EXHIBIT 10.4
CONSTRUCTION MANAGEMENT/CONTRACTOR AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of
September, 1998, by and between MUDRA CONSTRUCTION, LTD., a Nebraska
corporation, with its principal place of business at 0000 Xxxxx 00xx Xxxxxx,
Xxxxx, Xxxxxxxx, 00000 ("Mudra") and PROFESSIONAL VETERINARY PRODUCTS, LTD., a
Missouri corporation, with its principal place of business at 00000 X Xxxxxx,
Xxxxx, Xxxxxxxx, 00000 ("PVP").
1. SCOPE OF WORK
(a) Subject to and in accordance with the terms and conditions of this
Agreement, Mudra agrees to furnish all design and engineering services, and all
construction services, including all general construction, mechanical, and
electrical and all other construction services, equipment and tools necessary to
perform the work as necessary and required for the construction of an
approximately 110,000 square foot office and warehouse building as set forth in
plans and specifications being furnished by Mudra upon the tract of land legally
described as Xxx 0, Xxxxxx 0, Xxxxxxx Xxxxxxxxxx Xxxx, Xxxxx Xxxxxx, Xxxxxxxx.
(x) Mudra will contract with such qualified and licensed architects and
engineers as are necessary for the proper design of the Project. The cost of the
architect and engineering services shall be paid by Mudra and shall not be
included in the cost of the work. All architects and engineers utilized by Mudra
will be subject to the prior approval of PVP. The architect and engineers will
prepare plans and specifications in accordance with the PVP's requirement and
budget. PVP must approve all plans and specifications before bids for any work
are solicited. In the event PVP requests any changes in the plans and
specifications after such approval, PVP shall be responsible for such changes,
unless the changes are necessitated due to the fault of Mudra or any
subcontractor of Mudra.
(c) All documents, including the plans and specifications for the
Project, shall be deemed owned by PVP, who may utilize such documents in the
future for any renovation, remodeling, modification or expansion of the Project
without any future compensation to Mudra or to any architect or engineer
utilized by Mudra for preparation thereof. Mudra shall make appropriate
arrangements with any architect and engineer used by Mudra to assure PVP's
rights to such documents.
(d) Mudra shall furnish to PVP reproducible record drawings of the
Project, which shall be delivered to PVP within 120 days after final completion.
2. CONSTRUCTION MANAGEMENT DUTIES AND RESPONSIBILITIES OF MUDRA
Mudra's construction management duties shall include, but not be
limited to, the following:
(a) Mudra shall utilize only qualified subcontractors and suppliers of
labor and materials to construct the building. For each subcontract to be
awarded, Mudra shall obtain two or more suitable bids based upon the plans and
specifications approved by PVP. PVP will approve in advance all such
subcontracts to be awarded by Mudra and shall reserve the right to reject any
subcontractor. PVP shall have the right to require that bids be obtained from
subcontractors that PVP designates; provided, however, that all such
subcontractors must be reasonably acceptable to Mudra. All subcontractors will
enter into written contracts with Mudra for the performance of such work, and
Mudra shall be responsible to PVP to manage the subcontractors' work and to
assure that all such work is performed by the subcontractors in accordance with
the requirements of this contract and in compliance with the plans and
specifications approved by PVP. All such subcontracts shall incorporate by
reference the terms and conditions of this Agreement and shall provide that upon
termination of this Agreement due to the default of Mudra, such subcontractors
shall, at the election of PVP, continue to perform their subcontracts as direct
contractors of PVP, without any increase in their respective subcontracted
awards. Mudra will obtain from the plumbing, mechanical, electrical and
sprinkler subcontractors payment and performance bonds in the amount of their
respective contracts.
(b) After receipt of bids for all of the work to be performed for such
Project, Mudra will furnish to PVP a guaranteed maximum price ("GMP") for the
Project, which GMP shall include a contingency acceptable to PVP for costs that
are reimbursable but are not the proper subject of a change order. Such GMP
shall be based upon the approved plans and specifications upon which the bids
were based. The GMP shall include the cost of all labor, materials, taxes,
permit fees, and all other costs of any nature, and shall include Mudra's fee
set forth in Paragraph 6 below. At the time the GMP is established, this
Agreement shall be amended to include the GMP as a part of this Agreement. Such
amendment shall also identify the plans and specifications upon which such GMP
is based and shall set forth any allowances, unit prices and unit price
quantities included therein. Any changes in the plans and specifications may
cause a change in the GMP as provided in Paragraph 10 below.
(c) Mudra shall be responsible for the construction of the Project and
as such, shall perform or cause to be performed, all construction work required
by the plans and specifications, Mudra shall further be responsible for the acts
and omissions of all subcontractors and for person and entities employed or
contracted by them. Mudra shall oversee and supervise the Project, inspect the
work of subcontractors for adherence to the plans and specifications, coordinate
the activities of the subcontractors and assure completion by the subcontractors
of all subcontracted work. All work shall be done in a good and worker like
manner, and in compliance with all
applicable governmental laws, ordinances, regulations and codes. PVP shall
not interfere in any manner with the performance of the work by Mudra or any
subcontractor, so long as such work is being performed in a good and worker
like manner, in accordance with all applicable governmental laws, ordinances,
regulations and codes and is being performed in compliance with the Agreement
and with the approved plans and specifications
(d) Mudra shall, at the expense of PVP, obtain all required permits,
licenses and certificates of inspection and shall see to it that all
construction work and materials, and all activities of Mudra and the
subcontractors and others on the Project site are in compliance with all laws,
ordinances, and regulations of all governmental agencies having jurisdiction.
Mudra shall obtain all inspection services required by law. Any deviations from
the plans and specifications must be approved in advance by PVP.
(e) Mudra shall be responsible and shall take all necessary precautions
for the safety of all persons working at the Project and shall comply with all
applicable federal, state and local laws, ordinances and regulations applicable
thereto. Mudra shall take all necessary precautions to protect the safety and
protection of the workers on the Project, the public and for any improvements on
the Project site.
(f) Mudra shall pay all royalties and license fees which may be due for
the inclusion of any potential or copyrighted materials, methods or options
selected by Mudra, the architect, any engineer or subcontractor, and
incorporated in the Project, and shall indemnify PVP and hold PVP harmless from
any liability with respect thereto.
(g) Mudra shall meet and shall be responsible for requiring that each
subcontractor meet the insurance requirements stated below. Mudra and each
subcontractor shall purchase from and maintain in a company or companies
lawfully authorized to do business in the jurisdiction in which the work is
performed, and reasonably acceptable to PVP, insurance for claims under workers'
compensation; employers' liability; business automobile liability; and
commercial general liability (including product/completed operations coverage to
be maintained for at least 2 years after substantial completion) which may arise
out of or result from the obligations under this Agreement. The Insurance shall
include contractual liability insurance applicable to any indemnity obligation
of Mudra, and shall name PVP as an additional insured on such policies. Mudra
and each subcontractor shall furnish a certificate evidencing the insurance
required by this paragraph and evidencing the obligation of its insurer not to
cancel or materially amend such policy without thirty (30) days prior written
notice to PVP and evidencing PVP's status as an additional insured. The
certificates shall be filed with PVP prior to the commencement of the work. The
insurance required by this paragraph shall have minimum limits as follows:
Workers Compensation Statutory Limits
Employers' Liability $ 500,000
Automobile Liability $ 500,000
Commercial General Liability $1,000,000
(h) To the fullest extent permitted by law, Mudra shall defend,
indemnify and hold PVP harmless from all claims for bodily injury and property
damage including resulting loss of use that may arise from the performance of
the Work, to the extent of the acts or omissions of Mudra, any of the
subcontractors or anyone employed directly or indirectly by any of them or by
anyone for whose acts any of them may be liable.
3. WARRANTIES
Mudra warrants that all materials and equipment furnished under this
Agreement will be new unless otherwise specified, of good quality, in
conformance with the plans and specifications approved by PVP, and free from
defective workmanship and materials. Warranties shall commence on the date of
substantial completion of the entire Project. Mudra agrees to correct all
construction performed under this Agreement which proves to be defective in
workmanship and materials within a period of one year from the date of
substantial completion or for such longer periods of time as may be set forth
with respect to specific warranties required by the plans and specifications.
Mudra shall secure required certificates of inspection, testing or approval and
deliver them to PVP. Mudra shall collect all written warranties and equipment
manuals and deliver them to PVP. With the assistance of the PVP's maintenance
personnel, Mudra shall direct the checkout of utilities and operations of
systems and equipment for readiness, and assist in their initial start-up and
testing.
4. LABOR COSTS TO BE REIMBURSED TO MUDRA
If Mudra wishes to provide any labor personnel who are employees of
Mudra to work on the construction Project, Mudra shall first obtain the approval
of PVP and shall provide to PVP a written proposal for the cost of such work.
Subject to the limitation of the GMP, PVP shall reimburse Mudra at a rate of
$30.00 per hour for unskilled labor and $40.00 per hour for skilled labor. It is
expressly understood that supervisory services are to be paid only under
paragraph 6, Fee for Services. The hourly rate for any type of labor shall be
the total amount charged PVP for such work, and includes all payroll taxes,
workers' compensation insurance, unemployment insurance, employee benefits and
any other amounts which Mudra, as an employer, is obligated to pay on behalf of
its employees. Mudra shall indemnify and hold PVP harmless for any liability
arising out of Mudra's failure to provide or pay for the obligations stated in
this paragraph, including reasonable attorneys' fees to enforce this indemnity.
Mudra will be reimbursed monthly for labor incurred at the above rates upon
submission of invoices supported by time cards for each of the employees
involved, subject to the 10% retention referred to in Paragraph 7 hereof. It is
expressly agreed that Mudra is an independent contractor, all of the persons
described in this paragraph as employees are employees of Mudra and are not
employees, agents or representatives of PVP.
5. COMPLETION
The work to construct the Project shall commence upon receipt by
Contractor of
a notice to proceed from PVP, and shall be Substantially Completed, subject
to delays approved by PVP, on the date set forth on the Addendum to this
Agreement which establishes the GMP. The Project will be considered
"Substantially Complete" when (1) the Project has been constructed in
conformance with the plans and specifications, (2) all required inspections
by the appropriate city and state (if any) departments have been completed,
(3) an Occupancy Permit has been issued ("Completion"), and (4) the Project
is capable of being used by PVP for its intended purpose. The Project will be
considered "Finally Completed" when substantial completion has been achieved,
and when Mudra has performed all work and other obligations to be performed
under this Agreement. It is necessary for PVP, or any other contractor of
PVP, to access the Project for purposes of installing, or preparing for the
installation of, any equipment, such access will be coordinated with Mudra
and shall be accomplished in a manner that does not unreasonably interfere
with Mudra's performance of the work hereunder.
6. FEE FOR SERVICES
In addition to reimbursement for labor costs, as provided in paragraph
4, Mudra shall receive a fee for the services outlined in this Agreement. Such
fee shall be $250,000.00, payable $50,000.00 upon completion of plans and the
issuing of an initial permit; $100,000.00 upon the building being erected,
enclosed and locked; and $100,000.00 upon final completion of the building
pursuant to paragraph 5. The cost of all architect and engineering fees for the
Project for preparation of plans and specifications upon which bids are
obtained, and for any ordinary and usual architectural services during
construction, such as approval of shop drawings, are included in said fee and
shall be paid by Mudra. Mudra's fee shall also include all services to be
performed by Mudra hereunder, except for labor costs for construction personnel
actually performing construction at the Project as set forth in paragraph 4
above. Prior to the commencement of construction of the Project, Mudra shall
furnish to PVP a letter of credit, issued by an FDIC insured bank, reasonably
acceptable to PVP, in the amount of $250,000, with PVP as the sole beneficiary
therein. Such letter of credit shall not expire until 6 months after the
scheduled date for final completion of the work. The purpose of the letter of
credit is to insure Mudra's performance under the terms of this Agreement and
payment for all labor and materials used therein. Such letter of credit shall
provide that PVP can draw on the letter of credit, one or more times and up to
the full amount thereof, for PVP's actual costs (excluding any insurance
reimbursement) resulting from Mudra's default under the terms of this Agreement.
Such draw by PVP shall occur only upon presentation to the bank of a draft by
PVP accompanied by the written certification of PVP that Mudra has defaulted
under this Agreement and that Mudra has taken no action to cure the default
after ten (10) days written notice thereof to Mudra.
7. PAYMENT
PVP will pay Mudra for the work performed on the Project, in addition
to the amounts referred to in paragraph 6 above, based upon the invoices
submitted by Mudra and by subcontractors for the work performed by such
subcontractors. Mudra shall be
responsible for all payments to subcontractors. Such invoices shall include
only the work actually performed on the Project and for any materials
delivered to the Project site and suitably stored and insured. Mudra shall
also submit with each such pay request such other documents as PVP or PVP's
lender may reasonably request. The amounts paid to Mudra for subcontractor's
work will be subject to a retainage by PVP of 10% of amount of each
subcontractor invoice. Such retainage shall be held as to each such
subcontractor until such time as such subcontractor has completed all work to
be performed by such subcontractor for the Project. In no event shall the
total amount paid to any subcontractor exceed the amount of such
subcontractors' contracted amount for such work unless PVP has approved an
increase in such contracted amount. Any discount for prompt payment by Mudra
or any subcontractor shall inure to the benefit of PVP. All refunds,
discounts, and credits for any returned materials shall be credited to PVP.
In no event shall the cost of the work including the contractor's fee and all
amounts paid for contractor's labor costs, referred to in paragraph 4 above,
exceed the GMP except for any changes in the work by PVP as provided in
Paragraph 10 hereof. Any savings resulting from the cost of the work being
less than the GMP shall belong to PVP. Any costs in excess of the GMP shall
be the responsibility of, and shall be paid by Mudra. PVP shall not be
required to pay Mudra for: (a) the wages of any Mudra personnel other than
those referred to in Paragraph 4 above; (b) any home office expenses; (c) any
costs incurred due to the negligent act or omission of Mudra, or any of
Mudra's subcontractors or persons or entities for whose acts they are
responsible; or (d) correction of any defective work or any work damaged by
anyone other than PVP.
8. WAIVERS OF CONSTRUCTION LIENS
Mudra will obtain waivers of construction liens from all subcontractors
and material suppliers with each progress payment and prior to final payment to
Mudra. Mudra shall promptly procure the discharge of record of any construction
lien filed against the Project for any labor and/or materials furnished for the
Project by any person or entity. Mudra shall indemnify PVP and hold it harmless
for any loss or damage caused by the filing of any such liens.
9. PVP PROJECT ENGINEER
Xxx Xxxxxx is designated the Project Representative for PVP, and
Mudra's services will be coordinated with the Project Representative. PVP will
also use the services of the Delta Group as a representative of PVP in
connection with the Project, which services shall be coordinated through Xxx
Xxxxxx.
10. CHANGE ORDERS
(a) The GMP shall not be increased except by written change order
signed by PVP. In the event PVP proposes any changes in the work which results
in a material change in the work as described in the plans and specifications
upon which the GMP was determined, Mudra shall, within ten (10) days thereafter,
advise PVP of the proposed cost thereof. If PVP elects to proceed with the
change, and the amount
thereof, does not exceed the amount of the contingency then remaining that is
part of the GMP, the GMP shall not be increased. In the event that the amount
for such changes does exceed the contingency account, then the GMP shall be
increased by the amount of the excess. Any deductive change order amounts
shall be credited to the contingency fund. There shall be no increase in the
GMP for any delays in the Project from whatever cause, unless such delay is
caused by the active interference by PVP.
(b) For any claim for an increase in the GMP, and/or an extension in
the date of Substantial Completion Mudra shall give PVP written notice of the
claim within twenty-one (21) days after the occurrence giving rise to the claim
or within twenty-one (21) days after Mudra first recognizes the condition giving
rise to the claim, whichever is later. Except in an emergency, notice shall be
given before proceeding with the Work. Any change in the GMP, and or date of
Substantial Completion resulting from such claim shall be authorized by Change
Order.
11. PROPERTY INSURANCE
(a) PVP shall obtain and maintain property insurance upon the entire
Project for the full cost of replacement at the time of any loss. This insurance
shall insure against loss from the perils of fire and extended coverage, and
shall include "all risk" insurance for physical loss or damage including without
duplication of coverage at least; theft, vandalism, malicious mischief, transit,
collapse, falsework, temporary buildings, debris removal, flood, earthquake,
testing, and, if available without additional premium cost, damage resulting
from defective design, workmanship or material. Any loss covered by such
insurance will be adjusted by PVP, and the proceeds thereof paid to PVP. In the
event of a casualty loss to the Project, if PVP elects to repair the damage, the
GMP will be increased to reflect the increased cost of the Project due to such
casualty loss.
12. WAIVER OF SUBROGATION
To the extent permitted by applicable insurance policies, PVP and Mudra
waive all rights against each other, and any of their respective employees,
agents, consultants, subcontractors and subsubcontractors for damages caused by
risks covered by casualty insurance maintained by either of them, to the extent
they are covered by that insurance and to the extent that insurance proceeds are
collectible under such policies due to such loss. Mudra shall require similar
waivers from all Subcontractors, and shall require each of them to include
similar waivers in their subsubcontracts and consulting agreements.
13. NO OTHER COMPENSATION
Mudra agrees that its only compensation for services rendered shall be
as specified in this Agreement, and that Mudra shall not accept any other fees
or compensation, such as overrides, commissions, refunds, or rebates from
contractors, suppliers, or any other person, either in money or in kind.
14. TERMINATION
In the event either party fails to comply with any provision of this
Agreement, the other party may terminate the Agreement upon 10 days written
notice to the non-complying party and such defaulting party not correcting such
default in said 10 day period.
15. WAIVER/SEVERABILITY
No failure or delay by either party in exercising any right, remedy,
power of privilege hereunder will operate as a waiver thereof. If any of the
terms of this Agreement are found to be illegal or unenforceable by a court of
competent jurisdiction, the remaining terms and conditions of this Agreement
shall remain in full force and effect.
16. NO ASSIGNMENT
Mudra shall not assign this Agreement or any portion thereof, or any
right to payment hereunder without the prior written consent of PVP.
17. COMPLETE AGREEMENT AND BINDING EFFECT
The above accurately and completely represents the understanding and
intent of the parties hereto. This Agreement shall be binding on the successors
and permitted assigns of the parties hereto.
PROFESSIONAL VETERINARY PRODUCTS, LTD.
By: /s/ Xx. Xxxxxx Xxxxxx
-----------------------------
Title: President
MUDRA CONSTRUCTION, LTD.
By: /s/ Xxxxxxx Xxxxx
-----------------------------
Title: President
STATE OF NEBRASKA )
) SS.
COUNTY OF XXXXXXX )
Subscribed and sworn to before me this 20th day of July 1999, by Xxxxxx
Xxxxxx, President of Professional Veterinary Products, Ltd.
/s/ Xxxxxx X. Xxxxxx
-----------------------------
Notary Public
Commission Expires: March 3, 0000
XXXXX XX XXXXXXXX )
) SS.
COUNTY OF XXXXXXX )
Subscribed and sworn to before me this 20th day of July 1999, by
Xxxxxxx Xxxxx, President of Mudra Construction, Ltd.
/s/ Xxxxxx X. Xxxxxx
-----------------------------
Notary Public
Commission Expires: March 3, 2002
ADDENDUM TO CONSTRUCTION MAMAGEMENT/CONTRACTOR AGREEMENT
THIS ADDENDUM ("Addendum") is made and entered into as of this 17th day
of May, 1999, by and between MUDRA CONSTRUCTION, LTD., a Nebraska Corporation
("Mudra") and PROFESSIONAL VETERINARY PRODUCTS, LTD., a Missouri Corporation
("PVP").
WITNESSETH:
WHEREAS, Mudra and PVP have entered into a Construction
Management/Contractor Agreement dated as of September 1, 1998, (the "Agreement")
for the construction of an office and warehouse building for PVP, and
WHEREAS, Mudra has now completed the plans and specifications for the
Project and has established a Guaranteed Maximum Price ("GMP") and a Substantial
Completion date for the Project, and
WHEREAS, the parties wish to amend the Agreement to add thereto the GMP
and the Substantial Completion date.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. The GMP for the Project (including Contractor's fee) is
$4,426,383.00.
2. The allowances that are included in the GMP are as follows:
See Purchase Order No. 30 attached. Total allowances are
$381,700.00.
3. Unit prices are as follows:
None
4. The date for Substantial Completion of the Project is October 31,
1999. Final Completion of the Project shall be achieved within sixty (60) days
after Substantial Completion.
5. The Purchase Orders and amounts used in determining the GMP for the
Project are listed on the attached Exhibits "A" and "B." The plans included are
as follows:
(a) Xxxxxxx Engineering, dated Xxxxx 00, 0000
(x) Xxxxxx Xxxxx Architect, dated April 15, 1999
(c) Xxxxxxxx Engineering, Inc., dated April 15, 1999
6. All capitalized terms used herein shall have the same meaning as set
forth in the Agreement unless specifically defined otherwise herein. This
Addendum shall be binding on the successors and assigns of the parties hereto.
IN WITNESS WHEREOF, the parties have signed this Addendum as of the
date first above written.
MUDRA CONSTRUCTION, LTD.
By: /s/ Xxxxxxx Xxxxx
-----------------------------
Its: President
PROFESSIONAL VETERINARY
PRODUCTS, LTD.
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Its: President
