWNER'S LIABILITY INSURANCE
7.2.1 The Owner shall be responsible for purchasing and maintaining
liability insurance to protect the Owner against claims which may
arise from operations under this Project.
7.3 PROPERTY INSURANCE
7.3.1 Unless otherwise provided under this Part 2 Agreement, the Owner
shall purchase and maintain, in a company or companies authorized to
do business in the jurisdiction in which the principal improvements
are to be located, property insurance upon the Work to the full
insurable value thereof on a replacement cost basis without optional
deductibles. Such property insurance shall be maintained, unless
otherwise provided in the Contract Documents or otherwise agreed in
writing by all persons and entities who are beneficiaries of such
insurance, until final payment has been made or until no person or
entity other than the Owner has an insurable interest in the
property
17
required by this Paragraph 7.3 to be insured, whichever is earlier.
This insurance shall include interests of the Owner, the
Design/Builder, and their respective contractors and subcontractors
in the Work.
7.3.2 Property insurance shall be on an all-risk policy form and shall
insure against the perils of fire and extended coverage and physical
loss or damage including, without duplication of coverage, theft,
vandalism, malicious mischief, collapse, falsework, temporary
buildings and debris removal including demolition occasioned by
enforcement of any applicable legal requirements, and shall cover
reasonable compensation for the services and expenses of the
Design/Builder's Architect and other professionals required as a
result of such insured loss. Coverage for other perils shall not be
required unless otherwise provided in the Contract Document.
7.3.3 If the Owner does not intend to purchase such property insurance
required by this Part 2 Agreement and with all of the coverages in
the amount described above, the Owner shall so inform the
Design/Builder prior to commencement of the construction. The
Design/Builder may then effect insurance which will protect the
interests of the Design/Builder and the Design/Builder's contractors
in the construction, and by appropriate Change Order the cost
thereof shall be charged to the Owner. If the Design/Builder is
damaged by the failure or neglect of the Owner to purchase or
maintain insurance as described above, then the Owner shall bear all
reasonable costs properly attributable thereto.
7.3.4 Unless otherwise provided, the Owner shall purchase and maintain
such boiler and machinery insurance required by this Part 2
Agreement or by law, which shall specifically cover such insured
objects during installation and until final acceptance by the Owner.
This insurance shall, include interests of the Owner, lenders,
mortgages, the Design/Builder, the Design/Builder's contractors and
subcontractors in the Work, and the Design/Builder's Architect and
other design professionals. The Owner and the Design/Builder shall
be named insureds.
7.3.5 A loss insured under the Owner's property insurance shall be
adjusted by the Owner as fiduciary and made payable to the Owner as
fiduciary for the insureds, as their interests may appear, subject
to requirements of any applicable mortgagee clause and of
Subparagraph 7.3.10. The Design/Builder shall pay contractors their
shares of insurance proceeds received by the Design/Builder, and by
appropriate agreement, written where legally required for validity,
shall require contractors to make payments to their subcontractors
in similar manner.
7.3.6 INTENTIONALLY OMITTED.
7.3.7 INTENTIONALLY OMITTED.
7.3.8 The Owner and the Design/Builder waive all rights against each other
and the Architect and other design professionals, contracts,
subcontractors, agents and employees, each of the other, for damages
caused by fire or other perils to the extent covered by property
insurance obtained pursuant to this Paragraph 7.3 or other property
insurance applicable to the Work, except such rights as they may
have to proceeds of such insurance held by the Owner as trustee. The
Owner or Design/Builder, as appropriate, shall require from
contractors and subcontractors by appropriate agreements, written
where legally required for validity, similar waivers each in favor
of other parties enumerated in this Paragraph 7.3. The policies
shall provide such waivers of subrogation by endorsement or
otherwise. A waiver of subrogation shall be effective as to a person
or entity even though that person or entity would otherwise have a
duty of indemnification, contractual or otherwise, did not pay the
insurance premium directly or indirectly, and whether or not the
person or entity had an insurable interest in the property damaged.
7.3.9 If required in writing by a party in interest, the Owner as trustee
shall, upon occurrence of an insured loss, give bond for proper
performance of the Owner's duties. The cost of required bonds shall
be charged against proceeds received as fiduciary. The Owner shall
deposit in a separate account proceeds so received, which the Owner
shall distribute in accordance with such agreement as the parties in
interest may reach, or in accordance with an arbitration award in
which case the procedure shall be as provided in Article 10. If
after such loss no other special agreement is made, replacement of
damaged Work shall be covered by appropriate Change Order.
7.3.10 The Owner as trustee shall have power to adjust and settle a loss
with insurers unless one of the parties in interest shall object in
writing, within five (5) days after occurrence of loss to the
Owner's exercise of this power; if such objection be made, the
parties shall enter into dispute resolution under procedures
provided in Article 10. If distribution of insurance proceeds by
arbitration is required, the arbitrators will direct such
distribution.
7.3.11 Partial occupancy or use prior to Substantial Completion shall not
commence until the insurance company or companies providing property
insurance have consented to such partial occupancy or use by
endorsement or otherwise. The Owner and the Design/Builder shall
take reasonable steps to obtain consent of the insurance company or
companies and shall not, without mutual written consent, take any
action with respect to partial occupancy or use that would cause
cancellation, lapse or reduction of coverage.
7.4 LOSS OF USE INSURANCE
18
7.4.1 The Owner, at the Owner's option, may purchase and maintain such
insurance as will insure the Owner against loss of use of the
Owner's property due to fire or other hazards, however caused. The
Owner waives all rights of action against the Design/Builder for
loss of use of the Owner's property, including consequential losses
due to fire or other hazards, however caused.
ARTICLE 8
CHANGES IN THE WORK
8.1 CHANGES
8.1.1 Changes in the Work may be accomplished after execution of this Part
2 Agreement, without invalidating this Part 2 Agreement, by Change
Order, or Construction Change Directive, subject to the limitations
stated in the Contract Documents.
No action, conduct, omission, prior failure, or course of dealing by
the Owner shall act to waive, modify, change, or alter the
requirement that Change Orders and Construction Change Directives
must be in writing and signed as provided herein. Such written
change orders or directives are the exclusive method for effecting
any change to the Contract Sum or Contract Time. The Design/Builder
understands and agrees that the contract Sum and Contract Time
cannot be changed by implication, oral agreements, actions,
inactions, course of conduct, or constructive change order.
8.1.2 A Change Order shall be based upon agreement between the Owner and
the Design/Builder; a Construction Change Directive may be issued by
the Owner without the agreement of the Design/Builder.
8.1.3 Changes in the Work shall be performed under applicable provisions
of the Contract Documents, and the Design/Builder shall proceed
promptly, unless otherwise provided in the Change Order, or
Construction Change Directive.
8.1.4 If unit prices are stated in the Contract Documents or subsequently
agreed upon, and if quantities originally contemplated are so
changed in a proposed Change Order or Construction Change Directive
that application of such unit prices to quantities of Work proposed
will cause substantial inequity to the Owner or the Design/Builder,
the applicable unit prices shall be equitably adjusted.
8.2 CHANGE ORDERS
8.2.1. A Change Order is a written instrument prepared by the
Design/Builder and signed by the Owner and the Design/Builder,
stating their agreement upon all of the following:
1. a change in the Work;
2. the amount of the adjustment, if any, in the Contract sum; and
3. the extent of the adjustment, if any, in the Contract Time.
8.2.2 If the Owner requests a proposal for a change in the Work from the
Design/Builder and subsequently elects not to proceed with the
change, a Change Order shall be issued to reimburse the
Design/Builder for any costs incurred for estimating services,
design services or preparation of proposed revisions to the Contract
Documents.
8.3 CONSTRUCTION CHANGE DIRECTIVES
8.3.1 A Construction Change Directive is a written order prepared and
signed by the Owner, directing a change in the Work prior to
agreement on adjustment, if any, in the Contract Sum or Contract
Time, or both.
8.3.2. Except as otherwise agreed by the Owner and the Design/Builder, the
adjustment to the Contract Sum shall be determined on the basis of
reasonable but not to exceed actual expenditures and savings of
those performing the Work attributable to the change, including the
expenditures for design services and revisions to the Contract
Documents. In case of an increase in the Contract Sum, the cost
shall include an allowance for overhead not to exceed ten percent
(10%) and an allowance for profit not to exceed ten percent (10%).
In such case, the Design/Builder shall keep and present an itemized
accounting together with appropriate supporting data for inclusion
in a Change Order. Unless otherwise provided in the Contract
Documents, costs for these purposes shall be limited to the
following:
1. costs of labor, including social security, old age and
unemployment insurance, fringe benefits required by agreement
or custom, and workers' compensation insurance;
2. costs of materials, supplies and equipment, including cost of
transportation, whether incorporated or consumed;
3. rental costs of machinery and equipment exclusive of hand
tools, whether rented from the Design/Builder or others;
4. costs of premiums for all bonds and insurance permit fees, and
sales, use or similar taxes;
5. additional costs of supervision and field office personnel
directly attributable to the change; and fees paid to the
Architect, engineers and other professionals.
8.3.3 Pending final determination of cost to the Owner, amounts not in
dispute may be included in Applications for Payment. The amount of
credit to be allowed by the Design/Builder to the Owner for deletion
or change which results in a net decrease in the Contract Sum will
be actual net cost. When both additions and credits covering related
Work or substitutions are involved in a change, the allowance for
19
overhead and profit shall be figured on the basis of the net
increase, if any, with respect to that change.
8.3.4 When the Owner and the Design/Builder agree upon the adjustments in
the Contract Sum and Contract Time, such agreement shall be
effective immediately and shall be recorded by preparation and
execution of an appropriate Change Order.
8.4 INTENTIONALLY OMITTED.
8.5 CONCEALED CONDITIONS
8.5.1 If conditions are encountered at the site which are (1) subsurface
or otherwise concealed physical conditions which differ materially
from those indicated in the Contract Documents, or (2) unknown
physical conditions of an unusual nature which differ materially
from those ordinarily found to exist and generally recognized as
inherent in construction activities of the character provided for in
the Contract Documents, then notice by the observing party shall be
given to the other party promptly before conditions are disturbed
and in no event later than 21 days after first observance of the
conditions. The Contract Sum shall be suitably adjusted for such
concealed or unknown conditions by Change Order upon claim by either
party made within 21 days after the claimant becomes aware of the
conditions.
8.6 REGULATORY CHANGES
8.6.1 The Design/Builder shall be compensated for changes in the
construction necessitated by the enactment or revisions of codes,
laws or regulations subsequent to the execution of this Part 2
Agreement.
ARTICLE 9
CORRECTION OF WORK
9.1 The Design/Builder shall promptly correct Work rejected by the Owner
or known by the Design/Builder to be defective or failing to conform
to the requirements of the Contract Documents, whether observed
before or after Substantial Completion and whether or not
fabricated, installed or completed. The Design/Builder shall bear
costs of correcting such rejected Work, including additional testing
and inspections.
9.2 If, within one (1) year after the date of Substantial Completion of
the Work or, after the date for commencement of warranties
established in a written agreement between the Owner and the
Design/Builder, or by terms of an applicable special warranty
required by the Contract Documents, any of the Work is found to be
not in accordance with the requirements of the Contract Documents,
the Design/Builder shall correct it promptly after receipt of a
written notice from the Owner to do so unless the Owner has
previously given the Design/Builder a written acceptance of such
condition.
9.3 Nothing contained in this Article 9 shall be construed to establish
a period of limitation with respect to other obligations which the
Design/Builder might have under the Contract Documents.
Establishment of the time period of one (1) year as described in
Subparagraph 9.2 relates only to the specific obligation of the
Design/Builder to correct the Work, and has no relationship to the
time within which the obligation to comply with the Contract
Documents may be sought to be enforced, nor to the time within which
proceedings, may be commenced to establish the Design/Builder's
liability with respect to the Design/Builder's obligations other
than specifically to correct the Work.
9.4 If the Design/Builder fails to correct nonconforming Work as
required or fails to carry out Work in accordance with the Contract
Documents, the Owner, by written order signed personally or by an
agent specifically so empowered by the Owner in writing, may order
the Design/Builder to stop the Work, or any portion thereof, until
the cause for such order has been eliminated; however, the Owner's
right to stop the Work shall not give rise to a duty on the part of
the Owner to exercise the right for benefit of the Design/Builder or
other persons or entities.
9.5 If the Design/Builder defaults or neglects to carry out the Work in
accordance with the Contract Documents and fails within seven (7)
days after receipt of written notice from the Owner to commence and
continue correction of such default or neglect with diligence and
promptness, the Owner may without prejudice to other remedies the
Owner may have, correct such deficiencies. In such case an
appropriate Change Order shall be issued deducting from payments
then or thereafter due the Design/Builder, the costs of correcting
such deficiencies. If the payments then or thereafter due the
Design/Builder are not sufficient to cover the amount of the
deduction, the Design/Builder shall pay the difference to the Owner.
Such action by the Owner shall be subject to dispute resolution
procedures as provided in Article 10.
ARTICLE 10
DISPUTE RESOLUTION -- MEDIATION AND ARBITRATION
10.1 Claims, disputes or other matters in question between the parties to
this Part 2 Agreement arising out of or relating to this Part 2
Agreement or breach thereof shall be subject to and decided by
mediation or arbitration. Such mediation or arbitration shall be
conducted in accordance with the Construction Industry Mediation or
Arbitration Rules of the American Arbitration Association currently
in effect.
10.2 In addition to and prior to arbitration, the parties
20
shall endeavor to settle disputes by mediation. Demand for mediation
shall be filed in writing with the other party to this Part 2
Agreement and with the American Arbitration Association. A demand
for mediation shall be made within a reasonable time after the
claim, dispute or other matter in question has arisen. In no event
shall the demand for mediation be made after the date when
institution of legal or equitable proceedings based on such claim,
dispute or other matter in question would be barred by the
applicable statutes of repose or limitations.
10.3 Demand for arbitration shall be filed in writing with the other
party to this Part 2 Agreement and with the American Arbitration
Association. A demand for arbitration shall be made within a
reasonable time after the claim, dispute or other matter in question
has arisen. In no event shall the demand for arbitration be made
after the date when institution of legal or equitable proceedings
based on such claim, dispute or other matter in question would be
barred by the applicable statutes of repose or limitations.
10.4 An arbitration pursuant to this Article may be joined with an
arbitration involving common issues of law or fact between the
Design/Builder and any person or entity with whom the Design/Builder
or Owner has a contractual obligation to arbitrate disputes, and
with whom the Design/Builder and Owner agree.
10.5 The award rendered by the arbitrator or arbitrators shall be final,
and judgement may be entered upon it in accordance with applicable
law in any court having jurisdiction thereof.
10.6 Unless otherwise agreed in writing, the Design/Builder shall
continue to provide services and shall maintain progress during any
mediation or arbitration proceedings, and the Owner shall continue
to make payments to the Design/Builder in accordance with Articles 5
and 13, but the Owner shall be under no obligation to make payments
on or against any claims or amounts in dispute during the pendency
of any mediation or arbitration proceeding to resolve those claims
or amounts in dispute.
10.7 The Article 10 shall survive completion or termination of Part 2.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1 Unless otherwise provided, this Part 2 Agreement shall be governed
by the law of the place where the Project is located.
11.2 SUBCONTRACTS
11.2.1 The Design/Builder, as soon as practicable after execution of this
Part 2 Agreement, shall furnish to the Owner in writing the names of
the persons or entities the Design/Builder will engage as
contractors for the Project.
11.3 WORK BY OWNER OR OWNER'S CONTRACTORS
11.3.1 The Owner reserves the right to perform construction or operations
related to the Project with the Owner's own forces, and to award
separate contracts in connection with other portions of the Project
or other construction or operations on the site under conditions of
insurance and waiver of subrogation identical to the provisions of
this Part 2 Agreement. If the Design/Builder claims that delay or
additional cost is involved because of such action by the Owner, the
Design/Builder shall assert such claims as provided in Subparagraph
11.4.
11.3.2 The Design/Builder shall afford the Owner's separate contractors
reasonable opportunity for introduction and storage of their
materials and equipment and performance of their activities and
shall connect and coordinate the Design/Builder's construction and
operations with theirs as required by the Contract Documents.
11.3.3 Costs caused by delays or by improperly timed activities or
defective construction shall be borne by the party responsible
therefor.
11.4 CLAIMS FOR DAMAGES
11.4.1 If either party to this Part 2 Agreement suffers injury or damage to
person or property because of an act or omission of the other party,
of any of the other party's employees or agents, or of others for
whose acts such party is legally liable, written notice of such
injury or damage, whether or not insured, shall be given to the
other party within a reasonable time not exceeding 21 days after
first observance. The notice shall provide sufficient detail to
enable the other party to investigate the matter. If a claim of
additional cost or time related to this claim is to be asserted, it
shall be filed in writing.
11.5 INDEMNIFICATION
11.5.1 To the fullest extent permitted by law, the Design/Builder shall
indemnify and hold harmless the Owner, Owner's consultants, and
agents and employees of any of them from and against claims,
damages, losses and expenses, including but not limited to
attorneys' fees, arising out of or resulting from performance of the
Work, provided that such
21
claim, damage, loss or expense is attributable to bodily injury,
sickness, disease or death, or to injury to or destruction of
tangible property (other than the Work itself) including loss of
use resulting therefrom, but only to the extent caused in whole or
in part by negligent acts or omissions of the Design/Builder, anyone
directly or indirectly employed by the Design/Builder or anyone for
whose acts the Design/Builder may be liable, regardless of whether
or not such claim, damage, loss or expense is caused in part by a
party indemnified hereunder. Such obligation shall not be construed
to negate, abridge, or reduce other rights or obligations of
indemnity which would otherwise exist as to a party or person
described in this Paragraph 11.5.
11.5.2 In claims against any person or entity indemnified under this
Paragraph 11.5 by an employee of the Design/Builder, anyone directly
or indirectly employed by the Design/Builder or anyone for whose
acts the Design/Builder may be liable, the indemnification
obligation under this Paragraph 11.5 shall not be limited by a
limitation on amount or type of damages, compensation or benefits
payable by or for the Design/Builder under workers' compensation
acts, disability benefit acts or other employee benefit acts.
11.6 SUCCESSORS AND ASSIGNS
11.6.1 The Owner and Design/Builder, respectively, bind themselves, their
partners, successors, assigns and legal representatives to the other
party to this Part 2 Agreement and to the partners, successors and
assigns of such other party with respect to all covenants of this
Part 2 Agreement. Neither the Owner nor the Design/Builder shall
assign this Part 2 Agreement without the written consent of the
other. The Owner may assign this Part 2 Agreement to any
institutional lender providing construction financing, and the
Design/Builder agrees to execute all consents reasonably required to
facilitate such an assignment. If either party makes such an
assignment, that party shall nevertheless remain legally responsible
for all obligations under this Part 2 Agreement, unless otherwise
agreed by the other party.
11.7 TERMINATION OF PROFESSIONAL DESIGN SERVICES
11.7.1 Prior to termination of the services of the Architect or any other
design professional designated in this Part 2 Agreement, the
Design/Builder shall identify to the Owner in writing another
architect or other design professional with respect to whom the
Owner has no reasonable objection, who will provide the services
originally to have been provided by the Architect or other design
professional whose services are being terminated.
11.8 EXTENT OF AGREEMENT
11.8.1 This Part 2 Agreement represents the entire agreement between the
Owner and the Design/Builder and supersedes prior negotiations,
representations or agreements, either written or oral. This Part 2
Agreement may be amended only by written instrument and signed by
both the Owner and the Design/Builder.
11.9 No action or failure to act by the Owner or Design/Builder shall
constitute a waiver of a right or duty afforded them under the
contract, nor shall such action or failure to act constitute
approval of or acquiescence in a breach thereunder, except as may be
specifically agreed in writing.
11.10 In no event will the Owner ever be liable to the Design/Builder or
any other person or entity acting on its behalf under this
Agreement, for lost profits or other indirect incidental or
consequential damages. In no event will the Design/Builder ever be
liable to the Owner or any other person or entity acting on its
behalf under this Agreement, for lost profits or other indirect
incidental or consequential damages.
11.11 The Owner shall have the right to use and occupy spaces, area,
systems and other portions of the Work prior to completion and
acceptance of all the Work, provided that in the reasonable opinion
of the Design/Builder, such use or occupancy shall not unreasonably
interfere with the Design/Builder's operations nor delay him in
completing the entire Work. If the Owner desires to exercise its
right of partial occupancy and use under this Paragraph, the Owner
shall give reasonable notice thereof to the Design/Builder. If the
Design/Builder determines that the proposed use or occupancy would
not unreasonably interfere with its operations or delay him in
completing the entire Work, the Design/Builder shall cooperate with
the Owner in providing basic services and facilities reasonably
required for the proposed use or the health, safety and comfort of
the users or occupants and other parties lawfully present on or
entering or leaving the site; such as heating, ventilating, cooling,
water, lighting, power, elevator and telephone services for the
space or spaces to be occupied. If the equipment required to furnish
such services is not entirely completed at the time the Owner
desires to use or occupy the aforesaid space or spaces, the
Design/Builder shall make every reasonable effort to complete the
same as soon as possible so that the necessary equipment can be put
into operation and use. Mutually acceptable arrangements shall be
made between the Owner and the Design/Builder with regard to
procedures, terms and conditions governing the operation and
maintenance of such services and facilities as may be utilized for
the benefit of the Owner. The Owner will assume proportionate and
reasonable responsibility for operation of systems, equipment and
utilities required to provide such services in part or in total,
including proportionate and reasonable expenses of operation
incidentals thereto, and mutually acceptable arrangements shall be
made as to guarantees and warranties affecting designated portions
or elements of the Work associated therewith.
11.12 The Owner's use or occupancy of such designated areas or portions of
the Work prior to completion and acceptance of all or portions of
the Work pursuant to Paragraph 11.11 shall not constitute acceptance
of systems, materials, or elements of the Work which are not in
accordance with the requirements of the Contract Documents, nor
relieve the Design/Builder from his obligation to complete the Work,
or his responsibility for loss or damage due to or arising out of,
defects in or malfunctioning of systems,
22
materials, equipment, or elements of the Work, nor from other
unfulfilled obligations or responsibilities of the Design/Builder
under this Contract. If however, damage results to such designated
areas or portions of the Work, in whole or in part, from any act of
the Owner, then the Owner will assume its proportionate
responsibility from such damage, to the extent that such damage is
not covered by insurance provided in accordance with the terms of
the Contract Documents.
11.13 The Design/Builder on behalf of itself and all others performing the
Work waives all rights to file a mechanic's or materialmen's lien
under the laws of the Commonwealth of Pennsylvania. The
Design/Builder has evidenced this agreement by delivery to the Owner
of a general waiver of liens, a copy of which is attached hereto as
Exhibit A and the terms of which are incorporated herein by
reference.
11.14 All notices of default and termination and all other notices not in
the ordinary course that are required to be given by the terms of
the Contract Documents or by any law of governmental regulation
either by the Owner or the Design/Builder shall be in writing and
shall be sent by registered or by certified mail, return receipt
requested and postage prepaid, hand delivered and receipted for, or
by reputable overnight delivery service with tracking capabilities
and addressed if to the Owner to the address on the first page of
this Agreement with a copy to Ballard Spahr Andrews & Ingersoll,
LLP, 1735 Market Street, 51st Floor, Philadelphia, PA. 19103,
attention Tina R. Makoulian, Esquire, and if to the Design/Builder,
to the address on the first page of this Agreement. All other
notices in connection with the Project shall be in writing and shall
be hand delivered by first class mail or sent as described above to
the addresses listed above, except that copies of such other notices
need not be given to counsel for the Owner. The Owner may designate
to the Design/Builder the address to which notices to any lender
shall be sent and the Design/Builder shall provide such lender with
copies of all notices required to be given to the Owner at such
designated address and in the manner set forth above.
11.15 All indemnification, payment, insurance and other obligations of the
Design/Builder under this Agreement or any of the other Contract
Documents shall survive the expiration or sooner termination of the
Agreement.
11.16 No approval, determination, inspection, test, review, comment,
payment and/or other action or the failure to approve, determine,
inspect, test, review, comment, make payment and/or take any action
by the Owner shall affect or impair any of the Design/Builder's
representations, warranties or covenants under this Agreement nor be
construed to alter, amend, or waive any of the Design/Builder's
obligations to comply with any of the provisions of the Contract
Documents and the Owner shall not be deemed to have waived any of
its rights arising from or in connection therewith nor to have
assumed or created any liability on the part of the Owner.
ARTICLE 12
TERMINATION OF THE AGREEMENT
12.1 TERMINATION BY THE OWNER
12.1.1 This Part 2 Agreement may be terminated by the Owner upon 5 days'
written notice to the Design/Builder. If such termination occurs,
and is not due to the fault of the Design/Builder, then the Owner
shall pay the Design/Builder for Work completed to the termination
date, together with reimbursable expenses then due.
12.1.2 If the Design/Builder defaults or persistently fails or neglects to
carry out the Work in accordance with the Contract Documents or
fails to perform the provisions of this Part 2 Agreement, the Owner
may give written notice that the Owner intends to terminate this
Part 2 Agreement. If the Design/Builder fails to correct the
defaults, failure or neglect within seven (7) days after being given
notice, the Owner may without prejudice to any other remedy make
good such deficiencies and may deduct the cost thereof from the
payment due the Design/Builder or, at the Owner's option, may
terminate the employment of the Design/Builder and take possession
of the site and of all materials, equipment, tools and construction
equipment and machinery thereon owned by the Design/Builder and as
well as all drawings, plans and specifications and finish the Work
by whatever method the Owner may deem expedient. If the unpaid
balance of the Contract sum exceeds the expense of finishing the
Work and all damages incurred by the Owner, such excess shall be
paid to the Design/Builder. If the expense of completing the Work
and all damages incurred by the Owner exceeds the unpaid balance,
the Design/Builder shall pay the difference to the Owner. This
obligation for payment shall survive termination of this Part 2
Agreement.
12.1.3 INTENTIONALLY OMITTED.
12.2 TERMINATION BY THE DESIGN/BUILDER
12.2.1 If the Owner fails to make payment when due, the Design/Builder may
give written notice of the Design/Builder intention to terminate
this Part 2 Agreement. If the
23
Design/Builder fails to receive payment within seven (7) days after
receipt of such notice by the Owner, the Design/Builder may give a
second written notice and, seven (7) days after receipt of such
second written notice by the Owner, may terminate this Part 2
Agreement and recover from the Owner payment for Work executed, and
for proven losses sustained upon materials, equipment, tools, and
construction equipment and machinery, including reasonable profit
earned to date and applicable damages.
ARTICLE 13
BASIS OF COMPENSATION
The Owner shall compensate the Design/Builder in accordance with Article 5,
Payments, and the other provisions of this Part 2 Agreement as described below.
13.1 COMPENSATION
13.1.1 For the Design/Builder's performance of the Work, as described in
Paragraph 3.2 and including any other services listed in Article 14
as part of Basic Services, the Owner shall pay the Design/Builder in
current funds the Contract Sum as follows:
13.1.1 The cost of the Work is guaranteed by the Design/Builder not to
exceed $14,850,000.00, subject to additions and deductions by Change
Order as provided in the Contract Documents. Such maximum sum is
referred to in the Contract Documents as the Guaranteed Maximum
Price. Costs which would cause the Guaranteed Maximum Price to be
exceeded shall be paid by the Design/Builder without reimbursement
by the Owner. The Guaranteed Maximum Price is based on the
following:
This part II Agreement will be amended to include the GMP-Guaranteed
Maximum Price once the estimate is completed and approved.
Procurement $ 4,455,650.00
Fixed Fee $ 226,578.00
Construction Management $ 9,344,672.00
Validation $ 823,100.00
Total Procurement, Construction Management, Fee & Validation $14,850,000.00
To the extent that the Drawings and Specifications are anticipated
to require further development by the Architect, the Design/Builder
has provided in the Guaranteed Maximum Price for such further
development consistent with the Contract Documents and reasonable
inferable therefrom.
13.1.2. For Additional Services, as described in Paragraph 3.3 and including
any other services listed in Article 14 as Additional Services,
compensation shall be as agreed to by approved SAN's (Scope
Adjustment Notice):
13.2 REIMBURSABLE EXPENSES
13.2.1 Reimbursable Expenses are included in the compensation for Basic and
Additional Services, and include actual expenditures made by the
Design/Builder's employees and contractors in the interest of the
Project.
13.2.2 FOR REIMBURSABLE EXPENSES, compensation shall be a multiple of one
(1) times the amounts expended.
13.3 INTEREST PAYMENTS
13.3.1 The rate of interest for past due payments shall be as follows:
Prime plus 1%
(Lusury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations at the Owner's and
Design/Builder's principal places of business, at the location of the Project
and elsewhere may affect the validity of this provision. Specific legal advice
should be obtained with respect to deletion, modification or other requirements,
such as written disclosures or waivers.)
ARTICLE 14
OTHER CONDITIONS AND SERVICES
14.1 The Basic Services to be performed shall be commenced on May 20,
2001 and proceed as shown on the attached Project Schedule Rev. 4
08/29/01 and, subject to executed change orders granting extension
of time, Substantial Completion shall be achieved in the Contract
Time of 8/16/02 (454) calendar days.
24
14.2 The Basic Services beyond those described in Article 3 are as
follows:
Attachment# Description
----------- -------------------------------------------------------
1 Executive Summary -- 2 Pages dated 8/16/01
2 Design (BOD) dated 8/22/01
3 Procurement Plan
4 Validation -- Proposal & Scope dated 6/5/01 13 -- Pages
5 GMP Estimate -- dated July 24, 2001 -- 13 Pages
6 Schedule -- Revision 4 dated 8/29/01
14.3 Additional Services beyond those described in Article 3 are as
follows:
14.4 The Design/Builder shall submit an Application for Payment on the
Tenth (10th) day of each month.
14.5 INTENTIONALLY OMITTED.
ARTICLE 15
15.1 Progress Payments
15.1.1 Based upon Applications for Payment submitted by the Design/Builder,
the Owner shall make progress payments on account of the Contract
Sum to the Design/Builder as provided below and elsewhere in the
Contract Documents.
15.1.2 The period covered by each Application for Payment shall be one (1)
calendar month ending on the last day of the month Payments shall be
made by the Owner not later then thirty (30) days after the Owner
receives the Application for Payment.
15.2 Final Payment
15.2.1 Final payment constituting the entire balance of the Contract Sum
shall be made by the Owner to the Design/Builder when the
Design/Builder has fully performed the Contract and the Owner has
approved the Design/Builder's final Application for Payment. The
Owner's final payment to the Design/Builder [and release of
retainage] shall be made no later than thirty (30) days after
approval of the Application for Payment.
15.2.2 The Owner's accountants will review and report on the
Design/Builder's final accounting within thirty (30) days after
delivery of the final accounting by the Design/Builder. Approval of
the final Application for Payment shall be based on such Cost of the
Work as the Owner's accountants report to be substantiated by the
Design/Builder's final accounting. If the Owner's accountants report
the Cost of the Work as substantiated by the Design/Builder's final
accounting to be less than claimed by the Design/Builder, the
Design/Builder shall be entitled to demand resolution of the dispute
pursuant to Article 10 of this Agreement. Such demand shall be made
within thirty (30) days after receipt by the Design/Builder of
notification of Owner's findings; failure to make such demand within
this thirty (30) days period shall result in the substantiated
amount reported by the Owner's accountants becoming binding on the
Design/Builder. The time periods in this subparagraph relating to
the final accounting supersede the general provisions in Article 10.
Pending final resolution, the Owner shall pay the Design/Builder the
undisputed amount.
Title Date 10-29-01
------------------------------- -------------------------------
This Agreement entered into as of the day and year first written
above.
/s/ P. SHERRILL NEFF /s/ ANTHONY J. MACCHIA
------------------------------- -----------------------------
OWNER (Signature) DESIGN/BUILDER (Signature)
P. SHERRILL NEFF ANTHONY J. MACCHIA
------------------------------- -----------------------------
PRESIDENT & CHIEF OPERATING OFFICER VICE PRESIDENT FINANCE
25