EXHIBIT 10.8
CONSTRUCTION MANAGEMENT AGREEMENT
This Construction Management Agreement (the "Agreement") is made this
11th day of April, 2003, by and between SARDY HOUSE, LLC, a Colorado limited
liability company (hereinafter "Owner"), and BLOCK 66, LLC, a Colorado limited
liability company (hereinafter "Construction Manager").
Owner and Construction Manager agree as set forth below:
1. DESIGNATION OF BLOCK 66, LLC AS CONSTRUCTION MANAGER AND AGENT.
Owner hereby irrevocably appoints Construction Manager as its Construction
Manager and Agent. Construction Manager shall perform the duties and assume the
responsibilities of construction manager by and through Xxxxx X. Xxxxxx and
Xxxxxx X. Xxxxxx. Construction Manager shall have the complete and exclusive
authority, subject to Owner's right to approve plans, specifications, and
budgets as provided below, to contract for, supervise and direct all aspects of
the Work (defined below) required in order to complete the renovation of the
Sardy House in Aspen, Colorado. In that regard, Owner hereby appoints and
constitutes Construction Manager as Owner's lawful attorney-in-fact to do any
and every act that Owner might do in Owner's own behalf related to the Work,
including the authorization to enter into contracts on behalf of Owner, to
prosecute or defend any action or proceeding in connection with the Work. Owner
covenants not to interfere in any manner with Construction Manager's performance
hereunder, and agrees not to undertake any of the Work except through the
Construction Manager pursuant to this Agreement, unless and until the Agreement
is terminated as provided herein.
2. CONSTRUCTION CONTRACTS. The Construction Manager is hereby
authorized and directed, on behalf of Owner, to enter into "Construction
Contracts" with such construction contractors or subcontractors, suppliers or
vendors as Construction Manager may select to perform the Work (collectively,
the "Contractors"). The Construction Contracts shall obligate Owner to pay for
the Cost of the Work (defined below), together with a contractor's fee based on
the Cost of the Work. The Construction Contracts shall obligate the Contractors
to perform in a good and workmanlike manner and in compliance with all
applicable federal, state, and local laws, ordinances, regulations, codes and
orders, and to obtain, maintain, and provide evidence of comprehensive general
liability insurance, errors and omissions insurance, builders' risk insurance,
workmen's compensation insurance, unemployment insurance, and any other
insurance coverage which may be required by the Construction Manager. In the
event that any Contractor fails to adequately perform in the judgment of the
Construction Manager, the Construction Manager is authorized to terminate the
Construction Contract and to enter into a contract with another Contractor of
the Construction Manager's choice who the Construction Manager reasonably
believes is qualified and capable of completing the Work, in accordance with the
approved plans and specifications and in a reasonable time.
3. THE WORK. The "Work" to be performed by Contractors and directed by
the Construction Manager shall consist of the renovation and equipping of the
Sardy House in Aspen, Colorado, in accordance with the plans and specifications
set forth in EXHIBIT A, which plans and specifications are hereby approved by
Owner. The date on which construction commences shall be determined by the
Construction Manager. The parties agree that there shall be no material changes
to the Work unless agreed to in writing by Owner and Construction Manager, which
agreement shall establish the adjustment, if any, to the Cost of the Work for
which Owner is responsible.
4. COST OF THE WORK.
(a) The term "Cost of the Work" shall mean costs necessarily
incurred by the Contractors in the performance of the Work. The Cost of
the Work shall include only the items set forth below:
(1) The wages and benefits of individuals employed by
Contractors to perform the Work, together with Contractors'
payroll and employment insurance costs.
(2) The cost, including transportation, of materials
incorporated or to be incorporated in the Work, including
prepaid costs incurred by Owner prior to the commencement of
construction, less any deposits previously paid by Owner.
(3) Payments made by Contractors to subcontractors in
accordance with the Construction Contracts.
(4) Costs of all temporary facilities, equipment and
hand tools not customarily owned by construction workers which
are provided by the Contractors at the site of and fully
consumed in the performance of the Work.
(5) Reasonable rental costs for necessary temporary
facilities, machinery and equipment used at the site of the
Work, whether rented from the Contractors or others.
(6) Cost of removal of debris from the site of the
Work.
(7) Fees and assessment for the building permit and
for other permits necessary for the prosecution of the Work
for which the Contractors are required to pay.
(8) Cost incurred in taking action to prevent
threatened damage, injury or loss in the case of an emergency
affecting the safety of persons and property, unless caused by
the fault, neglect or intentional act of the Contractors.
(9) Sales, use or similar taxes imposed by a
governmental authority which are directly related to the Work
and for which the Contractors are liable, except for income or
franchise taxes.
(b) Although Owner has or is obligated to pay all of the
following items, except (4), the term "Cost of the Work" shall not
include:
(1) The Contractors' fees.
(2) The Construction Manager's Fee.
(3) Tap fees for water and sewer service.
(4) Contractors' general overhead expenses
(i.e., principal office and clerical personnel).
(5) The fees of the architect and other
consultants, engineers, planners or attorneys employed by
Owner.
(c) Any estimates of the Cost of the Work prepared by the
Construction Manager represent the Construction Manager's best judgment
as a person or entity familiar with the construction industry. It is
recognized, however, that neither the Construction Manager nor the
Owner has control over the cost of labor, materials, equipment, or
Contractors' methods of determining subcontractor bid prices, or over
market or negotiating conditions. Accordingly, the Construction Manager
cannot and does not warrant or represent that the actual Cost of the
Work will not vary from the estimates prepared by the Construction
Manager.
(d) No fixed limit of Construction Cost shall be established
as a condition of this Agreement or by the preparation and submittal to
Owner of Cost of Work estimates.
5. PROGRESS PAYMENTS.
(a) No more frequently than once each month, each Contractor
shall submit a "Request for Payment" to the Construction Manager which
includes: (1) Copies of receipts for materials, temporary facilities,
equipment, furnishings, tools and other items utilized in the Work; (2)
invoices for labor performed in the Work; and (3) mechanics' lien
waivers for all applicable labor and materials for which payment is
requested. No Request for Payment shall include any amount which was
part of a previous request. The Request for Payment shall include each
Contractor's fee.
(b) The Construction Manager shall review and approve each
Request for Payment and, upon approval, shall submit the summary of the
Request for Payment to the Owner. Upon the request of Owner, the
Summary Request for Payment and supporting documents shall be sent to
Owner's lender at the same time that it is sent to Owner.
Owner or Owner's lender shall pay the approved Request for Payment,
together with the Construction Manager's Fee, as provided below, within
fifteen (15) days after mailing or delivery. Payment shall be submitted
to the Construction Manager who shall pay the Contractors. Owner shall
be liable for the payment of interest at the rate of eighteen percent
(18%) per annum on any Requests for Payment from and after the date
due.
(c) The Construction Manager's submission of a Summary Request
for Payment shall constitute a representation to Owner that, to the
best of the Construction Manager's knowledge, information and belief,
the Work has progressed to the point indicated and the quality of the
Work is in accordance with the Construction Contracts and that the
Contractors are entitled to payment in the amount requested.
(d) The submission of a Summary Request for Payment shall not
be a representation that the Construction Manager has: (1) reviewed
copies of requisitions received from subcontractors and material
suppliers to substantiate the Contractors' right to payment, or (2)
ascertained how or for what purpose the Contractors have used money
previously paid by Owner.
(e) Final payment to the Contractors shall be due and payable
ten (10) days after mailing or delivery of a Certificate of Occupancy
for the Sardy House and a certificate executed by the Construction
Manager certifying that the Construction Manager has conducted a final
inspection of the Work, that the Contractors has satisfied any punch
list items, and that the Work is complete.
6. CONSTRUCTION MANAGER'S COMPENSATION. In consideration of
Construction Manager's performance hereunder, Owner shall pay the Construction
Manager a fee in the amount of $75.00 per hour for the time Xxxxx X. Xxxxxx and
Xxxxxx X. Xxxxxx have incurred pursuant to this Agreement, together with
reimbursement for the cost of insurance related to the Work provided by
Construction Manager and reasonable out-of-pocket expenses. The "Construction
Manager's Fee" shall be payable to the Construction Manager in monthly
installments along with progress payments for the Work as provided in paragraph
5(b), above, based upon hours of work. The final installment of the Construction
Manager's Fee shall be paid along with the final payment to Contractors for the
Cost of the Work as provided in paragraph 5(e) above.
7. CONSTRUCTION MANAGER'S RESPONSIBILITIES AND AUTHORITY.
(a) The Construction Manager shall provide sufficient
organization, personnel and management to carry out the requirements of
this Agreement in an expeditious and economical manner consistent with
the interests of the Owner.
(b) The Construction Manager shall prepare and provide to
Owner a schedule for the anticipated commencement and completion of the
Work prior to the commencement of construction, along with an estimate
of the Cost of the Work.
(c) The Construction Manager shall provide Owner with periodic
updates of the construction schedule and revised estimates of the Cost
of the Work.
(d) The Construction Manager shall maintain accounting records
which verify the actual Cost of the Work performed, which shall be
available for review by Owner upon reasonable notice.
(e) The Construction Manager shall determine in general that
the Work of the Contractors is being performed in accordance with the
requirements of the Construction Contracts, endeavoring to guard the
Owner against defects and deficiencies in the Work. As appropriate, the
Construction Manager shall have authority from the Owner to require
independent inspections or testing of the Work in accordance with the
provisions of the Construction Contracts, whether or not such Work is
fabricated, installed or completed. The Construction Manager may reject
Work which does not conform to the requirements of the Construction
Contracts.
(f) The Construction Manager shall not have control over or
charge of and shall not be responsible for construction means, methods,
techniques, sequences or procedures, or for safety precautions and
programs in connection with the activities of the Contractors since
these are solely the Contractors' responsibility. The Construction
Manager shall not be responsible for the failure of the Contractors to
carry out the Work in accordance with the Construction Contracts. The
Construction Manager shall not have control over or charge of acts or
omissions of the Contractors, or their agents or employees, or any
other persons performing portions of the Work not directly employed by
the Construction Manager.
(g) The Construction Manager shall obtain certificates of
insurance for the coverages required by the Construction Contracts from
the Contractors and shall keep them on file in its office. Owner shall
be named insured with respect to required coverages.
(h) The Construction Manager shall coordinate the correction
and completion of the Work. Following substantial completion of the
Work, the Construction Manager shall conduct an inspection and shall
provide the Contractors with a "punch list" of items to be corrected or
completed, and shall provide Owner with a Substantial Completion
Report, including an anticipated date for final completion and issuance
of a Certificate of Occupancy.
(i) The Construction Manager shall secure and transmit to the
Owner warranties and similar submittals required by the Construction
Contracts and deliver all keys, manuals, record drawings and as-built
plans to Owner within a reasonable time after completion thereof.
8. TERMINATION OF CONSTRUCTION MANAGER AGREEMENT. This Agreement may
only be terminated by Owner, upon not less than 30 days written notice, should
the Construction
Manager fail substantially to perform in accordance with the terms of this
Agreement, through no fault of the Owner. The Construction Manager shall not be
entitled to terminate this Agreement for non-performance by Owner, but may seek
injunctive relief and/or damages. In the event of any litigation arising out of
this Agreement, the Court may award, to the prevailing party, its reasonable
costs and expenses, including attorney fees.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto, and supersedes all prior and contemporaneous
agreements, representations and understandings of the parties regarding the
subject matter of this Agreement. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by the parties
hereto.
10. BINDING EFFECT/ASSIGNMENT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, and their respective heirs,
successors and assigns. Construction Manager may not assign its rights
hereunder, without the prior written consent of Owner, which consent can be
withheld for any reason.
11. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Colorado, and the parties hereby
consent to the exclusive jurisdiction of the Colorado state courts in the event
of any controversy or suit arising hereunder. Venue shall be in Pitkin County,
Colorado.
12. SEVERABILITY. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the provisions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
13. NOTICES. All notices and other communications tendered in
connection with this Agreement shall be in writing, and shall be deemed to have
been duly given when delivered in person or by telefax, or on the third (3rd)
day after mailing, if mailed registered or certified mail, postage prepaid and
properly addressed as follows:
To Owner at: Sardy House, LLC
000 Xxxx Xxxx Xxxxxx
Xxxxx, XX 00000
To Construction Manager at: Block 66, LLC
000 Xxxx Xxxx Xxxxxx
Xxxxx, XX 00000
14. RECORDING. The parties agree that this Agreement shall not be
recorded in the public records.
15. NOTICE OF ACCEPTANCE/BINDING CONTRACT. This proposal shall expire
unless accepted in writing by Owner as evidenced by Owner's signature below, and
unless the Construction Manager receives notice of such acceptance on or before
5:00 p.m. MDT, on
April 14, 2003. Upon execution of this Agreement by both Owner and Construction
Manager, this instrument shall become and be deemed a binding contract between
Owner and Construction Manager. The effective date of this Agreement shall be
the date of execution by Owner. In no event shall any time periods under this
Agreement begin to run until this document has been fully executed by both
Construction Manager and Owner.
OWNER:
SARDY HOUSE, LLC
BY: BLOCK 66, LLC
By: /s/ Xxxxx X. Xxxxxx April 11, 2003
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Xxxxx X. Xxxxxx, Manager Date of Owner's Signature
CONSTRUCTION MANAGER:
BLOCK 66, LLC
By: /s/ Xxxxxx X. Xxxxxx April 11, 2003
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Xxxxxx X. Xxxxxx, Manager Date of Construction Manager's
Signature
EXHIBIT A
SARDY HOUSE RENOVATION
Plans and Specifications
