CONSTRUCTION AGREEMENT
THIS CONSTRUCTION AGREEMENT is made and entered into this 21st day of
April, 1997, by and between RYAN BELLE PLAINE, LLC, a Minnesota limited
liability company ("Landlord"), and EXCELSIOR-XXXXXXXXX MOTORCYCLE
MANUFACTURING COMPANY, a Minnesota corporation ("Tenant").
RECITALS
A. Landlord and Tenant have entered into a Single Tenant Lease
Agreement of even date herewith (the "Lease"), relating to property located
in Belle Plaine, Minnesota, more particularly described therein (the
"Property"). Terms which are capitalized and not otherwise defined herein
have the meanings ascribed to them in the Lease.
B. This Agreement shall set forth the agreements between Landlord and
Tenant regarding the design and construction of the improvements contemplated
by the Preliminary Plans (defined below). The "Work" is the total design,
construction and other services required under the Contract Documents and
includes, without limitation, all professional design services, the completed
construction, and all labor, materials, equipment and services which are
necessary to produce or which are used or incorporated in such design and
construction. The "Work" also shall include the enforcement of that certain
Public Improvements Agreement dated as of December 31, 1996, by and between
CLC Development, Inc. and the City (defined below), including, without
limitation, taking over performance of the improvements contemplated by such
Agreement pursuant to Section 3.5 of the Development Agreement (defined
below) if necessary in order to insure timely completion of such improvements.
NOW, THEREFORE, in consideration of the mutual terms hereof and of the
Lease, Landlord and Tenant agree as follows:
1. CONTRACT DOCUMENTS. The Contract Documents consist of the following:
(a) This Agreement;
(b) The Preliminary Plans and Outline Specifications described on
ATTACHMENT 1 to this Agreement (the "Preliminary Plans");
(c) The General Conditions for Construction attached as
ATTACHMENT 2 to this Agreement (the "General Conditions");
(d) The Contract Schedule attached as ATTACHMENT 3 to this
Agreement (the "Contract Schedule");
(e) The Schedule of Values attached hereto as ATTACHMENT 4 to
this Agreement (the "Schedule of Values");
(f) The Final Plans (defined below); and
(g) Written modifications signed by Landlord and Tenant.
Additionally, the General Conditions are hereby incorporated by reference
into and constitute a part of this Agreement for all purposes of this
Agreement, the Lease and all other documents and agreements executed in
connection herewith.
2. FINAL PLANS. Landlord shall submit to Tenant for its approval final
design and construction drawings and specifications setting forth in detail
the requirements for construction of the Improvements (the "Final Plans").
Such Final Plans shall be prepared and certified by licensed architects or
engineers in the respective disciplines selected by Landlord. Tenant agrees
that it will not unreasonably withhold its approval of the Final Plans so
long as they are consistent with the Preliminary Plans. When the Final Plans
have been approved, they shall be signed or otherwise approved in writing by
Landlord and Tenant and shall supersede the Preliminary Plans.
3. CONTRACT TIME. Landlord shall perform the Work with due diligence so
as to achieve the various construction milestones provided in the Contract
Schedule, subject to the provision in the General Conditions dealing with
Excusable Delay. Time is of the essence of this Agreement. Landlord has
agreed that, subject to the provisions in the General Conditions dealing with
Excusable Delay, it bears all risk of delay under this Agreement (including
all risk of increased costs attributable to such delay) that is occasioned by
any delay in the performance or completion of the Work. Landlord shall employ
sufficient forces and take all other steps necessary to achieve each of the
intermediate milestone dates, if any, and dates for Substantial Completion and
Final Completion set forth in this paragraph.
4. CONTRACT SUM.
4.1 CONTRACT SUM. In consideration of the performance of the Work,
Tenant shall pay Landlord the sum of Three Million Sixty Thousand Eight
Hundred Five and No/100 Dollars ($3,060,805.00) (the "Company Funds"),
subject to any additions and deductions as provided in the Contract
Documents. Landlord and Tenant acknowledge and agree that as of the date of
this Agreement Tenant has prepaid to Landlord Fifty-One Thousand Two Hundred
Eighty-Six and No/100 ($51,286.00) of the Company Funds, the receipt of which
is hereby acknowledged by Landlord. In addition, the Belle Plaine Economic
Development Authority (the "Authority") has agreed to contribute towards the
cost of performing the Work the sum of
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One Million One Hundred Thousand and No/100 Dollars ($1,100,000.00) (the
"Authority Funds") pursuant to that certain Contract for Private Development
dated December 31, 1996, among Tenant, the City of Belle Plaine, Minnesota
(the "City") and the Authority, as amended by Assignment, Assumption and
Amendment of Development Contract dated as of even date with the Lease among
Landlord, Tenant, the City and the Authority (collectively, the "Development
Agreement"). The Company Funds and the Authority Funds have been or will be
paid into an escrow account (the "Escrow Account") and held for disbursement
in accordance with this Agreement and pursuant to that certain Escrow
Agreement dated as of even date herewith by and among the Authority,
Landlord, Tenant and Commonwealth Land Title Insurance Company (the "Escrow
Agreement"). Except as otherwise provided in this Agreement, (i) the Company
Funds and the Authority Funds are absolute maximums and shall not be
increased for any reason whatsoever, and (ii) all remaining sums necessary to
complete the Work shall be the "Landlord's Contribution" and shall be paid by
Landlord as and when incurred. Landlord anticipates financing Five Million
and No/100 Dollars ($5,000,000.00) of Landlord's Contribution pursuant to the
Initial Mortgage (as defined in the Lease), but the obtaining of the Initial
Mortgage shall in no event be deemed to be a condition to Landlord's
obligations hereunder. The sum of the Company's Funds, the Authority Funds
and the Landlord's Contribution shall hereinafter be referred to as the
"Contract Sum". Except as otherwise provided herein, the Contract Sum shall
be full compensation to the Landlord for the performance of the Work pursuant
to the Contract Documents, including so-called "soft costs" and all of
Landlord's profits and fees. It is the expressed intention of the Parties
that all material costs comprising the Contract Sum have been disclosed to
Tenant. To the extent that Tenant has not been furnished with the
documentation substantiating the costs comprising the Contract Sum, Landlord
shall so provide any and all such documents not previously provided to Tenant
upon Tenant's written request.
4.2 CONCEALED CONDITIONS. Should Landlord encounter subsurface
conditions which differ materially from those identified in the subsurface
exploration report by Xxxxx Intertec, dated January 31, 1997, or should
Landlord encounter any hazardous substances or underground tanks on the
Property, Tenant and Landlord shall issue a Change Order with respect to any
Changed Work reasonably necessitated thereby. Landlord shall notify Tenant
within five (5) days after the first observance of any such concealed
conditions.
4.3 ALLOWANCES. If the cost to Landlord of any element of the Work
for which an allowance is set forth in the Contract Documents differs from
the allowance amount, the difference shall be paid in cash to Landlord or
Tenant as the case may be; such adjustments to be made within thirty (30)
days after the date on which Substantial Completion is achieved.
4.4 SOFT COSTS ALLOWANCE. The Contract Sum includes an allowance
amount of $527,225 (the "Soft Costs Allowance") for the following soft costs
associated with the Work:
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COST ALLOWANCE
---- ---------
Legal Expense:
(a) Xxxx $ 15,000
(b) Lender $ 25,000
Title & Recording
(a) Mortgage Registration Tax $ 13,225
(b) Title Insurance Premium $ 17,500
(c) Disbursing Fee $ 2,500
(d) Closing & Recording $ 2,000
Financing Fee $138,000
Interim Interest
(Through Rent Commencement) $100,000
Interest on Land Closing $ 8,000
Advance at 9.5%
Initial Closing Costs $ 3,900
Interest to CLC Development $ 14,100
Survey $ 10,000
Appraisal $ 5,000
Environmental Assessment $ 15,000
Real Estate Taxes $ 5,000
Corporate Real Estate Fee $ 62,500
Xxxxxxxxx Fee $ 20,000
Special Consideration $ 36,000
Contingency for Above Items $ 34,500
--------
$527,225
--------
--------
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If the actual total amount of the above soft costs differs from the total Soft
Costs Allowance then Landlord shall pay to Tenant (if it is less) or Tenant
shall pay to Landlord (if it is more) the difference between such actual
total costs and the Soft Costs Allowance, such adjustment to be made in
connection with the payment of the Retainage pursuant to Section 5.7.
Landlord shall reimburse Tenant for the amount of any of the foregoing soft
costs paid by Tenant directly within ten (10) days after Tenant Landlord with
evidence of such payment.
5. PAYMENT OF CONTRACT SUM.
5.1 PAYMENT. The Company Funds and the Authority Funds shall be
held pursuant to the Escrow Agreement for disbursement in accordance with
this Agreement. After such disbursement has been completed, Landlord shall
pay when due all other costs associated or incurred in connection with the
Work. Landlord shall be responsible for fully complying with all of the terms
and conditions of the Development Agreement with respect to the application
of the Authority Funds. Without limitation to the foregoing, Landlord shall
ensure that Authority Funds are paid only for qualifying "Site Improvement
Costs" under the Development Agreement and shall coordinate with the City and
the Authority in connection therewith.
5.2 APPLICATION FOR PAYMENT OF COMPANY FUNDS AND AUTHORITY FUNDS.
Landlord may submit to Tenant not more often than once each month an
"Application for Payment" with respect to the Company Funds and the Authority
Funds. Each Application for Payment shall be submitted on a form reasonably
acceptable to Tenant and shall contain the same items and sequence as the
Schedule of Values. Two notarized originals (signed by a responsible officer
of Landlord acceptable to Tenant) and one copy of the Application for Payment
shall be submitted to Tenant. Upon Tenant's request, Landlord shall furnish
Tenant with such backup material and supporting data for each Application for
Payment with respect to any Changed Work or allowance items as Tenant may
reasonably require under the circumstances. The Application for Payment shall
indicate the percentage of completion of each portion of the Work as of the
end of the period covered by the Application for Payment. No Application for
Payment shall include (i) any amount relating to changes in the Work until a
Change Order has been issued by the Tenant with respect to such change, or
(ii) requests for payment of amounts Landlord does not intend to pay to a
subcontractor or material supplier because of a dispute or other reason.
5.3 RETAINAGE. Until such time as the Work is fifty percent (50%)
complete, each Application for Payment shall contain a retainage of ten
percent (10%) of the amount set forth therein for all elements of Work set
forth on the Schedule of Values, except soft costs ("Retainage"). No
Retainage shall be deducted from Applications for Payment submitted
subsequent to such time as the Work is fifty percent (50%) complete. Such
Retainage shall not be payable until final payment pursuant to Section 5.7.
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5.4 LIEN WAIVERS. Landlord shall submit its conditional lien
waiver with each Application for Payment. On each Application for Payment,
Landlord shall also certify that all bills and/or subcontrators have been
paid for which previous Applications for Payment have been issued upon which
payment has been made; if partial payment has been made, then Landlord shall
identify payments made to subcontractors and material suppliers. Landlord
shall also submit lien waivers from subcontractors and material suppliers
covering prior payments in excess of One Thousand Dollars ($1,000) with the
second and each subsequent Application for Payment. In addition, in
connection with the Final Payment Tenant in its discretion may require lien
waivers shall be provided concurrently in exchange for the payments to which
they relate. The lien shall state the dollar amount of all payments and shall
be on a form acceptable to Tenant.
5.5 PARTIAL PAYMENTS. Subject to the terms and conditions of the
General Conditions, within ten (10) days after receipt of the Application for
Payment by Tenant as aforesaid, Tenant shall authorize the payment to
Landlord from the Escrow Account of those amounts set forth in the
Application, provided the Application is in proper form and is accompanied by
the required supporting data, unless Tenant legitimately objects in writing
to payment and, in such event, Landlord shall be entitled to be paid any
undisputed amount, with amount in dispute to be resolved in accordance with
the terms of the Contract Documents. If Tenant wrongfully fails to authorize
any payment to Landlord within such 10-day period, Tenant shall be liable to
Landlord for interest on the amount due at the rate of twelve percent (12%)
per annum from the last day of such 10-day period until such payment is
authorized by Landlord. Such interest shall be paid upon demand.
5.6 MORTGAGE DISBURSEMENTS. Landlord shall not draw down or cause
the disbursement of any loan proceeds or other sums whatsoever which shall be
secured by the Initial Mortgage or otherwise until such time as the Landlord
shall have satisfied the Application For Payment, lien waiver, Tenant
authorization and other requirements set forth in this Article 5 in the same
manner as if such sums were payments of Company Funds.
5.7 PAYMENT UPON SUBSTANTIAL COMPLETION. Tenant shall authorize
payment to Landlord of the remaining unpaid portion of the Contract Sum
(other than amounts held pursuant to Section 5.8), including the Retainage
when both (1) Substantial Completion has been achieved, and (2) a final
Application for Payment has been issued by the Landlord and approved by
Tenant, which final Application for Payment shall include, without
limitation, a comprehensive punch list of items remaining to be corrected or
completed. Such final payment shall be authorized by Landlord not more than
twenty (20) days after Tenant's receipt of the final Application for Payment,
provided it is approved by Tenant, and such approval shall not be
unreasonably withheld.
5.8 PUNCH LIST. Tenant may withhold authorization of payment to
Landlord from the payment under Section 5.7 of a sum equal to one hundred
fifty percent (150%) of the cost (as reasonably estimated by Tenant) of
completing any unfinished Work as identified on
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the punch list of elements of the Work which are either incomplete or do not
conform to the Final Plans, prepared by Landlord as aforesaid and
supplemented by Tenant and delivered to Landlord within twenty (20) days
after receipt of Landlord's final Application for Payment. Landlord will
proceed expeditiously and with due diligence to complete and/or correct all
punch list items, prior to the date required by this Agreement for Final
Completion. Tenant shall authorize the payment to Landlord of the sum so
withheld within ten (10) days after (i) the achievement of Final Completion,
and (ii) submission by Landlord to Tenant of a supplemental Application for
Payment therefor.
5.9 LANDLORD'S RECORDS. Landlord shall keep complete and
accurate records with regard to all costs incurred in connection with any
allowance items and Changed Work. Such records shall be maintained in a
manner reasonably satisfactory to Tenant. Tenant shall have access at all
reasonable times to Landlord's records and other documents of any kind
relating to such Work, including, without limitation, all subcontracts,
purchase orders, receipts, vouchers and correspondence. All of the foregoing
records and other documents shall be preserved by Landlord, and the Tenant
shall have access to them, for not less than two (2) years after Substantial
Completion. Tenant may conduct periodic audits of Landlord's records and
other documents relating to such Work, and Landlord shall cooperate with
Tenant in conducting such audits.
6. INSURANCE. Landlord shall purchase and maintain the insurance
required by the Contract Documents until the date on which Final Completion
is achieved.
7. CHANGES IN THE WORK. Tenant may order changes in the Work in
accordance with the Contract Documents. In the event Changed Work is ordered,
the Contract Sum shall be adjusted only as provided in the Contract
Documents, subject, in all events, to the provisions of Subparagraph 11.1.1
of the General Conditions. If an adjustment is to be made, the increase or
decrease in the Contract Sum shall be determined on the basis of the
reasonable expenditures and savings of those performing the Changed Work,
plus, with respect to each additive change, a Landlord's fee equal to five
percent (5%) of the additional expenditures; subject, however to the further
limitations set forth in Subparagraph 11.1.3 of the General Conditions. As a
condition to Landlord undertaking any Changed Work that increases the
Contract Sum, Landlord may require Tenant to escrow the entire amount
reasonably estimated by the parties to be the cost of the Changed Work and
the Landlord's fee thereon as aforesaid in the Escrow Account, and the
Schedule of Values shall be revised accordingly. In the case of any deletion
or change which results in a net decrease in the cost of the Work, the
adjustment to the Contract Sum determined as aforesaid shall be deducted in
full from the Company Funds owing under this Agreement and promptly paid to
Tenant by Landlord at Substantial Completion.
8. LANDLORD DEFAULT.
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8.1 LANDLORD DEFAULT. Without limitation to any of Tenant's other
rights or remedies, after five (5) days' notice to Landlord, Tenant may
withhold authorization of any payment to Landlord during the continuance of
any of the following defaults by Landlord:
(a) Landlord is adjudged a bankrupt or makes a general assignment
for the benefit of creditors, or a receiver is appointed on
account of its insolvency;
(b) Landlord persistently or repeatedly refuses or fails to supply
enough properly-skilled workmen or proper materials, or fails
to achieve the Contract Schedule;
(c) Landlord persistently fails or neglects to carry out the Work
in accordance with the Contract Documents;
(d) Landlord fails to make prompt payment to subcontractors for
labor or materials;
(e) Landlord persistently disregards laws, ordinances, rules,
regulations, or orders of any public authority having
jurisdiction; or
(f) Landlord otherwise is guilty of a material violation of a
provision of the Contract Documents.
In addition, in the event any of the foregoing defaults shall occur prior to
achievement of Substantial Completion and shall continue for a period of
sixty (60) days after notice thereof from Tenant to Landlord and the Initial
Mortgagee (as defined in the Lease), Tenant at its election may do any of
the following: (i) terminate this Agreement, (ii) terminate the Lease,
(iii) exercise any of Tenant's rights and remedies under the Lease, and/or
(iv) exercise any or all of Tenant's legal, equitable, statutory and other
rights and remedies. The Initial Mortgagee also shall have the right to cure
any such default within such sixty (60) day period.
8.2 REIMBURSEMENT; COMPANY MORTGAGE. Without limitation to any of
Tenant's other rights and remedies, in the event the Lease is terminated
pursuant to Section 8.1, Landlord shall promptly reimburse Tenant for the
entire amount of the Company Funds. Such reimbursement obligation of Landlord
is secured by a Mortgage dated as of even date herewith between Landlord and
Tenant and encumbering the Property (the "Company Mortgage"). Tenant shall
fully subordinate the Company Mortgage to the Initial Mortgagee. Tenant will
satisfy and discharge the Company Mortgage upon the achievement of
Substantial Completion.
8.3 DAMAGES. Notwithstanding any exercise or alleged exercise of
any of Tenant's other rights and remedies, Landlord hereby indemnifies and
agrees to hold Tenant
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harmless from and against any and all losses and/or damages incurred by
Tenant in connection with any failure by Landlord to fully, completely and
promptly pay, perform and comply with any of the terms, covenants or
conditions of this Agreement, including, without limitation, any bargain
value of the Lease, any and all costs and expenses incurred or paid by Tenant
in connection with this Agreement, the Lease or otherwise with respect to
this transaction, including, without limitation, the Company Funds and the
Authority Funds (which Tenant has guaranteed and, in some circumstances, has
agreed to repay to the Authority, pursuant to the Development Agreement), and
all costs and expenses (including, without limitation, reasonable attorneys'
fees) incurred by Tenant in connection with such failure. The foregoing
obligations shall survive expiration or earlier termination of this Agreement.
8.4 RIGHTS CUMULATIVE. Each right, power or remedy herein conferred
upon the Tenant is cumulative and in addition to every other right, power or
remedy, express or implied, now or hereafter arising, available to Tenant, at
law or in equity, or under any other agreement, and each and every right,
power and remedy herein set forth or otherwise so existing may be exercised
from time to time as often and in such order as may be deemed expedient by
the Tenant and shall not be a waiver of the right to exercise at any time
thereafter any other right, power or remedy. No delay or omission by the
Tenant in the exercise of any right, power or remedy arising hereunder or
arising otherwise shall impair any such right, power or remedy or the right
of Tenant to resort thereto at a later date or be construed to be a waiver of
any default under this Agreement.
8.5 RIGHT TO DISCONTINUE REMEDIES. In the event Tenant shall have
proceeded to invoke any right, remedy or recourse permitted under this
Agreement and shall thereafter elect to discontinue or abandon the same for
any reason, Tenant shall have the unqualified right to do so.
9. MISCELLANEOUS.
9.1 ENTIRE AGREEMENT. The Lease, this Agreement and the other
Contract Documents constitute the entire agreement between the parties with
respect to the construction of the Improvements and supersedes all prior
negotiations between the parties with respect to the subject matter thereof,
except to the extent that such negotiations resulted in executed agreements
which have been specifically referenced and incorporated herein.
9.2 ASSIGNMENT. Landlord may not assign or otherwise transfer its
interest or obligations under this Agreement without the prior written
consent of Tenant, except as collateral to the holder of the Initial Mortgage
(as defined in the Lease).
9.3 TERMS. Unless otherwise provided in this Agreement, defined
terms used in this Exhibit which not are defined herein shall have the
meanings given to them in the Lease and the Contract Documents.
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9.4 GUARANTY. Landlord and Tenant acknowledge that all of the
Landlord's obligations under the Contract Documents have been guaranteed
by Xxxx Companies US, Inc., a Minnesota corporation, pursuant to a
Guaranty of even date herewith.
9.5 NOTICES. Any notices required to be given by the parties
pursuant to the Contract Documents shall be given as provided in
Section 32 of the Lease; provided, however, any notices, requests or
submission to Tenant shall simultaneously be given to Corporate Real
Estate, 000 Xxxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxxxx,
Xxxxxxxxx 00000, Attention: Xxxxx Xxxx.
9.6 UNENFORCEABILITY OF CERTAIN CLAUSES. The unenforceability or
invalidity of any provisions of this Agreement shall not render any other
provision or provisions herein contained unenforceable or invalid.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Agreement to be
duly executed as of the date first above written.
RYAN BELLE PLAINE, LLC
By-------------------------------
Its Chief Manager
EXCELSIOR-XXXXXXXXX
MOTORCYCLE MANUFACTURING
COMPANY
By-------------------------------
Its Chief Financial Officer
-----------------------------
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ATTACHMENT 1
Preliminary Plans and Outline Specifications
Final Outline Specification for the Design and Construction of Xxxx Companies
(Owner) Excelsior-Xxxxxxxxx Motorcycle Manufacturing Company (Tenant) 170,000
Manufacturing/Office Building, Belle Plaine, Minnesota; Prepared by Xxxx
Companies US, Inc., dated April 8, 1997.
DRAWING NO. DRAWING TITLE PREPARED BY DATE
----------- ------------- ----------- ----
A1 Roof Plan/Site Plan Xxxx Associates, Inc. 3/17/97
A2 First Floor Plan Xxxx Associates, Inc. 3/17/97
A2E Equipment Plan Xxxx Associates, Inc. 3/5/97
A3 Partial First Floor Plan Xxxx Associates, Inc. 3/17/97
A4 Second Floor Plan Xxxx Associates, Inc. 3/17/97
A5 Enlarged Floor Plans Xxxx Associates, Inc. 3/17/97
A6 Sections Xxxx Associates, Inc. 12/10/96
A6 Exterior Elevations Xxxx Associates, Inc. 3/17/97
A8 Sections Xxxx Associates, Inc. 3/17/97
A9 Sections Xxxx Associates, Inc. 3/17/97
A10 Sections Xxxx Associates, Inc. 2/21/97
A11 Sections/Details Xxxx Associates, Inc. 3/17/97
Reflected Ceiling Plan Xxxx Associates, Inc. 3/17/97
S1 Foundation Plan XxXxxxxx & Associates, Inc. 3/4/97
S2 Roof Framing Plan XxXxxxxx & Associates, Inc. 3/4/97
S3 Second Floor & Mezz. XxXxxxxx & Associates, Inc. 3/4/97
Framing Plan
S4 Sections XxXxxxxx & Associates, Inc. 3/4/97
S5 Sections XxXxxxxx & Associates, Inc. 3/4/97
S6 Structural Notes, Plans XxXxxxxx & Associates, Inc. 3/4/97
& Sections
M1 Mechanical First Floor Xxxxxx Associates 0/0/00
Xxxx
X0 Xxxxxxxxxx Xxxxxx Xxxxx Xxxxxx Associates 3/7/97
Plan
L1 Landscape Plan British Landscapes, Ltd. 1/16/97
62640-001 Grading and Drainage Xxxxxxx & Xxxxxx 3/13/97
62640-002 Utility Xxxxxxx & Xxxxxx 4/15/97
62640-003 Detail Xxxxxxx & Xxxxxx 2/28/97
ATTACHMENT 2
GENERAL CONDITIONS FOR CONSTRUCTION OF IMPROVEMENTS
These General Conditions are attached to and a part of the Construction
Agreement dated as of April 21, 1997 (together with these General Conditions,
the "Agreement"), between Ryan Belle Plaine, LLC, a Minnesota limited liability
company ("Landlord"), and Excelsior-Xxxxxxxxx Motorcycle Manufacturing Company,
a Minnesota corporation ("Tenant").
1. OWNERSHIP AND USE OF DOCUMENTS. All information, reports and other
documents provided by Tenant to Landlord shall be owned by Tenant. Landlord
shall treat all information relating to Tenant's business and all information
supplied to Landlord by Tenant, or any agent for or contractor of Tenant, as
confidential and proprietary information of Tenant, and shall not permit its
release to other parties or make any public announcement or publicity
releases except upon the express written instruction of Tenant; provided,
however, that Landlord may, to the extent necessary to enable it to perform
its services under the Agreement, disclose such information to (1) its
accountants, attorneys, advisers, lenders, subcontractors, suppliers,
architects, and engineers; (2) public officials in connection with obtaining
city or other governmental approvals for the Improvements; and (3) any party
to whom Landlord becomes legally compelled to make disclosure by order of a
court of competent jurisdiction. The drawings, specifications and other
documents prepared by Landlord for the Improvements are the property of
Landlord. Tenant shall be permitted to retain copies, including reproductive
copies and automated drafting disks, of the drawings, specifications, and
other documents for information and reference. Further, Tenant shall be
granted an irrevocable royalty free license to reproduce, distribute, and
otherwise use the drawings, specifications, or other documents, or any part
them of any information contained in them for additions to the project by
others, or for the completion of the project by others if the agreement
between Tenant and Landlord is terminated. Landlord agrees that it shall not
re-use, sell, transfer, give, or assign copies of the drawings,
specifications, and other documents (in their entirety or any substantial or
distinctive portion thereof) to any other party nor itself re-use, reproduce,
and market the drawings, specifications, and other documents (in their
entirety or any substantial or distinctive portion thereof) nor permit or
license any third party to re-use, reproduce, or market the drawings,
specifications, and other documents (in their entirety or any substantial or
distinctive portion thereof). The provisions of this paragraph shall survive
the expiration or termination of the Agreement.
2. TENANT.
2.1 TENANT'S RIGHT TO CARRY OUT THE WORK. If Landlord defaults or
neglects to carry out the Work in accordance with the Contract Documents and
fails within ten (10) days upon receipt of written notice from Tenant to
commence and continue correction of such default or neglect with diligence and
promptness, Tenant, without prejudice to any other
remedy it may have, may make good such deficiencies. In such case, there
shall be deducted from the payments then or thereafter due to Landlord the
cost of correcting such deficiencies. If the payments then or thereafter due
Landlord are not sufficient to cover such amount, Landlord shall pay the
difference to Tenant. This right of Tenant to carry out the Work shall not
give rise to any duty on the part of Tenant to exercise this right for the
benefit of Landlord or any other person or entity.
2.1 TENANT'S RIGHT TO REJECT THE WORK. Tenant will have the right to
reject Work which does not conform to the Contract Documents. Tenant will also
have the right to require special inspection or testing of the Work in
accordance with the Contract Documents, whether or not such Work is then
fabricated, installed, or completed. Neither Tenant's right to act under this
subparagraph nor any decision made by it either to exercise or not to exercise
such right shall give rise to any duty or responsibility of Tenant to Landlord
or to any other person or entity.
2.3 TENANT'S REVIEW OF SUBMITTALS.
2.3.1 Tenant will review Landlord's submittals such as Shop
Drawings, Product Data and Samples. Landlord acknowledges that any such
review by Tenant shall be only for the purpose of ensuring that Tenant has a
record thereof and for general conformance with the design concept of the
Work, and for compatibility with the Tenant's Equipment; Tenant shall not be
responsible for errors, omissions or deficiencies in shop drawings or other
submittals. Nothing in Tenant's approval of Shop Drawings, Product Data or
Samples shall be construed as authorizing additional Work, which
authorization may only be made by Change Order as provided herein. Neither
Tenant's right to act under this Subparagraph nor any action taken or not
taken by Tenant with respect to any submittal shall relieve Landlord from any
responsibility with respect to the design of the Project, or impose any such
responsibility on Tenant.
2.3.2 Tenant shall render decisions with respect to
matters affecting the Project with reasonable promptness so as to cause no
delay. When Tenant's decision with respect to any matter is required within
a particular time, Landlord shall so advise Tenant, and Tenant shall inform
Landlord of Tenant's decision within such time provided, however, (1) the
decision requested of Tenant is properly a matter for Tenant's decision, (2)
the decision is requested at an appropriate stage, given the sequencing of
the design and construction process, (3) Landlord provides Tenant with a
complete description of all relevant alternatives, appropriate back-up
information, and an outline of Landlord's recommendations, and (4) the time
allowed for Tenant's decision is reasonable, taking into consideration the
character, complexity and magnitude of the decision, the stage of
construction, the availability of relevant information, and the need for
appropriate deliberations and consultations, both internally and with outside
consultants. If Tenant fails to respond in a timely fashion, any resulting
delay shall constitute "Tenant Delay" for purposes of the Contract Documents
if (1) Landlord informs Tenant in writing that Tenant has failed to respond
within the time required
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and that any further delay may cause a delay in the progress of the Work, and
(2) such delay, in fact, causes a delay in the progress of the Work.
2.4 TENANT'S SITE REPRESENTATIVE (TSR). Tenant has appointed Xxxxx
Xxxx of Corporate Real Estate as its Tenant Site Representative ("TSR") in
connection with the Work. Tenant's instructions to Landlord will be issued
through the TSR. Any shop drawings, product data, and samples for
Tenant-supplied equipment will be forwarded to Landlord by the TSR. The TSR
shall, at all times, have access to the Work and Landlord shall provide
facilities for such access. Landlord shall simultaneously forward to the TSR
duplicate copies of all notices, correspondence, submissions (including,
without limitation, all Final Plans, Applications for Payment, Shop Drawings,
Product Data and Samples) and other deliveries made in connection with the
Work. The TSR may schedule and conduct periodic Project meetings at the
site, which Landlord shall attend as requested. The TSR will endeavor to
facilitate communication and the transmission of information between Tenant
and Landlord; however, the TSR shall have no authority whatsoever to amend,
abridge, modify, or interpret the Agreement or Contract Documents in any way.
No supervision or inspection by the TSR, nor the authority to act nor any
other actions taken by the TSR, shall relieve Landlord of any of its
obligations under the Contract Documents nor give rise to any duty on the
part of Tenant.
3. LANDLORD.
3.1 INDEPENDENT CONTRACTOR. Landlord acknowledges that it is an
independent contractor and not an agent of Tenant.
3.2 POSITION OF TRUST. Landlord acknowledges the position of trust
it occupies, and that Tenant will rely upon Landlord for the proper performance
of the Work.
3.3 INDEPENDENT INVESTIGATION. Landlord acknowledges that, except
as specifically provided in the Contract Documents, Tenant, by supplying
maps, drawings, data or other technical information makes no representations
as to the accuracy of such maps, drawings, data or technical information and
that it is Landlord's responsibility to verify all conditions. Landlord
represents that it has: (a) visited the Property, (b) taken such other steps
as may be necessary to ascertain the nature and location of the Work and the
general and local conditions which affect the Work or the cost thereof, and
(c) examined the site, the obstacles which may be encountered and all other
conditions (including, without limitation, the availability of labor and any
potential labor difficulties) having a bearing upon the performance of the
Work, the superintendent of the Work, the time of completion and all other
relevant matters. Landlord acknowledges that, except as specifically
provided in the Contract Documents, Tenant has no responsibility for
understandings or representations concerning conditions made by any of
Tenant's agents, representatives or employees prior to the execution of the
Contract Documents.
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3.4 COORDINATION. Landlord acknowledges its responsibility to
coordinate the Work with that of separate contractors to be selected for the
installation of other work within the Project. Landlord expressly promises to
use reasonable efforts to schedule and coordinate its Work with such separate
contractors so as to assist them and permit the Project to be completed on
schedule.
3.5 DELAYS. Landlord agrees that no payment or compensation of any
kind shall be made to it for any damages which may arise out of or be caused by
any delay from any cause in the progress of the Work, whether such delay be
avoidable or unavoidable, and Landlord waives any right to claim such damages.
The foregoing does not affect Landlord's ability to make a claim for an increase
in the Contract Time or the Contract Sum to the extent and in the manner
expressly permitted elsewhere in the Contract Documents.
3.6 SOLE RESPONSIBILITY. Landlord shall have the sole responsibility
for designing, constructing, and completing the Work.
3.7 SUPERVISION AND CONSTRUCTION PROCEDURES.
3.7.1 Landlord shall construct the Work. Construction services shall
be performed by qualified personnel of Landlord and by qualified Subcontractors,
Sub-subcontractors and suppliers under the direction and control of Landlord,
and for whom Landlord shall be responsible. Landlord shall supervise and direct
the Work using its best skill and attention. It shall be solely responsible for
all construction means, methods, techniques, sequences and procedures and for
coordinating all portions of the Work under the Contract Documents.
3.7.2 Landlord shall be responsible to Tenant for the acts and
omissions of Landlord and Landlord's agents and employees. Landlord shall
defend, indemnify and hold harmless Tenant, the TSR and Tenant's agents and
employees from any claims, damages, losses, costs and expenses (including
attorneys' fees) arising out of, caused by, or incurred in connection with such
acts or omissions. Landlord further agrees to obtain, maintain, and pay for
such general liability insurance coverage and endorsements as will insure the
provisions of this subparagraph.
3.7.3 Landlord shall be responsible for the acts and omissions of the
Subcontractors and Sub-subcontractors, their agents and employees, anyone acting
on behalf of any of them, and any other persons performing any of the Work
directly or indirectly under a contract with Landlord including design
professionals, and their consultants. Landlord shall defend, indemnify and hold
harmless Tenant, the TSR and Tenant's agents and employees from any claims,
damages, losses, costs and expenses (including attorneys' fees) arising out of,
caused by, or incurred in connection with such acts or omissions. Landlord
further agrees to obtain, maintain, and pay for such general liability insurance
coverage and endorsements as will insure the provisions of this paragraph.
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3.7.4 Landlord shall at all times enforce strict discipline and good
order among its employees and other persons performing the Work and shall not
employ or permit the employment of unfit persons or persons not skilled in the
task assigned to them.
3.7.5 Landlord shall not be relieved from its obligations to perform
the Work in accordance with the Contract Documents either by the activities or
duties of the representatives of Tenant, or by inspections, tests or approvals
required or performed by persons other than Landlord.
3.8 LABOR AND MATERIALS. Unless otherwise provided in the Contract
Documents, Landlord shall provide and promptly pay for all labor, materials,
equipment, tools, construction equipment and machinery, water, heat,
utilities, transportation and other facilities and services necessary for the
proper execution and completion of the Work, whether temporary or permanent
and whether or not incorporated or to be incorporated in the Work.
3.9 WARRANTY PROVISION. Landlord warrants to Tenant that all
materials and equipment furnished under this Agreement will be of good
quality and will be new unless otherwise specified, and that all Work will be
of good quality, free from faults and defects and in conformance with the
Contract Documents. All Work not conforming to these requirements, including
substitutions not properly approved and authorized, shall be considered
defective. Landlord's warranties shall not be affected by the specification
of any product or procedure. Landlord's warranty shall not be restricted by
the limitations of any manufacturer's warranty. Inability or refusal of a
subcontractor, sub-subcontractor of any tier, or supplier responsible for any
defective Work, to correct shall Work, shall not relieve Landlord from
performing under the Warranty. If required by Tenant, Landlord shall furnish
satisfactory evidence as to the kind of quality of materials and equipment
incorporated in the Work. This warranty is in addition to and not in
limitation of any other warranty or remedy required by law or under the
Contract Documents. In addition, upon Substantial Completion Landlord shall
assign to Tenant any and all manufacturer's, subcontractor's or supplier's
warranties associated with any portion or element of the Work.
3.10 TAXES. Landlord shall pay all sales, consumer, use and other
similar taxes for the Work or portions thereof provided by Landlord, which
taxes are legally enacted at the date hereof, whether or not yet effective.
3.11 PERMITS. Unless otherwise provided in the Contract Documents,
Landlord shall secure and pay for construction permits and for all other
permits and governmental fees, licenses, approvals and inspections necessary
for the proper execution and completion of the Work. Tenant shall secure and
pay for all permits, licenses and approval necessary for the operation of its
business at the Property.
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3.12 COMPLIANCE WITH LAWS.
3.12.1 Landlord shall give all notices and comply with all laws,
ordinances, rules, regulations and lawful orders of any public authority
bearing on the performance of the Work, and in the event of an allegation
that Landlord has failed to do so, Landlord shall pay any fines or penalties
imposed upon Tenant, and shall reimburse Tenant for any expenses (including
attorneys' fees) incurred by Tenant, as a result of such allegation.
3.12.2 It is the responsibility of Landlord to make certain that
the Contract Documents are in accordance with applicable laws, ordinances,
building codes, rules and regulations.
3.12.3 If Landlord performs any Work which is contrary to such laws,
statutes, ordinances, building codes, rules and regulations, Landlord shall
correct such Work at its expense and shall be responsible for all costs,
delays and damages attributable thereto.
3.13 SUPERINTENDENT.
3.13.1 Landlord shall employ a competent superintendent and
necessary assistants who shall be in attendance at the Project site during
the progress of the Work. The superintendent shall represent Landlord and
all communications given to the superintendent shall be binding upon
Landlord. Upon written request in each case, Tenant shall confirm important
communications in writing to Landlord's Project manager.
3.14 PROGRESS SCHEDULE. Landlord, along with the assistance of
Tenant, shall develop and maintain a construction progress schedule
consistent with meeting the Substantial Completion deadline set forth in the
Agreement. Landlord shall regularly update and distribute the schedule as
required to inform all parties of the status of the Work.
3.15 DOCUMENTS AND SAMPLES AT THE SITE. Landlord shall maintain in
good order at the site for Tenant one copy of all drawings, specifications,
Addenda, Change Orders and other Modifications, and approved Shop Drawings,
Product Data, Samples and similar required submittals. These shall be available
to Tenant and the TSR and shall be delivered to Tenant upon completion of the
Work.
3.16 SHOP DRAWINGS, PRODUCT DATA AND SAMPLES.
3.16.1 "Shop Drawings" are drawings, diagrams, schedules and other
data specially prepared for the Work by Landlord or any Subcontractor,
manufacturer, supplier or distributor to illustrate some portion of the Work.
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3.16.2 "Product Data" are illustrations, standard schedules,
performance charts, instructions, brochures, diagrams and other information
furnished to illustrate a material, product or system for some portion of the
Work.
3.16.3 "Samples" are physical examples which illustrate materials,
equipment or workmanship and establish standards by which the Work will be
judged.
3.16.4 Landlord shall review, approve and submit with reasonable
promptness and in such sequence as to cause no delay in the Work or in the work
of Tenant or any separate contractor, all Shop Drawings, Product Data, Samples
and similar submittals required by the Contract Documents. Tenant will review,
approve or take other appropriate action with respect to such submittals. Upon
the award of each Subcontract, Landlord will deliver to TSR and Tenant a
schedule of approximate dates that Shop Drawings, Product Data and Samples will
be delivered to Xxxx Associates, Inc. and TSR for their approval.
3.16.5 No portion of the Work requiring submission of Shop Drawings,
Product Data, Samples or similar submittals shall be commenced until the
submittal has been approved by Tenant as provided in the Contract Documents.
All such portions of the Work shall be in accordance with approved submittals.
3.16.6 By approving and submitting Shop Drawings, Product Data,
Samples and similar submittals, Landlord represents that it has determined
and verified all materials, field measurements, and field construction
criteria related thereto, or that it will do so, and that it has checked and
coordinated the information contained in such submittals with the
requirements of the Work and of the Contract Documents. Landlord shall
obtain from Tenant Shop Drawings and Product Data of all Tenant-supplied
equipment. Landlord shall review and return a copy thereof to Tenant with
comments and approval. Approval by Landlord shall represent that field
conditions have been or will be coordinated to receive Tenant-supplied
equipment as so approved by Landlord.
3.16.7 Landlord will submit three (3) copies of all Shop Drawings,
Product Data and Samples to Tenant for approval. Landlord will stamp all
Shop Drawings, Product Data and Supplies, with a form of stamp acceptable to
Tenant, confirming that Landlord has made all of the determinations and
verifications required by these General Conditions. Landlord shall not be
relieved of responsibility for any deviation from the requirements of the
Contract Documents by Landlord's approval of Shop Drawings, Product Data,
Samples or similar submittals. Landlord shall specifically inform Tenant in
writing of any deviation from the requirements of the Contract Documents at
the time of submission. Landlord shall not be relieved from responsibility
for errors or omissions in the Shop Drawings, Product Data, Samples or
similar submittals by Tenant's receipt thereof.
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3.16.8 Landlord shall direct specific attention, in writing or noted
on resubmitted Shop Drawings, Product Data, Samples or similar submittals, to
revisions other than those requested by Tenant on previous submittals.
3.16.9 Landlord shall furnish copies of approved Shop Drawings,
Product Data, Samples and similar submittals to separate contractors and to
Subcontractors as may be necessary to coordinate their work or upon their
request.
3.17 USE OF SITE. Landlord shall confine operations at the site to
areas permitted by law, ordinances, permits and the Contract Documents and shall
not unreasonably encumber the site with any materials or equipment.
3.18 CUTTING AND PATCHING OF WORK.
3.18.1 Landlord shall be responsible for all cutting, fitting or
patching that may be required to complete the Work or to make its several
parts fit together properly, except as otherwise specifically provided in the
Contract Documents.
3.18.2 Landlord shall not damage or endanger any portion of the
Work or the work of Tenant or any separate contractors by excavation or by
cutting, patching or otherwise altering any work. Landlord shall not cut or
otherwise alter the work of Tenant or any separate contractor except with the
written consent of Tenant and of such separate contractor. Landlord shall not
unreasonably withhold from Tenant or any separate contractor its consent to
cutting or otherwise altering the Work.
3.18.3 Cutting shall be accurately located and neatly done.
Unnecessary cutting shall be avoided. Patching shall be done by skilled
mechanics experienced in the particular type of work involved. Patching work
shall conform to the standards of the specifications where applicable, and
where not specified, such work shall conform to the highest standards of the
trade. Finished patching work shall be acceptable to the contractor whose
work has been patched.
3.18.4 Landlord shall leave all holes, chases and other openings in
its construction required by other contractors for the installation of their
work, provided such openings are accurately located by the party requiring
them before the execution of the construction. Landlord shall afford other
contractors a reasonable opportunity to locate such openings.
3.19 CLEANING UP.
3.19.1 Landlord at all times shall keep the Property free from
accumulation of waste materials or rubbish caused by its operations. At the
completion of the Work it shall
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remove all of its waste materials and rubbish from and about the Property as
well as all of its tools, construction equipment, machinery and surplus
materials.
3.19.2 Immediately prior to the Work being submitted to Tenant as
Substantially Complete, Landlord shall remove all waste materials, rubbish,
Landlord's tools, construction equipment, machinery and surplus materials
from the area to be inspected. Landlord shall also remove all protective
coatings, temporary work, barriers and other protective devices.
(1) Finished spaces which are to be inspected shall be cleaned as
necessary to remove all stains, dirt and dust. Glass shall be
cleaned on both faces, and carpet shall be vacuumed.
(2) Unfinished spaces such as mechanical and electrical equipment
rooms which are to be inspected shall be "broom clean".
(3) Mechanical work such as unit heaters, finned tube radiation and
its covers, grilles and registers in finished spaces shall be
cleaned as necessary to remove all stains, dirt and dust, in
unfinished spaces, mechanical work such as equipment, ducts, and
pipes shall be "broom clean".
(4) Electrical work such as light fixtures in finished spaces shall
be cleaned as necessary to remove all stains, dirt and dust. In
unfinished spaces, electrical work shall be "broom clean".
Landlord shall replace burned out lamps.
3.19.3 Prior to Substantial Completion, or prior to Tenant's
partial or complete occupancy, Landlord shall do the following: (1) Clean
all spaces of the Work so that they are ready for Tenant's occupancy without
additional cleaning; (2) Remove from the site all temporary buildings or
facilities; (3) Replace filters in air handling equipment according to the
specifications; and (4) Replace burned out lamps. This obligation is in
addition to and not by way of limitation of Landlord's obligation to provide
the Work complete and ready to use in all respects by the time limits set
forth in this Agreement.
3.19.4 If Landlord fails to clean up at the completion of the Work,
and Landlord does not correct such failure within three days after receipt of
written notice from Tenant, Tenant may do so and the cost thereof shall be
charged to Landlord and may be deducted from any amounts then or thereafter
due to Landlord.
3.20 COMMUNICATIONS. Except as otherwise directed by Tenant, Landlord
shall direct all communications, correspondence and submittals to Tenant through
the TSR. If
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the Contract Documents require written notice, it shall be given in
accordance with the Agreement.
3.21 ROYALTIES AND PATENTS. Landlord shall pay all royalties and
license fees incurred in connection with the Work. It shall defend all suits
or claims for infringement of any patent, trademark, trade secret, copyright
or other intellectual property rights, and shall save Tenant harmless from
loss on account thereof, except that Tenant shall be responsible for all such
loss when a particular design or process or the product of a particular
manufacturer or manufacturers is specified by Tenant, but if Landlord has
reason to believe that the design, process or product specified is an
infringement of a patent, it shall be responsible for such loss unless it
promptly gives such information to Tenant.
3.22 INDEMNIFICATION.
3.22.1 Landlord agrees to assume entire responsibility and liability
to the fullest extent permitted by law, for all damages or injury (including
death) to all persons, whether employees or otherwise, and to all property
(including the Work and loss of use), arising out of (in whole or in part),
resulting from, or in any manner connected with the execution of the Work
provided for in this Agreement, except as may result solely from the
negligence or intentional acts of Tenant or TSR or any agent or separate
contractor of Tenant. Landlord, to the fullest extent permitted by law,
agrees to indemnify and save harmless Tenant and TSR, their officers,
directors, and employees from and against any and all claims, losses,
expenses, penalties, costs and other liabilities arising out of or resulting
from or in any manner connected with the Work or this Agreement, except those
which are attributable solely to the negligence or intentional acts of Tenant
or TSR or any agent or separate contractor of Tenant and all losses, costs,
penalties, damages (including punitive damages) or expense, including legal
fees and disbursements, related to such claims or to the enforcement of the
provisions of this paragraph. Landlord further agrees to obtain, maintain,
and pay for such general liability insurance coverage and endorsements as
will insure the provisions of this paragraph. The foregoing indemnity
obligation shall not be construed to negate, abridge or otherwise reduce any
other right or obligation of indemnity which would otherwise exist as to any
party or person described in this Subparagraph 3.23.1. The obligations of
Landlord under this paragraph shall survive the expiration or termination of
the Agreement and shall extend to claims, losses, damages and expenses
asserted or arising after completion of the Work as well as during the Work's
progress.
3.22.2 In any and all claims against any of the Indemnified Parties
by an employee of Landlord, a Subcontractor or Sub-subcontractor, anyone
directly or indirectly employed by any of them or anyone acting on behalf of
any of them, the indemnification obligation under this paragraph shall not be
limited in any way by any limitation on the amount or type of damages,
compensation or benefits payable by or for Landlord or any Subcontractor or
Sub-subcontractor or other party under workers' compensation acts, disability
benefit acts or other employee benefit acts.
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3.22.3 Without limiting any other indemnification obligations, to
the extent permitted by law, Landlord shall indemnify and save harmless Tenant
and the Project from any liens or security interests filed or threatened by
Landlord or any subcontractors, sub-subcontractors of any tier, or suppliers and
from any related costs, liabilities, judgments, executions, attorneys' fees and
disbursements, except that Landlord need not defend or indemnify Tenant for
mechanics' lien claims caused by Tenant's wrongful failure to make payment in
accordance with the Contract Documents for the Work to which such mechanics'
lien claims relate.
3.23 ACCESS TO THE WORK. Landlord shall allow Tenant, the TSR and
Tenant's representatives, agents and consultants free access to the site and
to the Work wherever located at all times. Landlord shall provide facilities
for such access.
3.24 MANUALS AND INSTRUCTIONS.
3.24.1 Landlord shall be responsible for collecting, identifying and
collating the following materials from Subcontractors, and shall deliver two
copies to Tenant at the time of Final Completion:
(1) Complete equipment diagrams, operating instructions, maintenance
manuals, parts lists, wiring diagrams, pneumatic and/or
electrical control diagrams, test and balance reports, inspection
reports, guarantees and warranties, as applicable, for each piece
of fixed equipment furnished under the Agreement, together with
specific information regarding manufacturer's name and address,
nearest distributor, service representative's name, address,
office and home phone number, make and model numbers, operating
designs and characteristics, and the like. These materials shall
be supplied in a ring binder, hard-cover book, properly indexed
for ready reference.
(2) Name and address of all Subcontractors and Sub-subcontractors
(including equipment and material suppliers), together with their
respective areas of work, materials or equipment furnished.
(3) Complete list of all materials and equipment utilized, together
with the respective location in the Work.
(4) Complete operating instructions for each equipment system.
(5) Complete parts lists, together with recommended spare parts for
each type and model of equipment installed.
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3.25 AS-BUILT DRAWINGS. At the time of Final Completion, Landlord
shall deliver two (2) copies of as-built drawings and one set of sepia to
Tenant.
4. SUBCONTRACTORS.
4.1 DEFINITION.
4.1.1 A Subcontractor is a person or entity who has a direct
contract with Landlord to perform any of the Work at the site. The term
Subcontractor is referred to throughout the Contract Documents as if singular
in number and masculine in gender and means a Subcontractor or its authorized
representative. The term Subcontractor does not include any separate
contractor or its subcontractors.
4.1.2 A Sub-subcontractor is a person or entity who has a direct or
indirect contract with a Subcontractor to perform any of the Work at the
site. The term Sub-subcontractor is referred to throughout the Contract
Documents as if singular in number and masculine in gender and means a
Sub-subcontractor or an authorized representative thereof.
4.2 AWARD OF SUBCONTRACTS FOR CHANGED WORK. With respect to any
Changed Work, Landlord shall submit to Tenant copies of all bids and other
proposals from potential Subcontractors, and shall advise Tenant which
Subcontractors it proposes to use. Landlord shall submit to Tenant copies of
all bids and other proposals. Landlord shall also submit a bid for each
portion of the Work which Landlord proposes to perform with its own forces.
If reasonably requested by Tenant, Landlord shall obtain at least three (3)
bids for each such Work. Tenant may designate entities from whom Landlord
shall solicit bid, and Tenant may require that additional bids be obtained if
it determines the initial bids to be unsatisfactory. Landlord shall in all
cases submit a recommendation for award, supported by a comparative bid
analysis for all bids taken, and Landlord's original estimate for the Work
being priced to Tenant. Tenant will determine with the advice of Landlord
which bids will be accepted.
4.3 SUBCONTRACTUAL RELATIONS.
4.3.1 By an appropriate written agreement, Landlord shall require
each Subcontractor, to the extent of the Work to be performed by the
Subcontractor, to be bound to Landlord by the terms of the Contract
Documents, and to assume toward Landlord all obligations and responsibilities
which Landlord, by these documents, assumes toward Tenant. Said agreement
shall preserve and protect the rights of Tenant under the Contract Documents
with respect to the Work to be performed by the Subcontractor so that the
subcontracting thereof will not prejudice such rights. Landlord shall
require each Subcontractor to enter into similar agreements with its
Sub-subcontractors. Landlord shall make available to each proposed
Subcontractor, prior to the execution of the subcontract agreement, copies of
the
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Contract Documents to which the Subcontractor will be bound by this
subparagraph and shall identify to the Subcontractor any terms and conditions
of the proposed subcontract which may be at variance with the Contract
Documents. Landlord shall require each Subcontractor similarly to make
copies of such documents available to its Sub-subcontractors.
4.3.2 Landlord shall not award a subcontract for any Changed Work on
the basis of the cost of the work plus a fee without Tenant's prior consent.
In addition, Landlord shall not award a subcontract for any Changed Work
which provides that the allowance for overhead and profit payable to the
Subcontractor with respect to changes in the Work is greater than the
following: 1) with respect to those portions of such Work performed by such
Subcontractor, the allowance shall not exceed ten (10%) percent of the cost
of such portions of the Work, 2) with respect to those portions of such Work
performed by any lower tier Sub-subcontractor, the allowance shall not exceed
five (5%) percent of the amount paid to such lower tier Sub-subcontractor as
a result of such change.
4.3.3 Each subcontract agreement for a portion of the Work is
assigned by Landlord to Tenant, provided that such assignment is effective
only after the termination of the Agreement by Tenant for cause and provided
that such assignment is effective only as to those subcontracts which Tenant
specifically accepts by notifying the Subcontractor in writing. Landlord
agrees to execute such additional documents as Tenant may request to confirm
such assignments. Landlord shall insure that each subcontract agreement
recognizes the rights of Tenant pursuant to the foregoing contingent
assignment. Landlord shall provide Tenant with a copy of each subcontract
agreement upon request.
5. WORK BY TENANT OR BY SEPARATE CONTRACTORS.
5.1 TENANT'S RIGHT TO PERFORM WORK AND TO AWARD SEPARATE CONTRACTS.
5.1.1 Tenant shall have the right to perform work related to the
Project, including, without limitation, with respect to the Tenant's
Equipment, with its own forces and to award separate contracts in connection
with other portions of the Project or other work on the site. Tenant shall
not award contracts to any contractor who is not signatory to a collective
bargaining agreement with a local AFL-CIO Building Traders Union without the
prior written approval of Landlord.
5.1.2 Tenant will provide for the coordination of the work of its own
forces and of each separate contractor with the Work of Landlord, who shall
cooperate therewith as provided in the Contract Documents. If Tenant's own
forces or any separate contractor fail to so coordinate with the Work of
Landlord, any resulting delay shall constitute "Tenant Delay" for purposes of
the General Conditions if (i) Landlord informs Tenant in writing that Tenant's
forces or separate contractor has failed to coordinate with the Work of
Landlord, and that continued failure to coordinate may cause a delay in the
progress of the Work, and (ii) to the extent that such failure to coordinate in
fact causes a delay in the progress of the Work. If
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Tenant's election to use its own forces or separate contractors shall give
rise to a labor dispute, any resulting delay shall also constitute "Tenant
Delay" for purposes of the General Conditions if (i) Landlord informs Tenant
in writing that Tenant's use of its own forces or separate contractors has
given rise to a labor dispute that may cause a delay in the progress of the
Work, and (ii) to the extent that the labor dispute in fact causes a delay in
the progress of the Work.
5.2 MUTUAL RESPONSIBILITY.
5.2.1 Landlord shall afford Tenant and separate contractors
reasonable opportunity for the introduction and storage of their materials
and equipment and the execution of their work, and shall connect and
coordinate its Work with theirs as required by the Contract Documents.
5.2.2 If any part of Landlord's work depends for proper execution or
results upon the work of Tenant or any separate contractor, Landlord shall,
prior to proceeding with the Work, promptly report to Tenant any apparent
discrepancies or defects in such other work that render it unsuitable for
such proper execution and results. Failure of Landlord so to report shall
constitute an acceptance of Tenant's or separate contractor's work as fit and
proper to receive its Work, except as to defects which were not reasonably
discoverable but which may subsequently become apparent in such work by
others.
5.2.3 Any costs caused by defective or ill-timed work shall be borne by
the party responsible therefor.
5.2.4 Should Landlord cause damage to the work or property of Tenant,
or to other work on the site, Landlord shall promptly remedy such damage.
5.2.5 Should Landlord cause damage to the work or property of any
separate contractor, Landlord shall promptly attempt to settle with such
separate contractor or otherwise to resolve the dispute. If such separate
contractor sues or initiates an arbitration proceeding against Tenant on
account of any damage alleged to have been caused by Landlord, Tenant shall
notify Landlord who shall defend such proceedings at Landlord's expense, and
if any judgment or award against Tenant arises therefrom, Landlord shall pay
or satisfy it and shall reimburse Tenant for all attorney's fees and court or
arbitration costs which Tenant has incurred.
5.2.6 Should any separate contractor of Tenant cause damage to the
work or property of Landlord or any of its Subcontractors, Tenant will use
reasonable efforts to cause such separate contractor to promptly attempt to
settle with Landlord or otherwise to resolve the dispute.
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5.3 TENANT'S RIGHT TO CLEAN UP. If a dispute arises between Landlord
and separate contractors as to their responsibility for cleaning up, Tenant may
clean up and charge the cost thereof to the parties responsible therefor as
Tenant shall determine to be just.
6. MISCELLANEOUS PROVISIONS.
6.1 SUCCESSORS AND ASSIGNS. Tenant and Landlord each binds itself,
its partners, successors, assigns and legal representatives to the other
party hereto and to the partners, successors, assigns and legal
representatives of such other party in respect to all covenants, agreements
and obligations contained in the Contract Documents. Landlord shall not
assign the Contract nor shall Landlord assign any moneys due or to become due
to it under the Contract without the previous written consent of Tenant.
Tenant may assign, transfer, convey, pledge, or otherwise dispose of its
interest, or any part thereof, under the Contract Documents only in
connection with a permitted assignment of the Lease. From and after the
effective date of such assignment, Landlord shall recognize such assignee as
being in the stead and place of Tenant, but all of the obligations of
Landlord to Tenant hereunder shall be performed for, and shall run in favor
of, both such assignee and also the original Tenant, and the original Tenant
hereunder shall retain the right to enforce all of its rights and remedies
and all of Landlord's obligations, including without limitation, all
warranties.
6.2 RIGHTS AND REMEDIES.
6.2.1 The duties and obligations imposed by the Contract Documents
and the rights and remedies available thereunder are cumulative and are in
addition to, and not a limitation on, any duties, obligations, rights and
remedies otherwise imposed or available by law.
6.2.2 No action or failure to act by Tenant or Landlord shall
constitute a waiver of any right or duty afforded either of them under the
Contract, nor shall any such action or failure to act constitute an approval
of or acquiescence in any breach thereunder, except as may be specifically
provided in the Contract Documents or agreed in writing.
6.2.3 Subparagraphs 6.2.1 and 6.2.2 shall not permit Landlord to assert
a claim which has not been timely made or has otherwise been waived under the
terms of the Contract Documents.
6.2.4 Should any litigation or proceeding be commenced between the
parties hereto or their representatives concerning the Contract Documents, or
the rights or duties of any person or entity in relation thereto, the party or
parties prevailing in such litigation shall be entitled, in addition to such
other relief as may be granted, to a reasonable sum as and for its or their
attorneys' fees and court costs in such litigation or proceeding which shall be
determined by the court in such litigation or proceeding or in a separate action
brought for that purpose. In connection with Landlord's obligation to provide a
legal defense to Tenant or
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other Indemnified Parties pursuant to any provision of this Agreement, Tenant
shall have the right to select counsel to provide such defense.
6.3 CONTINUATION OF WORK. Landlord shall carry on the Work and
adhere to the Construction Schedule during all disputes and disagreements with
Tenant. No Work shall be delayed or postponed pending resolution of any
disputes or disagreements. Pending the resolution of any such dispute or
disagreement, Tenant shall (subject to the General Conditions) pay or authorize
payment to Landlord any amounts owed to Landlord that are not in dispute.
6.4 USE OR OCCUPANCY PRIOR TO SUBSTANTIAL COMPLETION.
6.4.1 Tenant shall have the right to install its furnishings and
Tenant's Equipment within the Work prior to Substantial Completion, provided
such installation does not materially interfere with the progress of the
Work. Such installation shall not constitute occupancy or use by Tenant.
Tenant shall have the responsibility to protect such furnishings and
equipment.
6.4.2 Tenant shall procure and maintain all-risk property insurance
with respect to the Tenant's Equipment, and Landlord shall have no liability
for any loss or damage thereto which is coverable by such insurance,
irrespective of whether its negligence may have contributed to such loss or
damage.
7. TIME.
7.1 DEFINITIONS. The time allotted for the completion of the Work,
or designated portions thereof, as provided in the Construction Schedule is
the Contract Time. The Construction Schedule is set forth in the Agreement
and may be adjusted only in accordance with the Contract Documents.
7.2 PROGRESS AND COMPLETION. All time limits stated in the Contract
Documents are of the essence of the Contract. Landlord shall employ
sufficient forces and take all other steps necessary to achieve each of the
dates set forth in the Construction Schedule. In the event any delays are
experienced in the performance of the Work, Landlord shall accelerate its
performance, employ overtime, cause the Subcontractors to employ overtime,
and take such other steps as are necessary to meet the Construction Schedule.
7.3 DELAYS AND EXTENSIONS OF TIME.
7.3.1 An "Excusable Delay" is a delay in the progress of the Work
caused by (i) unusual delay in transportation, (ii) adverse weather conditions
not reasonably foreseeable, (iii) damage to the Work by fire or other casualty,
(iv) labor disputes, (v) governmental action or non-action, (vi) some other
event or circumstance so unique, unusual and unexpected that
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no reputable and responsible Landlord in the position of Landlord on this
Project could be expected to have anticipated it, or (vii) by an Tenant
Delay. A "Tenant Delay" is a delay in the progress of the Work caused by (1)
Tenant's failure to approve or disapprove any timely manner drawings or other
submittals properly submitted by Landlord pursuant to this Agreement, (2)
Tenant's failure to render a decision in a timely manner with respect to any
matter properly submitted by Landlord pursuant to the General Conditions, (3)
Tenant's own forces or separate contractors, to the extent provided in the
General Conditions, or (4) Change Orders issued in accordance with the
Agreement which specifically provides for a time extension.
7.3.2 Any claim of an Excusable Delay shall be made by written
notice to Tenant not more than twenty (20) days after the commencement of the
delay; otherwise it shall be waived. In the case of a continuing delay only
one claim is necessary. Landlord shall provide an estimate of the probable
effect of such delay on the progress and cost of the Work.
7.3.3 In the event of an Excusable Delay, the Contract Time shall be
extended by Change Order for such reasonable time as is attributable thereto,
provided Landlord makes timely request as provided herein. Delays affecting
events not on the critical path will not be cause for a time extension. In
lieu of granting an extension of time, Tenant may issue a Change Order or a
Directive directing Landlord to accelerate its performance to meet the
Construction Schedule, in which case the Contract Sum shall be adjusted as
provided in the Contract Documents for a change in the Work to reflect the
actual increase, if any, in the cost of performance as a result of such
acceleration, except that there shall be no additional fee or allowance for
overhead and profit payable to Landlord for such change. Tenant shall have
the right to determine in its discretion whether to handle an Excusable Delay
by extending the Contract Time or by directing Landlord to accelerate its
performance, or by a combination of both.
7.4 DAMAGES FOR DELAY.
7.4.1 Landlord shall be responsible for damages and expenses
incurred by Tenant and any separate contractors for delay resulting from
Landlord's failure to complete the Work within the Contract Time or resulting
from the progress of the Work failing to conform to the Construction Schedule.
7.4.2 In case of Tenant Delay (i) Tenant shall reimburse Landlord
actual out of pocket costs and expenses incurred by Landlord that are in the
nature of general conditions and overhead costs described in the Agreement,
including additional interest expense in the Initial Mortgage, but only to the
extent that Landlord would not have incurred such costs and expenses but for
such Tenant Delay, and (ii) the Contract Sum shall be increased to reflect any
increase in labor rates under applicable union agreements, but only to the
extent that such Tenant Delay is the only factor preventing completion of the
Work before the effective date of
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the labor rate increase under such union agreements. In no event, however,
will Tenant be responsible to Landlord for consequential damages.
8. PAYMENTS AND COMPLETION.
8.1 CONTRACT SUM. The Contract Sum is stated in the Agreement and,
together with authorized adjustments thereto, is the total amount payable to
Landlord for the performance of the Work under the Contract Documents. The
Contract Sum will be paid in periodic progress payments following the procedures
set forth in the Contract Documents.
8.2 APPLICATIONS FOR PAYMENT.
8.2.1 Unless otherwise provided in the Contract Documents, payments
shall be made on account of materials and equipment delivered and suitably
stored at the site for subsequent incorporation in the Work. If approved in
advance by Tenant, payment may similarly be made for materials and equipment
suitably stored off the site at a location agreed upon in writing. Payment
for materials and equipment stored on or off the site shall be conditioned
upon compliance by Landlord with procedures satisfactory to Tenant to
establish Tenant's title to such materials and equipment or otherwise protect
Tenant's interest, and shall include applicable insurance, storage and
transportation to the site for such materials and equipment stored off the
site.
8.2.2 The Application for Payment shall constitute a representation by
Landlord to Tenant that the Work has progressed to the point indicated, that the
quality of the Work covered by the Application is in accordance with the
Contract Documents, and that Landlord is entitled to payment in the amount
requested.
8.2.3 Landlord warrants that it will pay all subcontractors and
suppliers due payment as a result of work performed on the Project and will take
such steps as are necessary to remove all liens and encumbrances placed on the
Property by Landlord's subcontractors and/or suppliers.
8.3 PROGRESS PAYMENTS.
8.3.1 Promptly upon receipt of payments, Landlord shall pay each
Subcontractor out of the amount paid to Landlord on account of such
Subcontractor's work the amount to which said Subcontractor is entitled,
reflecting the percentage actually retained, if any, from payments to
Landlord on account of such Subcontractor's work. Landlord shall, by an
appropriate agreement with each Subcontractor, require each Subcontractor to
make payments to Sub-subcontractors in similar manner.
8.3.1 Tenant shall have no obligation to pay or to see to the payment
of any moneys to any Subcontractor.
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8.4 PAYMENTS WITHHELD.
8.4.1 Tenant may decline to approve Landlord's Application for
Payment in whole or in part to the extent reasonably necessary to protect
Tenant if, in Tenant's reasonable opinion, the Work has not progressed to the
point indicated on the Application for Payment or the quality of the Work is
not in accordance with the Contract Documents.
8.4.2 In the event any liens are filed by any Subcontractor,
Sub-subcontractor or material supplier, Tenant may withhold from amounts
otherwise due Landlord an amount equal to one hundred fifty percent (150%) of
the amount of such liens (or accept other security from Landlord in lieu of
such withholding, acceptable to Tenant, including an escrow with the title
insurer) until such liens are resolved or insured over. Landlord shall
release and remove from record or otherwise discharge of record or cause to
be insured against any lien, charge, encumbrance or other claim or security
interest within twenty (20) days of request from Tenant. The foregoing is in
addition to Tenant's rights under Subparagraph 8.4.1 and any other provisions
of the Contract Documents.
8.4.3 When the above reasons for withholding payment are removed,
payment shall be made for amounts withheld because of them.
8.5 SUBSTANTIAL COMPLETION AND FINAL COMPLETION.
8.5.1 Upon Substantial Completion of the Work, Landlord shall notify
Tenant in writing and shall submit to Tenant a comprehensive punch list of
items remaining to be corrected or completed. Tenant shall have the right to
supplement said punch list. Landlord shall correct or complete all items on
the punch list prior to the date established for Final Completion in the
Construction Schedule. The failure to include an item on such punch list (or
the failure of Tenant to supplement such punch list) does not relieve
Landlord from the responsibility to complete all Work in accordance with the
Contract Documents. Tenant may conduct such inspections of the Work as
Tenant deems appropriate. If it is determined that any items (whether or not
on the punch list) are not in accordance with the Contract Documents,
Landlord shall complete or correct such items prior to the date established
for Final Completion in the Construction Schedule. Neither the failure of
Tenant to conduct inspections nor the failure of Tenant to notify Landlord of
items not in accordance with the Contract Documents shall relieve Landlord
from the responsibility to complete all Work in accordance with the Contract
Documents.
8.5.2 Pursuant to the Agreement, Tenant may withhold until Final
Completion authorization of payment to Landlord of an amount equal to one
hundred fifty percent (150%) of the cost (as reasonably estimated by Tenant) of
completing all punch list items.
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8.5.3 "Substantial Completion" means completion of the Work to the
extent that a certificate of occupancy has been issued for the Improvements
and that Tenant can install the Tenant's Equipment in the Improvements and
use the facility for its intended purpose to the same extent as if the Work
were fully complete, subject only to completion or correction of minor punch
list items. "Final Completion" means full and final completion of the Work in
strict accordance with the Contract Documents, including, without limitation,
correction and completion of all punch list items.
8.6 FINAL PAYMENT.
8.6.1 After Tenant has accepted Final Completion, and after Landlord
has achieved Final Completion and delivered all manuals and instructions,
insurance certificates, bonds and other documents required by the Contract
Documents, and a final certificate of occupancy for the Project issued by the
City of Belle Plain, Landlord may submit a supplemental Application for
Payment, following the procedure set forth in the Agreement.
8.6.2 The final payment shall not be earned by Landlord or owed by
Tenant until Landlord submits to Tenant: (1) an affidavit that all payrolls,
bills for materials and equipment and other indebtedness connected with the
Work for which Tenant or its property may in any way be responsible have been
paid or otherwise satisfied; (2) other data establishing payment or
satisfaction of all such obligations in excess of $1,000, such as receipts,
releases and waivers of liens arising out of the Contract, to the extent and
in such form as may be designated or required by Tenant; (3) consent of
surety, if any, to final payment; and (4) the manuals and instructions,
certificates of insurance and all other documents required to be submitted by
Landlord under the Contract Documents.
8.6.3 If any Subcontractor refuses to furnish a release or waiver
required by Tenant, Landlord may furnish a bond satisfactory to Tenant to
indemnify it against any such lien. If any such lien remains unsatisfied
after all payments are made, Landlord shall refund to Tenant all moneys that
the latter may be compelled to pay in discharging such lien, including all
costs and reasonable attorneys' fees.
8.6.4 The acceptance of final payment shall constitute a waiver of
all claims by Landlord except those previously made in writing and identified
by Landlord as unsettled at the time of the final Application for Payment.
8.7 NO WAIVER BY TENANT. Landlord's obligation to perform and
complete the Work in accordance with the Contract Documents shall be absolute.
Neither the approval of any Application for Payment, the making of any payment,
the giving of any approval, the use or occupancy of the Work or any part
thereof, the acceptance of Final Completion, the making of final payment, or any
other action on the part of Tenant shall constitute a waiver of claims by Tenant
or an acceptance of any Work which is not in accordance with the Contract
Documents.
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9. PROTECTION OF PERSONS AND PROPERTY.
9.1 SAFETY PRECAUTIONS AND PROGRAMS.
9.1.1 Landlord shall be responsible for initiating, maintaining and
supervising all safety precautions and programs in connection with the
performance of the Work, including compliance with the requirements of OSHA.
9.1.2 Landlord shall establish a written safety program for the
Project ("Landlord's Written Safety Program") that will, at a minimum,
require that all persons working on the Project comply with all federal,
state and local safety rules, ordinances, laws and regulations. Landlord
shall use reasonable efforts to cause all of its employees, agents and
subcontractors performing Work on the Project to comply with Landlord's
Written Safety Program. Tenant shall in its agreements with any separate
contractors (i) obligate such separate contractors (including their
employees, agents and subcontractors) to comply with Landlord's Written
Safety Program, and (ii) provide that such separate contractors shall be
directly answerable and liable to Landlord for any and all loss, cost,
damage, and expense suffered by Landlord as a result of such separate
contractor's failure to abide by Landlord's Written Safety Program.
9.2 SAFETY OF PERSONS AND PROPERTY.
9.2.1 Landlord shall take all reasonable precautions for the safety
of, and shall provide all reasonable protection to prevent damage, injury or
loss to:
(1) all employees on the Work and all other persons who may be
affected thereby;
(2) all the Work and all materials and equipment to be incorporated
therein, whether in storage on or off the site, under the care,
custody or control of Landlord or any Subcontractor or
Sub-subcontractor; and
(3) other property at the site 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.
9.2.2 Landlord shall give all notices and comply with all applicable
laws, ordinances, rules, regulations and lawful orders of any public
authority bearing on the safety of persons or property or their protection
from damage, injury or loss.
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9.2.3 Landlord shall erect and maintain, as required by existing
conditions and by performance of the Agreement, all reasonable safeguards for
safety and protection, including posting danger signs and other warnings
against hazards, promulgating safety regulations and notifying tenants and
users of adjacent utilities.
9.2.4 When the use or storage of explosives or other hazardous
materials or equipment or unusual methods are necessary for the execution of
the Work, Landlord shall exercise the utmost care and shall carry on such
activities under the supervision of properly qualified personnel.
9.2.5 Landlord shall promptly remedy all damage or loss to any
property referred to in Subparagraphs 9.2.1.2 and 9.2.1.3 caused in whole or
in part by Landlord or any Subcontractor or Sub-subcontractor, or anyone
directly or indirectly employed by any of them, or anyone acting on behalf of
any of them. The foregoing obligations of Landlord are in addition to its
obligations under the Contract Documents.
9.2.6 Landlord shall designate a responsible member of its
organization at the site whose duty shall be the prevention of accidents.
This person shall be Landlord's superintendent unless otherwise designated by
Landlord in writing to Tenant.
9.2.7 Landlord shall not load or permit any part of the Work to be
loaded so as to endanger its safety.
9.3 EMERGENCIES. In any emergency affecting the safety of persons or
property, Landlord shall act, at its discretion, to prevent threatened damage,
injury or loss. Any additional compensation or extension of time claimed by
Landlord on account of emergency work shall be determined as provided in Article
11 for changes in the Work and in Article 7 for Excusable Delays.
9.4 HAZARD COMMUNICATION PROGRAMS. Landlord shall be responsible
for coordinating any exchange of material safety data sheets or other hazard
communication information required to be made available to or exchanged
between or among employers at the site in accordance with the requirements of
OSHA and other applicable laws and regulations.
10. INSURANCE.
10.1 LANDLORD'S LIABILITY INSURANCE.
10.1.1 Landlord shall maintain, in a company or companies
satisfactory to Tenant and licensed to do business in the state in which the
Property is located, worker's compensation insurance, employer's liability
insurance, and general and automobile liability insurance. Such insurance shall
be sufficient to protect Landlord and Tenant from claims
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which arise out of, result from, or are in any manner connected with the
execution of the Work or the operations under the Agreement by Landlord and
all Subcontractors and Sub-subcontractors, except claims which arise solely
out of the acts or negligence of Tenant or its separate contractors or their
agents or employees. All of the insurance required to be obtained by
Landlord pursuant to the Contract Documents shall be with companies rated no
less than X as to financial rating and no less than A as to policyholder's
rating in the current edition of Best's Insurance Guide. Such insurance
shall include the minimum coverages and limits of liability set forth in
Subparagraph 10.1.2 below, and such additional coverages and higher limits as
may be specified elsewhere in the Contract Documents.
10.1.2 The insurance carried by Landlord shall include the
following minimum coverages and limits of liability:
10.1.3 Worker's compensation and employer's liability insurance:
(a) Worker's compensation insurance as required by any applicable law
or regulation.
(b) Employer's liability insurance in the amount of $1,000,000 each
accident for bodily injury, $1,000,000 policy limit for bodily
injury by disease and $1,000,000 each employee for bodily injury
by disease.
10.1.4 General liability insurance: Commercial General Liability
insurance covering all operations by or on behalf of Landlord, which shall
include the following minimum limits of liability and coverages:
(a) Required coverages:
(1) Premises and Operations,
(2) Products and Completed Operations,
(3) Contractual Liability, insuring the indemnity obligations
assumed by Landlord under the Contract Documents,
(4) Broad Form Property Damage (including Completed Operations),
(5) Explosion, Collapse and Underground Hazards, and
(6) Personal Injury Liability.
(b) Minimum limits of liability:
(1) $1,000,000 each occurrence (for bodily injury and property
damage),
(2) $1,000,000 for Personal Injury Liability,
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(3) $2,000,000 aggregate for Products and Completed Operations
(which shall be maintained for a three (3) year period
following final completion of the Work),
(4) $2,000,000 general aggregate applying separately to this
Project
10.1.5 Automobile Liability Insurance: Automobile liability
insurance (bodily injury and property damage liability) including coverage
for owned, hired, and nonowned automobiles. The limits of liability shall
not be less than $1,000,000 combined single limit each accident for bodily
injury and property damage combined. Landlord shall also require each of its
Subcontractors to include in their liability insurance policies coverage for
Automobile Contractual Liability.
10.1.6 Umbrella/Excess Liability Insurance: Landlord shall also
carry umbrella/excess liability insurance in the amount of $5,000,000. If
there is no per project aggregate under the Commercial General Liability
policy, the limit shall be $5,000,000.
10.1.7 Landlord's liability insurance shall be written on an
occurrence basis. Landlord's insurance shall include an endorsement whereby
Tenant and its TSR are named as additional insureds as respects all
operations performed by or on behalf of Landlord in connection with the Work.
Landlord's insurance shall also include an endorsement providing that there
shall be severability of interests with respect to the additional insureds.
All of the coverage afforded to Tenant through Landlord's insurance shall be
primary and not contributory to any coverage available to Tenant under any
other insurance held by Tenant. Prior to commencing the Work, Landlord shall
submit to Tenant a certificate of insurance evidencing that the required
insurance is in full force and effect. This certificate shall contain
certification by the insurance companies that such insurance may not be
canceled, non-renewed, materially changed or subject to a reduction in limits
without 30 days prior written notification to Tenant. Upon request of
Tenant, Landlord shall submit copies of the insurance policies to Tenant.
10.1.8 It is the obligation of Landlord to provide insurance which
complies with the requirements of the Contract Documents. Landlord's
agreement to provide insurance is a material part of Landlord's obligations
under the Contract Documents. The parties intend that Landlord shall provide
the required insurance and that such insurance shall protect the interests of
Landlord and Tenant notwithstanding any assertion or determination that any
indemnity provision of the Contract Documents is void or unenforceable. The
obligations of Landlord under the Contract Documents with respect to
insurance shall not be waived by Tenant's failure to request evidence of
insurance or to enforce any of the other provisions of the Contract Documents
respecting insurance, or by Tenant's failure to respond to or object to any
submission by Landlord respecting insurance. Landlord shall be liable to
Tenant for all damages incurred by Tenant as a result of Landlord's failure
to carry or to cause any Subcontractor to carry the required insurance.
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10.2 PROPERTY INSURANCE.
10.2.1 Landlord shall maintain property insurance on the Work.
Such insurance shall:
10.2.1.1 include the interest of Tenant, Landlord,
subcontractors, suppliers, and any other persons or entities identified
in the Agreement, each of whom is deemed to have an insurable interest
and shall be listed as an insured or additional insured;
10.2.1.2 be written on a Builder's Risk-All-Risk or open peril
or special causes of loss policy form that shall at least include
insurance for physical loss or damage to the Work, temporary buildings,
false work, and work in transit, and shall insure against at least the
following perils: fire, lightning, extended coverage, theft, vandalism,
and malicious mischief, earthquake, collapse, debris removal,
demolition occasioned by enforcement of laws and regulations, water
damage, and such other perils as may be specifically required by the
Agreement;
10.2.1.3 include expenses incurred in the repair or
replacement of any insured property (including, but not limited to,
fees and charges of engineers and architects);
10.2.1.4 cover materials and equipment stored at the site or
at other location that was agreed to in writing by Tenant prior to being
incorporated into the Work, provided that such materials and equipment
have been included in the Application for Payment submitted by
Landlord; and
10.2.1.5 be maintained in effect until Substantial Completion
has been achieved, unless otherwise agreed to in writing by Tenant and
Landlord within thirty (30) days' written notice to each other
additional insured to whom a Certificate of Insurance has been issued.
10.2.2 Landlord shall purchase and maintain such boiler and
machinery insurance or additional property insurance as may be required to
protect Landlord's equipment (but not Tenant's Equipment) or otherwise
required by this Agreement or any laws and regulations and shall include the
interests of Landlord, Tenant, subcontractors, and any other persons or
entities identified in the Agreement, each of whom is deemed to have an
insurable interest and shall be listed as an insured or additional insured.
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11. CHANGES IN THE WORK.
11.1 CHANGE ORDERS.
11.1.1 Tenant, without invalidating the Agreement, may order changes
in the Work within the general scope of the Agreement, consisting of
additions, deletions or other revisions by way of Change Orders. If the
change directed by Tenant involves a material increase or decrease in the
scope of the Work, the Contract Sum and/or Contract Time will be
appropriately increased or decreased, as provided in the relevant Change
Order. If the change directed by Tenant does not involve a material increase
or decrease in the scope of the Work, there shall be no adjustment to the
Contract Sum or Contract Time.
11.1.2 A Change Order is a written order, signed by Landlord and
Tenant, modifying the Contract by authorizing a change in the Work and/or an
adjustment to the Contract Sum or Contract Time. The Contract Sum and the
Contract Time may be changed only by Change Orders. A Change Order signed by
Landlord indicates agreement therewith including the adjustment, if any, in
the Contract Sum and Contract Time.
11.1.3 The increase or decrease in the Contract Sum (subject, in all
events, to Subparagraph 11.1.1) resulting from a change in the Work shall be
determined in accordance with the other Contract Documents; provided,
however, the additional profit and overhead with respect to any Subcontractor
or Sub-subcontractor shall not exceed the following: 1) with respect to those
portions of such Work performed by such Subcontractor or Sub-subcontractor
with its own forces, the amount of such allowance shall not exceed ten (10%)
percent of the cost of such portions of the Work, 2) with respect to those
portions of such Work performed by any lower tier Sub-subcontractor, the
amount of such allowance shall not exceed five percent (5%) of the amount
paid to such lower tier Sub-subcontractor as a result of such change. Unless
otherwise provided in the Contract Documents, the expenditures included in
the cost of such Work (a) shall be limited to only those costs actually and
properly paid by Landlord and incurred in the performance of the changed Work
for items which are required for the proper completion of the changed Work in
accordance with the Contract Documents and any additional interest expense
under the Initial Mortgage (as defined in the Lease) resulting from any
applicable extension of the Contract Time (which shall be reimbursed pursuant
to Section 4.4), and (b) shall be further limited by the following:
Landlord's actual cost of materials and equipment incorporated into the
changed Work, including sales tax and cost of delivery; Landlord's actual
cost of labor, including social security, old age and unemployment insurance,
and fringe benefits required by agreement or custom; workers' compensation
insurance; rental value of equipment and machinery; and the additional costs
of supervision and field office personnel directly attributable to the
change. When both additions and credits covering related Work or
substitutions are involved in any one change, the Landlord's five percent
(5%) fee shall be calculated on the basis of the net increase, if any, with
respect to that change. In calculating the cost of the changed Work, all cash
discounts, rebates, or refunds, all trade discounts, rebates, or refunds, and
all proceeds
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from the return of surplus materials and equipment shall be deducted
therefrom and shall accrue to the benefit of the tenant. In addition, the
cost of the changed Work shall be calculated at rates not higher than those
prevailing in the location of the performance of the changed Work.
11.1.4 Landlord shall keep and present, in form reasonably
acceptable to Tenant, an itemized accounting together with appropriate
supporting data of the cost of Work resulting from a change in the Work.
11.1.5 Any change in the Work which affects the Contract Time shall
require the prompt notification by Landlord as to the time impact of such
change. In computing the cost of such changes for submission to Tenant,
Landlord shall alternately compute costs on the basis of completion of the
Work within the existing Contract Time and on the basis of completion on an
extended Contract Time.
11.2 MINOR CHANGES IN THE WORK. Tenant shall have the right to order
minor changes in the Work not involving an adjustment in the Contract Sum or an
extension of Contract Time and not inconsistent with the intent of the Contract
Documents. Such changes shall be affected by written field orders and shall be
binding on Tenant and Landlord. Landlord shall carry out field orders promptly.
12. UNCOVERING AND CORRECTION OF WORK.
12.1 UNCOVERING OF WORK.
12.1.1 If any portion of the Work should be covered contrary to the
request of Tenant or to requirements specifically expressed in the Contract
Documents, it must, if required in writing by Tenant, be uncovered for its
observation and shall be replaced at Landlord's expense.
12.1.2 If any portion of the Work has been covered which Tenant has
not specifically requested to observe prior to being covered, Tenant may
request to see such Work and it shall be uncovered by Landlord. If such Work
is found to be in accordance with the Contract Documents, the cost of
uncovering and replacement shall, by appropriate Change Order, be charged to
Tenant. If such Work is found not to be in accordance with the Contract
Documents, Landlord shall pay such costs unless it is found that this
condition was caused by Tenant or a separate contractor, in which event
Tenant shall be responsible for the payment of such costs.
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12.2 CORRECTION OF WORK.
12.2.1 Landlord shall promptly correct all Work rejected by Tenant
as defective or as failing to conform to the Contract Documents whether
observed before or after Final Completion and whether or not fabricated,
installed or completed, provided that Landlord is notified thereof by Tenant
in writing prior to the expiration of the Correction Period. Landlord shall
bear all costs of correcting such rejected Work.
12.2.2 As used in this Subparagraph 12.2.2, the term "Correction
Period" means one (1) year after Substantial Completion. If, within the
Correction Period any of the Work is found to be defective or not in
accordance with the Contract Documents, and if Landlord is notified thereof
by Tenant within the Correction Period, Landlord shall correct it promptly
after receipt of a written notice from Tenant to do. This obligation shall
survive termination of the Agreement. Tenant shall give such notice promptly
after discovery of the condition. Landlord will assign to Tenant any
applicable special warranty required by the Contract Documents which extends
beyond the Correction Period.
12.2.3 Landlord shall remove from the site all portions of the Work
which are defective or nonconforming and which have not been corrected,
unless removal is waived by Tenant.
12.2.4 If Landlord fails to correct defective or non-conforming
Work, Tenant may correct it at the expense of Landlord in accordance with the
Contract Documents.
12.2.5 If Landlord does not proceed promptly and diligently with the
correction of defective or non-conforming Work, Tenant may remove it and may
store any salvageable materials or equipment at the expense of Landlord. If
Landlord does not pay the cost of such removal and storage within ten (10)
days after written notice, Tenant may upon ten (10) additional days' written
notice sell such materials and equipment at auction or at a private sale.
Tenant shall account for the net proceeds thereof after deducting all costs
that should have been borne by Landlord. If such proceeds of sale do not
cover all costs which Landlord should have borne, the difference shall be
deducted from the payments then or thereafter due Landlord. If the payments
then or thereafter due Landlord are not sufficient to cover such amount,
Landlord shall promptly pay the difference to Tenant.
12.2.6 Landlord shall bear the cost of making good all work of
Tenant or separate contractors destroyed or damaged by correction or removal of
defective or non-conforming Work.
12.2.7 Nothing contained in this Article shall be construed to
establish a period of limitation with respect to any other obligation which
Landlord might have under the Contract Documents. The establishment of time
periods set forth in this Article relate only to the specific obligations of
Landlord to correct the Work and has no relationship to the time
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within which its obligation to comply with the Contract Documents may be
sought to be enforced nor to the time within which proceedings may be
commenced to establish Landlord's liability with respect to its obligations
other than specifically to correct the Work.
12.3 ACCEPTANCE OF DEFECTIVE OR NONCONFORMING WORK. If Tenant
prefers to accept defective or non-conforming Work, it may do so instead of
requiring its removal and correction, in which case a Change Order will be
issued to reflect a reduction in the Contract Sum where appropriate and
equitable. Such adjustment shall be effected whether or not final payment
has been made.
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ATTACHMENT 3
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Contract Schedule
Commencement April 14, 1997
Fifty Percent (50%) Completion of the Work August 1, 1997
Substantial Completion November 14, 1997
Final Completion December 31, 1997
