DESIGN/BUILD AGREEMENT EXHIBIT 10.1
BETWEEN
T. MARZETTI COMPANY, LLC
AND
SHAMBAUGH & SON, LP
THIS AGREEMENT is made and entered into as of the 6th day of December 2004, by
and between T. Marzetti Company, LLC, a Kentucky limited liability company
(hereinafter referred to as "the Owner"), having its principal office at 1105
Schrock Road, P.O. Box 29163, Columbus, Ohio 43229 and Shambaugh & Son,
LP,(hereinafter referred to as "Design/Builder"), having its principal office at
7614 Opportunity Drive, P.O. Box 1287, Fort Wayne, Indiana 46801-1287.
WHEREAS, the Owner intends to construct a Production Facility in Horse Cave,
Kentucky, for salad dressings and sauces, together with ancillary spaces and
equipment purchase and installation as described in the Owner's Criteria,
hereinafter referred to as the "Project"; and
WHEREAS, the Owner desires the service of a Design/Builder to design, organize,
coordinate, direct and construct the Project, and to assume all risks and
responsibilities of producing the Project within a Guaranteed Maximum Price, as
hereinafter defined; and
WHEREAS, Design/Builder represents itself as having the skill, experience,
expertise and resources necessary to provide the foregoing services; and
WHEREAS, Design/Builder has previously undertaken the performance of certain
services required in connection with the Project and included within the scope
of this Agreement;
NOW THEREFORE, for and in consideration of the mutual covenants and agreements
set forth herein, the Owner and Design/Builder agree as follows:
ARTICLE 1
GENERAL PROVISIONS
The Design/Builder accepts the relationship of trust and confidence established
between it and the Owner by this Agreement. It covenants with the Owner to
furnish skill and judgment consistent with industry standards for projects of
similar scope and complexity, and to cooperate in furthering the interests of
the Owner. It agrees to furnish efficient business administration and
superintendence and to use reasonable efforts to complete the Project in
conformance with the terms of this Agreement and in the most expeditious and
economical manner consistent with the interest of the Owner.
1.1 THE CONSTRUCTION TEAM. The Design/Builder which is also the
Architect/Engineer, and the Owner, called the "Construction Team", shall work in
accordance with this Agreement to complete design services commenced under the
Part 1 Agreement, through Final Completion. The Design/Builder shall provide
leadership to the Construction Team on all matters relating to design and
construction.
1.1.2 Owner and Design/Builder commit at all times to cooperate fully with each
other, and proceed on the basis of trust and good faith, to permit each party to
realize the benefits afforded under this Agreement.
1.2 DESIGN/BUILDER'S ORGANIZATIONAL PLAN.
1.2.1 The Owner and the Design/Builder agree that the services to be provided by
the Design/Builder under this Agreement depend on the skills of the
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Design/Builder's individual staff members and specific subconsultants proposed
for the Project, and that the selection of the Design/Builder would not have
been made by the Owner except for its confidence in the professional abilities
of the Design/Builder and the specific personnel and subconsultants it has
represented will be assigned to the Project. The Owner and the Design/Builder
agree further that the aforesaid matters are substantial and material to this
Agreement. The Design/Builder agrees and covenants that, to the extent within
the Design/Builder's control, the business organization of the Design/Builder,
and the management and technical personnel represented as those to be performing
the work under this contract, including those firms, venture partners,
associates or consultants identified as performing design and construction
management service, in accordance with the organizational chart set forth in the
Part 1 Report defined herein and made a part hereof as Exhibit #1, shall not be
changed, nor shall the proportion of work or responsibilities be appreciably
changed, without the prior written consent of the Owner, which consent shall be
at the Owner's discretion but not unreasonably withheld. Further, upon the
reasonable request of the Owner, the Design/Builder shall replace any staff
assigned to the Project with other qualified personnel.
1.2.2 Design/Builder covenants that all the Work shall be done in a good and
workmanlike manner and that all Materials furnished and used in connection
therewith shall be new and approved by the Owner, except as otherwise expressly
provided for in the Drawings and Specifications. Design/Builder shall cause all
Materials and other parts of the Work to be readily available as and when
required or needed for or in connection with the construction, furnishing and
equipping of the Improvements
1.2.3 The agreements between the Design/Builder and the persons or entities
identified in this 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.
1.2.4 Design services required by the Design/Builder under this Agreement shall
be performed by qualified architects and other design professionals. The
services of such design professionals shall be performed in a timely manner
consistent with professional skill and care so as not to delay or hinder the
progress of the Project. The Design/Builder represents, and the Owner
acknowledges, that the design services under this Agreement shall be performed
in accordance with prevailing professional standards, consistent with
professional skill and care necessary for the proper and effective design of
similar facilities of comparable size and in comparable areas. The contractual
obligations of such professional persons or entities are the responsibility of
the Design/Builder.
1.2.4.1 The Design/Builder shall provide design services in conjunction with the
other services described under Article 2 of this Agreement, including but not
limited to all architectural, civil, structural, mechanical and electrical
engineering services for core, shell, processing, packaging, warehousing and
interior of the Project, design and engineering services necessary for lighting,
acoustics, paging, security, code, directional and graphic signage, FF&E
planning, layout and specification, voice/data infrastructure and distribution,
landscaping, coordinating the Project with the requirements for
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equipment to be purchased and installed by the Owner, and any specialty
consultant the Design/Builder deems necessary to complete the Project in a
manner consistent with the Owner's intended uses.
1.2.5 Construction budgets shall be prepared by qualified professionals, cost
estimators or contractors. The contractual obligations of such professional
persons or entities are the responsibility of the Design/Builder.
1.2.6 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 any portion of the Design/Builder's obligations under
this Agreement.
1.3 EXTENT OF AGREEMENT & DOCUMENT PRECEDENCE. This Agreement represents the
entire agreement between the Owner and the Design/Builder and supersedes all
prior negotiations, representations or agreements. Nothing contained in this
Agreement shall create a contractual relationship between the Owner and any
person or entity other than the Design/Builder. When the Drawings and
Specifications are complete, they shall be identified by amendment to this
Agreement as the basis of the Guaranteed Maximum Price. Interpretation of this
Agreement shall be governed by the following order of document precedence
beginning with the highest: 1) this Agreement as may be amended in writing by
the Owner and Design/Builder together with the Owner's Criteria attached herein
as Exhibit #2; 2) assumptions and qualifications as may be specifically
identified and mutually approved by the Owner and Design/Builder in establishing
the Guaranteed Maximum Price; and 3) the Part 1 Report and Addenda 1 through 3
and 5 through 8 (Addendum 4 intentionally deleted) as modified by the Contract
Documents including the Drawings and Specifications.
1.4 MISCELLANEOUS DEFINITIONS
"Agreement" or "Contract" means this Agreement as executed between the parties.
"Application for Payment" means the monthly billing submitted by the
Design/Builder in accordance with the provisions of Article 11.
"Architect/Engineer" or "Architect" means those licensed professionals in the
direct employ of the Design/Builder or a Design Consultant to the Design/Builder
providing services in accordance with Section 1.2.4 herein.
"Change" or "Changes" has the meaning as applicable in Article 9.
"Construction Contingency" shall have the meaning as set forth in Section 6.5.
"Contract Documents" or "Construction Documents" consist of the bidding
information and instructions, bidding forms, bid guarantees and performance
bonds, General and Special Conditions, Drawings and Specifications prepared by
the Design/Builder, and related documents necessary to define the scope and
performance of the Work as prepared in cooperation between the Owner and
Design/Builder as set forth in Section 2.2.4
"Cost of Work" shall have the meaning as set forth in Section 8.1.
"Day" or "Days" shall mean calendar days unless otherwise specifically noted in
this Agreement or in the Contract Documents.
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"Design Consultant" is a qualified, licensed design professional who is not an
employee of Design/Builder, but is retained by Design/Builder, or employed or
retained by anyone under contract with Design/Builder or Subcontractor, to
furnish design services required under the Contract Documents.
"Design/Builder" means Shambaugh & Son, LP.
"Design/Builder Compensation" has the meaning set forth in Article 7.
"Design Development" or "Design Development Documents" have the meaning as set
forth in Section 2.2.3.
"Drawings and Specifications" means the documents prepared by the
Architect/Engineer for the Schematic Design, Design Development and Construction
Documents phases for the purpose of defining the scope and performance of the
Work in combination with the balance of the Construction Documents, conforming
to the standard of practice as set forth in Section 1.2.4 and as defined in
Article 2 for each phase of design services, together with addenda, bulletins
and other related documentation issued as necessary during the course of the
Work.
"Estimate of Probable Cost" has the meaning as set forth in Section 2.2.7.
"Final Completion" is the date following Substantial Completion on which the
Work is completed, including all necessary inspections, process and equipment
testing, punch list work, all applicable permits are in place and all start-up
activities have been completed, thereby allowing the Project in its entirety to
be used for its intended purpose without condition or temporary period of time,
and all compliance requirements of Factory Mutual have been satisfied.
"Final Application for Payment" is the Application for Payment following Final
Completion of the Project for which the Design/Builder requests payment for the
balance of all incurred costs in accordance with the Guaranteed Maximum Price
and the provisions of Article 11.
"Fixed Limit of Cost" is the maximum cost amount most recently approved by the
Owner as the budget limit for all elements of the Project designed, specified or
constructed by the Design/Builder and included under this Agreement.
"General Conditions" and "Special Conditions" shall have the meanings as
generally understood to represent those documents used in combination with the
balance of the Construction Documents to set forth the terms and conditions for
undertaking construction on the Site, subject to approval by the Owner.
"Guaranteed Maximum Price" is the amount set forth in Article 6.
"Hazardous Conditions" are any materials, wastes, substances and chemicals
deemed to be hazardous under applicable Legal Requirements, or the handling,
storage, remediation, or disposal of which are regulated by applicable Legal
Requirements. Hazardous Conditions shall not include (i) any substances brought
onto the Site by Design/Builder and/or Subcontractor or Sub-subcontractor and
(ii) any such substances which are handled and stored in accordance with
applicable Legal Requirements.
"Interim Completion Dates" means the date(s) of Substantial Completion for a
portion(s) of the Project as may be agreed in writing between the parties.
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"Legal Requirements" are all applicable federal, state and local laws, codes,
ordinances, rules, regulations, orders and decrees of any government or
quasi-government entity having jurisdiction over the Project, the Site or the
Work.
"Liquidated Damages Rate" has the meaning set forth in Section 5.4 of this
Agreement.
"Master Project Construction Schedule" shall have the meaning as set forth in
Section 2.2.6.
"Owner" is the T. Marzetti Company, LLC.
"Owner's Criteria" refers to the document prepared by the Owner dated July 20,
2004 and attached hereto in Exhibit #2.
"Part I Agreement" means the agreement dated 1 October 2003 between the Owner
and the Design/Builder titled Standard Form of Preliminary Agreement Between
Owner and Design/Builder.
"Part I Report" refers to the Project Buckeye New Salad Dressing Facility Part I
report issued in October, 2003 by the Design/Builder, together with electronic
files of drawings make up Exhibit #1.
"Project" shall have the meaning as set forth in the recitals to this Agreement.
"Revised Scheduled Completion Date" shall have the meaning as set forth in
Section 5.4.2.
"Scheduled Completion Date" means the date by which the Design/Builder is
required to achieve Substantial Completion. The Scheduled Completion Date shall
be mutually agreed between the Design/Builder and Owner as provided in Section
5.2 herein.
"Schematic Design" or "Schematic Design Documents" have the meaning as set forth
in Section 2.2
"Site" is the location of the Project in Horse Cave, Kentucky.
"Subcontractor" is any person or entity retained by Design/Builder as an
independent contractor to perform a portion of the Work and shall include
materialmen and suppliers.
"Sub-Subcontractor" is any person or entity retained by a Subcontractor as an
independent contractor to perform any portion of a Subcontractor's Work and
shall include materialmen and suppliers.
"Substantial Completion" shall have the meaning as set forth in Section 5.3 of
this Agreement.
"Work" is all or part of the design, construction, furnishing and equipping for
the Project to be completed by the Design/Builder under this Agreement, which
shall include all aspects of the Project to be designed or specified as
described herein.
"Work Product" shall mean the Construction Documents and all other documents as
set forth in Section 15.3.1.
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ARTICLE 2
DESIGN/BUILDER'S SERVICES
The Design/Builder will perform the following services under this Agreement as
described in this Article. The Design/Builder shall designate a representative
authorized to act on the Design/Builder's behalf with respect to the Project.
The parties agree that the services provided under Sections 2.2.1 and 2.2.2
herein have been provided by the Design/Builder under the Part 1 Agreement with
the Owner, the costs for which are separate from the Guaranteed Maximum Price
pursuant to Article 6 herein. The parties further agree that the Owner has
accepted the Part I Report, subject to any modifications necessary to conform
the Conceptual Design and Schematic Design to the Owner's Criteria.
2.1 DUTIES IN GENERAL. The Design/Builder will provide management and
coordination of the Work on the Project so that each component is completed on
time and within the Guaranteed Maximum Price.
2.1.1 Establish and implement a comprehensive program including all appropriate
direction, procedures, coordination, administration, review and expediting
required to complete the Project is a timely, economical and acceptable manner.
2.1.2 Provide all services in compliance with all applicable federal, state and
local laws, regulations and orders.
2.1.3 Provide all services promptly so as to permit the timely completion of
each component of the Project.
2.1.4 Review all materials and equipment specified for the Project to ensure
they are consistent with the Contract Documents, and notify the Owner if, in the
opinion of the Design/Builder, such materials and equipment may not be adequate
for the purpose for which they are specified.
2.1.5 Respond to all inquiries from the Owner or the Owner's Representative in
not more than two (2) business days from the date of the inquiry. Each response
will adequately address the questions raised and, if requested, will be in
writing; provided, however, that if two (2) business days is not a reasonable
period of time for the Design/Builder to prepare the response, the time period
will be extended to an adequate period.
2.1.6 The Design/Builder's duties and obligations as set forth herein, and any
liabilities arising hereunder, will at no time be diminished or released by
reason of any approval by the Owner of any documents prepared by the
Design/Builder, it being expressly understood that the Owner is at all times
relying upon the Design/Builder's skill and knowledge in preparing such
documents.
2.1.7 Develop and enforce policies and procedures to prevent the presence, use
or possession of unlawful drugs, controlled substances, weapons and explosives
on the Site.
2.2 PRECONSTRUCTION SERVICES
2.2.1 PROGRAMMING AND CONCEPTUAL DESIGN.
2.2.1.1 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.
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2.2.1.2 The Design/Builder shall consult with the Owner, and other parties as
the Owner may designate, to ascertain the applicable requirements of the Project
and shall review the understanding of such requirements with the Owner,
providing a preliminary evaluation of the Owner's program and project budget
requirements, each in terms of the other.
2.2.1.3 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.
2.2.1.4 The Design/Builder shall document the applicable requirements necessary
for the various Project functions or operations, including projected functional
areas and relationships, architectural, mechanical, electrical and related
special systems, and interior systems, furniture, furnishings and equipment.
2.2.1.5 The Design/Builder shall review with the Owner alternative approaches to
design and construction of the Project.
2.2.1.6 The Design/Builder shall submit to the Owner the completed Project
Program together with Conceptual Design Documents, a statement of the proposed
Fixed Limit of Cost, and a proposed schedule for completion of the Project.
Conceptual 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. This submission, together with any modifications
required by the Owner shall, with the Owner's approval, become the basis for
Schematic Design.
2.2.2 SCHEMATIC DESIGN PHASE
2.2.2.1 The Design/Builder shall provide a further evaluation of the Program and
the Project budget and schedule requirements, each in terms of the other.
2.2.2.2 The Design/Builder shall prepare for approval by the Owner Schematic
Design Documents consisting of scaled drawings, outline specifications and other
supporting information illustrating the scope and relationship of the principal
site, architectural, structural, mechanical and electrical elements of the
Project.
2.2.2.3 The Schematic Documents, at a minimum, shall consist of the following
drawings and supporting information:
a) Perspective sketch studies and study models to the extent required to
convey the three-dimensional character of the architectural design;
b) Architectural plans and sections illustrating the configuration and scale
of all building levels and program spaces;
c) Site Plans illustrating the relationship and scale of the building, the
site, site elements and features including topography, landscaping,
commercial access, pedestrian and vehicular circulation, parking and
building services;
d) Building Elevations;
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e) Structural sketches illustrating the framing methods and systems;
f) Mechanical and electrical sketches illustrating the basic organization and
distribution of building systems;
g) Outline Specifications describing the size and components of the entire
Project with respect to architectural, structural, mechanical, electrical,
fire protection, building management, life safety, vertical transportation
systems, materials and such other elements as may be appropriate; and
h) Review of zoning codes, building codes, and any other statute, regulation,
ordinance, rule or law of any governmental or regulatory authority
applicable to the Project, to the extent ascertainable by due inquiry,
including identification of all required governmental reviews, permits and
approvals, to the extent ascertainable by due inquiry.
2.2.2.4 At intervals appropriate to the progress of the Schematic Design Phase,
the Design/Builder shall provide intermediate Schematic Design Documents to the
Owner for review, which will be made in a timely manner so as to cause no delay
to the Project.
2.2.2.5 Upon completion of the Schematic Design Phase, the Design/Builder shall
prepare a corresponding cost estimate and schedule in accordance with Sections
2.2.2 and 2.2.3 for review by the Owner. Should the estimate differ from the
Fixed Limit of Cost previously proposed by the Design/Builder, the
Design/Builder shall identify the cause(s) for such difference and recommend in
writing for the Owner's approval any modification in the Schematic Documents
necessary to conform the Estimate of Probable Cost to the Fixed Limit of Cost.
2.2.3 DESIGN DEVELOPMENT PHASE
2.2.3.1 Based on the then current Owner approved Schematic Design Documents,
Fixed Limit of Cost and Project schedule and any further adjustments in the
scope or quality of the Project authorized by the Owner, the Design/Builder
shall prepare for approval by the Owner, the Design Development Documents. The
Design Development Documents shall conform to the organization, format and scale
to be used for the completed Construction Documents, and shall at a minimum
include: 1) revised and refined versions of all drawings, outline specifications
and other documents listed under the previous Schematic Design Phase; 2)
additional plan and section details, descriptions, drawings, specifications and
documents sufficient to evaluate the functionality of all programmed, ancillary
and incidental building spaces and site features; and 3) additional details,
descriptions, drawings, specifications and documents sufficient to evaluate the
quality, constructability, operation and cost of all major building systems,
including architectural, structural, mechanical and electrical systems,
materials, and all such other essential elements as may be necessary to define
the scale, configuration and scope of the Project.
2.2.3.2 At intervals appropriate to the progress of the Design Development
Phase, the Design/Builder shall provide intermediate Design Development
Documents to the Owner for review, which will be made in a timely manner so as
to cause no delay to the Project.
2.2.3.3 Upon completion of the Design Development Phase, prepare a corresponding
cost estimate and schedule in accordance with Sections 2.2.2 and
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2.2.3 for review by the Owner. Should the estimate differ from the Fixed Limit
of Cost approved at the completion of Schematic Design, the Design/Builder shall
identify the cause(s) for such difference and recommend in writing for the
Owner's approval any modification in the Design Development Documents necessary
to conform the Estimate of Probable Cost to the Fixed Limit of Cost.
2.2.4 CONSTRUCTION DOCUMENTS PHASE
2.2.4.1 Based on the then current Owner approved Design Development Documents,
Fixed Limit of Cost, Project Schedule and any further adjustments in the scope
or quality of the Project authorized by the Owner, the Design/Builder shall
prepare, for approval by the Owner, Drawings and Specifications setting forth in
usual and customary detail the requirements for the construction of the Project.
Specifications shall be prepared in conformance with the divisional format of
the Construction Specifications Institute. The Drawings and Specifications shall
be sufficiently complete, clear, and fully coordinated, and in compliance with
all applicable codes, ordinances, statutes, laws and regulations, for the
Design/Builder to fulfill its obligations pursuant to this Agreement.
Specifications shall require Subcontractors to provide all necessary assistance
in the utilization of equipment, systems, operation and maintenance manuals, and
in training of the Owner personnel for operation and maintenance.
2.2.4.2 At intervals appropriate to the progress of the Construction Documents
Phase, the Design/Builder shall provide intermediate Construction Documents to
the Owner for review and approval, which will be made in a timely manner so as
to cause no delay to the Project.
2.2.4.3 The Design/Builder shall inform the Owner of any changes in requirements
or in construction materials, systems or equipment as the Drawings and
Specifications are developed and make adjustments within the estimate of Project
Cost and Project schedule appropriately.
2.2.5 CONSULTATION DURING PROJECT DEVELOPMENT. Schedule and attend regular
meetings with its Architect and the Owner during conceptual and schematic
design, design development and preparation of bid documents with respect to site
use and improvements, selection of materials, building systems and equipment.
Provide recommendations on construction feasibility, availability of materials
and labor, time requirements for installation and construction, and factors
related to cost including costs of alternative designs or materials, preliminary
budgets and possible economies.
2.2.6 SCHEDULING. Develop a Master Project Construction Schedule, after
consultation with the Owner. The Master Project Construction Schedule and each
update thereto will establish and conform to the Owner's occupancy requirements
for the Project and be subject to the Owner's approval. The Master Project
Construction Schedule will coordinate and integrate the Design/Builder's design
efforts with the construction, material and equipment delivery and installation
schedules for each part of the Project. The Master Project Construction Schedule
will be updated at the end of the schematic design, design development and
contract documents phases and will incorporate a detailed schedule for the
construction operations of the Project, including realistic activity sequences
and durations, time for the Owner reviews and approvals, allocation of labor and
materials, processing of shop drawings and samples, delivery of products
requiring long lead time procurement, and the
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Owner occupancy requirements showing portions of the Project having occupancy
priority. The Master Project Construction Schedule shall be sufficiently
detailed to allow for a full evaluation and understanding by the Owner.
2.2.7 ESTIMATE OF PROBABLE COST. Prepare a cost estimate as soon as major
Project requirements have been identified, and update periodically for the
Owner's approval. Prepare an estimate based on a quantity survey of Drawings and
Specifications at the end of the schematic design, design development and
contract document phases for approval by the Owner as the Estimate of Probable
Cost. Update and refine this estimate for the Owner approval as the development
of the Drawings and Specifications proceeds. Advise the Owner if it appears the
Estimate of Probable Cost will exceed the then current, approved Fixed Limit of
Cost, and make recommendations for corrective action. Such construction cost
estimates shall include reasonable and appropriate contingency amounts for
potential increases in the cost which might result from design, bidding or price
escalation, and shall be sufficiently detailed to allow for a full evaluation
and understanding by the Owner. The Design/Builder shall recommend provisions in
the Contract Documents for alternate bids to reduce, if necessary the
construction cost to the approved Fix Limit of Cost.
2.2.8 COORDINATION OF CONTRACT DOCUMENTS. Review the Drawings and Specifications
as they are being prepared, recommending alternative solutions whenever design
details are discovered which may adversely affect construction feasibility,
schedules or cost.
2.2.9 CONSTRUCTION PLANNING.
2.2.9.1 Recommend for purchase and expedite the procurement of long-lead items
to ensure their delivery by the required dates.
2.2.9.2 Make recommendations to the Owner regarding the division of Work in the
Drawings and Specifications to facilitate the bidding and awarding of
Subcontracts, allowing for phased construction if approved by the Owner and
taking into consideration such factors as time of performance, availability of
labor, overlapping trade jurisdictions, provisions for temporary facilities and
the operating requirements of the Owner.
2.2.9.3 Review the Drawings and Specifications for completeness, eliminate areas
of conflict and overlapping in the Work to be performed by the various
Subcontractors, and prepare prequalification criteria for bidders. As part of
its review, the Design/Builder shall report to the Owner in writing any errors,
inconsistencies, or omissions the Design/Builder discovers and provide for
correction of such errors, inconsistencies or omission by its Architect.
2.2.9.4 Prepare necessary bidding information and instructions, bidding forms,
General and Special Conditions, and form of agreement between the Design/Builder
and Subcontractors. These documents and all other Contract Documents shall be
subject to approval by the Owner prior to being issued for bidding.
2.2.9.5 Develop Subcontractor interest in the Project, issue bid documents to
bidders, facilitate questions from bidders, issue addenda as needed with the
assistance of the Architect, and take competitive bids or proposals on the Work
of the various Subcontractors. After analyzing the bids or proposals,
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recommend to the Owner for approval the Subcontractors to which such contracts
shall be awarded.
2.2.10 EQUAL EMPLOYMENT, LABOR AGREEMENTS, LEASE REQUIREMENTS AND SAFETY
REGULATIONS. Determine applicable requirements for each of the captioned items
for inclusion in Project bidding documents.
2.3 CONSTRUCTION PHASE.
2.3.1 PROJECT CONTROL. Manage, direct, monitor and oversee the Work of the
Subcontractors and its own forces and coordinate the Work with the activities
and responsibilities of the Owner, Architect and Design/Builder to complete the
Work in accordance with the terms of this Agreement.
2.3.1.1 Maintain a competent full-time staff at the Site in accordance with
Paragraph 1.2 of this Agreement to coordinate and provide general direction of
the Work and progress of the Subcontractors and its own forces on the Project.
2.3.1.2 Establish on-site organization and lines of authority in order to carry
out the overall plans of the Construction Team.
2.3.1.3 Develop procedures for coordination among the Design/Builder, the
Architect, and the Owner, with respect to all aspects of the Project and
implement such procedures.
2.3.1.4 Provide for its Architect or Project Manager, as appropriate, to
undertake all construction administration activities consistent with
professional standards including but not limited to: 1) visiting the Site at
regular intervals appropriate to the progress of construction as required to
become familiar with the progress and quality of the work in conformance with
the Contract Documents; 2) attending all job meetings; 3) providing timely
review of all submittals and responses to Requests for Information; 4) preparing
Bulletins and Change Orders; 5) reviewing Certificates for Payment; 6) advising
the Owner of any need for testing or special inspection of subcontractor work;
7) preparing punch lists and lists of incomplete work; 8) conducting inspections
to determine the date of completion for each subcontract; and 9) coordinating as
necessary with all trade contractors to produce as-built documents in electronic
format.
2.3.1.5 Schedule and conduct regular progress meetings at which the
Design/Builder and the Owner can discuss jointly such matters as procedures,
progress, problems and scheduling. The Design/Builder shall prepare and
distribute meeting minutes within three (3) business days following such
meetings.
2.3.1.6 Provide regular monitoring of the schedule as construction progresses.
Identify potential variances between scheduled and probable completion dates.
Review the schedule for Work not started or incomplete, and recommend to the
Owner adjustments in the schedule to meet the required completion date. Provide
summary reports of each monitoring and document all changes in schedule.
2.3.1.7 Determine the adequacy of the Subcontractors' and its own personnel and
equipment and the availability of materials and supplies to meet the schedule.
Implement courses of action, subject to the reasonable approval of the Owner
when requirements of a Subcontract are not being met.
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2.3.1.8 As necessary to provide for the accurate and coordinated layout and
construction of the Work shown in the Contract Documents, the Design/Builder
shall establish and certify all principal building layout lines, elevations of
the bottom of footings, floor levels and key Site and structural elevations and
shall verify by a qualified surveyor or professional engineer critical layout
lines and elevations established by Subcontractors. The Design/Builder shall
record all such surveys and any other test results in duplicate, make all such
records available to the Owner and the Architect at all times, and at the
completion of the Project deliver all such records to the Owner.
2.3.2 PHYSICAL CONSTRUCTION. Provide all labor, materials, supplies, apparatus,
appliances, construction equipment, fixtures, tools, implements, transportation,
utilities, storage and subcontract items which are necessary for the completion
of the Work. To the extent that the Design/Builder performs any Work, other than
General Conditions Work, with its own forces, it shall, with respect to such
Work, be bound to the extent not inconsistent with this Agreement, by the
procedures and the obligations with respect to such Work as may govern the
Subcontractors under the Contract Documents including any General and Special
Conditions to the Subcontracts. No Work shall be performed by the Design/Builder
without the reasonable consent of the Owner.
2.3.3 COST CONTROL. Develop and monitor a system of Project cost control.
Periodically revise and refine the initially approved project construction
budget, incorporate approved changes, and develop cash flow reports and
forecasts as needed. Identify variances between actual and budgeted or estimated
costs and advise the Owner whenever projected cost exceeds budgets or estimates.
2.3.3.1 Maintain cost accounting records on authorized Work performed under unit
costs, actual costs, or other basis requiring project accounting records for the
administration of the Work. Afford the Owner access to these records and
preserve them for the Owner until completion of the Project at which time they
shall be delivered to the Owner, or if not desired by the Owner retained for a
period of six (6) years. Such records shall be in such detail as is customary
for the Design/Builder and presented in such form as requested by the Owner.
2.3.4 BULLETINS AND CHANGE ORDERS. Develop and implement a system for the
preparation, review and processing of Bulletins and Change Orders. Recommend
necessary or desirable changes to the Owner, review requests for changes, submit
recommendations to the Owner and assist in negotiating Change Orders.
2.3.5 PAYMENTS TO SUBCONTRACTORS. Develop and implement a procedure for the
review, processing and payment of applications by Subcontractors for progress
and final payments, subject to the approval of the Owner and Architect.
2.3.6 PERMITS AND FEES. Except as provided in Section 3.5, the Design/Builder
shall obtain, all building permits and special permits for permanent
improvements, including permits for inspection or temporary facilities required
to be obtained directly by the various Subcontractors, obtain approvals from all
the authorities having jurisdiction, give all notices and comply with all laws,
ordinances, rules, regulations, and orders of any public authority bearing on
the performance of the Work as it pertains to the construction process.
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2.3.7 THE OWNER'S CONSULTANTS. If required, assist the Owner in selecting,
coordinating and retaining professional services of testing laboratories and
special consultants.
2.3.8 INSPECTION AND CORRECTIVE WORK. Inspect the Work for defects and
deficiencies, and provide for correction of all Work rejected by the Owner or
known by the Design/Builder to be defective, failing to conform to the
requirements of the Contract Documents, or conflicting with any laws, ordinances
rules, regulations and restrictions whether observed before or after Substantial
Completion and whether or not fabricated, installed or completed.
2.3.9 PROTECTION OF PERSONS AND PROPERTY.
2.3.9.1 The Design/Builder shall be responsible for initiating, maintaining and
providing supervision of all safety precautions and programs in connection with
the performance of this Agreement. The Design/Builder shall develop, communicate
in writing and monitor safety standards for the Project, review the safety
programs of each of the Subcontractors and make appropriate recommendations for
modification of such programs to conform to the Project safety standards, and
Legal Requirements.
2.3.9.2 The Design/Builder shall take reasonable precautions for the safety of,
and shall provide reasonable protection to prevent damage, injury or loss to: 1)
employees on the Work and other persons who may be affected thereby; 2) the Work
and materials and equipment to be incorporated therein, whether in storage on or
off the Site, under care, custody, or control of the Design/Builder or the
Design/Builder's contractors; and 3) other property at or adjacent thereto, such
as trees, shrubs, lawns, walks, pavements, roadways, structures and utilities
not designated for removal relocation, or replacement in the course of
construction. The Design/Builder's responsibilities hereunder include, but are
not limited to, protection of persons and property from damage by the elements,
theft or vandalism.
2.3.9.3 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 the property at the Site caused in whole or in part by
the Design/Builder, a Subcontractor or anyone directly or indirectly employed by
any of them, or by anyone for whose acts they may be liable.
2.3.10 WASTE REMOVAL. Maintain the Project free and clear of accumulated waste
materials and rubbish. Ensure that the Subcontractors fulfill their obligation
not to create any condition that would constitute a safety or health hazard. At
the completion of each component of the Project, the Design/Builder will ensure
the removal of all waste materials and rubbish, tools, equipment, machinery and
surplus materials from and about the Project.
2.3.11 DOCUMENT INTERPRETATION. Refer to the Design/Builder's Architect all
questions for interpretation of the documents prepared by the Architect. The
Architect shall be the interpreter of the requirements of such documents and the
judge of the performance thereunder by the Design/Builder and the
Subcontractors. The Architect's decisions as to the requirements of the
documents shall be final and not subject to further proceedings, if made in good
faith.
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2.3.12 SHOP DRAWINGS AND SAMPLES. Design/Builder shall prepare or cause to be
prepared, as part of the Work, all shop drawings and other detail drawings not
made a part of the Drawings and Specifications which are required in the
performance of Design/Builder's obligations hereunder. Consistent with this
requirement, the Design/Builder shall establish and implement procedures for
expediting the processing and approval of shop drawings and samples. The
Design/Builder shall provide for the receipt, review and approval of all
Subcontractor shop drawings and sample submittals for completeness and
conformance with the Contract Documents consistent with professional standards
of care.
2.3.13 REPORTS AND PROJECT SITE DOCUMENTS. Record the progress of the Project.
Submit on a monthly basis, written progress reports in a format acceptable to
the Owner that include an updated project schedule, information on the
Subcontractors' work, the percentage of completion, cost data with budget
implications, progress photographs and change order activity.
2.3.13.1 Maintain at the Site a daily log in which the Design/Builder will
record the progress of each part of the Project including a record of weather,
Subcontractors' work on the Site, the number of and type of workers on the Site,
work accomplished, problems encountered, unusual events and other relevant data
as the Owner may require. The log shall be made available at the request of the
Owner.
2.3.13.2 Maintain at the Site, on a current basis: records of all agreements
with Subcontractors and any supplier, current Contract Documents, Subcontractor
submittals and payment applications, reports, instructions to Subcontractors,
samples, purchases, materials, equipment, maintenance and operating manuals and
instructions, and other construction related documents, including all revisions.
Obtain data from Subcontractors and maintain a current set of record Drawings,
Specifications and operating manuals. These materials are to be maintained in
good and current order and marked to record all changes made during
construction. Maintenance of current and accurate as-built documents shall be a
prerequisite to full payment of the monthly progress payments pursuant to the
provisions of Article 11.
2.3.13.3 Promptly following completion of each part of the Project, prepare
as-built documents identifying deviations in the Work from information provided
in the Contract Documents for delivery to the Owner.
2.3.13.4 Promptly following completion of each part of the Project, obtain from
the respective Subcontractors operating manuals and recommended preventive
maintenance routines for the equipment installed in such part of the Project.
Review such manuals and routines to ensure they are generally adequate for the
purpose for which they are intended. At the completion of the Project, deliver
all such records to the Owner.
2.3.14 SUBSTANTIAL COMPLETION. With its Architect, provide written notice to the
Owner that the Design/Builder believes Substantial Completion of the Work or
designated portions have been achieved, and prepare a list of incomplete items
and a schedule for their completion.
2.3.15 START-UP. Upon or as the completion of each part of the Project
approaches, direct the testing, start-up and check-out of all utilities and
operating systems and equipment in accordance with the Contract Documents. The
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testing, start-up and check-out will be thorough and conducted in such a manner
so as to discover any defects in accordance with Exhibit #3. The Design/Builder
will advise the Owner in writing of any defects.
2.3.16 TRAINING. During the testing, start-up and check-out described in 2.3.15
herein, provide for the Owner's maintenance personnel to receive training in the
proper operation of, and performance of routine maintenance on, all utilities,
operating systems and equipment in accordance with the Contract Documents.
Provide for videotaping such training for the Owner's subsequent use.
2.3.17 FINAL COMPLETION. With its Architect, provide written notice to the Owner
that the Design/Builder believes Final Completion of the Project as a whole has
been achieved, and the Work is ready for final inspection. Secure and transmit
to the Owner required guarantees, affidavits, releases, bonds and waivers
required by this Agreement. Turn over to the Owner all keys, manuals, record
drawings, schedules of warranties and maintenance stocks required by this
Agreement.
2.3.18 WARRANTY. Where any Work is performed by the Design/Builder's own forces
or by Subcontractors under contract with the Design/Builder, the Design/Builder
shall warrant for a period of one year following the Date of Substantial
Completion that all materials and equipment included in such Work will be new,
unless otherwise specified, and that such Work will be of good quality, free
from improper workmanship and defective materials and in conformance with the
Drawings and Specifications. With respect to the same Work, the Design/Builder
further agrees to correct all such defective material and workmanship for a
period of one year from the Date of Substantial Completion, including any
additional testing and inspections, or within such longer period of time as may
be set forth in the Contract Documents. The Design/Builder shall collect and
deliver to the Owner any specific written warranties required by the Contract
Documents.
2.3.18.1 If there are more than three (3) calls for warranty work for any reason
on a specific system, piece of equipment, area or item of work, the warranty
period shall extend to a period of one (1) year beyond the later of: 1) the date
of the last repair; or 2) one (1) year past the date at which the product or
work item is functioning as intended for an industry standard period of time
without requiring service or repairs.
2.4 ADDITIONAL SERVICES. At the request of the Owner the Design/Builder will
provide the following additional services upon written agreement between the
Owner and Design/Builder defining the extent of such additional services and the
amount and manner in which the Design/Builder will be compensated for such
additional services provided, however, the Design/Builder shall not be
compensated for any of the following services made necessary by the fault of the
Design/Builder:
2.4.1 Services related to appraisals or valuations of existing conditions,
facilities or equipment.
2.4.2 Preparation of professional perspectives, models or renderings not
provided for in this Agreement except insofar as these are otherwise useful or
necessary to the Design/Builder in the provision of its services hereunder.
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2.4.3 Obtaining training for maintenance personnel or negotiating maintenance
service contracts other than as provided for in the Contract Documents.
2.4.4 Consultation, negotiation or preparing documentation in support of Project
financing.
2.4.5 Surveys, site evaluations, legal descriptions and aerial photographs.
2.4.6 Soils, subsurface and environmental studies, reports and investigations
required for submission to governmental authorities or others having
jurisdiction over the Project.
2.4.7 Investigation or making measured drawings of existing conditions or the
verification of drawings or other Owner-provided information except as required
as a service by this Agreement.
2.4.8 Making revisions to the Contract Documents when such revisions are 1)
inconsistent with written approvals or instructions previously given by the
Owner; 2) are required by the enactment or revision of codes, laws or
regulations subsequent to the preparation of such documents; and 3) in all
events, are due to no act or failure to act on the part of the Design/Builder.
2.4.9 Serving or preparing to serve as an expert witness in connection with any
public hearing, arbitration proceeding or legal proceeding to which the
Design/Builder is not a party in its own name, which is not instituted by the
Design/Builder or in which the performance of the Design/Builder is not in
issue; provided, however that this Subparagraph shall not be interpreted to mean
that any appearance by the Design/Builder at any meeting of the Owner shall be
an Additional Service
ARTICLE 3
OWNER'S RESPONSIBILITIES
3.1 The Owner will endeavor to timely provide the Design/Builder all information
it has regarding its requirements for the Project. The Owner and the
Design/Builder shall consult regarding the requirements of the Project and any
modifications which may be desirable in the Program, including the Owner's
objectives, schedule, constraints and criteria, including space requirements and
relationships, flexibility, expandability, special equipment, systems and site
requirements.
3.1.1 The Owner and Design/Builder shall agree to review periods for design
submissions and the Construction Documents, requests for information and Changes
in the Work. If the time period for any specific request or submission is not a
reasonable period of time for the Owner to prepare a response, the time period
will be extended to an adequate period.
3.2 The Owner shall designate a representative who shall be fully acquainted
with the Project and has authority to approve Changes in the Project, render
decisions promptly and furnish information expeditiously. The Design/Builder
will submit any documents requiring the Owner's decision reasonably in advance
of the date by which the decision is required.
3.3 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
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Owner's expense in a timely manner and shall not delay the orderly progress of
the Design/Builder's services.
3.4 SURVEY AND GEOTECHNICAL INFORMATION.
3.4.1 The Owner shall furnish for the Site of the Project all necessary surveys
describing the physical characteristics, legal limitations, utility locations,
and a legal description.
3.4.2 The Owner shall furnish the services of geotechnical engineers as
requested by the Design/Builder to properly design and prosecute the Work. Such
services may include but are not limited to test borings, test pits,
determinations of soil bearing values, percolation tests, evaluations of
hazardous materials, ground corrosion and resistivity tests, and necessary
operations for anticipating subsoil conditions.
3.4.3 With respect to the requirements of this Section 3.4, it is the
understanding between the parties that the Owner will furnish to the
Design/Builder all information required pursuant to this Section as it becomes
available.
3.5 Unless otherwise specified in the Contract Documents or this Agreement, the
Owner shall secure, with the assistance of the Design/Builder, and pay for: (i)
necessary zoning approvals, easements, variances, assessments and charges
required for the construction, use or occupancy of permanent structures or for
permanent changes in existing facilities; and (ii) environmental permits
required for the operation of the Project upon completion of construction. The
Owner shall cooperate with the Design/Builder in securing building and other
permits, utility capacity permits, licenses and inspections.
3.6 The Owner shall furnish such legal services as may be necessary for
providing the items set forth in Paragraph 3.5, and such auditing services as it
may require to verify the Design/Builder's Applications for Payment. Legal and
auditing services will not be provided for the Design/Builder, its Architect or
Subcontractors in the performance of their obligations under this Agreement.
3.7 This Section not used.
3.8 The Owner shall provide the insurance for the Project as provided in
Paragraph 12.4.
3.9 The services, information, surveys and reports required by the above
paragraphs shall be furnished with reasonable promptness at the Owner's expense
so as not to cause delay, and the Design/Builder shall be entitled to rely upon
the accuracy and completeness thereof.
3.10 If the Owner observes or otherwise becomes aware of a fault or defect in
the Work or nonconformity with the Design/Builder's Proposal or the Construction
Documents, the Owner shall give prompt written notice thereof to the
Design/Builder.
3.11 The Owner shall communicate with persons or entities employed or retained
by the Design/Builder through the Design/Builder, unless otherwise requested by
the Design/Builder and agreed to by the Owner.
3.12 SEPARATE CONTRACTORS.
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3.12.1 Design/Builder understands and agrees that the Owner has separately
contracted with third parties for the manufacture, supply, delivery and
installation of systems and equipment which are essential to and form the basis
of the Owner's operations. As the Design/Builder for the Project, Design/Builder
is responsible for the overall Project and for the integration of its design and
construction with the systems and equipment provided and installed by the
Owner's separate contractors. Design/Builder understands that in connection with
the installation of any system or equipment by any separate contractors or
manufacturers that Design/Builder shall oversee and coordinate the work of such
contractors and manufacturers and that the Owner shall be responsible only to
the extent that its contract with such parties requires supervising such work.
Design/Builder understands that it has the responsibility jointly with such
separate contractors or manufacturers to coordinate the Work with their
respective works.
3.12.2 The Owner and Design/Builder recognize that the work required of the
Owner's separate contractors may continue to be performed after final completion
of the Work under this Agreement. Without otherwise limiting the
Design/Builder's obligations hereunder, it is understood and agreed that nothing
herein shall require the Design/Builder to oversee or coordinate the work of the
Owner's separate contractors after final completion of the Work and acceptance
thereof by the Owner.
ARTICLE 4
SUBCONTRACTS
4.1 The Design/Builder shall furnish to the Owner, in writing, a list of
proposed Subcontractors for Work to be performed and materials to be supplied.
The Owner shall have the right to review and approve all bidding documents and
all proposed Subcontractors; any such approval shall not relieve the
Design/Builder of full responsibility for the Work to be performed or the
materials to be supplied by such parties.
4.2 Except as permitted by the Owner, the Design/Builder shall take competitive
bids for the Work to be performed by Subcontractors. Upon receipt of
Subcontractor bids, and during or after completion of negotiations by the
Design/Builder with the bidding Subcontractors, but prior to concluding any such
agreement, the Design/Builder shall prepare a complete bid analysis of the bids
received and transmit same to the Owner for review and approval. Such bid
analysis shall clearly establish the basis for award of the proposed
subcontracts.
4.2.1 The parties agree that the Design/Builder shall self-perform labor for the
scope of work associated with Divisions 15 and 16 as defined by the Construction
Specification Institute. In approving such self-performance, the Design/Builder
acknowledges its responsibility to obtain competitive bids for all materials and
equipment furnished for such Work as otherwise provided for in this Article 4.
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4.3 If the Owner refuses to accept a Subcontractor recommended by the
Design/Builder, the Design/Builder shall recommend an acceptable substitute and
the Guaranteed Maximum Price shall be modified by the difference in cost
occasioned by such substitution and an appropriate Change Order shall be issued.
4.4 Subcontracts will be between the Design/Builder and its Subcontractors. The
Subcontractor agreement, bid forms, General and Special Conditions shall be
developed by the Design/Builder for review and approval by the Owner.
ARTICLE 5
SCHEDULE
5.1 The Design/Builder acknowledges that the Scheduled Completion Date and any
Interim Completion Dates are essential to the Owner's satisfaction of its
obligations under separate agreements entered into with respect to construction
of and the supply and installation of equipment for the Project, and to the
Owner's business operations, financing and development plans and therefore time
is of the essence in meeting said dates. The Design/Builder acknowledges that
the Project as a whole shall be Substantially Complete no later than October 1,
2006 so as to meet the Owner's requirements. Interim completion dates for
separate components of the Project may be established in accordance with the
Master Construction Schedule established pursuant to Paragraph 2.2.6.
5.2 A Scheduled Completion Date of the Project as a whole shall be established
within thirteen months following the commencement of construction.
5.3 Substantial Completion of the Work is when construction is sufficiently
complete in accordance with the Drawings and Specifications, except for minor
punch list items, such that the Owner can occupy or utilize the Work for the use
for which it is intended. Warranties called for by this Agreement or by the
Contract Documents shall commence on the date of Substantial Completion of the
Work as a whole.
5.4 SCHEDULE DELAYS.
5.4.1 Should the construction phase through completion of the Work be exceeded
by Thirty (30) days or less, the Design/Builder shall receive no additional
compensation for services in accordance with Article 2 or increase in the
Guaranteed Maximum Price. Should the Construction Phase through completion of
the Work be exceeded by more than Thirty (30) days the Substantial Completion
Date and the Guaranteed Maximum Price, as applicable, shall be equitably
adjusted by mutual agreement in writing between the Owner and Design/Builder as
follows: (i) with respect to the Substantial Completion Date, such date shall be
extended by the number of days equal to the actual number of days that the
Project has been so delayed and, (ii) with respect to the Guaranteed Maximum
Price, the increase in the Guaranteed Maximum Price shall not exceed the actual
costs incurred by the Design/Builder in connection with such delay, and in no
event shall include any adjustment in compensation for lost opportunity or other
consequential damages which may be claimed by the Design/Builder. The conditions
under which the Design/Builder may be entitled to an extension in the
Substantial Completion Date and increase in the Guaranteed Maximum Price under
this Paragraph 5.4 is limited to the following circumstances and no others:
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a) Force Majeure, defined as the following events:
1) Fire, flood or other unavoidable insured casualty;
2) An embargo by the Government of the United States;
3) Except in connection with a labor dispute on-site or at
locations under the control of the Design/Builder, any strike,
work stoppage or lockout in industries essential to the
conduct of the Work in no way caused or resulting from default
or collusion on the part of the Design/Builder;
4) Unusual delays caused by any change in governmental controls
or regulations after the commencement of construction; or
5) Acts of war or terrorism having a demonstrable, direct,
adverse affect on the ability of the Design/Builder to perform
its responsibilities under the terms of this Agreement.
b) Undisclosed site conditions to the extent not consistent with the
nature of the Work.
c) Any negligent act or omission of the Owner.
d) Delays in Owner furnished equipment or services.
Notwithstanding the foregoing, if the Design/Builder's own acts or
failures to act cause or contribute to the extension of the Construction Phase
beyond the original schedule, the Design/Builder will receive no additional
compensation under this Agreement. Further, the Design/Builder will receive no
additional compensation under this Agreement for delays or additional costs to
the Design/Builder occasioned by acts, failures to act or delays by
Subcontractors under the Design/Builder's oversight and supervision.
5.4.2 Should the Scheduled Completion Date be exceeded by more than Thirty (30)
days due to causes beyond the control of the Design/ Builder occurring after the
Scheduled Completion Date is established pursuant to Section 5.2 other than as
set forth in Section 5.4.1 herein, the Scheduled Completion Date shall be
equitably adjusted by mutual agreement in writing between the parties, but in no
event to be later than October 1, 2006, however, the Design/ Builder shall not
be entitled to an increase in the Guaranteed Maximum Price on account of such
delay. Notwithstanding the foregoing, if the Design/Builder's own acts or
failures to act cause or contribute to the extension of the Construction Phase
beyond the original schedule, the Design/Builder will receive no schedule
extension under this Agreement.
5.4.3 In addition to the provisions of 5.4.1 herein, if the Design/Builder does
not achieve Substantial Completion by the Scheduled Completion Date, a penalty
will be assessed at the rate of $5,000 per day (the "Liquidated Damages Rate")
until Substantial Completion is achieved. If Design/Builder believes the
Scheduled Completion Date will not be met, the Design/Builder shall provide a
one-time written notice delivered to Owner not less than 90 days prior to the
Scheduled Completion Date providing a new Scheduled Completion Date (the
"Revised Scheduled Completion Date"), which shall be no more than 30 days
following the Scheduled Completion Date. If Design/Builder achieves Substantial
Completion on or before the Revised Scheduled Completion Date, the penalty for
the period up to the Revised Scheduled Completion Date shall be assessed at 50%
of the Penalty Rate. If the Design/Builder, provides
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written notice and does not achieve Substantial Completion by the Revised
Substantial Completion Date, the full Penalty Rate will be assessed up to the
date of Substantial Completion.
ARTICLE 6
GUARANTEED MAXIMUM PRICE
6.1 Upon completion of the Contract Documents for bidding of Subcontracts in
accordance with Article 4 of this Agreement, the parties shall agree to a
Guaranteed Maximum Price for the Work.
6.1.1 Such Guaranteed Maximum Price (GMP) will include the estimated Cost of the
Work as set forth in Article 8 and the Design/Builder's Compensation as set
forth in Article 7 of this Agreement.
6.1.2 The parties agree that the Guaranteed Maximum Price for the Project shall
in no event exceed $44,334,680.
6.1.3 The Guaranteed Maximum Price will be subject to modification for Changes
in the Work as provided in Article 9 and for delays in accordance with Paragraph
5.4 hereof. Should the final actual Cost of the Work plus the Design/Builder's
Compensation exceed the Guaranteed Maximum Price as adjusted in accordance with
this Agreement, the Design/Builder shall pay such excess cost from its own
funds.
6.2 When the Design/Builder provides a Guaranteed Maximum Price, all assumptions
and qualifications, documents and clarifications used to establish the
Guaranteed Maximum Price shall be identified in writing and incorporated in this
Agreement as provided under Section 1.3.
6.3 The Guaranteed Maximum Price will include those taxes in the Cost of the
Work which are identified and agreed by the parties as applicable and legally
enacted at the time the Guaranteed Maximum Price is established
6.4 The Design/Builder guarantees that the total final Cost of the Work plus the
Design/Builder's Compensation will not exceed the final Guaranteed Maximum Price
as adjusted for changes during the course of the Project. The breakdown of the
Cost of the Work by line item is for informational purposes only. No guarantee
exists for the cost of any individual line item within the Cost of the Work;
savings developed within a specific line item may be utilized to offset possible
budget overruns in any other line item.
6.5 The Guaranteed Maximum Price shall include a Construction Contingency in an
amount equal to $2,521,240. Such Construction Contingency shall be the maximum
sum available to cover Changes in the Work as provided in Article 9 excluding
Section 9.1.6.
6.5.1 Of the total contingency amount, one half shall be available to the
Design/Builder for Changes in the Cost of Work associated with trade buyout
differentials, estimating errors or adjustments, labor, overtime, coordination
changes, minor modifications, punchlist items implemented during checkout and
startup in accordance with Section 2.3.15, or subcontractor contract
adjustments. Such portion of the contingency shall be available to the
Design/Builder without restriction and without prior approval of the Owner,
excluding costs associated with the Design/Builder's self-performed labor as
provided in Section 4.2.1. The contingency shall not be available for corrective
work as set forth in Section 8.3.
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6.5.2 Of the total contingency amount, one half shall be available to the
Design/Builder for the Cost of Work subject to Owner approval as provided in
Article 9, such approval not to be unreasonably withheld.
6.5.3 All contingency use involving the Design/Builder's self-performed labor as
authorized under Section 4.2.1 shall be subject to Owner approval, such approval
not to be unreasonably withheld.
6.5.4 Except as otherwise provided in Section 6.5.3, the contingency allocation
set forth in Section 6.5.1 shall be expended in its entirety prior to the
utilization of the contingency set forth in Section 6.5.2.
ARTICLE 7
DESIGN/BUILDER'S COMPENSATION
7.1 For the performance of its design/build services in accordance with this
Agreement, the Design/Builder shall be paid the amount of $5,892,203 in total
Compensation. In the event the Project is abandoned by the Owner, the
Design/Builder shall be entitled to compensation in accordance with this
Agreement for services rendered after the execution of this contract.
7.1.1 Included in the Design/Builder's Compensation are:
7.1.1.1 Salaries of the Design/Builder's employees when stationed at the field
office, in whatever capacity employed, employees engaged on the road in
expediting the production or transportation of materials and equipment, and
employees in the main or branch office performing the following functions:
purchasing, estimating, construction administration, scheduling, cost control,
project management, safety, project engineering, accounting, equal employment
opportunity and clerical help.
7.1.1.2 Cost of all customary employee benefits and taxes for such items as
unemployment compensation and social security, insofar as such cost is based on
wages, salaries, or other remuneration paid to employees of the Design/Builder.
7.1.1.3 Reasonable transportation, traveling, moving, and hotel expenses of the
Design/Builder or of its officers or employees incurred in discharge of duties
connected with the Project.
7.1.1.4 The cost of setting up, maintaining and operating a jobsite construction
field office. Such expenses include but are not limited to: trailer rental,
utilities, office supplies, office machines including personal computer hardware
and software, IS support expenses, fax, telephone/radio service including
long-distance telephone calls, postage, delivery, expressage, blueprinting,
progress photographs, field office supplies, Xerox copies, stationery and
similar petty cash items in connection with the Project.
7.1.1.5 Cost of the premiums for all insurance which the Design/Builder is
required to procure by this Agreement which are in addition to the
Design/Builder's customary insurance coverages.
7.1.1.6 Costs in excess of the Guaranteed Maximum Price in accordance with
Section 7.2.
7.1.1.7 The Design/Builder's profit and corporate overhead expenses (the "Fee")
equal to Five Percent (5%) of the Cost of the Work within the
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Guaranteed Maximum Price, which includes any part of the Design/Builder's
capital expenses and interest on the Design/Builder's capital employed for the
Project.
7.1.1.8 Cost of design and engineering services, inclusive of all fees and
reimbursable expenses necessary for the design, specification, bidding and
construction administration of the Project.
7.2 ADJUSTMENTS IN COMPENSATION
7.2.1 For Changes in the Project as provided in Article 9, the Design/Builder's
Compensation under Section 7.1.1, excluding Section 7.1.1.7, shall be adjusted
by the direct costs incurred by the Design/Builder to implement such Changes, or
as otherwise may be agreed in writing by the Owner and Design/Builder.
7.2.2 For Changes in the Project as provided in Article 9, the Design/Builder's
Compensation under Section 7.1.1.7 shall be adjusted in direct arithmetic
proportion to the change in the Guaranteed Maximum Price approved in accordance
with this Agreement or as otherwise may be agreed in writing by the Owner and
Design/Builder. If such calculation results in substantial inequity to the Owner
or the Design/Builder, the amount of the adjustment shall be equitably adjusted
by mutual agreement in writing between the parties.
7.2.3 The Design/Builder shall be paid additional compensation as set forth in
this Section 7.2 if the Design/Builder is placed in charge of the reconstruction
of any insured or uninsured loss.
7.3 SCHEDULE OF PAYMENTS
7.3.1 The Owner and the Design/Builder shall mutually approve in writing a
detailed breakdown of and estimated time schedule for payments on account of the
Design/Builder's Services. The breakdown shall indicate the portion of total
compensation attributable to each component and phase of the Design/Builder's
services in accordance with this Agreement and a time schedule coordinated with
the actual progress of the Project.
7.3.2 A Retainer of Five Percent (5%) of the Design/Builder's Compensation under
Section 7.1 will be withheld from each payment and paid to the Design/Builder as
part of the Final Payment in accordance with Section 11.3 of this Agreement.
ARTICLE 8
COST OF THE WORK
8.1 The term "Cost of the Work" shall mean all costs incurred by the
Design/Builder in performing its obligations in connection with this Agreement,
excluding costs as set forth in Article 7. The Cost of the Work shall be at
rates not higher than the standard paid in the locality of the Work, except with
prior written consent of the Owner, and consist of the items set forth below in
this Article.
8.1.1 The Owner agrees to pay the Design/Builder for the Cost of the Work as
defined in this Article 8. Such payment shall be in addition to the
Design/Builder's Compensation stipulated in Article 7.
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8.2 COST ITEMS
8.2.1 Wages paid for trade labor in the direct employ of the Design/Builder in
the performance of its Work under applicable collective bargaining agreements,
or under a salary or wage schedule agreed upon by the Owner and Design/Builder,
and including such insurance, taxes and other benefits, if any, as may be
payable with respect thereto.
8.2.2 Cost of all materials, supplies and equipment incorporated in the Project,
including costs of freight, cartage, loading and unloading charges,
transportation and storage thereof.
8.2.3 Cost, including transportation and maintenance, of all materials,
supplies, equipment, temporary facilities and hand tools not owned by the
workmen, which are employed, used, or consumed in the performance of the Work
shall be calculated as follows:
.1 Small tools having a value of $500 or less, whether purchased for
the job, rented, or provided from stock, shall remain the property
of the Design/Builder and shall be reimbursed by a 3% charge
calculated on costs as defined in Section 8.2. for field personnel
in the direct employment of the Design/Builder as set forth in
Exhibit #5.
.2 Consumables, as shown on Exhibit #6, shall be covered by a four
percent (4%) charge calculated on costs as defined in Section 8.2.1
for field personnel in the direct employment of the Design/Builder.
.3 Eight Dollars ($8.00) per hour charged against costs defined in
Section 8.2.1 for pre-fabrication shop labor to cover the cost of
tools, equipment, consumables, facility, and utilities. Such
pre-fabrication shop labor shall not be subject to the provisions
of, or included in the calculations for, Sections 8.2.3.1 and
8.2.3.2 herein.
8.2.4 Rental charges of all necessary machinery and equipment, exclusive of hand
tools, used at the Site, whether rented from the Design/Builder or others,
including installation, repairs and replacements, dismantling, removal, costs of
lubrication, transportation and delivery costs thereof, at rental charges in the
most recent edition of the Associated Equipment Distributors' Rental Rates and
Specifications book.
8.2.5 All sales, use, gross receipts or other taxes, fees and charges (excepting
federal, state and city taxes on net income of Design/Builder) payable by
Design/Builder on account of this contract or the receipts therefrom or its
performance, under authority of any law, ordinance or regulation, whether before
or after final settlement.
8.2.6 Payments by the Design/Builder to Subcontractors including the cost, if
any, of associated surety bond premiums for such Subcontractors based upon each
subcontract value.
8.2.7 Permit fees, licenses, tests, royalties, customs, duties, damages for
infringement of patents and costs of defending suits therefor, and deposits lost
for causes other than the Design/Builder's negligence or willful misconduct.
8.2.8 Losses and related expenses or damages, for causes other than the
Design/Builder's acts or failures to act, to the extent not compensated by
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insurance or otherwise (including settlement made with the written approval of
the Owner).
8.2.9 Cost of removal of all debris.
8.2.10 Cost of obtaining and using all utility services required for the Work.
8.2.11 Cost incurred due to an emergency affecting the safety of persons and
property.
8.2.12 Legal costs reasonably resulting from prosecution of the Project for the
Owner, not resulting from any act or failure to act of the Design/Builder.
8.2.13 The cost of defending suits or claims for infringement of patent rights
arising from the use of a particular design, process, or product required by
Owner, paying legal judgments against Design/Builder resulting from such suits
or claims, and paying settlements made with Owner's written consent.
8.2.14 The reasonable cost of travel and lodging for trade labor in the direct
employ of the Design/Builder relocated from the principal office of the
Design/Builder to the Project site during the course of construction.
8.2.15 Overhead costs on labor, materials and equipment (including freight
costs), taxes, fees and travel paid for or purchased directly by the
Design/Builder for self-performed work as defined in Section 4.2.1 shall be
calculated on the basis of the following:
.1 Fifteen percent (15%) times the cost of labor, and the calculations
for small tools and consumables.
.2 Ten Percent (10%) times the cost of materials, and for equipment
with unit costs less than One Hundred Thousand Dollars ($100,000).
.3 Five percent (5%) times the cost of equipment with unit costs
greater than One Hundred Thousand Dollars ($100,000), taxes, fees
and licenses, and self-performed employee travel.
8.2.16 All costs necessarily incurred in the performance of the Work that are
not included in the Design/Builder's Compensation as set forth in Article 7, nor
resulting from any act or failure to act of the Design/Builder, and to the
extent approved in advance by the Owner.
8.3 THE COST OF CORRECTIVE WORK.
8.3.1 Should Work installed on the Project be determined to be defective,
damaged during the construction process, not meet the requirements of the
Contract Documents or conflict with applicable laws, ordinances, rules, or
regulations, it shall be corrected or replaced by the Design/Builder at the
Design/Builder's own expense, including the cost of any necessary testing and
inspection, and disposal of materials and equipment defective, damaged or
wrongly supplied.
8.3.2 The Design/Builder shall, at the Design/Builder's own expense, replace,
repair or restore any parts of the Project, furniture, fixtures, equipment or
other items placed therein (whether by the Owner or any other party) that are
damaged by any such parts of the Work that do not conform to the requirements of
this Agreement or due to defects in the Work.
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8.3.3 If the Owner and Design/Builder deem it inexpedient to require the
correction of work damaged or not done in accordance with the Contract
Documents, an equitable deduction from the Guaranteed Maximum Price shall be
made by agreement between Design/Builder and the Owner. Until such settlement,
the Owner may withhold such sums as the Owner deems just and reasonable from
monies, if any, due Design/Builder.
ARTICLE 9
CHANGES IN THE WORK
9.1 From time to time the Owner, without invalidating this Agreement, may
authorize changes in the Work, additional instructions, additional Work or the
omission of work previously ordered. In such cases the Cost of the Work and, as
applicable under this Agreement, the Guaranteed Maximum Price, the
Design/Builder's Compensation and/or the Scheduled Date of Substantial
Completion shall be adjusted accordingly.
9.1.1 All such changes shall be authorized by a written Change Order to the
Design/Builder signed by the Owner or its authorized agent. Each adjustment in
the Guaranteed Maximum Price resulting from a Change Order shall clearly
separate the amount attributable to the Cost of the Work and the
Design/Builder's Compensation. If upon completion of the Work the net of all
additive and deductive Change Orders have resulted in an increase in the
Guaranteed Maximum Price, the Design/Builder's Compensation under Section
7.1.1.7 shall be increased in accordance with the provisions of Section 7.2. If
the net of all additive and deductive Change Orders have resulted in a decrease
in the Guaranteed Maximum Price, the Design/Builder's Compensation under Section
7.1.1.7 shall be reduced in proportion to the net decrease in the cost of such
Change Order Work.
9.1.2 The increase or decrease in the estimated Cost of the Work resulting from
a change in the scope of the Work, including proposed adjustments in time and
costs to unchanged Work resulting from such change, shall be determined by
mutual agreement between the Owner and the Design/Builder in one or more of the
following ways:
.1 By mutual acceptance of a lump sum properly itemized and supported
by sufficient substantiating data to permit evaluation;
.2 By unit prices stated in the Agreement or subsequently agreed upon;
.3 By cost as defined in Article 8; or
.4 by the method provided in Subparagraph 9.1.3.
9.1.3 Upon written direction signed by the Owner, the Design/Builder shall
promptly proceed with the Work involved in a pending Change Order. Provided
however, if none of the cost methods set forth in Subsections 9.1.2.1 through
9.1.2.3 is agreed upon, the Design/Builder shall keep and present, in such form
as the Owner may reasonably prescribe, an itemized accounting of direct labor
and material costs incurred in performing the Work attributed to the Change
together with appropriate supporting data of the change in the Cost of the Work
and Design/Builder Compensation as outlined in Articles 7 and 8.
9.1.4 In no event shall the Design/Builder interrupt or delay prosecution of the
Work pending resolution of any Change Order cost.
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9.1.5 If unit prices are stated in the Agreement or subsequently agreed upon,
and if the quantities originally contemplated are so changed that the quantities
of Work proposed will cause substantial inequity to the Owner or the
Design/Builder, the applicable unit prices and Guaranteed Maximum Price shall be
equitably adjusted by mutual agreement.
9.1.6 The Guaranteed Maximum Price shall be modified by the amount of a Change
Order if the Change Order results from one of the following circumstances and no
others:
.1 Elective changes in the scope of work documented pursuant to
Paragraph 6.2 of this Agreement as the basis for the Guaranteed
Maximum Price.
.2 Undisclosed conditions which could not reasonably be identified from
information available to the Design/Builder, the Design/Builder's
inspection of the Site, the Contract Documents or the nature or
location of the Project. Notwithstanding the foregoing sentence and
anything contained in the contract documents to the contrary, the
GMP includes an allowance for any soil compaction/ sinkhole
remediation.
.3 Changes in law or regulation governing the Project.
.4 Loss insured under Article 12 of this Agreement.
.5 An emergency as described under Paragraph 9.4 of this Agreement
9.1.7 Should the Design/Builder find at any time during the progress of the Work
that, in its judgment, existing conditions demand or make desirable or
beneficial a modification in the requirements of the Project, it shall promptly
report such matter in writing to the Owner for decision and instruction.
9.1.8 Design/Builder shall include in each subcontract a limitation on the
amount of profit and overhead which Subcontractor can include in Change Orders,
which limitation will be subject to the approval of the Owner.
9.2 CLAIMS FOR ADDITIONAL COST OR TIME. If the Design/Builder wishes to make a
claim for an increase in the Cost of the Work, the Guaranteed Maximum Price, the
Design/Builder's Compensation, or an extension to the Date of Substantial
Completion, it shall give the Owner written notice thereof within seven (7) days
of the event giving rise to such claim or delay, and within ten (10) days
following the expiration of any such delay, provide a written request for
extension of the Scheduled Completion Date or Interim Completion Dates by reason
of such delay. Failure of the Design/Builder to deliver any such notice or
request within the required period shall constitute an irrevocable waiver by the
Design/Builder of any request for an adjustment in cost or time. In the case of
the continuing cause of delay of a particular nature, Design/Builder shall be
required to make only one such request with respect thereto. If the Owner and
the Design/Builder cannot agree on the amount of the adjustment in cost or time,
during the pendancy of such claims the Design/Builder shall proceed with the
Work without delay provided the Owner makes payments in accordance with this
Agreement for all amounts not in dispute. No claim or delay of the Scheduled
Completion Date or Interim Completion pursuant to this Section 9.2 shall
prejudice any right the Owner may have under this Agreement, or otherwise, to
terminate this Agreement.
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9.3 MINOR CHANGES IN THE WORK. The Design/Builder will have authority to order
minor Changes in the Work not yet performed and not involving an adjustment in
the Cost of the Work or an extension of the Scheduled Date of Substantial
Completion and not inconsistent with the Drawings and Specifications. Such
changes may be effected by written order and shall be binding on the Owner.
9.4 EMERGENCIES. In any emergency affecting the safety of persons or property,
the Design/Builder shall act, at its discretion, to prevent threatened damage,
injury or loss. Any increase in the Cost of Work or extension of time claimed by
the Design/Builder on account of emergency work shall be determined as provided
in this Article.
9.5 Agreement on any Change Order shall constitute a final settlement on all
items covered therein, subject to the approval of the Owner and performance
thereof and payment therefor pursuant to the terms of this Agreement.
ARTICLE 10
DISCOUNTS
10.1 Design/Builder shall take affirmative steps to ensure that it takes full
advantage of any and all available discounts, rebates, refunds and returns. All
the Owner funded cash discounts shall accrue to the Cost of the Work, and
Design/Builder shall notify the Owner of the availability of such cash discounts
in order that the Owner may make available funds therefor. If Design/Builder
shall fail to so notify the Owner, the value of such cash discount shall be
credited to the Cost of the Work. Failure of the Owner to fund such discounts
shall leave payment discounts to the discretion of the Design/Builder. All trade
discounts, rebates and refunds, and all returns from sale of surplus materials
and equipment shall be credited to the Cost of the Work, and Design/Builder
shall endeavor to make provisions for the securing thereof. Any discounts
accruing to the Cost of the Work pursuant to this paragraph shall not result in
adjustment of the Guaranteed Maximum Price.
10.2 The Design/Builder shall notify the Owner of any discount programs in which
it participates that result in future rebates on account of quantity purchases
or other factors. To the extent such cost reductions apply to materials or
supplies included in the Cost of Work, such reductions shall be credited to the
Cost of the Work, and in the event such rebates occur following Final Payment,
the Design/Builder shall remit payment to the Owner for the share of such rebate
attributable to the Project.
ARTICLE 11
PAYMENTS TO THE DESIGN/BUILDER
11.1 The Design/Builder shall submit monthly to the Owner, and to such parties
as the Owner may direct, an Application for Payment showing in detail the Cost
of Work completed less retainage withheld from Subcontractors in accordance with
the conditions of the subcontracts, the amount of the Design/Builder's
Compensation due as provided in Article 7 and any other amounts permitted by
this Agreement. The Application for Payment shall be submitted by the
Design/Builder to its Architect/Engineer for certification as to conformance
with the Contract Documents by the first of each month. Payment by the Owner to
the Design/Builder of Applications for Payment submitted in
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accordance with this Article shall be made by wire transfer within twenty (20)
calendar days after the application is received.
11.1.1 As soon as possible after each such progress payment but not more than
twenty (20) calendar days thereafter, the Design/Builder shall submit to the
Owner a statement accounting for the disbursement of funds received from the
Owner, which statement shall include lists of invoices, payrolls, equipment
rental schedules, lien waivers from the Design/Builder and from all
Subcontractors and material suppliers having received total payments in excess
of fifty thousand ($50,000) dollars for all work, labor and material for which
payment was requested from the Owner through the date of such progress payment.
Design/Builder shall also execute and obtain any other such forms as required by
the Owner or the Owner's title insurer in order to assure an effective release
of mechanics' or materialmen's liens in compliance with the laws of the State of
Kentucky.
11.1.2 The Owner may require reasonable documentation as to the costs and
expenses actually paid by the Design/Builder prior to making any subsequent
payment.
11.1.3 Applications for Payment shall not include the cost of materials or
equipment not incorporated in the Work without the express written approval of
the Owner. In its sole discretion, the Owner may approve payment for stored
materials or equipment where the Design/Builder has provided documentation that
such materials or equipment have been:
.1 delivered and suitably stored at the Site or at some location agreed
upon by the Owner;
.2 title to all such equipment and materials shall pass to the Owner
upon payment therefor or incorporation in the Work, whichever occurs
first; and
.3 the Design/Builder has prepared and executed all documents necessary
to effect and perfect such transfer of title.
11.1.4 The Design/Builder shall not submit for the Owner's review and approval
any Application for Payment which is incomplete, inaccurate or lacks the detail,
specificity or supporting documentation required by this Section 11.1. It is
understood and agreed by Design/Builder and the Owner that any Application for
Payment which is deficient in any such manner shall not constitute a valid and
proper Application for Payment, and Design/Builder shall be required to resubmit
said Application for Payment in proper form prior to the Owner incurring any
obligation to make payment on account thereof. Design/Builder specifically
agrees that it shall not include in any Application for Payment sums
attributable to Work which the Owner or Design/Builder have rejected or which
otherwise constitute or relate to applications for payments, billings or
invoices of subcontractors or suppliers which the Design/Builder disputes or for
any other reason does not intend to pay.
11.2 Retention in the amount of Five Percent (5%) of the value of Work performed
by the Design/Builder's own forces (excluding trade labor at the Site), all
materials and equipment purchased directly by the Design/Builder, and Work
performed by all individual Subcontractors which include both labor
Page 29
and materials, shall be withheld from each payment in accordance with the terms
set forth in the Subcontractor Agreement or as mutually agreed between the Owner
and the Design/Builder. Retention on Design/Builder Compensation shall be made
in accordance with Section 7.3.2. Design/Builder may submit a request for
release of retention from time to time for any Subcontractor or
Sub-subcontractor whose work is entirely completed, for which consent for
release of retention will not be unreasonably withheld.
11.2.1 Retainage under subcontracts shall be included in the Design/Builder's
Application for Payment for the purpose of indicating the value of the Work
performed, however, Design/Builder shall not request payment thereof from the
Owner until such retainage is actually paid or payable.
11.3 Thirty (30) days after final completion of the Work and acceptance thereof
by the Owner or as soon thereafter as possible, Design/Builder shall submit a
final request for payment ("Final Application for Payment") which shall set
forth all amounts due and remaining unpaid to Design/Builder (including the
unpaid portion of the Design/Builder's Fee) and upon approval thereof by the
Owner, the Owner shall pay to Design/Builder the amount due under such Final
Application for Payment. The Additional Fee, if any, payable to Design/Builder
shall be due and payable when Design/Builder's Costs are finally established and
agreed to by Design/Builder and the Owner. Anything to the contrary contained
herein or elsewhere notwithstanding, Final Payment shall not be made prior to
thirty (30) days following final completion of the Work.
11.4 Design/Builder shall within seven (7) days following receipt of payment
from the Owner, pay all bills for labor and material performed and furnished by
others in connection with the construction, furnishing and equipping of the
Improvements and the performance of the Work. Before issuance of final payment,
the Design/Builder shall submit satisfactory evidence that all payrolls,
materials bills and other indebtedness connected with the Project have been paid
or otherwise satisfied, together with lien waivers from the Design/Builder and
material suppliers for which lien waivers were not previously submitted to the
Owner. Design/Builder's failure to make payments within such time shall
constitute a material breach of this Agreement.
11.5 The Final Application for Payment shall not be made until Design/Builder
delivers to the Owner a complete release of all liens arising out of this
Agreement and an affidavit that so far as Design/Builder has knowledge or
information the release includes and covers all materials and services for which
a lien could be filed, but Design/Builder may, if any subcontractor or supplier
refuses to furnish a release in full, furnish a bond satisfactory to the Owner,
and the Owner's title insurer to indemnify the Owner and other parties against
any lien. To the extent the Design/Builder's statements are based upon work
performed by Subcontractors, a sworn statement of each such Subcontractor
attesting to the satisfactory completion of the work for which claim is made
shall accompany the Design/Builder's statement.
11.6 In no event shall any interest be due and payable by the Owner to
Design/Builder, any Subcontractor or any other party on any of the sums retained
by the Owner pursuant to any of the terms or provisions of any of the Contract
Documents.
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11.7 Any provision hereof to the contrary notwithstanding, the Owner shall not
be obligated to make any payment to Design/Builder hereunder if Owner notifies
the Design/Builder in writing that any one or more of the following conditions
exists:
.1 The Architect/Engineer declines to certify payment and withholds its
Certificate in whole or in part, if in its opinion it is unable to
make representations to the Owner that the Work has progressed to
the point indicated; that, to the best of its knowledge, information
and belief, the quality of the Work is in accordance with the
Contract Documents; and that the Design/Builder is entitled to
payment in the amount certified. The Architect/Engineer may also
decline to certify payment or, because of subsequently discovered
evidence or subsequent observations, it may nullify the whole or any
part of any Certificate of Payment previously issued, to such extent
as may be necessary in its opinion to protect the Owner from loss;
.2 Defective Work not remedied;
.3 Third party claims filed;
.4 Failure of the Design/Builder to make payments properly to
Subcontractors for labor, materials or equipment;
.5 Reasonable evidence that the Work cannot be completed for the unpaid
balance of the Guaranteed Maximum Price;
.6 Damage to the Owner or another contractor.
.7 Reasonable evidence that the Work will not be completed in
accordance with the approved Project Time Schedule; or
.8 Persistent failure by the Design/Builder to carry out the Work in
accordance with this Agreement and the Contract Documents.
No partial payment made hereunder shall be or construed to be final
acceptance or approval of that part of the Work to which such partial payment
relates or relieve Design/Builder of any of its obligations hereunder with
respect thereto.
11.8 The notice required in Section 11.7 herein shall indicate the reason or
reasons for the withholding and the specific measures the Design/Builder must
take to resolve the Owner's concerns.
11.9 Notwithstanding anything to the contrary in the Contract Documents, the
Owner shall pay the Design/Builder all undisputed amounts in the Application for
Payment in accordance with this Article 11.
11.10 LIENS. Design/Builder shall not voluntarily permit any laborer's,
materialmen's, mechanics', or other similar lien to be filed or otherwise
imposed on any part of the Work or the property on which the Work is performed.
If any laborer's materialmen's, mechanics', or other similar lien or claim
thereof is filed for which the Design/Builder has received payment or for which
the Owner has not made payment on account of disputes between the lienor and the
Design/Builder not involving the Owner, and if Design/Builder does not cause
such lien to be released and discharged forthwith, or file a bond in lieu
thereof, the Owner shall have the right to pay all sums necessary to obtain such
release and discharge and deduct all amounts so paid from the
Page 31
Guaranteed Maximum Price, or deduct same from the Design/Builder's Fee portion
of the next succeeding Application for Payment until the total amount of same
shall be recouped, as the Owner may elect. If any such lien is filed or
otherwise imposed, at the request of the Owner, Design/Builder shall cause such
lien to be released and otherwise discharged. Design/Builder shall indemnify and
hold harmless the Owner from all claims, losses, demands, causes of action or
suits of whatever nature arising out of any such lien or that part of the Work
covered thereby so long as the Owner is in good standing with respect to any
outstanding payments not otherwise disputed or in dispute.
11.11 The payment of any Application for Payment by the Owner, including the
final Application for Payment, does not constitute approval or acceptance of any
item of cost in such Application for Payment.
11.12 INTEREST. Payments due, unpaid and not in dispute by Owner to
Design/Builder, shall bear interest commencing five (5) days after payment is
due at one percent (1%) over the then prime rate as published in the Wall Street
Journal.
ARTICLE 12
INSURANCE, BONDS, INDEMNITY AND WAIVER OF SUBROGATION
12.1 INDEMNITY
12.1.1 To the fullest extent not prohibited by law, the Design/Builder shall and
does agree to indemnify, protect, defend and hold harmless the Owner and its
members, officers, directors, employees, consultants and agents from and against
all claims, damages, losses, liens, causes of action, suits, judgments and
expenses (including reasonable attorney's fees and other costs of defense), of
any nature, kind or description, which (a) arise out of, are caused by or result
from performance of the Design/Builder's services hereunder, (b) are
attributable to bodily injury, personal injury, sickness, disease or death of
any person, or to damage to or destruction of property, including the loss of
use and consequential damages resulting therefrom, and (c) to the extent they
are caused by any negligent act or omission 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 Design/Builder agrees that it will not
assert any immunity under applicable Workers' Compensation laws in order to
avoid its indemnity obligations under this Agreement.
.1 Consequential damages as provided under this Section 12.1.1 shall be
limited to the extent of insurance coverage for same under the
professional liability coverage required pursuant to Section 12.2.5,
up to a cumulative maximum of Five Million Dollars ($5,000,000).
.2 Except as set forth in Section 12.1.1.1 above, the parties waive
claims of consequential damages against each other.
12.1.2 To the fullest extent not prohibited by law, the Design/Builder shall and
does agree to indemnify, protect, defend and hold harmless the Owner and its
officers, directors, employees, consultants and agents from and against all
claims, damages, losses, liens, causes of action, suits, judgments and expenses
(including reasonable attorney's fees and other costs of defense), of any
nature, kind or description, which result from any claimed infringement of any
copyright, patent or other intangible property right by the
Page 32
Design/Builder, anyone directly or indirectly employed by the Design/Builder or
anyone for whose acts the Design/Builder may be liable.
.1 This Section 12.1.2 shall not be applicable to any suit, claim or
proceeding based on infringement or violation of a patent or
copyright (i) relating solely to a particular process or product of
a particular manufacturer specified by Owner and not offered or
recommended by Design/Builder to Owner or (ii) arising from
modifications to the Work by Owner or its agents after acceptance of
the Work. If the suit, claim or proceeding is based upon events set
forth in the preceding sentence, the Owner shall defend, indemnify
and hold harmless the Design/Builder to the same extent the
Design/Builder is obligated to defend, indemnify and hold harmless
the Owner in Section 12.1.2.
.2 The obligations set forth in this Section 12.1.2 shall constitute
the sole agreement between the parties relating to liability for
infringement of violation of any patent or copyright.
12.1.3 To the fullest extent not prohibited by law, the Design/Builder shall and
does agree to indemnify, protect, defend and hold harmless the Owner and its
officers, directors, employees and agents from and against all claims, losses,
damages, liabilities and expenses, including attorneys' fees and expenses,
arising out of or resulting from those Hazardous Conditions introduced to the
Site by the Design/Builder, Subcontractors or anyone for whose acts they may be
liable.
12.1.4 The Owner, to the fullest extent permitted by law, shall indemnify, hold
harmless and defend the Design/Builder and any of the Design/Builder's officers,
directors, employees, or agents from and against claims, losses, damages,
liabilities, including attorneys' fees and expenses, for bodily injury, sickness
or death not otherwise covered by worker's compensation, and property damage or
destruction (other than to the Work itself) to the extent resulting from the
negligent acts or omissions of Owner's separate contractors or anyone for whose
acts any of them may be liable provided that the Design/Builder gives prompt
notice to the Owner of any such claim and allow the Owner the opportunity to
defend.
12.1.5 To the fullest extent permitted by law, Owner shall indemnify, defend and
hold harmless the Design/Builder and any of Design/Builder's officers,
directors, employees, or agents, from and against any and all claims, losses,
damages, liabilities and expenses, including attorneys' fees and expenses,
arising out of or resulting from the presence of a Hazardous Condition at the
Site previously known to the Owner and not disclosed to the Design/Builder,
provided that Owner is given prompt notice of any such claims and is allowed the
opportunity to defend.
12.1.6 If, in accordance with the Owner's direction, an exemption for all or
part of the Work is claimed for taxes, the Owner shall indemnify, defend and
hold harmless Design/Builder from and against any liability, penalty, interest,
fine, tax assessment, legal fees or other expenses or costs incurred by the
Design/Builder as a result of any action taken by Design/Builder in accordance
with the Owner's directive provided that the Owner is given prompt notice of any
such claim and allowed the opportunity to defend.
Page 33
12.2 DESIGN/BUILDER'S LIABILITY INSURANCE The Design/Builder shall purchase and
maintain the following insurance to provide protection from certain exposures
which may arise out of or result from the Design/Builder's operations under this
Agreement whether such operations be by itself or by any Subcontractor or by
anyone directly or indirectly employed by any of them, or by anyone for whose
acts any of them may be liable:
12.2.1 Worker's compensation and other insurance required by law pursuant to
disability benefit and similar employee benefit acts or employers liability laws
which are applicable to the work to be performed.
12.2.2 Comprehensive General Liability Insurance, including: a)
premises-operations (including explosion, collapse and underground hazards
coverage); b) elevators and escalators; c) independent contractors; d) products
and completed operations (to remain in force for one (1) year following the date
of acceptance of the Work by the Owner with renewal at the expiration thereof
for an additional one (1) year); e) personal injury liability; f) incidental
malpractice; and g) blanket contractual liability on all written and oral
contracts, all including broad form property damage coverage.
12.2.3 The Design/Builder's Comprehensive General and Automobile Liability
Insurance, as required by Subparagraph 12.2.2 shall be written for not less than
limits of liability as follows:
a. Comprehensive General Liability
$20,000,000 Combined Single Limit Per Occurrence and in the
Aggregate where Applicable
b. Comprehensive Automobile Liability
$20,000,000 Combined Single Limit Per Occurrence and in the
Aggregate where Applicable
12.2.4 Comprehensive General Liability and Automobile Liability Insurance may be
arranged under a single policy for the full limits required or by a combination
of underlying policies with the balance provided by an Excess or Umbrella
Liability policy.
12.2.5 The Design/Builder shall provide coverage of Professional Liability
Insurance, in the amount of Five Million Dollars ($5,000,000) for claims of
negligent errors, acts, or omissions of the person or entity, or other
consultants, providing the architectural or engineering services required of the
Design/Builder in association with this Agreement; said coverage shall be
maintained for not less than four (4) years after the completion of the Project.
12.2.6 Insurance coverages and limits required for each Subcontractor employed
by the Design/Builder shall be subject to the prior written approval of the
Owner.
12.2.7 The Owner shall be named as an additional insured on coverages provided
under Sections 12.2.2, 12.2.3 and 12.2.4. The policies required by Section 12.2
shall contain a provision that coverages afforded under the policies will not be
materially changed, canceled or not renewed until at least thirty (30) days'
prior written notice has been given to the Owner by the Design/Builder.
Certificates of Insurance showing such coverages to be in force shall be filed
with the Owner prior to commencement of the Work. Timely
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renewal Certificates shall be provided the Owner as the coverage renews. All
insurance provided by the Design/Builder shall be issued by companies with not
less than a Best A rating, which are licensed to do business in the State of
Kentucky.
12.2.8 With the exception of the coverage described in Section 12.2.5, The
Design/Builder shall maintain all insurance policies as required in this Article
12 for a period of at least two (2) years from the date of Final Completion of
the Work.
12.3 THE OWNER'S LIABILITY INSURANCE
12.3.1 The Owner shall be responsible for purchasing and maintaining its own
liability and worker's compensation insurance and, at its option, may purchase
and maintain such insurance as will protect it against claims which may arise
from operations under this Agreement.
12.4 INSURANCE TO PROTECT PROJECT. The Owner shall purchase and maintain
property insurance upon and/or self-insure the entire Project for the full cost
of replacement as of the time of any loss. This insurance and/or self insurance
shall include the interest of the Owner, Design/Builder and the Subcontractors
and their Sub-Subcontractors and shall insure against loss from the perils of
Fire, Extended Coverage, and shall include "All Risk" protection typically
available in the area for physical loss or damage including without duplication
of coverage, theft, vandalism, malicious mischief, transit, storage and
collapse. The Design/Builder and its Subcontractors will bear the entire risk of
loss with respect to any tools, equipment, protective fencing, scaffolding,
temporary structures, forms, or other property owned, rented, or used by the
Design/Builder or Subcontractors in the performance of the Work unless the value
of such items are included in the Cost of the Work, and such items are
specifically identified in the Construction Documents. The Owner will be
responsible for any co-insurance penalties or deductibles.
12.4.1 If the Owner finds it necessary to occupy or use a portion or portions of
the Project prior to Substantial Completion thereof, such occupancy shall not
commence prior to a time mutually agreed to by the Owner and the Design/Builder
and to which the insurance company or companies providing the property insurance
have consented by endorsement to the policy or policies. This insurance shall
not be canceled or lapsed on account of such partial occupancy. Consent of the
Design/Builder and of the insurance company or companies to such occupancy or
use shall not be unreasonably withheld.
12.4.2 The Owner shall purchase and maintain such boiler and machinery insurance
as may be required or necessary. This insurance shall include the interests of
the Owner and of the Design/Builder and the Subcontractors in the Work.
12.4.3 The Owner shall maintain copies of the insurance it is required to
purchase and maintain hereunder at its offices and permit the Design/Builder or
any Subcontractor to inspect the policies during normal business hours and upon
reasonable advance written notice.
12.5 PROPERTY INSURANCE LOSS ADJUSTMENT. Any insured loss shall be adjusted only
with the Owner and shall be made payable to the Owner as Trustee for the
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insureds as their interest may appear. The Owner, as trustee, will have the
power to adjust and settle any loss with its insurers.
12.6 WAIVER OF SUBROGATION.
12.6.1 The Owner and the Design/Builder waive all rights against (1) each other
and the Subcontractors, Sub-subcontractors, agents and employees each of the
other, and (2) the Architect and separate contractors, if any, and their
subcontractors, sub-subcontractors, agents and employees, for damages caused by
fire or other perils to the extent covered by insurance obtained pursuant to
this Article 12 or any other property insurance applicable to the Work, except
such rights as they may have to the proceeds of such insurance held by the Owner
as trustee. The Owner or the Design/Builder, as appropriate, shall require of
separate contractors, Subcontractors and Sub-subcontractors by appropriate
agreements, written where legally required for validity, similar waivers each in
favor of all other parties enumerated in this Section 12.6.1.
12.6.2 If the policies of insurance referred to in this Article 12 require an
endorsement to provide for continued coverage where there is a waiver of
subrogation, the owners of such policies will cause them to be so endorsed.
ARTICLE 13
TERMINATION OF THE AGREEMENT AND OWNER'S
RIGHT TO PERFORM DESIGN/BUILDER'S OBLIGATIONS
13.1 TERMINATION BY THE DESIGN/BUILDER. Should the Owner fail to make payment to
the Design/Builder in accordance with Article 11 of this Agreement, the
Design/Builder may, upon ten (10) days' written notice to the Owner, during
which period the Owner does not remedy its failure, terminate this Agreement and
recover from the Owner payment for all Work performed in accordance with this
Agreement. Notwithstanding the foregoing, the Design/Builder may not terminate
this Agreement for nonpayment if the Owner makes payment of all reasonably
undisputed amounts due to the Design/Builder within five (5) days of receipt of
the Design/Builder's written notice to terminate.
13.1.1 If the Project is stopped for a period of ninety (90) days under an order
of any court or other public authority having jurisdiction, or as a result of an
act of government, such as a declaration of a national emergency making
materials unavailable, through no act or fault of the Design/Builder, then the
Design/Builder may, upon thirty (30) days' written notice to the Owner,
terminate this Agreement and recover from the Owner payment for all Work
performed in accordance with this Agreement.
13.2 OWNER'S RIGHT TO PERFORM DESIGN/BUILDER'S OBLIGATIONS AND TERMINATION BY
THE OWNER FOR CAUSE
13.2.1 If Design/Builder shall fail to commence the Work in accordance with the
provisions of this Agreement or fail to diligently prosecute the Work to
completion thereof in a diligent, efficient, timely, workmanlike, skillful and
careful manner and in strict accordance with the provisions of the Contract
Documents (including the Scheduled Completion Date and Interim Completion
Dates), fail to use an adequate amount or quality of personnel or equipment to
complete the Work without undue delay, fail to perform any of its obligations
under the Contract Documents, or fail to make prompt payments to its
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Subcontractors, materialmen or laborers, then the Owner shall have the right, if
Design/Builder shall not cure any such default after seven (7) days written
notice thereof (or, if such default is of such a nature as to be incapable of
cure within such period, shall not commence action to cure said default within
such period and thereafter diligently and continuously pursue such action. to
complete such cure promptly, and in all events within thirty days of such
notice), to (i) terminate this Agreement, (ii) take possession of and use all or
any part of Design/Builder's materials, equipment, supplies, and other property
of every kind used by Design/Builder in the performance of the Work and to use
such property in the completion of the Work, or (iii) complete the Work in any
manner it deems desirable, including engaging the services of other parties
therefor. Any such act by the Owner shall not be deemed a waiver of any other
right or remedy of the Owner. If after exercising any such remedy the cost to
the Owner of the performance of the balance of the Work is in excess of that
part of the Guaranteed Maximum Price which has not theretofore been paid to
Design/Builder hereunder, Design/Builder shall be liable for and shall reimburse
the Owner for such excess.
13.2.2 The Owner may, if Design/Builder neglects to prosecute the Work properly
or to perform any provision of the Contract Documents, or otherwise does, or
omits to do, anything whereby safety or proper construction may be endangered or
whereby damage or injury may result to person or property, after three (3) days
written notice to Design/Builder, without prejudice to any other remedy the
Owner may have, make good all work, material, omissions or deficiencies, and may
deduct the cost therefor from the amount included in the Guaranteed Maximum
Price due or which may thereafter become due Design/Builder, but no action taken
by the Owner hereunder shall affect any of the other rights or remedies of the
Owner granted by this Agreement or by law or relieve Design/Builder from any
consequences or liabilities arising from such acts or omissions.
13.2.3 If Design/Builder is adjudged a bankrupt, or makes a general assignment
for the benefit of creditors, or if a receiver is appointed for the benefit of
its creditors, or if a receiver is appointed on account of its insolvency, such
could impair or frustrate Design/Builder's performance of this Agreement. Upon
the occurrence of any such event, the Owner shall be entitled to request of
Design/Builder or its successor in interest adequate assurance of future
performance in accordance with the terms and conditions hereof. Failure to
comply with such request within ten (10) days of delivery of the request shall
entitle the Owner to terminate this Agreement and to the accompanying rights set
forth above in this Section 13.2. In all events pending receipt of adequate
assurance of performance and actual performance in accordance therewith, the
Owner shall be entitled to proceed with the Work with its own forces or with
other contractors on a time and material or other appropriate basis the cost of
which will be back-charged against the Guaranteed Maximum Price.
13.3 TERMINATION BY THE OWNER WITHOUT CAUSE
13.3.1 The Owner hereby reserves the right to terminate this Agreement without
regard to fault or breach upon written notice to Design/Builder, effective
immediately unless otherwise provided in said notice. In the event of such
termination, the Owner shall pay as the sole amount due to
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Design/Builder in connection with this project (i) for any unpaid Cost of the
Work earned in accordance with this Agreement plus the Design/Builder's
Compensation then due in accordance with this Agreement; and (ii) fair
compensation, either by purchase or rental at the election of the Owner, for any
equipment retained. Such sums will be due and payable in accordance with Article
11 hereof. Upon receipt of such payment, the parties hereto shall have no
further obligations to each other except for Design/Builder's obligations to
perform corrective and/or warranty work and to indemnify the Owner as provided
for in this Agreement. It is understood and agreed that no fee shall be due or
payable for unperformed Work. Design/Builder agrees that each subcontract and
purchase order issued by it will reserve for Design/Builder the same right of
termination provided by this Section 13.3 and Design/Builder further agrees to
require that comparable provisions be included in all lower tier subcontracts
and purchase orders.
13.3.2 Upon the Owner making the payments and assuming the obligations and
commitments provided for in this Section 13.3, the Design/Builder shall not be
entitled to further payment of any kind or for any purpose.
13.4 Upon a final judicial determination (and all appeals exhausted) that
termination of Design/Builder or its successor in interest pursuant to Section
13.2 was wrongful, such termination will be deemed converted to a termination
pursuant to section 13.3. Design/Builder's remedy for wrongful termination in
such event shall be limited to the recovery of the payments permitted for
termination for convenience as set forth in Section 13.3.
13.5 MITIGATION. Upon notice of any termination or suspension of this Agreement,
for whatever reason, the Owner and Design/Builder shall each make every
reasonable effort to mitigate its costs hereunder; provided, however, that the
Design/Builder may with the Owner's approval perform such acts as may be
necessary to preserve and protect that part of the Project then completed.
13.6 FURTHER RIGHTS AND REMEDIES. The rights and remedies of the Owner and
Design/Builder under this Article 13 shall be non-exclusive, and shall be in
addition to all the other remedies available to such parties at law or in
equity, subject, however, in the case of Design/Builder, to the limitations
contained in Section 13.3 and other provisions of this Agreement.
ARTICLE 14
ASSIGNMENT AND GOVERNING LAW
14.1 The Owner and the Design/Builder, respectively, bind themselves, their
partners, successors, assigns and legal representatives of such other party with
respect to all covenants of this Agreement. Neither the Owner nor the
Design/Builder shall assign, sublet or transfer any interest in this Agreement
without the written consent of the other except as to the assignment of
proceeds.
14.2 Any provisions hereof the contrary notwithstanding, Design/Builder shall
observe and abide by and perform all of its obligations hereunder in accordance
with all applicable laws, rules and regulations of all governmental authorities
having jurisdiction, including the Federal Occupational, Safety and Health Act.
14.3 This Agreement shall be governed by the laws of the State of Kentucky.
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ARTICLE 15
MISCELLANEOUS PROVISIONS
15.1 DISPUTE RESOLUTION PROCEDURES
15.1.1 The parties are fully committed to working with each other throughout the
Project and agree to communicate regularly with each other at all times so as to
avoid or minimize disputes or disagreements. If disputes or disagreements do
arise, the Design/Builder and the Owner each commit to resolving such disputes
or disagreements in an amicable, professional and expeditious manner so as to
avoid unnecessary losses, delays and disruptions to the Work.
15.1.2 The Design/Builder and the Owner will first attempt to resolve disputes
or disagreements at the field level through discussions between the
Design/Builder's Project Manager and the Owner's Representative.
15.1.3 If a dispute or disagreement cannot be resolved through the
Design/Builder's Representative and the Owner's Representative, the
Design/Builder's Senior Representative and the Owner's Senior Representative,
upon the request of either party, shall meet as soon as conveniently possible,
but in no case later than thirty (30) days after such a request is made, to
attempt to resolve such dispute or disagreement. Prior to any meetings between
the Senior Representatives, the parties will exchange relevant information that
will assist the parties in resolving the dispute.
15.1.4 If after meeting the Senior Representatives determine that the dispute
cannot be resolved on terms satisfactory to both parties, the parties shall
submit the dispute to non-binding mediation conducted in accordance with Section
15.1.5.
15.1.5 MEDIATION. The parties shall endeavor to resolve claims, disputes and
other matters in question between them by non-binding mediation. Request for
mediation shall be filed in writing with the other party to this Agreement. The
parties hereby agree to use a private, non-American Arbitration Association
mediator chosen by mutual agreement. If the parties are unable or unwilling to
mutually agree on such private mediator, each party will thereafter, within a
period of ten (10) days, provide one independent, non-employee person reasonably
believed to be qualified as a mediator. These two selected mediators, as
representatives of their respective parties, shall within ten (10) days from
selection meet and mutually agree upon an independent, non-employee person of
either party to serve as the mediator. Within thirty (30) days after the
mediator has been selected, both parties and their representative attorneys
shall meet with the mediator for one mediation session of at least four hours.
The mediation shall be held in the city of the Site. Each party must supply a
representative for mediation with the authority vested in such representative to
settle the dispute. Efforts to reach a settlement will continue until the
conclusion of the proceeding, which is deemed to occur when: (i) a written
settlement is reached, or (ii)) the mediator concludes and informs the parties
in writing that further efforts would not be useful, or (iii) the parties agree
in writing that an impasse has been reached, or (iv) after the initial four (4)
hours, either party gives two (2) hours written notice to terminate during which
period both parties must continue to participate. Each party shall pay its costs
and expenses of
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mediation, including attorneys' fees, and the costs and expenses of the mediator
shall be shared equally by the parties. Mediation shall proceed in advance of
legal or equitable proceedings, which shall be stayed pending mediation for a
period of sixty (60) days from the date of filing ("Mediation Period"), subject
to extension by mutual agreement. If either party does not honor the obligation
to mediate, the other party may bring an action to seek enforcement of such
obligation in any court of law having jurisdiction thereof.
15.1.6 DUTY TO CONTINUE PERFORMANCE. The Design/Builder shall continue to
perform the Work and Owner shall continue to satisfy its payment obligations to
Design/Builder in accordance with this Agreement pending resolution of any
dispute between the Design/Builder and the Owner.
15.2 NOTICES. Any notice provided for in this Agreement shall be valid only if
delivered in writing in person to the Owner's Designated Representative or the
Design/Builder's Project Manager, and in each case personally receipted for by
such person, or otherwise by certified mail to the addresses listed below, or as
otherwise changed, by certified mail, in any event mailing to be effective two
business days after posting:
If to the Owner: Jeff Harris
T. Marzetti Company, LLC
1105 Schrock Road
P.O. Box 29163
Columbus, OH 43229
If to the Design/Builder: Mark Shambaugh
Shambaugh & Son, L.P.
7614 Opportunity Drive (46825)
P. O. Box 1287
Fort Wayne, IN 46801
Gary Hegger
Shambaugh & Son, L.P.
7614 Opportunity Drive (46825)
P. O. Box 1287
Fort Wayne, IN 46801
15.3 TITLE TO WORK.
15.3.1 The Owner acknowledges the Design/Builder's Construction Documents as
instruments of service. Nevertheless, the Drawings, Specifications and other
documents, including those in electronic form prepared by the Design/Builder and
its Design Consultants for the Owner under this Agreement, shall become the
property of the Owner upon payment for services for the Project. The results of
the work, including without limitation, the design, composition, layout,
drawings, specifications, other documents, electronic data and all other work
performed by the Design/Builder or its employees or independent architects in
connection with the work (collectively, the "Work Product"), which shall also
include, without limitation, all trademark, copyrights, and all other rights of
any nature and kind therein and the right to grant these rights or any part of
them to third parties, are hereby irrevocably transferred and assigned to Owner,
in perpetuity. All tangible
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Work Product, whether provided as liability for Design/Builder in electronic
form or otherwise, and all copies thereof, shall be delivered by the
Design/Builder to the Owner within thirty (30) Days of the earlier of (a) the
completion of the services furnished under this Agreement or (b) the termination
of this Agreement.
15.3.2 Upon Owner's payment in full for all Work performed under the
Construction Documents, Design/Builder expressly agrees that the Owner may
utilize any of the Construction Documents or other documents prepared by the
Design/Builder for the Project in order to complete the Project in the event of
the Design/Builder's discharge and/or any subsequent projects at the Owner's
discretion; provided, however, that this use of the Construction Documents is
with the express understanding that its use of the Work Product is at the
Owner's sole risk and without liability or legal exposure to Design/Builder and
the Design/Builder or anyone working by or through Design/Builder, including
Design Consultants of any tier shall have no liability for the Owner's use of
such Work Product.
15.3.3 In the event this Agreement is terminated pursuant to Section 13.1.1 or
Section 13.3.1, Design/Builder shall, upon Owner's payment in full of the
amounts due Design/Builder under Section 13.1.1 or Section 13.3.1, as
applicable, grant Owner a limited license to use the Work Product and related
documents to complete the Project and subsequently occupy the Project, at
Owner's sole risk without liability or legal exposure to the Design/Builder or
any person, entity or consultant working by or through the Design/Builder.
15.3.4 In the event this Agreement is terminated pursuant to Section 13.2, the
Design/Builder shall grant the Owner a limited license to use the Work Product
in connection with Owner's completion and occupancy of the Project. This limited
license is conditioned on Owner's express understanding that its use of the Work
Product is at Owner's sole risk and without liability or legal exposure to the
Design/Builder or any person, entity or consultant working by or through the
Design/Builder.
15.4 WAIVER. No consent or waiver, express or implied, by either party to this
Agreement to or of any breach or default by the other in the performance of any
obligations hereunder shall be deemed or construed to be a consent or waiver to
or of any other breach or default by such party hereunder. Failure on the part
of any party hereto to complain of any act or failure to act of the other party
or to declare the other party in default hereunder, irrespective of how long
such failure continues, shall not constitute a waiver of the rights of such
party hereunder. Inspection by, payment by, or tentative approval or acceptance
by the Owner or the failure of the Owner to perform any inspection hereunder,
shall not constitute a final acceptance of the Work or any part thereof and
shall not release Design/Builder of any of its obligations hereunder.
15.5 EARLY OCCUPANCY. Design/Builder shall use reasonable efforts to complete
and make available portions of the project for occupancy by the Owner or its
tenants prior to the Interim and Scheduled Completion Dates provided such
occupancy does not delay the Project. Any such early occupancy shall be pursuant
to an appropriate agreement setting forth (i) responsibility for utility cost;
(ii) commencement of warranty obligations for the portion of the Improvements to
be occupied; (iii) insurance to be maintained by the Owner or
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its respective separate contractors; and (iv) appropriate modification of
Design/Builder's obligation to indemnify the Owner as such indemnity relates to
the area(s) to be occupied. As portions of the project are completed and
occupied, Design/Builder shall ensure that continuing construction activity will
not unreasonably interfere with the use, occupancy and quiet enjoyment of the
completed portions thereof.
15.6 DESIGN/BUILDER REPRESENTATIONS. Design/Builder represents and warrants that
it is financially solvent, able to pay its debts as they mature, and possessed
of sufficient working capital to complete this Agreement; that it is able to
furnish the plant, tools, materials, supplies, equipment and labor, and is
experienced in and competent to perform the Work contemplated by this Agreement,
and that it is qualified to do the work herein and is authorized to do business
in the State of Kentucky.
15.6.1 The Design/Builder represents and warrants that it holds a license,
permit or other special license to perform the services included in this
Agreement, as required by law, or employs or works under the general supervision
of the holder of such license, permit or special license.
15.6.2 Design/Builder's express representations and warranties shall be in
addition to, and not in lieu of, any other remedies the Owner may have under
this Agreement, at law, or in equity for defective Work.
15.7 CONFIDENTIALITY AND MEDIA COMMUNICATIONS. Design/Builder shall treat all
information relating to the project and all information supplied to
Design/Builder by the Owner as confidential and proprietary information of the
Owner and shall not permit its release to other parties or make any public
announcement or publicity releases without the Owner's express written
authorization. Design/Builder shall also require its Subcontractors,
Sub-subcontractors and vendors to comply with this requirement.
15.8 INDEPENDENT CONTRACTOR. In performing its obligations hereunder,
Design/Builder shall be deemed an independent contractor and not an agent or
employee of the Owner nor shall the Owner and Design/Builder be or be considered
or deemed to be partners, joint venturers or otherwise engaged in a joint
venture or joint undertaking. Design/Builder shall have exclusive authority to
manage, direct, and control the Work. the Owner is interested in only the
results obtained and not in the methods used in achieving the results.
15.9 INSPECTION AND AUDIT
15.9.1 Design/Builder represents that it has inspected the location or locations
of the Work and has satisfied itself as to the condition thereof and that the
Guaranteed Maximum Price is just and reasonable compensation for all the Work,
including all foreseen or foreseeable risks, hazards, and difficulties in
connection therewith.
15.9.2 The Owner at all times shall have access to the Work for inspection
thereof, but shall not be obligated to conduct any such inspection.
Design/Builder shall provide proper and safe facilities for such access and
inspection. If any of the Work is required to be inspected or approved by any
public authority, Design/Builder shall cause such inspection or approval to be
performed.
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15.9.3 No inspection performed or failed to be performed by the Owner hereunder
shall be a waiver of any of Design/Builder's obligations hereunder or be
construed as an approval or acceptance of the Work of any part thereof.
15.9.4 Design/Builder shall check all materials and labor entering into the Work
and shall keep such full and detailed accounts as may be necessary to determine
Design/Builder's Cost.
15.9.5 The Owner shall have access to the Work and the right to audit all
Design/Builder's books, records, correspondence, instructions, drawings,
receipts, vouchers and memoranda relating to the Work, and Design/Builder shall
preserve all such records for a period of four (4) years after the Final Payment
hereunder.
15.10 HAZARDOUS CONDITIONS
15.10.1 Unless otherwise expressly provided in the Contract Documents to be part
of the Work, the Design/Builder is not responsible for Hazardous Conditions
encountered at the Site. Upon encountering any Hazardous Conditions,
Design/Builder will stop Work immediately in the affected area and immediately
notify Owner and, if required by Legal Requirements, all government or
quasi-government entities with jurisdiction over the Project or Site.
15.10.2 Upon receiving notice of the presence of suspected Hazardous Conditions,
the Owner shall take the necessary measures required to ensure that the
Hazardous Conditions are remediated or rendered harmless. Such necessary
measures shall include Owner retaining qualified independent experts to (i)
ascertain whether Hazardous Conditions have actually been encountered, and, if
they have been encountered, (ii) prescribe the remedial measures that Owner must
take either to remove the Hazardous Conditions or render the Hazardous
Conditions harmless.
15.10.3 Design/Builder shall be obligated to resume Work at the affected area of
the Project only after Owner's expert provides it with written certification
that (i) the Hazardous Conditions have been removed or rendered harmless and
(ii) all necessary approvals have been obtained from all government and
quasi-government entities having jurisdiction over the Project or Site.
15.11 CONSTRUCTION OF TERMS. Unless the context clearly intends to the contrary,
words singular or plural in number shall be deemed to include the other and
pronouns having a masculine or feminine gender shall be deemed to include the
other. The term "person" shall be deemed to include an individual, corporation,
partnership, trust, unincorporated organization, government and governmental
agency or subdivision, as the context shall require.
15.11.1 CAPTIONS. The captions used for the Sections in this Agreement are
inserted only as a matter of convenience and for reference and in no way define,
limit or describe the scope of the intent of this Agreement or any Section
hereof.
15.12 SEVERABILITY. If any provision of this Agreement, or any covenant,
obligation or agreement contained herein is determined by a court of competent
jurisdiction to be invalid or unenforceable, such determination shall not affect
any other provision, covenant, obligation or agreement, each of which
Page 43
shall be construed and enforced as if such invalid or unenforceable provision
were not contained herein. Such invalidity or unenforceability shall not affect
any valid and enforceable application thereof, and each such provision,
covenant, obligation or agreement, shall be deemed to be effective, operative,
made, entered into or taken in the manner and to the full extent permitted by
law.
IN WITNESS WHEREOF, this Agreement is hereby executed as of the date first above
set forth,
THE DESIGN/BUILDER: THE OWNER:
SHAMBAUGH & SON, LP T. MARZETTI COMPANY, LLC
By /s/ Mark Shambaugh By /s/ Bruce Rosa
--------------------- --------------
Mark Shambaugh Bruce Rosa
Its: CEO Its: President
Page 44
GUARANTY
This Guaranty is made and delivered as of the 6th day of December, 2004,
by EMCOR GROUP, INC., a Delaware corporation having an address at 301 Merritt 7,
Norwalk, Connecticut 06851, ("Guarantor") in favor of T. MARZETTI COMPANY, LLC a
Kentucky limited liability company, having an address at 1105 Schrock Road,
Columbus, Ohio 43229 ("Owner").
The Guarantor hereby agrees as follows:
1. GUARANTY. In order to induce Owner to enter into that certain Design/Build
Agreement (the "Agreement") being executed simultaneously herewith between Owner
and Shambaugh & Sons, LP, having an address at 7614 Opportunity Drive, P. O. Box
1287 Fort Wayne, Indiana 46801-1287 (together with its successors and/or
assigns, the "Design/Builder"), which is wholly owned by Guarantor , for the
construction of a production facility for salad dressings and sauces, as more
fully described in the Agreement and in recognition and acknowledgement of the
fact that Owner would not have entered into the Agreement without this Guaranty,
the undersigned Guarantor does hereby guarantee to Owner the full and faithful
performance and observance of all the covenants, terms, conditions and
obligations provided to be performed and observed by Design/Builder under the
Agreement. Guarantor shall, upon demand, perform, and observe each and every
term, covenant and condition of the Agreement in the same place and stead as
Design/Builder. Guarantor represents and warrants that there are no conditions
to the effectiveness of this Guaranty, and nothing impairs the effectiveness of
the liability of Guarantor to Owner hereunder or prevents this Guaranty from
taking immediate effect.
2. MODIFICATION OF AGREEMENT; AMENDMENT. Owner shall have the full right with
the agreement of Design/Builder, in Owner's sole discretion and without any
notice to or consent from the Guarantor, from time to time at any time and
without affecting, impairing or discharging, in whole or in part, the liability
of the Guarantor hereunder (such liability continuing in full force and effect)
(a) to make any change, amendment, modification, supplement or extension
whatsoever of any of the terms and conditions of the Agreement, including,
without limitation, the change of scope of the Project, and/or (b) to extend, in
whole or in part, on one or any number of occasions, the time for the
performance of any term or condition under the Agreement.
3. GUARANTY ABSOLUTE. This Guaranty is and shall be construed to be an absolute,
present, and continuing guaranty of the performance and satisfaction of all
obligations of Design/Builder under the Agreement as from time to time amended
or modified, and not of collection, and is in no way conditioned or contingent
upon any attempt to collect payment from or enforce performance by the
Design/Builder and is in no way affected by any delays in enforcement of any of
the liabilities and obligations of the Design/Builder under the Agreement. Owner
shall have the right to proceed against the Guarantor immediately upon any
default under the Agreement and shall not be required to take any action or
proceeding of any kind against Design/Builder or any other party liable for
Design/Builder's liabilities or any security which Owner may hold, either under
this Guaranty, the Agreement or otherwise, before proceeding against the
Guarantor hereunder. Guarantor further agrees that in any action or proceeding
brought by Owner against Design/Builder, Guarantor need not be joined as a party
thereto. The liability of the Guarantor
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hereunder shall continue in full force and effect until all obligations of the
Design/Builder under the Agreement are satisfied and discharged; and shall not
be reduced, affected, impaired, or discharged, in whole or in part, by reason of
(a) the dissolution, liquidation, bankruptcy or insolvency, or the merger,
consolidation or other change in form of Design/Builder, (b) the invalidation of
any of the provisions of the Agreement, (c) the modification, rejection,
assignment or termination of the Agreement due to the bankruptcy or insolvency
of Design/Builder, and the liability of the Guarantor shall be for the greater
of the sums and other obligations due under the Agreement as it existed
immediately prior to any such modification, rejection, assignment or
termination, or (d) the assignment of the interest of the Design/Builder under
the Agreement whether or not permitted by the Agreement and whether or not known
of or consented to by Owner or Guarantor.
4. NO WAIVER OF OWNER'S RIGHTS. No waiver of any of Owner's rights hereunder and
no modification of this Guaranty shall be deemed to be made for any reason
whatsoever, including, but not limited to, any act or failure or delay in acting
of Owner unless the same shall be in writing and duly signed by Owner, and each
such waiver, if any, shall apply only with respect to the specific instance
involved and shall in no way impair or affect the rights of Owner or the
obligations of Guarantor in any other respect or at any other time, provided
that Guarantor's obligations hereunder shall always be consistent with the
obligations of Design/Builder pursuant to the Agreement as modified by Owner and
Design/Builder in accordance with the terms of the Agreement. Owner's failure or
delay in exercising any rights under the Agreement or this Guaranty or in
sending any notices, demands or requests, or in requiring strict performance or
observance of any term or covenant of the Agreement, shall not be a waiver of
any of Owner's rights created by this Guaranty.
5. NO ORAL MODIFICATION. This Guaranty cannot be modified, altered, changed or
terminated orally but only by a writing executed by both Owner and Guarantor.
This Guaranty reflects the entire understanding of the parties in respect of the
subject matter hereof and supersedes any and all prior oral or written
understandings.
6. JURISDICTION; GOVERNING LAW; ATTORNEY'S FEES. This Guaranty
shall be deemed made in the State of Kentucky and shall be governed, construed
and interpreted, as to validity, enforcement and in all other respects, in
accordance with the laws of the State of Kentucky. The Guarantor hereby submits
to the jurisdiction of any federal court located in the State of Kentucky for
any action or claim brought by the Owner pursuant to this Guaranty. Service of
process may be made upon the Guarantor by mailing a copy of the papers to be
served to the Guarantor at the address for Guarantor set forth herein by
certified mail, return receipt requested. The Guarantor hereby waives any
defense or right to stay or dismiss on the basis of forum non conveniences or
lack of jurisdiction regarding any action or proceeding brought before any of
said courts. Guarantor hereby waives the right to trial by jury in any action or
proceeding that may hereafter be instituted by Owner against Guarantor in
respect of this Guaranty. In the event that the Owner commences any action or
proceeding with respect to the Guaranty or its rights hereunder, the prevailing
party shall (as hereinafter defined) be entitled to recover from the other party
the reasonable attorneys' fees and disbursements incurred by such prevailing
party. The prevailing party shall be the party designated as such by the judge
ruling on a dispute between the parties.
7. ASSIGNMENT BY OWNER. This Guaranty shall inure to the benefit of Owner and
its successors
Page 46
and assigns, and shall be binding upon the successors and assigns of Guarantor.
The Owner shall have the right to assign and transfer this Guaranty in whole or
in part to any assignee or successor owner of the Project constructed pursuant
to the Agreement. The Owner's successors and assigns shall have all of the
rights, elections, remedies, privileges, discretion and powers granted hereunder
to Owner, and shall have the right to rely on this Guaranty, in the same manner
and with the same force and effect as if they were specifically named as the
Owner herein.
8. ASSIGNMENT BY GUARANTOR; PROHIBITED TRANSFERS. Neither this Guaranty nor the
obligations of the Guarantor hereunder may be assigned or otherwise transferred
by Guarantor, except to a successor to substantially all of the assets and
business of Guarantor, and any such purported assignment or other transfer shall
be void and of no force or effect and shall also constitute an "Event of
Default" (as defined in the Agreement) under the Agreement.
9. MISCELLANEOUS.
(a) Guarantor hereby expressly waives promptness, diligence, notice of
acceptance hereof or of action in reliance hereon, notice of the failure of
Design/Builder or any other person, firm or corporation to perform and any other
notice to which Guarantor might otherwise be entitled.
(b) If any provision of this Guaranty shall be unenforceable in whole or part
for any reason whatsoever, then such provision (to the extent it is
unenforceable) shall be ineffective and the balance of this Guaranty shall be
deemed valid and enforceable and construed as if the offending provision had
been deleted herefrom.
(c) All notices, demands, statements or other communications (collectively,
"Notices") given or required to be given by either party to the other hereunder
shall be in writing, shall be sent by United States certified mail, postage
prepaid, return receipt requested, or delivered personally or by established
overnight delivery service, (i) to Guarantor at its address set forth above with
a copy to Design/Builder's counsel, Frank Donelan, Esq. c/o EMCOR Group, Inc.,
301 Merritt 7, Norwalk, Connecticut 06851 or to such other address(es) as
Design/Builder may from time to time designate in a Notice to Owner or (ii) to
Owner at its address set forth above with a copy to David Segal, Esq., Lancaster
Colony Corporation, 37 West Broad Street, Columbus, Ohio 43215 or to such other
address(es) as Owner may from time to time designate in a Notice to
Design/Builder.
IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty
as of the day and year first above written.
EMCOR GROUP, INC., a Delaware corporation
By: /s/ Anthony J. Guzzi
----------------------
Name: Anthony J. Guzzi
Title: President
Page 47
STATE OF (Connecticut)
ss.: Norwalk
COUNTY OF Fairfield)
On the 7th day of December in the year 2004 before me, the
undersigned, a Notary Public in and for said State, personally appeared Anthony
J. Guzzi, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity, and that by
his signature on the instrument, the individual or the person upon behalf of
which the individual acted, executed the instrument.
/s/ Madeline M. Avnayim
- -----------------------
NOTARY PUBLIC
Madeline M. Avnayim
My commission expires 1/31/2006
Page 48
GUARANTY
This Guaranty is made and delivered as of the 6th day of December, 2004,
by LANCASTER COLONY CORP., an Ohio corporation having an address at 37 West
Broad Street, Columbus, Ohio 43215, ("Guarantor") in favor of SHAMBAUGH & SONS,
LP a Texas limited partnership, having an address at 7614 Opportunity Drive, P.
O. Box 1287, Fort Wayne, Indiana 46801-1287 (together with its successors and/or
assigns, the "Design/Builder").
The Guarantor hereby agrees as follows:
1. GUARANTY. In order to induce Design/Builder to enter into that certain
Design/Build Agreement (the "Agreement") being executed simultaneously herewith
between T. Marzetti Company LLC, an entity owned indirectly by Guarantor,
(hereinafter referred to as "Owner") and Design/Builder, for the construction of
a production facility for salad dressings and sauces, as more fully described in
the Agreement and in recognition and acknowledgement of the fact that
Design/Builder would not have entered into the Agreement without this Guaranty,
the undersigned Guarantor does hereby guarantee to Design/Builder the full and
faithful payment, performance and observance of all the covenants, terms,
conditions and obligations provided to be performed and observed by Owner under
the Agreement. Guarantor shall, upon demand, pay, perform, and observe each and
every term, covenant and condition of the Agreement in the same place and stead
as Owner. Guarantor represents and warrants that there are no conditions to the
effectiveness of this Guaranty, and nothing impairs the effectiveness of the
liability of Guarantor to Design/Builder hereunder or prevents this Guaranty
from taking immediate effect.
2. MODIFICATION OF AGREEMENT; AMENDMENT. Design/Builder shall have the full
right with the agreement of Owner, in Design/Builder's sole discretion and
without any notice to or consent from the Guarantor, from time to time at any
time and without affecting, impairing or discharging, in whole or in part, the
liability of the Guarantor hereunder (such liability continuing in full force
and effect) (a) to make any change, amendment, modification, supplement or
extension whatsoever of any of the terms and conditions of the Agreement,
including, without limitation, the change of scope of the Project, and/or (b) to
extend, in whole or in part, on one or any number of occasions, the time for the
performance of any term or condition under the Agreement.
3. GUARANTY ABSOLUTE. This Guaranty is and shall be construed to be an absolute,
present, and continuing guaranty of the performance and satisfaction of all
obligations of Owner under the Agreement as from time to time amended or
modified, and not of collection, and is in no way conditioned or contingent upon
any attempt to collect payment from or enforce performance by the Owner and is
in no way affected by any delays in enforcement of any of the liabilities and
obligations of the Owner under the Agreement. Design/Builder shall have the
right to proceed against the Guarantor immediately upon any default under the
Agreement and shall not be required to take any action or proceeding of any kind
against Owner or any other party liable for Owner's liabilities or any security
which Design/Builder may hold, either under this Guaranty, the Agreement or
otherwise, before proceeding against the Guarantor hereunder. Guarantor further
agrees that in any action or proceeding brought by Design/Builder against Owner,
Guarantor need not be joined as a party thereto. The liability of the Guarantor
hereunder shall
Page 49
continue in full force and effect until all obligations of the Owner under the
Agreement are satisfied and discharged; and shall not be reduced, affected,
impaired, or discharged, in whole or in part, by reason of (a) the dissolution,
liquidation, bankruptcy or insolvency, or the merger, consolidation or other
change in form of Owner, (b) the invalidation of any of the provisions of the
Agreement, (c) the modification, rejection, assignment or termination of the
Agreement due to the bankruptcy or insolvency of Owner, and the liability of the
Guarantor shall be for the greater of the sums and other obligations due under
the Agreement as it existed immediately prior to any such modification,
rejection, assignment or termination or (d) the assignment of the interest of
the Owner under the Agreement whether or not permitted by the Agreement and
whether or not known of or consented to by Design/Builder or Guarantor.
4. NO WAIVER OF DESIGN/BUILDER'S RIGHTS. No waiver of any of Design/Builder's
rights hereunder and no modification of this Guaranty shall be deemed to be made
for any reason whatsoever, including, but not limited to, any act or failure or
delay in acting of Design/Builder unless the same shall be in writing and duly
signed by Design/Builder, and each such waiver, if any, shall apply only with
respect to the specific instance involved and shall in no way impair or affect
the rights of Design/Builder or the obligations of Guarantor in any other
respect or at any other time, provided that Guarantor's obligations hereunder
shall always be consistent with the obligations of Owner pursuant to the
Agreement as modified by Owner and Design/Builder in accordance with the terms
of the Agreement. Design/Builder's failure or delay in exercising any rights
under the Agreement or this Guaranty or in sending any notices, demands or
requests, or in requiring strict performance or observance of any term or
covenant of the Agreement, shall not be a waiver of any of Design/Builder's
rights created by this Guaranty.
5. NO ORAL MODIFICATION. This Guaranty cannot be modified, altered, changed or
terminated orally but only by a writing executed by both Design/Builder and
Guarantor. This Guaranty reflects the entire understanding of the parties in
respect of the subject matter hereof and supersedes any and all prior oral or
written understandings.
6. JURISDICTION; GOVERNING LAW; ATTORNEY'S FEES. This Guaranty shall be deemed
made in the State of Kentucky and shall be governed, construed and interpreted,
as to validity, enforcement and in all other respects, in accordance with the
laws of the State of Kentucky. The Guarantor hereby submits to the jurisdiction
of any federal court located in the State of Kentucky for any action or claim
brought by the Design/Builder pursuant to this Guaranty. Service of process may
be made upon the Guarantor by mailing a copy of the papers to be served to the
Guarantor at the address for Guarantor set forth herein by certified mail,
return receipt requested. The Guarantor hereby waives any defense or right to
stay or dismiss on the basis of forum non conveniences or lack of jurisdiction
regarding any action or proceeding brought before any of said courts. Guarantor
hereby waives the right to trial by jury in any action or proceeding that may
hereafter be instituted by Design/Builder against Guarantor in respect of this
Guaranty. In the event that the Design/Builder commences any action or
proceeding with respect to the Guaranty or its rights hereunder, the prevailing
party (as hereinafter defined) shall be entitled to recover from the other party
the reasonable attorneys' fees and disbursements incurred by such prevailing
party. The prevailing party shall be the party designated as such by the judge
ruling on a dispute between the parties.
7. ASSIGNMENT BY DESIGN/BUILDER. This Guaranty shall inure to the benefit of
Design/Builder
Page 50
and its successors and assigns, and shall be binding upon the successors and
assigns of Guarantor. The Design/Builder shall have the right to assign and
transfer this Guaranty in whole or in part to any assignee or successor
Design/Builder of the Project constructed pursuant to the Agreement. The
Design/Builder's successors and assigns shall have all of the rights, elections,
remedies, privileges, discretion and powers granted hereunder to Design/Builder,
and shall have the right to rely on this Guaranty, in the same manner and with
the same force and effect as if they were specifically named as the
Design/Builder herein.
8. ASSIGNMENT BY GUARANTOR; PROHIBITED TRANSFERS. Neither this Guaranty nor the
obligations of the Guarantor hereunder may be assigned or otherwise transferred
by Guarantor, except to a successor to substantially all of the assets and
business of Guarantor and any such purported assignment or other transfer shall
be void and of no force or effect and shall also constitute an "Event of
Default" (as defined in the Agreement) under the Agreement.
9. MISCELLANEOUS.
(a) Guarantor hereby expressly waives promptness, diligence, notice of
acceptance hereof or of action in reliance hereon, notice of the failure of
Owner or any other person, firm or corporation to perform and any other notice
to which Guarantor might otherwise be entitled.
(b) If any provision of this Guaranty shall be unenforceable in whole or part
for any reason whatsoever, then such provision (to the extent it is
unenforceable) shall be ineffective and the balance of this Guaranty shall be
deemed valid and enforceable and construed as if the offending provision had
been deleted herefrom.
(c) All notices, demands, statements or other communications (collectively,
"Notices") given or required to be given by either party to the other hereunder
shall be in writing, shall be sent by United States certified mail, postage
prepaid, return receipt requested, or delivered personally or by established
overnight delivery service, (i) to Designer/Builder at its address set forth
above with a copy to Design/Builders's counsel, Frank Donelan, Esq. 40 EMCOR
Group, Inc., 301 Merritt 7, Norwalk, Connecticut 06851 or to such other
address(es) as Design/Builder may from time to time designate in a Notice to
Guarantor or (ii) to Guarantor at its address set forth above with a copy to
David Segal, Esq., Lancaster Colony Corporation, 37 West Broad Street, Columbus,
Ohio 43215 or to such other address(es) as Guarantor may from time to time
designate in a Notice to Design/Builder.
IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guaranty
as of the day and year first above written.
LANCASTER COLONY CORPORATION, an Ohio corporation
By: /s/ Bruce Rosa
--------------------
Name: Bruce Rosa
Title: President
Page 51
STATE OF )
ss.:
COUNTY OF )
On the 6th day of December in the year 2004 before me, the
undersigned, a Notary Public in and for said State, personally appeared Bruce
Rosa, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity, and that by
his signature on the instrument, the individual or the person upon behalf of
which the individual acted, executed the instrument.
/s/ Erin Lott
- -------------------------
NOTARY PUBLIC
Erin Lott
My commission expires December 26, 2007
Page 52