1
EXHIBIT 10.46
OWNER/CONTRACTOR AGREEMENT
FOR CONSTRUCTION
BETWEEN
OWNER
ALTERA CORPORATION
0000 XXXXXXX XXXXXXX
XXX XXXX, XX 00000-0000
AND
CONTRACTOR
XXXXXXX AND XXXXXXX, INC.
X.X. XXX 0000
000 X. XXXXXXXXX XXXX., XXXXX 000
XXXXXX XXXX, XX 00000
JANUARY 10, 1996
2
TABLE OF CONTENTS
ARTICLE 1: DEFINITIONS.................................................... 2
ARTICLE 2: CONTRACT DOCUMENTS............................................. 6
ARTICLE 3: THE WORK....................................................... 6
ARTICLE 4: CONTRACTOR'S DUTIES AND STATUS................................. 6
ARTICLE 5: CONTRACT TIME.................................................. 9
ARTICLE 6: COST OF THE WORK AND GUARANTEED MAXIMUM PRICE.................. 10
ARTICLE 7: CONTRACTOR'S FEE............................................... 11
ARTICLE 8: CHANGE IN THE WORK............................................. 12
ARTICLE 9: COSTS TO BE REIMBURSED......................................... 13
ARTICLE 10: COSTS NOT TO BE REIMBURSED.................................... 16
ARTICLE 11: DISCOUNTS, REBATES AND REFUNDS................................ 17
ARTICLE 12: SUBCONTRACTS AND OTHER AGREEMENTS............................. 17
ARTICLE 13: ACCOUNTING RECORDS............................................ 18
ARTICLE 14: APPLICATIONS FOR PAYMENT...................................... 18
ARTICLE 15: PAYMENTS TO CONTRACTOR........................................ 21
ARTICLE 16: TERMINATION OF AGREEMENT...................................... 25
ARTICLE 17: MISCELLANEOUS PROVISIONS...................................... 29
ARTICLE 18: EXHIBITS...................................................... 34
3
OWNER/CONTRACTOR AGREEMENT
FOR CONSTRUCTION
(GUARANTEED MAXIMUM PRICE)
THIS AGREEMENT is made as of January 10, 1995
BETWEEN
Owner: Altera Corporation
0000 Xxxxxxx Xxxxxxx
Xxx Xxxx, XX 00000-0000
and Contractor: Xxxxxxx and Xxxxxxx, Inc.
X.X. Xxx 0000
000 X. Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxx Xxxx, XX 00000
For the Project: Altera Corporation Headquarters Project
Xxxxx Xxxxx Xxxxxx xxx Xxxxxxxx Xxxxx
Xxx Xxxx, XX
Project Architect: Xxxxxxxx Xxxxx + Xxxxxxxx
00 X. Xxx Xxxxxxxx Xx.
Xxxxx 000
Xxx Xxxx, XX 00000
Contractor agrees to provide certain construction services, and Owner
agrees to compensate Contractor for such services, on the following terms and
conditions:
January 10, 1995
Page 1
4
ARTICLE 1: DEFINITIONS
1.1 Interpretation and Use of Definitions. All capitalized terms and words
(other than proper nouns) used in this Agreement shall have the meanings set
forth below, unless otherwise defined in this Agreement or unless another
meaning is clearly intended based on the express language of the applicable
provision.
.1 Agreement. This Owner/Contractor Agreement for Construction between
Owner and Contractor, including all attached Exhibits, and any addenda and/or
modifications to any of the foregoing.
.2 Architect. The Project Architect identified above.
.3 Certificate of Occupancy. Written notification by the City of San Xxxx
of satisfaction of all terms, conditions and other provisions of all necessary
permits and approvals authorizing the full use and occupancy of the respective
Segment of the Work for the purposes intended without restriction.
.4 Certificate of Substantial Completion. A certificate prepared by
Architect pursuant to Subparagraph 9.8.2 of the General Conditions, certifying
that the Work is Substantially Complete and establishing the date of Substantial
Completion.
.5 Change Order. Defined in Paragraph 8.2.
.6 Change Order Request. Defined in Paragraph 8.2.
.7 Change Order Work. A Change in the Work covered by any approved Change
Order.
.8 Claim. A demand or assertion by one of the parties seeking, as a
matter of right, an adjustment or interpretation of the terms of the Agreement,
payment of money, extension of time, or other relief with respect to the terms
of the Agreement, whether arising due to an error or omission, breach of the
Agreement, or otherwise.
.9 Confidential Information. Defined in Exhibit G.
.10 Construction Schedule. Defined in Paragraph 5.1.
.11 Contract Documents. Defined in Paragraph 2.1.
January 10, 1995
Page 2
5
.12 Contract Time. The period of time, including adjustments authorized by
Change Orders, allotted in the Contract Documents for Substantial Completion of
each respective building or other applicable Segment of the Work.
.13 Contractor. Xxxxxxx and Xxxxxxx, Inc., a California corporation.
.14 Contractor's Fee. Defined in Article 7.
.15 Cost of the Work. Defined in Article 9.
.16 Day. Calendar day unless otherwise specifically designated.
.17 Default Rate. The "reference rate" or "prime rate" published from time
to time by Bank of America, N.T.& S.A., as the rate at which it lends funds to
credit worthy borrowers, plus two percent (2%); provided, however, that in no
event shall any interest or other amount due, payable or paid hereunder, or
pursuant to any other provision of this Agreement or any Contract Documents,
exceed the maximum applicable legal interest rate in effect from time to time.
.18 Drawings and Specifications. The drawings, specifications and other
documents which fix and describe the size and character of the entire Project as
to, without limitation, architecture, structure, electrical systems, mechanical
systems, civil engineering and landscaping.
.19 Equipment Schedule. Defined in Subparagraph 9.1.5.
.20 Event of Default. Defined in Paragraph 16.3.
.21 Final Application for Payment. An Application for Payment for the
Final Payment, which shall only be made in accordance with the provisions of
Paragraph 15.8.
.22 Final Completion. The status of the Work when all Punch List items
have been fully and finally completed, and all final releases, documents and
manuals required by the Contract Documents have been delivered.
.23 Final Payment. Defined in Paragraph 15.8.
.24 Force Majeure Delay. A delay in Contractor's performance under this
Agreement due to: an act or omission of Owner or Architect or any of their
respective employees or agents; labor disputes not caused by Contractor, fire,
unusual delay in transportation, adverse weather conditions not reasonably
foreseeable, unavoidable casualties, or any similar causes beyond the reasonable
control of Contractor and not reasonably foreseeable by Contractor, for which a
written claim of justifiable delay is made by Contractor pursuant to Paragraph
8.3 of the General Conditions.
January 10, 1995
Page 3
6
.25 General Conditions. Those "General Conditions of the Contract for
Construction" set forth in Exhibit I attached hereto.
.26 General Work Requirements. The portions of the Work and related
requirements that apply generally to site conditions, site safety, permits,
taxes, insurance, jobsite administration, and so forth, as described more
specifically in Exhibit E attached to this Agreement.
.27 Guaranteed Maximum Price. Defined in Paragraph 6.2.
.28 Laws. All Federal, State and local laws, statutes, ordinances, rules,
regulations, building codes and orders applicable to the Project, the Work, the
parties to this Agreement or otherwise governing the foregoing, as well as those
certain covenants, conditions and restrictions (CC&R's) recorded in the Official
Records of Santa Xxxxx County on February 7, 1980 in Book F 128, Page 480, as
amended (the Protea CC&R's), and on February 7, 1985 in Book J 232, Page 651, as
amended (the NELO CC&R's).
.29 Mechanics' Lien. Any mechanics' lien, materialmen's lien, stop notice,
charge, imposition, garnishment or attachment upon or against the Property, the
Project or Owner.
.30 Notice of Completion. A written notice verified by Owner or Owner's
authorized agent, and recorded with the Santa Xxxxx County Recorder within 10
days after completion of a Segment of the Work, pursuant to Section 3093 of the
California Civil Code.
.31 Notice to Proceed. Owner's issuance to Contractor of an instruction to
proceed with a defined scope of Work prior to Owner's having approved the
Guaranteed Maximum Price.
.32 Owner. Altera Corporation, a California corporation.
.33 Preconstruction Services. Services performed by Contractor prior to
commencement of construction, as defined in Subparagraph 9.1.16.
.34 Project. The total construction of which the Work performed under the
Contract Documents may be the whole or a part, and which may include
construction by the Owner or by separate contractors as described in Paragraph
3.1. The Project will include (i) approximately 360,000 square feet consisting
of a Corporate Building with 4 levels, a Production Building with 2 levels, and
an Engineering Building with 3 levels, all with shell, core, sitework and
interior improvements; and (ii) approximately 150,000 square feet consisting of
an Expansion Building with 3 levels, with shell, core, sitework, and partial
interior improvements.
.35 Property. The real property described in Exhibit A attached hereto,
which is also the site of the Project.
January 10, 1995
Page 4
7
.36 Punch List. A comprehensive list of minor items to be completed or
corrected following Substantial Completion of the Work, which items shall not
materially affect the use or aesthetic appearance of the Project.
.37 Schedule of Values. Defined in Paragraph 6.3.
.38 Segment. Each separate building, design/build system, or distinct
portion of the Work covered by a separate Notice to Proceed.
.39 Subcontract. A written agreement between the Contractor and another
party to perform a portion of the Work or to supply equipment, materials or
labor to the Project, as defined in Paragraph 12.1.
.40 Subcontractor. A person or entity who, pursuant to a Subcontract, is
retained by Contractor to perform a portion of the Work or to supply equipment,
materials or labor to the Project, including without limitation any
subcontractor, sub-subcontractor, laborer, design professional, engineer,
surveyor, consultant, equipment lessor, supplier or other materialman so
retained, but excluding any separate contractor retained by Owner to construct
any portion of the Project that is not within the scope of the Work.
.41 Substantial Completion. The status of the Work when (i) Owner and
Architect agree that the Work is sufficiently complete to permit Owner to occupy
or utilize the Work (or designated portion thereof) for the use for which it is
intended and (ii) Contractor has delivered to the Owner all information showing
the Work to be sufficiently complete to allow Owner to obtain a Certificate of
Occupancy.
.42 Work. The construction and services required and reasonably implied or
inferred to be required by the Contract Documents, whether such work is
completed or partially completed, and includes all other labor, materials,
equipment and services provided or to be provided by the Contractor to fulfill
the Contractor's obligations. The Work includes all Work which would reasonably
be inferred or anticipated by a contractor with Contractor's experience and
expertise after reviewing the Contract Documents. The Work may constitute the
whole or a part of the Project.
ARTICLE 2: CONTRACT DOCUMENTS
2.1 The Contract Documents consist of this Agreement (including all exhibits
attached hereto), the Drawings and Specifications, all Notices to Proceed issued
by Owner, and all Change Orders executed by Owner and Contractor. The Contract
Documents are further enumerated in Exhibit B attached hereto, entitled
"Contract Documents," and are incorporated herein by this reference, and
supersede all prior negotiations, representations and agreements, either written
or oral, between Owner and Contractor with respect to the Work. The Contract
Documents shall not include shop drawings, product data, or samples
January 10, 1995
Page 5
8
as described in Paragraph 3.12 of the General Conditions. The Contract Documents
will be developed and completed in accordance with the Construction Schedule. As
Contract Documents are completed, they shall become a part of this Agreement.
ARTICLE 3: THE WORK
3.1 Subject to Article 4 below, Contractor shall perform all the Work required
for the Project under the Contract Documents. The Work includes, without
limitation, the sitework, the core and shell of each of the buildings, and the
interior improvements of each of the buildings (but only partial interiors for
the Expansion Building). The Property is approximately twenty five (25) acres.
Parking lots and landscaping will be built out for the entire 25 acre site. The
buildings will be steel framed with curtainwall and pre-cast concrete exteriors,
or such other materials as Owner elects.
3.2 Owner may require Subcontracts to include hourly rates, unit prices,
alternate prices or allowances for certain portions of the Work. Contractor
shall be liable for the enforcement and administration of such hourly rates,
unit prices, alternate prices or allowances until completion of the Work. Such
Subcontracts shall provide that if this Agreement is terminated, or if Owner
wishes to engage a Subcontractor directly for work that is not part of
Contractor's Work under this Agreement, then Owner shall be entitled to contract
with Subcontractor directly on the basis of such rates, prices and allowances.
ARTICLE 4: CONTRACTOR'S DUTIES AND STATUS
4.1 Contractor shall perform all services and prosecute the Work under and
pursuant to this Agreement with the degree of care, skill and diligence
generally recognized as applicable to general contractors of good reputation
performing services of the nature encompassed in the Work in the San Francisco
Bay Area.
4.1.1 Contractor is skilled in the professional calling necessary to
perform the Work. Any references, terms or provisions in this Agreement, the
General Conditions or any other Contract Documents to the standard of care or
degree of knowledge or deemed knowledge to be applied to Contractor's
performance of the Work shall be deemed to refer to the standards set forth in
this Paragraph 4.1.
4.1.2 Contractor acknowledges that Owner, not being skilled in such
matters, is relying upon the skill and knowledge of Contractor with respect to
the Work. Contractor accepts the relationship of trust and confidence
established by this Agreement. Contractor shall exercise its best skill and
judgment, and shall cooperate with Architect to further the interests of Owner.
Contractor shall furnish efficient business administration and superintendence,
and shall use its best efforts to furnish at all times an adequate supply of
workers and materials, and to perform the Work in the best, most expeditious and
most economical manner consistent with the interests of Owner.
January 10, 1995
Page 6
9
4.2 Contractor shall furnish and transport all necessary labor, materials,
tools, implements and appliances required to perform and completely finish the
Work as described in Article 3 of this Agreement, in a workmanlike manner, and
to the satisfaction and approval of Owner and Architect, in accordance with the
Contract Documents, free of any and all Mechanics' Liens and claims of
Subcontractors.
4.3 Contractor agrees that the design and construction of any design/build
portion of the Project shall be in conformity in all respects with all Laws.
Contractor shall not construct any portions of the Work when it knows or should
reasonably know, as a competent and experienced general contractor, that such
Work or any portion thereof was designed in violation of any Law. Contractor
shall not construct any portion of the Work when it knows or should reasonably
know, as a competent and experienced general contractor, that such portion of
the Work is unbuildable or unsafe. Contractor shall require design/build
Subcontractors to obtain and maintain such insurance coverages, including
professional liability, as Owner requires.
4.4 The services to be performed by Contractor pursuant to this Agreement and
any of the Contract Documents shall not constitute it as an architect or
engineer, nor impose upon Contractor any obligation to assume, or to render to,
or to perform on behalf of Owner, the professional responsibilities, duties,
services and activities for which Owner has contracted with Architect, nor
impose upon Contractor any liability with respect thereto. Subject to the
provisions of Paragraphs 4.1 and 4.3 of this Agreement, above, Contractor
assumes no responsibility or liability in connection with the design of the
Project nor for the failure of Architect to provide any such design for the
Project. Contractor, by the performance of its duties under this Agreement,
shall not be deemed to have relieved Architect of any responsibilities for
services to be rendered by Architect with respect to the Project, whether
pursuant to the written agreement between Owner and Architect or otherwise, nor
shall Contractor incur any liability for Architect's failure or refusal to
perform or render any such services. Contractor shall promptly notify Owner
and/or Architect, in writing, if Contractor becomes aware that any needed
designs for the Project are omitted, and Contractor shall not proceed with the
relevant part of the Project until so directed by Owner.
4.5 Intentionally omitted.
4.6 Contractor hereby certifies that it has verified, to the best of its
ability, the coordination and completeness of all Contract Documents. Contractor
shall review all Contract Documents prior to their being issued for
Subcontractor bidding. Following this review, Contractor shall advise Owner and
Architect of any areas where the Contract Documents are incomplete or lacking in
clarity. The Architect shall coordinate with the Contractor for the Work of the
design/build Subcontractors by providing drawing backgrounds for their Work,
conducting meetings for the purpose of coordination, and establishing completion
dates for their Work in the Construction Schedule. The design/build
Subcontractors will be responsible for coordinating their Work with that of the
Architect and its subconsultants on the Project. The Construction Schedule will
establish mutually agreed milestones and completion dates for the design/build
Subcontractors' Work. If any changes are required to other aspects
January 10, 1995
Page 7
10
of the design because of insufficient information provided by Contractor on the
design/build systems or failure to meet an applicable completion date in the
Construction Schedule, the services of the Architect in connection with such
changes shall be paid by the Contractor and shall not be a Cost of the Work.
Conversely, the Architect's contract with Owner shall provide that if any
changes are required to the design/build Subcontractor's Work due to
insufficient information on the Architect's drawings or failure by the Architect
to meet an applicable completion date in the Construction Schedule, the
Architect is responsible for the cost of the time incurred by the Subcontractors
to make changes to their drawings.
4.7 Contractor has considered all information relevant to the Project and
available as of the date of this Agreement. Contractor shall coordinate its
construction with other projects under construction in the immediate vicinity of
the Project. As of the time that Owner and Contractor agree upon the Guaranteed
Maximum Price pursuant to Paragraph 6.2(iii), Contractor shall have satisfied
itself with respect to visible conditions, then-current public knowledge,
matters of record, and all other then-existing information relevant to the
Project and available to Contractor. Contractor's agreement to the Guaranteed
Maximum Price shall be deemed conclusively to be an acceptance by Contractor of
the foregoing information, and a determination by Contractor that the Guaranteed
Maximum Price is just and reasonable compensation for the Work. The Contractor
shall be entitled to reasonably rely on all information the Owner has provided
concerning the Project.
4.8 If any disputed Claim (as defined in Paragraph 1.1) should arise between
Owner and Contractor under this Agreement or otherwise concerning the Work,
Contractor shall proceed to perform the Work as directed by Owner pending
settlement of the dispute in accordance with Article 4 of the General
Conditions. Until any such disputed Claim is settled, Owner shall continue to
pay Contractor all sums due Contractor which are not in dispute and/or are not
directly related to Work which is in dispute.
4.9 Contractor shall warrant the Work to Owner as provided in Section 3.5 of
the General Conditions.
ARTICLE 5: CONTRACT TIME
5.1 The time allowed for Substantial Completion of each Segment of the Work,
and all other important Project milestones, are set forth in Exhibit C attached
hereto ("Construction Schedule"). Each Segment of the Work shall commence upon
Owner's issuance of a Notice to Proceed to Contractor provided that necessary
governmental authorizations have been obtained for such Segment. The Contract
Time for Substantial Completion of each of the buildings, together with
associated sitework and other related portions of the Work as shown on the
Drawings and Specifications, shall be consistent with the following completion
dates:
Building 1 Corporate Building June 13, 1997
Building 2 Expansion Building May 2, 1997
Building 3 Engineering Building May 23, 1997
Building 4 Production Building May 2, 1997
January 10, 1995
Page 8
11
Contractor shall achieve Substantial Completion of each Segment of the Work
within the Contract Time specified in the Construction Schedule. Contractor
acknowledges that the applicable Contract Time for each Segment includes an
allowance for thirty (30) calendar days of delay due to Force Majeure Delays,
including inclement weather. If Contractor is delayed on the critical path by
more than thirty (30) days due to Force Majeure Delays, then the provisions of
Subparagraph 8.3.1 of the General Conditions shall apply.
Contractor also acknowledges that Owner intends to install its office
systems furniture with non-union labor prior to Substantial Completion, and
Contractor shall not be entitled to any extension of the Contract Time by reason
of any labor disputes on account of such non-union labor, pursuant to Paragraph
3.20 of the General Conditions.
Final Completion with respect to any portion of the Work shall occur within
forty-five (45) days following Substantial Completion and agreement upon the
Punch List as to any such portion. It is understood that the Architect will use
reasonable efforts to respond to submittals, shop drawings and questions with
reasonable promptness, so as to not delay the Work, as described in Subparagraph
4.2.7 of the General Conditions.
5.2 Time is of the essence of this Agreement. Contractor shall complete each
portion of the Work within the applicable Contract Time as may be adjusted by
Change Order.
5.3 Contractor shall advise Owner of any delay in the Work (including delays in
receipt of drawings from Architect) and the cause of such delay, pursuant to
Article 8 of the General Conditions. Contractor shall take all prudent steps
necessary to minimize the delay and shall diligently proceed to complete the
Work as required by the Contract Documents. Contractor's notice to Owner
required by this Paragraph 5.3 shall not limit any right Owner may otherwise
have to recover damages from Contractor based on such delay.
5.4 Contractor shall meet all milestones in the Construction Schedule, as
adjusted by Change Orders. Should Contractor fail to meet any of such critical
dates, Contractor shall, upon written notice from Owner, cause its employees,
Subcontractors and all other parties under its control to work any necessary
overtime or extra shift work to return to the Construction Schedule, or to
demonstrate to Owner's satisfaction an alternate plan to return the Work to the
Construction Schedule. If the delays are not caused by Contractor's or any
Subcontractor's negligence, then the cost for such extra work, including without
limitation overtime rates, shall be a Cost of the Work, except that the
Guaranteed Maximum Price shall not be increased as a result of such work other
than for Force Majeure Delays as provided in Subparagraph 8.3.1 of the General
Conditions. If the delays are caused by Contractor's or a Subcontractor's
negligence, then the cost for such extra work, including without limitation
overtime rates, shall not be a Cost of the Work, but shall be borne solely by
Contractor.
ARTICLE 6: COST OF THE WORK AND GUARANTEED MAXIMUM PRICE
January 10, 1995
Page 9
12
6.1 The maximum cost to Owner for Contractor's performance of the Work shall be
the least of the following amounts:
6.1.1 the Cost of the Work as defined in Article 9 below and as limited by
Paragraph 6.2, plus the Contractor's Fee; or
6.1.2 the sum set forth in those Notices to Proceed to be executed by
Owner and Contractor from time to time during the course of the Work, as more
particularly provided in Article 15 of the General Conditions; or
6.1.3 an amount to be determined by Owner and Contractor within 45 days
after completion of the Contract Documents and set forth in a Change Order (the
"Guaranteed Maximum Price"), which Guaranteed Maximum Price is intended to
represent Owner's and Contractor's best estimate of the overall Cost of the Work
plus the Contractor's Fee.
The Cost of the Work shall be fixed as design documents are completed and
awarded, and the costs are authorized by Owner. If the sum of the Cost of the
Work and the Contractor's Fee is less than the Guaranteed Maximum Price, all
savings shall benefit Owner. The Guaranteed Maximum Price shall be modified only
as provided by Change Order.
6.2 The amount due to Contractor as part of the Cost of the Work shall not
exceed (a) $25,000 for Preconstruction Services, or (b) $61,000 per month for
the General Work Requirements (which amount shall apply with respect to any
extension or shortening of the Contract Time), or as otherwise agreed upon by
Owner and Contractor. Exhibit E to this Agreement describes the general
categories of the General Work Requirements. Prior to establishing the
Guaranteed Maximum Price, Owner and Contractor shall agree upon a schedule
setting forth a more detailed, line item description of each of such categories.
Once such schedule has been signed by both Owner and Contractor, it shall be
deemed to be incorporated into Exhibit E and shall become a part of this
Agreement to the same extent as if it had been originally set forth therein.
6.3 Subject to the approval of Owner, Contractor shall prepare (at such time as
Contractor has sufficient information) a schedule of values which divides the
Cost of the Work for the various trades, subcontracts, suppliers, materials,
equipment, labor or other recognized industry trade breakdowns ("Schedule of
Values"). Contractor warrants that the breakdowns so prepared will be accurate
breakdowns of Contractor's estimated costs used to determine the Guaranteed
Maximum Price. The Schedule of Values, as approved by Owner, shall be used as
the basis for Contractor's applications for payment.
6.4 Contractor shall not seek any increase in the Guaranteed Maximum Price on
account of any labor dispute within the Contractor's control involving
Contractor or Subcontractors arising during the period the Work is to be
performed, or by reason of the breach, fault, neglect, bankruptcy, insolvency,
or any failure of performance not excused hereunder, by Contractor or any
Subcontractor.
January 10, 1995
Page 10
13
ARTICLE 7: CONTRACTOR'S FEE
7.1 For Contractor's performance of the Work, Owner shall pay Contractor an
amount equal to One and Eight-Tenths Percent (1.80%) of the Cost of the Work
(the "Contractor's Fee"). At the time that the Guaranteed Maximum Price is
determined, the maximum Contractor's Fee (which is part of the Guaranteed
Maximum Price) shall be established as a fixed sum equal to the estimated Cost
of the Work times 1.80%.
7.2 There shall be no increase in the Contractor's Fee based on Change Order
Work until the Guaranteed Maximum Price has been increased, based upon the sum
of all increases in the individual Cost of Work authorizations resulting from
Change Order Work, by an amount equal to 3% of the Guaranteed Maximum Price
originally set forth in Paragraph 6.2, above. After Change Orders have increased
the Guaranteed Maximum Price by 3%, additional Change Order Work during
construction of the Project shall cause the Contractor's Fee to increase in an
amount equal to Four Percent (4.0%) for Change Order Work that results in an
increase in the Cost of the Work, and in an amount equal to Two Percent (2.0%)
for Change Order Work that results in a decrease in the Cost of the Work.
ARTICLE 8: CHANGE IN THE WORK
8.1 From time to time, there may be a change in the Work described in the
Contract Documents. Owner shall reimburse Contractor for any change in the Work
based on the Cost of the Work for such change. The Contractor's Fee shall not be
increased except as set forth in Paragraph 7.2
8.2 Owner, Architect or Contractor shall initiate a change in the Work and/or a
change in the Contract Documents by preparing the upper portion of a written
change order request ("Change Order Request") substantially in the form attached
hereto as Exhibit H setting forth in detail the nature of the requested change.
On or before the twenty-first (21st) day following Contractor's receipt or
preparation of a Change Order Request, Contractor shall complete the Change
Order Request setting forth in detail, with a suitable breakdown, (i) the
increase or decrease in the Cost of the Work as a consequence of the change,
(ii) the increase or decrease in the Contractor's Fee, if any, (iii) the revised
time for the completion of all other affected Work, and (iv) any adjustment in
the Contract Time attributable to the Change in the Work. Promptly thereafter,
Contractor shall submit such Change Order Request to Owner and Architect for
their written approval. Owner and Architect shall review all such Change Order
Requests and shall take appropriate action in a timely manner which does not
delay the Work. For purposes of the immediately preceding sentence, Owner shall
respond to any Change Order Request within twenty-one (21) days after Owner's
receipt of such Change Order Request, provided that the Change Order Request, as
submitted by Contractor, is complete and complies with the requirements of this
Paragraph 8.2. When Owner has approved a Change Order Request in writing,
Contractor shall undertake the Change in the Work described therein. Contractor
shall prepare a change order ("Change Order") each month, incorporating all
Change Order Requests which Owner has approved in writing during that month.
Each Change Order shall include the change in the Guaranteed Maximum Price, if
January 10, 1995
Page 11
14
any, and the revised Contract Time, if applicable. The Guaranteed Maximum Price
and the Contract Time shall not be adjusted except by Change Order executed by
Owner.
8.3 Contractor shall submit Subcontractors' breakdowns for overhead, labor
rates and profit related to that portion of the Change in the Work covered by
any Change Order ("Change Order Work") as part of the Subcontractor bid
analysis. The xxxx-up for any Change Order Work shall not exceed the rates,
overhead and fees listed in such breakdowns.
8.4 If Owner and Contractor are unable to agree (i) on a proposed Change Order
cost or (ii) whether work required by Owner constitutes part of the Work or
Change Order Work, then Contractor shall submit a Change Order Request which
sets forth a "not-to-exceed" cost for the proposed Change in the Work, as well
as the information required by clauses (ii), (iii) and (iv) in Paragraph 8.2,
above. Owner may then direct Contractor to proceed with such portion of the Work
or such Change Order Work on a "not-to-exceed" cost basis with Contractor
accounting for the Work on a time and material basis. If the dispute over such
Change Order Work concerned cost, then, promptly following completion of such
Change Order Work, Owner and Contractor shall execute a Change Order which sets
forth the cost of the Change Order Work as the lesser of (x) the not-to-exceed
cost or (y) the actual cost computed on a time and material basis, in each case
including cost impact on other portions of the Work. Owner reserves the right to
audit all Contractor and Subcontractor records regarding such Change Orders. If
Contractor submitted a Change Order Request because Owner and Contractor could
not agree on whether or not certain work required by Owner constituted part of
the Work or constituted Change Order Work, then Owner and Contractor shall
resolve that issue as set forth in Article 4 of the General Conditions within
twenty-one (21) days after the commencement of such disputed work. If Owner and
Contractor are unable to agree on a change in the Contract Time for any portion
of the Work, but the Change Order is otherwise acceptable to Owner and
Contractor, then Contractor shall commence the Change Order Work as directed by
Owner. If, within twenty-one (21) days following such commencement, Owner and
Contractor have not agreed on a change in the applicable Contract Time, then
Owner and Contractor shall submit that issue to dispute resolution as set forth
in Article 4 of the General Conditions.
ARTICLE 9: COSTS TO BE REIMBURSED
9.1 The term "Cost of the Work" shall mean costs necessarily incurred in the
proper performance of the Work which are actually paid by Contractor. Such costs
shall not exceed the standard paid in the locality of the Work except with the
prior written consent of Owner. Such costs shall include the items set forth in
this Article 9:
9.1.1 Wages paid for Contractor's employees, including (a) labor in the
direct employ of Contractor in the performance of the Work, (b) non-management
personnel stationed at the Project field office, engaged at shops to oversee
portions of the Work, performing courier services or delivery of materials to
the site necessary to expedite the Work, or for employees performing Work
exclusively on behalf of the Project, but only to the extent specifically agreed
to prior to incurring any cost on the
January 10, 1995
Page 12
15
Project, and (c) salaries for the services of management personnel in connection
with the Project, but only to the extent specifically agreed to by Owner prior
to incurring any cost on the Project. As of the date of this Agreement, Owner
and Contractor have agreed that the Cost of the Work for any of such employees
shall be charged at the rates shown on Exhibit D to this Agreement. Such rates
are deemed to be inclusive of any benefits or other payroll burden.
9.1.2 The portion of reasonable travel and subsistence expenses which
Contractor, its officers or employees incur while traveling substantially
outside the vicinity of the Project in discharge of duties connected with the
Work. Any expenses incurred because Contractor, its officers, employees or
Subcontractors live outside the vicinity of the Project are not included in the
foregoing.
9.1.3 Cost of all materials, supplies and equipment incorporated in the
Work, including costs of transportation thereof, excess materials and supplies,
and a reasonable allowance for waste and spoilage.
9.1.4 Payments made by Contractor to Subcontractors retained by Contractor
for Work performed pursuant to written Subcontracts entered into pursuant to
this Agreement.
9.1.5 Cost, including transportation and maintenance, of all materials,
supplies, equipment, temporary facilities and hand tools purchased by Contractor
to perform the Work which are consumed in the performance of the Work, and the
cost (less salvage value) of such items used to perform the Work, but not
consumed in the performance of the Work. In the latter of the two situations
described in the immediately preceding sentence, Contractor shall become the
owner of such items upon completion or termination of the Work. Owner may, at
its discretion, retain ownership of those items not consumed in the performance
of the Work or may direct Contractor to sell or buy such items and credit the
Cost of the Work by the amount of the proceeds which would then determine the
salvage value described above. Contractor shall provide Owner with a schedule
indicating the then current inventory of all equipment, hand tools, and
temporary facilities, showing original cost (as amended from time to time, the
"Equipment Schedule"). Contractor shall amend the Equipment Schedule by deleting
all items consumed and adding all items purchased during the course of the Work.
Contractor shall maintain a current Equipment Schedule located in the Project
office for review by Owner for equipment whose individual cost is One Hundred
Dollars ($100.00) or more.
9.1.6 Rental charges for all necessary machinery and equipment, exclusive
of hand tools, used at the site of the Work, whether rented from Contractor or
others, including installation, minor repairs and replacements, dismantling,
removal, transportation and delivery costs thereof, at rental charges consistent
with those prevailing in the vicinity of the Project. Rental charges for
Contractor-owned equipment shall not exceed prevailing market rates. Contractor
shall submit a source of published rates to Owner for approval. The rental
charge for each item of equipment shall not exceed its market price to purchase,
insure, maintain or store.
January 10, 1995
Page 13
16
9.1.7 Costs of premiums for all labor, materials and performance bonds and
insurance which the Contractor is required by the Contract Documents to purchase
and maintain, including the costs of Subcontract bonds. As a normal course of
business, the Contractor does not bond Subcontractors. There may be extenuating
circumstances where the Owner will consider bonding Subcontractors. Bonding of
Subcontractors shall be mutually agreed upon between Owner and Contractor. The
cost of liability insurance in an amount not to exceed One-Half Percent (0.50%)
of the other items comprising Cost of the Work.
9.1.8 Sales, use or similar taxes imposed by any governmental authority
which are related to the Work and for which the Contractor is liable.
9.1.9 Permit fees, royalties approved in advance by Owner, and deposits
lost for causes other than Contractor's negligence.
9.1.10 Cost of water, gas and electricity consumed in construction of the
Project.
9.1.11 Minor expenses such as telegrams, long distance telephone calls,
telephone service at the site, overnight courier service, and similar xxxxx cash
items in connection with the Work.
9.1.12 The cost of removal of all debris from the site of the Work.
9.1.13 Costs incurred due to an emergency affecting the safety of persons
and property, unless arising out of the fault or negligence of Contractor or its
Subcontractors, employees or agents.
9.1.14 The cost of on-site security necessary to protect the materials,
supplies, equipment and Project improvements at the Project site, including any
watchmen or other security services reasonably required to protect the Work.
9.1.15 Other costs incurred in the performance of the Work, if and to the
extent approved in advance in writing by Owner.
9.1.16 A fee for Contractor's services prior to commencement of
construction ("Preconstruction Services"), including preparation of detailed
estimates of the Cost of the Work and preparation of construction budgets and
value engineering during the design phase of the Project.
ARTICLE 10: COSTS NOT TO BE REIMBURSED
10.1 The term "Cost of the Work" shall not include any of the items set forth
below in this Article 10.
10.1.1 Salaries or other compensation of Contractor's personnel at
Contractor's principal office and branch offices other than personnel
specifically described in Article 9.
January 10, 1995
Page 14
17
10.1.2 Expenses of Contractor's principal and branch offices other than
the Project field office.
10.1.3 Any part of Contractor's capital expenses, including interest on
Contractor's capital employed for the Work.
10.1.4 Except as specifically provided in Subparagraph 9.1.6, rental cost
of machinery and equipment.
10.1.5 Overhead or general expenses of any kind, unless expressly included
in Article 9.
10.1.6 Costs arising out of the negligence of Contractor, any
Subcontractor, or of anyone directly or indirectly employed by any of them, or
for whose acts any of them may be liable, including but not limited to the costs
of correction of defective or non conforming Work, disposal of materials and
equipment wrongly supplied, or making good any damage to property.
10.1.7 The cost of any item not specifically and expressly included in the
items described in Article 9, unless previously specifically approved in writing
by Owner.
10.1.8 Losses and expenses sustained by Contractor or Subcontractors, not
compensated by insurance or otherwise, if such losses or expenses arise out of
the infidelity or dishonesty on the part of an employee of Contractor or a
Subcontractor.
10.1.9 Losses and expenses not covered by insurance if Contractor shall
fail to obtain and/or maintain in effect the insurance required by the Contract
Documents.
10.1.10 Costs, losses, expenses, bonds and/or insurance incurred by reason
of Contractor's general operations which Contractor would customarily incur or
carry without reference to Contractor's obligations under this Agreement.
10.1.11 Costs in excess of the Guaranteed Maximum Price, as it may be
adjusted pursuant to Article 8.
10.1.12 Provided Owner has paid Contractor all amounts then properly due
and payable under this Agreement, any sums spent or costs incurred by
Contractor, or for which Contractor is liable or obligated, with respect to any
Mechanic's Lien, filed or served by any Subcontractor because of Contractor's
failure or refusal to pay any such Subcontractor, whether or not any such
failure or refusal is wrongful or as a result of a bona fide dispute between
Contractor and any such Subcontractor, including without limitation any amounts
paid or incurred to discharge or release such Mechanics' Lien (whether paid to
such claimant or other party, or as attorneys' fees or otherwise), and all costs
of any bonds obtained to clear any such Mechanics' Lien.
ARTICLE 11: DISCOUNTS, REBATES AND REFUNDS
January 10, 1995
Page 15
18
11.1 All cash discounts shall accrue to Contractor unless Owner deposits funds
with Contractor with which to make payments, in which case cash discounts shall
accrue to Owner. Contractor shall notify Owner in writing, in advance, of the
availability of cash discounts to provide Owner adequate opportunity to take
advantage of such discounts. All trade discounts, rebates and refunds, and all
returns from sale of surplus materials and equipment, shall accrue to Owner, and
Contractor shall make provisions so that they can be secured.
ARTICLE 12: SUBCONTRACTS AND OTHER AGREEMENTS
12.1 All portions of the Work that Contractor does not perform with its
employees shall be performed pursuant to written subcontracts and, where
applicable, sub-subcontracts or material purchase orders (collectively,
"Subcontracts") with licensed or otherwise properly qualified subcontractors,
sub-subcontractors, laborers, design professionals, engineers, surveyors,
consultants, equipment lessors, and suppliers or other materialmen
(collectively, "Subcontractors"), approved in advance by Owner. Contractor shall
secure and deliver to Owner at least three (3) qualified bids on any and all
items in the construction of the Project (excluding those included in the
General Work Requirements), including without limitation those performed by
Contractor, unless agreed otherwise, from Owner-approved Subcontractors, and
shall promptly deliver to Owner all bids received in response to such
solicitations, together with Contractor's analysis and recommendations for
awards. Contractor shall keep all bid results confidential. Contractor shall
simultaneously deliver to Owner all data pertinent to Owner's decision and shall
certify that, to the best of Contractor's knowledge, the bid is bona fide,
complete and reasonable. As part of its bid analysis, Contractor shall notify
Owner of any bid that deviates from the Contract Documents. Owner's approval of
a bid on a Subcontract shall not constitute approval of a deviation or omission
from the Contract Documents. Any approved deviation or omission from the
Contract Documents shall occur only by means of a Change Order. Subject to
Article 5 of the General Conditions, Owner shall determine (with the advice of
Contractor and Architect, if requested by Owner) which bids are acceptable.
Owner reserves the right to reject any bid at any time.
12.2 All Subcontracts in excess of Two Hundred Fifty Thousand Dollars
($250,000) shall be submitted to Owner upon request by Owner prior to execution
by Contractor. Owner shall have ten (10) working days within which to approve or
disapprove award recommendations. After Owner has approved the award of any such
Subcontract, Contractor shall contract, solely in its own name and behalf, and
not in the name or on behalf of Owner, with the specified Subcontractor. Owner's
approval shall not make Owner a party to any Subcontract. Contractor's
Subcontract forms shall be subject to Owner's prior written approval.
12.3 All Subcontracts shall contain a clause approved by Owner allowing for the
direct assignment of each Subcontract to Owner upon termination or full
performance of this Agreement. Each Subcontract may then be further assigned to
a new general contractor if Owner so elects.
ARTICLE 13: ACCOUNTING RECORDS
January 10, 1995
Page 16
19
13.1 Contractor shall check all materials, equipment and labor being
incorporated into the Work, and shall keep such full and detailed accounts as
may be necessary for proper financial management under this Agreement.
Contractor's system shall be subject to the approval of Owner. Owner shall have
access to all Contractor's records, books, correspondence, instructions,
drawings, receipts, vouchers, memoranda and similar data relating to this
Agreement and/or the Work, and Contractor shall preserve all such records for a
period of three (3) years following Final Payment, or for any longer period
required by Law. Owner shall have the right to copy all or any part of
Contractor's job records.
13.2 Owner shall have the right, during the performance of the Work and for a
period of three (3) years thereafter, to audit the accounting records of
Contractor. Contractor shall have the opportunity to audit itself prior to
Owner's audit. Should any overcharge be found by Contractor's audit, Contractor
shall pay overcharge plus interest to Owner. After Contractor's audit, if any
such audit by Owner reveals that the amounts charged to Owner by Contractor
exceeded the actual Cost of the Work, then Contractor shall pay Owner an amount
equal to the amount overcharged plus interest at the rate set forth in Paragraph
15.6 (including any part of Contractor's Fee based on such overcharge) and shall
pay for the cost of the audit if the amount overcharged exceeds Five Thousand
Dollars ($5,000).
ARTICLE 14: APPLICATIONS FOR PAYMENT
14.1 Not later than the first (1st) business day of each calendar month,
Contractor shall submit to Owner an application for payment ("Application for
Payment") for the prior month, which application shall also include any portions
of the Work completed during periods of time covered by previously submitted
Applications for Payment to the extent such portions of the Work were not shown
on any such previous applications. Each Application for Payment shall be for a
sum equal to: (i) that portion of the Cost of the Work incurred during the
period covered by the particular application, determined in accordance with the
Schedule of Values, calculated on the basis of the percentage of the Work
completed during said month, provided that no payment to Contractor for Work
performed shall exceed the actual Cost of the Work performed (together with any
items applicable to the period covered by any preceding Application for Payment
to the extent such items were not reflected in any such Application for
Payment); and (ii) that portion of the Contractor's Fee equal to that percentage
of the Work completed during the prior month. In no event, however, shall the
Cost of the Work and the Contractor's Fee set forth in any Application for
Payment, when added to all amounts previously invoiced for the Cost of the Work
and for the Contractor's Fee, represent a percentage of the Guaranteed Maximum
Price greater than the completed percentage of the total Work to be performed
under the Contract Documents.
14.2 Contractor shall include with each Application for Payment back-up
material satisfactory to Owner to support all components of the application,
including, without limitation, verifiable Subcontractor payment applications,
current month as-built information, and actual cost for Contractor's Work,
indicating in detail all monies paid out or to be paid out for costs incurred on
account of the Cost of the Work, segregated where applicable for each separate
building as more particularly provided in Paragraph 14.8 below.
January 10, 1995
Page 17
20
14.3 In each Application for Payment, including the Final Application for
Payment upon the Final Completion of each respective building or other
applicable Segment of the Work, Contractor shall certify that:
(i) The Application for Payment represents a just estimate of the costs
then due Contractor under the terms of this Agreement.
(ii) All Work covered by the Application for Payment has been completed
in accordance with the applicable Contract Documents.
(iii) There are no known unbonded Mechanics' Liens outstanding at the date
of the Application for Payment.
(iv) All due and payable bills (except for amounts in dispute with
Subcontractors) with respect to the Work have been paid to date or
are included in the amount requested in the Application for Payment.
(v) There is no known basis for the filing of any Mechanics' Liens for
or relating to the Work except for (a) unpaid bills included in the
Application for Payment, all of which will be paid from the amount
due to Contractor with respect to the Application for Payment, or
(b) amounts in dispute with Subcontractors.
(vi) Subject to receipt of payment, Contractor waives any Mechanics' Lien
rights to the extent of such payments.
14.4 Each Application for Payment shall include unconditional Mechanics' Lien
releases from Contractor and all appropriate Subcontractors for all Work
performed in the prior payment period.
14.5 Requests for payment for materials stored on-site or off-site shall be
limited to materials on a list approved by Owner prior to Subcontract award.
Owner does not anticipate payment for any off-site materials other than
structural steel. Owner will not pay for on-site materials such as drywall or
any other commodity-like material until it is in place as a part of the Work.
14.6 As a condition of payment, Contractor shall submit a detailed construction
report to Owner each month in a form satisfactory to Owner, together with the
Application for Payment. The report shall contain pertinent information on the
following aspects of the Project:
(i) Past month's activities.
(ii) Current month's activities.
(iii) Current problems.
January 10, 1995
Page 18
21
(iv) Owner action required.
(v) Progress billing which shall include actual expenditures to date in
reasonable detail.
(vi) Updated Construction Schedule.
(vii) Change Order log.
(viii) Projected monthly cash expenditures for the remainder of the
Project.
14.7 Contractor warrants that title to all Work and materials covered by an
Application for Payment will pass to the Owner either by incorporation in the
construction or upon the receipt of payment by the Contractor, whichever occurs
first, free and clear of all Mechanics' Liens, claims, security interests or
encumbrances.
14.8 Since each of the four buildings comprising the Project will proceed on a
separate schedule, and will commence (and be completed) at different times, it
is essential for proper administration of the Project and the Work that the
provisions of this Article 14 and of Article 15 ("Payments to Contractor") shall
apply, to the extent possible, to each of the four buildings, each as an
individual Segment of the Work (provided, however, that Contractor shall not be
required to submit separate Applications for Payment in any month for the
individual portions of the Work, but only one Application for Payment each
month, covering the entire Work performed during the particular period covered
by the Application for Payment in question, except for the Final Application for
Payment for any individual Segment of the Work upon the Final Completion
thereof, as provided in the final sentence of this Paragraph 14.8). However,
Contractor shall make all reasonable efforts to ensure that each Application for
Payment reflects the Cost of the Work and the Contractor's Fee, prorated as to
each Segment of the Work covered by the Application for Payment in question; and
Contractor shall provide to Owner, together with each Application for Payment,
the back-up material required in Paragraph 14.2, including all Subcontractor
requests for payment, suitably segregated with respect to each building, as the
case may be. Contractor shall submit a Final Application for Payment separately
upon the Final Completion, respectively, of each of the four buildings.
ARTICLE 15: PAYMENTS TO CONTRACTOR
15.1 Owner will review each Application for Payment and will promptly take
appropriate action thereon as provided in the Contract Documents. The amount
agreed upon for payment shall be payable by Owner no later than fifteen (15)
calendar days after Contractor's submittal of a complete and accurate
Application for Payment, but no sooner than the tenth (10th) day of the month.
15.2 Payment by Owner with respect to any Application for Payment shall not
constitute Owner's approval or acceptance of any item or cost in such
Application for Payment, nor shall it be construed to
January 10, 1995
Page 19
22
be final acceptance or approval of that part of the Work to which the payment
relates, nor shall it relieve Contractor of any of its obligations under this
Agreement.
15.3 With respect to each Application for Payment, Owner shall pay Contractor
an amount equal to ninety percent (90%) of the Cost of the Work and the
Contractor's Fee then payable according to the Schedule of Values, until fifty
percent (50%) of that portion of the Work to be performed by Contractor or that
portion of the Work to be performed by any Subcontractor has been completed.
With respect to each Application for Payment thereafter, Owner shall pay
Contractor an amount equal to one hundred percent (100%) of the Cost of the
Work, but only to the extent that the amount paid by Owner is in turn paid to
the Subcontractor in question, and one hundred percent (100%) of the
Contractor's Fee then payable according to the Schedule of Values. The balance
of the retention shall be paid at time of Final Payment for each respective
Segment of the Work.
Any provision to the contrary in this Agreement or any other Contract
Documents notwithstanding, in the event of a disputed Claim (defined in Article
1.1) between Owner and Contractor with respect to any amount or circumstance
covered by any Application for Payment, Owner may withhold from the payment in
question an amount not to exceed one hundred fifty percent (150%) of the
disputed Claim, including without limitation amounts sufficient to reimburse
Owner for its expenditures for the account of Contractor and to secure (i)
correction or re-execution of Work which is defective or has not been performed
in accordance with the Contract Documents; (ii) past due payments to
Subcontractors; (iii) Owner's remedies in consequence of any default by
Contractor under this Agreement; and (iv) any costs incurred by Owner as a
result of claims, liabilities, losses and other damages covered by Contractor's
indemnification obligations pursuant to Paragraph 17.16.
15.3.2 If Owner, in its good faith judgment, determines that the portion
of the Guaranteed Maximum Price then remaining unpaid will not be sufficient to
complete the Work in accordance with this Agreement, then no additional
payments, including any payments in respect of the Contractor's Fee, will be due
Contractor hereunder unless and until Contractor, at its sole cost, performs a
sufficient portion of the Work so that such portion of the Guaranteed Maximum
Price then remaining unpaid is determined by Owner to be sufficient to complete
the Work.
15.3.3 In no event shall any interest be due and payable by Owner to
Contractor, any Subcontractor or any other party, on any of the sums properly
retained by Owner pursuant to any of the terms or provisions of any of the
Contract Documents.
15.4 In taking action on each Application for Payment, Owner shall have the
right to rely on the accuracy and completeness of the information furnished by
Contractor. Owner shall not be deemed to have made audits of the supporting
data, or exhaustive or continuous on-site inspections, or any examination to
ascertain how or for what purposes Contractor has used the monies previously
paid on account of this Agreement.
January 10, 1995
Page 20
23
15.5 Except for the Contractor's Fee, all sums paid to Contractor pursuant to
this Agreement shall be used for the performance of the Work and for no other
purpose whatsoever. To the extent applicable, all sums paid to Contractor in
turn shall be paid promptly to the respective Subcontractors.
15.6 Subject to Subparagraph 15.3.3, payments due and unpaid under any
Application for Payment for fifteen (15) calendar days shall bear interest, from
twenty (20) calendar days after the particular Application for Payment in
question was received until paid, at the Default Rate.
15.7 If, in connection with any Work for which Owner has paid Contractor as
required by this Agreement, any Mechanics' Lien is filed or served on Owner or
on any lender with respect to the Project, then Owner or any such lender, as the
case may be, shall have the right to withhold from any sums otherwise payable to
Contractor, an amount sufficient to discharge any or all such Mechanics' Liens.
Releases or receipted vouchers in settlement of such Mechanics' Liens, or other
security satisfactory to Owner, must be furnished to Owner by Contractor before
the withheld sums will be paid to Contractor. If Contractor has not settled or
provided acceptable security for any such Mechanics' Liens within a reasonable
time, not to exceed thirty (30) days from and after the date on which such
Mechanics' Lien is made, then Owner shall have the right, but not the
obligation, to discharge any or all such Mechanics' Liens out of the withheld
sums. Notwithstanding the foregoing, the Contractor shall have the right to bond
over the Mechanics' Lien and receive payment.
15.8 The entire unpaid balance due Contractor on account of the Cost of the
Work, including the Contractor's Fee, with respect to each Segment of the Work
(in each case, the "Final Payment"), shall be due to Contractor within
forty-five (45) days after the date on which a Certificate of Occupancy is
issued for the Segment of the Work in question (or, in the case of Building 4,
certification by the Architect of Final Completion of the Work required under
the Contract Documents). Contractor covenants that prior to submitting a Final
Application for Payment for the Final Payment, the following shall be
satisfactorily completed:
(i) A title insurance company designated by Owner shall have issued its
endorsements to Owner's title policy for the Project evidencing the
absence of any Mechanics' Liens related to the portion of the Work
in question. Contractor may, if any qualifying Subcontractor refuses
to furnish a release in full, furnish a bond satisfactory to Owner
to indemnify Owner against any Mechanics' Lien. Owner shall pay for
the cost of obtaining the endorsements, which cost shall not be
included in the Guaranteed Maximum Price.
(ii) A copy of the Certificate of Occupancy (or, for Building 4, all
applicable governmental approvals) shall have been delivered to
Owner.
(iii) Contractor shall have certified, in writing, that the Segment of the
Work in question has been completed in accordance with this
Agreement, subject only to minor Punch List items which shall be
noted on such certification. An amount sufficient to complete such
items shall be withheld by Owner.
January 10, 1995
Page 21
24
(iv) The applicable requirements of Article 14 (regarding Application for
Payment) shall have been met.
(v) Contractor shall have delivered to the Owner a waiver of Mechanics'
Lien rights, complying with California Civil Code Section 3262,
conditioned only upon receipt of the funds requested in the Final
Application for Payment, and executed by Contractor and by each
person or entity entitled to record a Mechanics' Lien against the
Property (or, if any Subcontractor refuses to furnish such waiver,
then a xxxx xxxx in form, substance and amount satisfactory to
Owner, protecting Owner from Mechanics' Liens by such persons).
(vi) Contractor shall have delivered to the Owner an affidavit in a form
satisfactory to the Owner stating that the Final Payment is being
requested and that the Mechanics' Lien releases and/or bonds
delivered to the Owner include and cover all materials, labor, and
services for which a Mechanics' Lien could be filed against the
Property.
(vii) Contractor shall have delivered to Owner one complete set of "as
built" drawings (and one electronic copy), all guaranties,
warranties, operating and maintenance manuals applicable to the
portion of the Work in question and/or required by the Drawings and
Specifications; provided, however, that Contractor shall only be
obligated to deliver two (2) sets of operating and maintenance
manuals for each building system or other portion of the Work which
is common to all buildings comprising the Project.
In the event of a disputed Claim between Owner and Contractor with respect
to any amount or circumstance covered by any Final Application for Payment,
Owner may withhold from the Final Payment in question an amount not to exceed
one hundred fifty percent (150%) of the disputed Claim. If an undisputed Final
Payment is not made within the time periods specified in this Article 15, the
Owner shall be subject to a charge of two percent (2%) per month (as provided by
Section 3260(g) of the California Civil Code on the improperly withheld amount,
in lieu of any interest otherwise due.
January 10, 1995
Page 22
25
15.9 Owner may file a Notice of Completion for any portion of the Work within
ten (10) days of the issuance of a Certificate of Occupancy for the portion of
the Work in question in the Official Records of the county in which the Project
is located (the "Notice of Completion").
ARTICLE 16: TERMINATION OF AGREEMENT
16.1 Contractor may suspend the Work (i) if Owner fails to pay or to object to
an Application for Payment within thirty (30) days after written notice of
delinquency is received by Owner from Contractor, (ii) pursuant to an order of
any court or other public authority having jurisdiction, or (iii) as a result of
an act of government, such as a declaration of a national emergency, making
materials unavailable. Owner may, at any time, without cause, order Contractor,
in writing, to suspend, delay or interrupt the Work in whole or in part for such
period of time as Owner may determine. If the Work is properly suspended for a
period of thirty (30) consecutive days or more by Contractor or Owner, then
Contractor shall have the right to terminate this Agreement and recover from
Owner payment for all Work completed and in place as of the date of the
termination.
16.2 The following provisions of this Paragraph 16.2 shall govern the Owner's
right to terminate this Agreement without cause.
16.2.1 In addition to Owner's right to terminate on account of
Contractor's default, as set forth in Paragraph 16.4, Owner may terminate this
Agreement and/or the Work, in whole or in part, at any time without cause, by
giving Contractor at least ten (10) days' prior written notice. Upon receipt of
any such notice, Contractor shall, unless the notice directs otherwise: (i)
immediately discontinue the Work on that date and to the extent specified in the
notice; (ii) enter into no further Subcontracts, except as may be necessary for
completion of such portion of the Work as is not discontinued; (iii) promptly
make every reasonable effort to procure cancellation, upon terms satisfactory to
Owner, of all Subcontracts to the extent they relate to the performance of the
discontinued portion of the Work; and (iv) shall thereafter do only such Work as
may be necessary to preserve and protect Work already in progress and to protect
materials, landscaping materials and equipment on the Property or in transit
thereto. Upon such termination, the obligations of the parties under this
Agreement shall continue as to those portions of the Work already performed and
as to bona fide obligations assumed by Contractor prior to the date of
termination.
16.2.2 In the event of such termination by Owner, Owner shall reimburse
Contractor for any unpaid Cost of the Work due under Article 6, plus (i) the
unpaid balance of the Contractor's Fee computed upon the Cost of the Work to the
date of termination at the percentage rate provided in Article 7, or (ii) if the
Contractor's Fee is stated as a fixed sum, an amount which will increase the
payments already made on account of the Contractor's Fee to a sum which bears
the same ratio to such fixed sum as the Cost of the Work at the time of
termination bears to the Guaranteed Maximum Price. In the event of any such
termination by Owner, Owner shall also pay to Contractor fair compensation,
either by purchase or rental, at the election of Owner, for any equipment Owner
wishes to continue to use. If Owner so terminates this Agreement, Owner shall
also assume and become liable for obligations,
January 10, 1995
Page 23
26
commitments and unsettled claims within the scope of the Contract Documents that
Contractor has previously undertaken or incurred in good faith in connection
with the Work. If, at the date of such termination, Contractor has properly
prepared or fabricated off the site any goods for subsequent incorporation into
the Work, and if Contractor delivers such goods to the site or to such other
place as Owner shall reasonably direct, then Contractor shall be paid for such
goods or materials. Contractor shall, as a condition to receiving the payments
described in this Article 16, execute and deliver to Owner such documents as may
be reasonably acceptable to Owner releasing Owner from all liability to
Contractor under this Agreement, including without limitation the waiver of
Mechanics' Lien rights and the affidavit described in Paragraph 15.8 (v) and
(vi).
16.2.3 Contractor hereby waives all claims for damages and loss of
anticipated profits on account of any termination by Owner pursuant to this
Paragraph 16.2 and, as the sole right or remedy of Contractor on account of such
termination, Contractor shall receive the amounts payable to Contractor under
this Paragraph 16.2. In addition, Contractor shall take all steps, including the
legal assignment of its contractual rights, which Owner may require for the
purpose of fully vesting in Owner such contractual rights.
16.3 Any of the following events shall be deemed to be a material default by
Contractor under the Contract Documents (an "Event of Default"):
(i) failure, without reasonable cause, by Contractor to prosecute the
Work diligently or properly; or
(ii) failure by the Contractor to make prompt payment to any
Subcontractor without just cause; or
(iii) failure by Contractor to comply with any applicable Law; or
(iv) failure by Contractor to perform any contractual obligation under
the Contract Documents, which failure by its nature Contractor has no capacity
to cure; or
(v) failure by Contractor to perform any other obligation under, or to
comply with any term, provision or condition of, the Contract Documents for a
period of ten (10) days following receipt of written notice of such failure from
Owner; or
(vi) the occurrence of any of the following: (A) the making by
Contractor of any general arrangements or assignments for the benefit of
creditors; (B) Contractor becomes a "debtor" as defined in 11 USC Section 101 or
any successor statute (unless, in the case of a petition filed against
Contractor, the same is dismissed within 60 days); (C) the appointment of a
trustee or receiver to take possession of substantially all of Contractor's
assets or of any asset used in connection with the Work, where possession is not
restored to Contractor within 30 days; or (D) the attachment, execution or other
judicial seizure of substantially all of Contractor's assets or of any asset
used in connection with the Work, where such
January 10, 1995
Page 24
27
seizure is not discharged within 30 days; provided, however, if any provision of
this Paragraph 16.3 (vi) is contrary to any applicable Law, such provision shall
be of no force or effect; or
(vii) a default by Contractor under any other contract between
Contractor and Owner; or
(viii) repeated failure (defined as a failure for which Owner has given
more than one notice) by Contractor to perform its obligations under the
Contract Documents in a timely or satisfactory fashion, which failure materially
interferes with Owner's scheduled completion of any portion of the Work within
the Contract Time.
16.4 Upon the occurrence of an Event of Default, Owner shall have the right to
pursue any and all remedies available at law or in equity including, without
limitation, the following: (i) the right to keep this Agreement in effect and
xxx Contractor for all damages caused by the default and recover the cost
thereof, which damages shall include, by way of illustration only and not by way
of limitation, any and all premiums, penalties, fees or other amounts Owner may
incur or pay to any third parties (including without limitation lenders on
construction or permanent financing for all or any portion of the Project) as a
result of or in connection with any delay in the completion of any portion of
the Work or otherwise caused by or resulting from any such default on the part
of Contractor, (ii) the right to cure any such default by Contractor and to
recover any damages caused thereby, and (iii) the right to terminate this
Agreement by giving Contractor written notice that this Agreement is terminated.
Upon such termination, Owner shall have the right to complete the Work or to
contract with others for completion of the Work and, in either event, to charge
the cost of completion to Contractor, including interest on Owner's expenditures
from the date the costs and expenses exceed the unpaid balance of the Guaranteed
Maximum Price until repayment by Contractor at the Default Rate. Owner may
deduct the cost of completion from amounts that may at any time be payable to
Contractor. If the cost of completion exceeds the amount that would have been
payable under this Agreement had Contractor completely performed the Work
pursuant to the terms of this Agreement, Contractor shall immediately pay the
amount of such excess to Owner. Owner may recover from Contractor all damages,
costs, expenses, attorneys' fees, experts' fees, court costs and lost profits,
of any kind and nature, directly or indirectly related to the default, including
without limitation any and all third party damages as described in subparagraph
16.4(i) above. Upon termination, Contractor shall be deemed to have waived all
claims against Owner for profits, loss or damage on or with respect to the
uncompleted Work. Contractor shall indemnify, defend, protect and hold Owner
harmless against any liability, claim, damage, loss, cost (including reasonable
attorneys' fees) or penalty which may be threatened or may in fact arise during
the period of any curable failure of Contractor to perform its contractual
duties hereunder.
16.5 If Owner terminates this Agreement on account of Contractor's default as
provided in Paragraph 16.4, then in addition to its obligations under Article 12
of the General Conditions, Contractor shall promptly and peaceably vacate the
Property and, at Owner's election, Owner may (i) take possession of the Property
and of all materials, equipment, tools, construction equipment and machinery
thereon owned by Contractor and Owner may finish the Work by whatever method it
may deem expedient, or (ii) cease construction and require the Contractor
promptly to remove from the Property, at Contractor's expense,
January 10, 1995
Page 25
28
all materials, equipment, tools, and construction equipment owned by Contractor.
Owner shall pay to Contractor fair compensation (at the election of Owner either
by purchase at fair market value or by rental at the prevailing rate of the
locale) for any equipment owned by the Contractor and used by the Owner during
the completion of the Work. Upon demand, (x) Contractor shall assign and deliver
to Owner all Drawings and Specifications, Subcontracts, documents, tangible and
intangible property, and contractual rights as Owner may demand for the purpose
of completing the Work, and (y) Contractor shall execute and deliver to Owner
such written documentation as Owner may request for the purpose of evidencing
the vesting in Owner of the rights and benefits of Contractor with respect to
the documents and rights so delivered and assigned.
16.6 If Owner terminates this Agreement as provided herein on account of
Contractor's default, and Owner then elects to complete the Work, Contractor
shall not be entitled to receive any further payments under this Agreement until
the Work is fully completed. Upon completion of the Work, if the expenses
reasonably incurred by Owner in completing the Work (including, without
limitation, payments made by Owner to any party supplying labor, materials,
equipment, services and the like for the Work, and all costs incurred by Owner
for managerial, administrative or supervisory services), plus the amounts
previously paid by Owner to Contractor, exceed the Guaranteed Maximum Price,
then Contractor shall pay Owner, upon demand, the amount of such excess, plus
interest thereon at the Default Rate. In all other cases of termination for
Contractor's default, Owner's liability to Contractor shall be limited to
reimbursement to Contractor of that portion of the unpaid Guaranteed Maximum
Price which is earned, due and payable to Contractor as of the date of the
termination, less the sum of (i) any amounts owing to Owner by Contractor under
the terms of the Contract Documents, and (ii) all costs, expenses, damages,
attorneys' fees, experts' fees, court costs and lost profits incurred by Owner
as a consequence of the Contractor's default.
ARTICLE 17: MISCELLANEOUS PROVISIONS
17.1 Time of Performance. If the date for any payment or obligations under this
Agreement falls on a Saturday, Sunday or legal holiday, payment shall be made or
the obligation shall be performed as specified on the next following business
day.
17.2 Independent Contractor. Contractor is and at all times shall be an
independent contractor with respect to the Work and the Project. Neither this
Agreement or any of the Contract Documents shall be interpreted as creating, or
shall be deemed to create, any employer-employee, partnership or other
relationship between Owner and Contractor. Contractor has and hereby retains the
right to exercise full control and supervision of the Work, and full control
over the employment, direction, compensation and discharge of all persons
assisting it in the execution of the Work. Contractor shall be solely
responsible for all matters relating to payment of its employees, including
compliance with Social Security, withholding and all other regulations governing
such matters. Contractor shall be solely and fully responsible for its own acts
and those of its subordinates, employees and Subcontractors during the term of
this Agreement.
January 10, 1995
Page 26
29
17.3 Design/Build Subcontractors. Architect and Contractor's engineering
consultants have established performance criteria and quality standards for the
Project. Contractor shall be solely responsible to Owner for the design,
engineering, construction and performance of the HVAC, electrical, plumbing,
fire sprinkler and exterior skin of the buildings, and for any other building
systems as provided by mutual agreement between Owner and Contractor. Contractor
shall coordinate the performance of the foregoing with Architect to insure that
such systems are fully and efficiently integrated into the Project. Subject to
the provisions of the following sentence, Architect's review of such systems
shall not constitute approval of the design, but shall indicate only that the
intent of the system conforms to the design criteria. Based on the loads given
by the design/build Subcontractor to the Architect, Architect shall review the
design/build systems and elements to ensure that the building structure, as
designed by Architect, will support the design/build elements for which
Contractor is responsible pursuant to this Paragraph 17.3. Architect shall
approve the architectural and spatial relationships of the design/build systems.
Owner and Contractor shall agree on the amount of professional liability
insurance the design/build Subcontractor shall carry. The cost of the
design/build work described in this Paragraph 17.3 is part of the Cost of the
Work, and is included in the Guaranteed Maximum Price.
17.4 Prior Work. Any Work, including all engineering and design work performed
by Contractor or its Subcontractors for the Project prior to the date of this
Agreement, shall be and hereby is incorporated into this Agreement and covered
by the conditions and requirements set forth herein.
17.5 Notices. All notices required or permitted to be given hereunder shall be
in writing, and shall be deemed duly delivered, received and given, (i) when
personally delivered, or (ii) one day following delivery to an overnight courier
guaranteeing next business day delivery to the address set forth below, or to
such other address designated by five (5) days' prior written notice to the
other party, or (iii) immediately upon confirmation of facsimile receipt at the
fax number set forth below or to such other fax number designated by five (5)
days' written notice to the other party. The address of the parties for the
purpose hereof shall respectively be:
TO OWNER AT: Altera Corporation
0000 Xxxxxxx Xxxxxxx
Xxx Xxxx, XX 00000-0000
Attn: General Counsel
Fax Number: (000) 000-0000
TO CONTRACTOR AT: Xxxxxxx & Xxxxxxx, Inc.
X.X. Xxx 0000
000 X. Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxxxx
Fax Number: (000) 000-0000
January 10, 1995
Page 27
30
17.6 Successors and Assigns. This Agreement calls for the personal services of
Contractor and, therefore, Contractor has no right to assign or transfer, and
shall not assign or transfer, any right or obligation under this Agreement
(including Contractor's right to payments). Owner may assign this Agreement to
any person or entity controlled by, under common control with, or which
controls, Owner, or to any lender on all or any portion of the Project, or to
any entity which succeeds to Owner's interest in the Project, without
Contractor's consent, or to any other person or entity with Contractor's
consent, which consent shall not be unreasonably withheld. Owner shall promptly
notify Contractor of any such assignment or transfer. Subject to the foregoing,
this Agreement shall extend to, be binding upon and inure to the benefit of, the
respective heirs, executors, administrators, successors and assigns of Owner and
Contractor.
17.7 Release and Waiver of Subrogation. Owner and Contractor, by their execution
of this Agreement, each hereby waives all rights against the other party for
damages to property caused by fire or other perils to the extent such damages
are covered by insurance obtained pursuant to any provision of the Contract
Documents, or any other property insurance applicable to the Work, except rights
they may have to the proceeds of insurance held by Owner as trustee; provided,
however, that such waivers are effective only if the applicable insurance
policies of both parties contain a clause to the effect that such release shall
not affect the right of the insured to recover under such policy. Each party
shall use reasonable efforts to cause each insurance policy obtained by it to
provide that the insurer waives all right of recovery by way of subrogation
against the other party in connection with any injury or damage covered by such
policy. Contractor shall also require of all Subcontractors similar waivers in
favor of Owner and Contractor.
17.8 Occupancy of Work Prior to Completion. If Owner finds it necessary to
occupy or use a portion of the Work prior to Substantial Completion thereof,
such occupancy or use shall not commence prior to a time mutually agreed to by
Owner and Contractor. Unless otherwise agreed upon, partial occupancy or use of
a portion or portions of the Work shall not constitute acceptance of Work not
complying with the requirements of the Contract Documents.
17.9 Confidentiality. Contractor and all Subcontractors shall keep confidential
any information acquired from Owner's employees, or from inspection of Owner's
property relating to Owner's designs, business plans, business opportunities,
financial or other confidential information. Contractor and those of its
employees as may be designated by Owner, and all Subcontractors, shall execute
Owner's Confidentiality Covenant in the form attached hereto as Exhibit G.
17.10 Attorneys' Fees. Should arbitration or litigation occur between Owner and
Contractor relating to the enforcement of any provision of this Agreement, all
hearing or court costs, witness fees, reasonable attorney's fees and related
costs shall be paid by the non-prevailing party to the prevailing party.
"Prevailing party" as used in this Paragraph 17.10 includes a party who
dismisses an action for recovery hereunder in exchange for sums allegedly due,
performance of covenants allegedly breached or considerations substantially
equal to the relief sought in the action.
January 10, 1995
Page 28
31
17.11 Amendments; Survival of Provisions. This Agreement may be amended only by
a written instrument signed by both Owner and Contractor. All provisions of this
Agreement which, by their nature (such as indemnification provisions) are
intended to or should survive the termination or expiration of this Agreement,
shall so survive.
17.12 Effective Date. This Agreement shall be deemed binding and effective the
day and year first above written, notwithstanding the actual date of execution
by the Parties hereto.
17.13 No Waiver. No failure on the part of either party to this Agreement to
exercise its rights hereunder shall be, or operate as, a waiver, a release, or
relinquishment of any rights or powers conferred under this Agreement.
17.14 Contractor's Representations and Warranties. Contractor hereby represents
and warrants to Owner that it is legally empowered to provide all of the
services required by this Agreement in the state in which the Project is located
and the state in which the Work will be performed. At all times during the term
of this Agreement, Contractor shall, at its sole cost and expense, keep in full
force and effect all professional and business permits, licenses and approvals
directly affecting Contractor's ability to perform the services required under
this Agreement, and otherwise necessary and appropriate to enable Contractor to
perform the Work, including without limitation all professional licenses and
qualifications of any individual employees of Contractor providing services
under this Agreement or any other Contract Documents. The person executing this
Agreement on behalf of Contractor represents that this Agreement is binding and
enforceable against Contractor in accordance with its terms, and that no other
signature of any party is necessary to make this Agreement binding on and
enforceable against Contractor. Contractor has made these representations and
warranties to Owner knowing that Owner is relying to a material extent on said
representations and warranties in entering into this Agreement.
17.15 Exposure to Hazardous Materials.
17.15.1 Contractor shall be solely responsible for any exposure of its
employees, agents and consultants to asbestos, PCB's or toxic substances brought
or permitted on the Property or elsewhere by Contractor or by any Subcontractor
and their respective employees and agents, except to the extent such exposure
results from the negligence or willful misconduct of Owner, its employees,
agents and contractors (other than Contractor or any Subcontractors, Architect
and any sub-consultant of Architect, and their respective employees and
contractors), and Owner shall have no liability to Contractor or such parties
with respect to such exposures; it being the understanding of the parties that
Contractor shall cause its Subcontractors, and the respective employees and
agents of Contractor and all Subcontractors, to take all reasonable precautions
necessary to prevent their exposure to such asbestos, PCB's and other toxic
substances. The Owner shall be responsible for removal of existing conditions of
toxic material which may be discovered in the construction process.
17.15.2 In addition, Owner and Contractor shall each have the rights
and obligations set forth in Article 10 of the General Conditions.
January 10, 1995
Page 29
32
17.16 Indemnification. Contractor shall indemnify, defend upon demand, protect
and hold harmless Owner and its officers, agents and employees, and any lender
on all or any portion of the Project, from and against any and all causes of
action, demands, losses, violations, infringements of Law, patent, license or
trademark, costs, attorneys' and experts' fees, claims, damages, and liabilities
of every kind and nature arising out of, alleged to have risen out of, or
resulting in any way from, the Work to be performed under this Agreement by
Contractor and its Subcontractors which are the result of any willful
misconduct, negligence, breach, act or omission of Contractor or its
Subcontractors, or by the respective agents, officers, employees, contractors or
subconsultants of any of them, except to the extent such claims are caused by
the negligence or a design deficiency on the part of Owner and/or its officers
and employees. Acceptance of any Work by Owner shall not operate as a waiver of
the foregoing indemnification, and the foregoing indemnification shall survive
the completion of the Project and the termination of this Agreement.
17.17 No Limitation of Rights and Remedies. No provision of this Agreement is
intended to, and no provision of this Agreement shall, limit the rights or
remedies of Owner or Contractor pursuant to any other provisions of this
Agreement, the Contract Documents or at law or in equity, except as otherwise
expressly provided in Articles 4.3, 4.4, and 4.5 of the General Conditions or
any other express provision of the Contract Documents.
17.18 Governing Law. This Agreement shall be construed and interpreted in
accordance with, and shall be governed and enforced in all respects according
to, the Laws of the State of California.
17.19 Counterparts. This Agreement may be executed in one or more counterparts.
All counterparts so executed shall constitute one agreement, binding on all
parties, even though all parties are not signatory to the same counterpart.
17.20 Construction. Each party has reviewed and revised this Agreement. The
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement.
17.21 Severability. If any provision of this Agreement as applied to either
party or to any circumstance shall be ruled by a court of competent jurisdiction
to be void or unenforceable for any reason, the same shall in no way affect (to
the maximum extent permissible by law) that provision as applied to other
permissible parties or circumstances or any other provision of this Agreement or
the validity or enforceability of the Agreement as a whole.
17.22 Headings. The headings used herein are for purposes of convenience only
and should not be used in construing the provisions hereof.
17.23 Cooperation with Lenders. Contractor shall at all times cooperate with any
lender on the Project, the Work, or any portion thereof, including without
limitation executing any agreements, documents, acknowledgments, certificates
and/or amendments to this Agreement as Owner and/or such lender may
January 10, 1995
Page 30
33
reasonably require in connection with any financing, whether construction or
permanent, for the Project or any portion thereof, all as more particularly
provided in the General Conditions.
17.24 No Third Party Beneficiary. This Agreement is not intended to and shall
not create any third party beneficiaries. No acts, omissions, reviews, approvals
or other actions hereunder by Contractor shall function to isolate any party
from liability to Owner, Contractor or any other party.
ARTICLE 18: EXHIBITS
18.1 The following exhibit are incorporated into this Agreement by this
reference:
Exhibit A Legal Description of the Property
Exhibit B Contract Documents
Exhibit C Construction Schedule
Exhibit D Contractor Rate Schedule
Exhibit E General Work Requirements
Exhibit F Minimum Insurance Requirements
Exhibit G Confidentiality and Non-Disclosure Covenant
Exhibit H Change Order Request
Exhibit I General Conditions of the Contract for Construction
18.2 In the event of any conflict or inconsistency between the terms and
conditions of the foregoing Owner/Contractor Agreement and the terms and
conditions of any of the exhibits attached hereto, the terms and conditions and
the foregoing Owner/Contractor Agreement shall govern and control.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of
the day and year first set forth above.
OWNER: CONTRACTOR:
ALTERA CORPORATION, XXXXXXX AND XXXXXXX, INC.,
a California corporation a California corporation
By:________________________ By:________________________
Its:_______________________ Its:_______________________
Date:______________________ Date:______________________
January 10, 1995
Page 31
34
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
All that real property situate in the City of San Xxxx, County of Santa Xxxxx,
State of California, described as follows:
Parcel One (NELO Parcel)
All of Parcel 2, as shown on that Parcel Map filed for record in the Official
Records of the County of Santa Xxxxx, State of California, on July 20, 1990, in
Book 616 of Maps, pages 16 and 17, as amended by Certificate of Correction
recorded June 6, 1991, in Book L 740, page 0602, Official Records.
Parcel Two (Protea Parcels)
All of Parcels A and B, as shown on that Parcel Map filed for record in the
Official Records of the County of Santa Xxxxx, State of California, on January
14, 1993, in Book 643 of Maps, pages 19 and 20.
January 10, 1995
Page 32
35
EXHIBIT B
CONTRACT DOCUMENTS
The Contract Documents consist of the following, all as may be amended,
supplemented or revised from time to time pursuant to the written agreement of
the parties:
1. The Owner/Contractor Agreement for Construction, with all
Exhibits attached thereto.
2. Drawings and Specifications prepared by Xxxxxxxx Xxxxx +
Xxxxxxxx, to be completed in accordance with the Construction Schedule.
3. All Notices to Proceed executed by Owner.
4. All Change Orders executed by Owner and Contractor.
January 10, 1995
Page 33
36
EXHIBIT C
CONSTRUCTION SCHEDULE
The Project Construction Schedule current as of execution of the
Contract Documents is entitled Altera Corporation New Headquarters Project
Summary Schedule, and has a revision date of December 29, 1995 (see copy
attached).
January 10, 1995
Page 34
37
EXHIBIT D
CONTRACTOR RATE SCHEDULE
Preconstruction Services Fixed Cost per Hour
------------------------ -------------------
V.P./Chief Estimator $95.00
Project Executive $95.00
Senior Estimator $75.00
Project Estimator $65.00
Mechanical Estimator $75.00
Electrical Estimator $75.00
Administrative Assistant $35.00
Construction Services Fixed Cost per Hour
--------------------- -------------------
Project Manager $70.00
Project Superintendent $85.00
Project Engineer $50.00
Mechanical/Electrical Coordinator $71.00
Project Accountant/Field Office Coordinator $29.00
Xxxxxxxxx Xxxxxxx $52.75
Laborer Xxxxxxx $48.00
Xxxxxxxxx $46.85
Laborer $39.25
Cement Xxxxx $42.50
Operating Engineer $57.60
January 10, 1995
Page 35
38
EXHIBIT E
GENERAL WORK REQUIREMENTS
(CATEGORIES)
I. JOBSITE ADMINISTRATION
II. SURVEY/LAYOUT
III. TEMPORARY FACILITIES
IV. TEMPORARY UTILITIES
V. SAFETY AND HEALTH
VI. CLEAN-UP
VII. MISCELLANEOUS EQUIPMENT
VIII. SITE CONDITIONS
IX. PERMITS, TAXES, INSURANCE
X. OTHER
The above list describes only the general categories of the General
Work Requirements. Prior to establishing the Guaranteed Maximum Price, Owner and
Contractor shall agree upon a schedule setting forth a more detailed, line item
description of each of the above categories. Once such schedule has been signed
by both Owner and Contractor, it shall be deemed to be incorporated into this
Exhibit E and shall become a part of this Agreement to the same extent as if it
had been originally set forth herein.
January 10, 1995
Page 36
39
EXHIBIT F
MINIMUM INSURANCE REQUIREMENTS
1. Minimum Amounts of Coverage. As a material part of the consideration
for this Agreement, Contractor agrees, for Owner's benefit, that Contractor
shall maintain amounts and types of insurance coverages as follows:
1.1 Commercial Liability. Comprehensive or Commercial General
Liability insurance covering Contractor and its officers, partners, employees,
agents and Subcontractors with respect to or in any way related to the Work.
Such insurance shall contain all coverage customarily found in such policies of
insurance, including endorsements or other provisions covering products and
completed operations, covering the contractual indemnities contained in this
Agreement, and including employees as additional insureds. Such insurance shall
have a combined single limit of not less than One Million Dollars ($1,000,000)
for all damages arising out of the bodily and/or personal injuries to or death
of one or more persons, and for all damages to or destruction of tangible
property, including loss of use resulting therefrom, in any one occurrence, and
subject to that limit, where applicable, an annual aggregate limit of not less
than One Million Dollars ($1,000,000).
1.2 Umbrella Liability. Umbrella liability insurance including
the coverages required in paragraph 1 above, with limits of not less than Ten
Million Dollars ($10,000,000).
1.3 Auto Liability. Auto Liability, comprehensive or business
automobile form, including owned, non-owned and hired autos, of not less than
One Million Dollars ($1,000,000).
1.4 Worker's Compensation. Worker's Compensation covering all
employees of Contractor performing services under this Agreement and complying
with all laws of the State of California.
1.5 Employer's Liability. Employers' Liability covering
employees of Contractor performing services under this Agreement providing a
limit of not less than Five Hundred Thousand Dollars ($500,000).
1.6 Valuable Papers and Records. Property insurance covering
valuable papers which will insure all documentation produced or used in
connection with the Work in an amount of not less than Five Hundred Thousand
Dollars ($500,000).
Exhibit F Page 1 of 2
January 10, 1995
Page 37
40
2. General Policy Requirements. Except for Worker's Compensation, the
insurance policies required above shall name Owner as an additional insured and
shall be in effect at all times during the term of this Agreement and for two
(2) years after the date of Substantial Completion of the Work. All the
insurance policies required above shall be primary (and any insurance maintained
by Owner shall be excess insurance only); shall include only such deductible
amounts as Owner shall reasonably approve; and shall provide that Owner shall
receive a minimum of 30 days' advance notice of cancellation or alteration. If
Contractor does not replace such insurance within the 30 day period, Owner shall
have the right, but not the obligation, to procure replacement insurance for
Contractor, at Contractor's cost (except to the extent the cost would have been
a Cost of the Work if Contractor had properly obtained the required insurance).
Contractor shall furnish Owner with copies of the insurance policies and/or
certificates showing that all insurance described above is being maintained by
Contractor. The certificates shall include the Project name as shown on drawings
and Project address, and the holder thereof shall be listed as follows:
Risk Management Department
Altera Corporation
0000 Xxxxxxx Xxxxxxx
Xxx Xxxx, XX 00000-0000
3. Additional Insurance. In addition to the insurance policies required
above, Owner shall have the right to require additional insurance policies,
additional or increased limits of coverage in existing policies of insurance,
and additional endorsements, including without limitation project-specific
liability insurance, builder's risk and property damage insurance, and
contractor's bonds. Such additional insurance shall be in such amounts, on such
policy forms, and with such carriers as Owner may reasonably require. Within
five days after written request by Owner at any time after the execution of this
Agreement, Contractor shall procure and deliver to Owner, at Owner's expense,
one or more commitments or binders for insurance, in form and content
satisfactory to Owner, issued by insurance carrier(s) satisfactory to Owner,
assuring that such carrier(s) will be obligated, upon payment of the required
premium, to issue for Owner's benefit such additional insurance as may be
requested by Owner. The premiums and all other costs to obtain any such
additional insurance requested by Owner shall be reimbursed by Owner to
Contractor at cost.
Exhibit F Page 2 of 2
January 10, 1995
Page 38
41
EXHIBIT G
CONFIDENTIALITY AND NON-DISCLOSURE COVENANT
THIS CONFIDENTIALITY AND NON-DISCLOSURE COVENANT ("Covenant") is made
as of _____________________, 19__ , by ______________________________, on behalf
of itself and its affiliates, successors, assigns, agents, officers, directors
and partners (collectively, "Receiving Party") for the benefit of Altera
Corporation, a California corporation, and its affiliates, successors, assigns,
agents, officers, directors and partners (collectively, "Owner"), pursuant to
that certain Owner/Contractor Agreement for Construction dated _______________
(the "Agreement"), executed by Owner and by Xxxxxxx and Xxxxxxx, Inc.
("Contractor") with respect to that certain Altera Corporation Headquarters
Project of construction ("Project") located at North First Street and Caviglia
Drive in San Jose, California ("Property").
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which is
hereby acknowledged, Receiving Party hereby agrees as follows:
1. Confidential Information. As used herein, the term "Confidential
Information" shall mean and include any and all data, reports, interpretations,
forecasts, projections, records, designs, analyses, and any other information
received from any source (whether oral, in writing, or in electronic form)
concerning or relating to the products, designs, business plans, business
opportunities, finances, research, development, know-how, personnel, or
activities of Owner, including without limitation information regarding the
Project; provided, however, that for purposes of this Covenant the term
"Confidential Information" shall not be deemed to include information which (1)
is now generally known or available by publication, commercial use or otherwise;
or (2) is known by Receiving Party at the time of disclosure and is not subject
to restriction under this Covenant.
2. Covenant of Non-Disclosure. Receiving Party agrees to use the same
degree of effort and care in maintaining the confidence of the Confidential
Information as it does with its own confidential information, but not less than
reasonable care, and to maintain the confidence of such Confidential
Information, to prevent its unauthorized dissemination, and to use the
Confidential Information only in accordance with this Covenant. Receiving Party
agrees not to use the Confidential Information in any manner except as may be
necessary to perform its obligations under the Agreement.
3. Return of Information. Receiving Party agrees to return all
Confidential Information including all manuals, technical notes, plans and
copies thereof to Owner (or to Owner's designee) on the written request of
Owner.
January 10, 1995
Page 39
42
4. Remedies. Receiving Party hereby acknowledges that unauthorized
disclosure or use of Confidential Information could cause irreparable harm and
significant injury which may be difficult to ascertain. Accordingly, Receiving
Party agrees that Owner shall have the right to seek and obtain immediate
injunctive relief from breaches of this Covenant, in addition to any other
rights and remedies Owner may have.
5. Governing Law. This Covenant shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, Receiving Party has executed this Covenant at San
Jose, California, as of the date first written above.
"RECEIVING PARTY"
________________________________________
________________________________________
By _____________________________________
Its ____________________________________
Date ___________________________________
January 10, 1995
Page 40
43
EXHIBIT H
CHANGE ORDER REQUEST
[See attached sample form.]
January 10, 1995
Page 41
44
EXHIBIT I
GENERAL CONDITIONS OF THE CONTRACT FOR CONSTRUCTION
[See attached.]
January 10, 1995
Page 42
45
EXHIBIT I
GENERAL CONDITIONS OF THE CONTRACT FOR CONSTRUCTION
ARTICLE 1
GENERAL PROVISIONS
1.1 BASIC DEFINITIONS
1.1.1 All capitalized terms and words (other than proper nouns) used in these
General Conditions shall have the meanings set forth below, unless otherwise
defined in the Agreement or unless another meaning is clearly intended based on
the express language of the applicable provision.
.1 Agreement. The Owner/Contractor Agreement for Construction between
Owner and Contractor to which these General Conditions are annexed, including
all attached Exhibits, and any addenda and/or modifications to any of the
foregoing.
.2 Architect. The Project Architect identified in the Agreement.
.3 Certificate of Occupancy. Written notification by the City of
San Xxxx of satisfaction of all terms, conditions and other provisions of all
necessary permits and approvals authorizing the full use and occupancy of the
respective Segment of the Work for the purposes intended without restriction.
.4 Certificate of Substantial Completion. A certificate prepared by
Architect pursuant to Subparagraph 9.8.2 below, certifying that the Work is
Substantially Complete and establishing the date of Substantial Completion.
.5 Change Order. Defined in Paragraph 8.2 of the Agreement.
.6 Change Order Request. Defined in Paragraph 8.2 of the Agreement.
.7 Change Order Work. A Change in the Work covered by any approved
Change Order.
.8 Claim. A demand or assertion by one of the parties seeking, as a
matter of right, an adjustment or interpretation of the terms of the Agreement,
payment of money, extension of time, or other relief with respect to the terms
of the Agreement, whether arising due to an error or omission, breach of the
Agreement, or otherwise.
.9 Confidential Information. Defined in Exhibit G to the Agreement.
General Conditions
January 10, 1996
Page 1
46
.10 Construction Schedule. Defined in Paragraph 5.1 of the Agreement.
.11 Contract Documents. Defined in Paragraph 2.1 of the Agreement.
.12 Contract Time. The period of time, including adjustments
authorized by Change Orders, allotted in the Contract Documents for
Substantial Completion of each respective building or other applicable Segment
of the Work.
.13 Contractor. Xxxxxxx and Xxxxxxx, Inc., a California corporation.
.14 Contractor's Fee. Defined in Article 7 of the Agreement
.15 Cost of the Work. Defined in Article 9 of the Agreement.
.16 Day. Calendar day unless otherwise specifically designated.
.17 Default Rate. The "reference rate" or "prime rate" published from
time to time by Bank of America, N.T.& S.A., as the rate at which it lends funds
to credit worthy borrowers, plus two percent (2%); provided, however, that in no
event shall any interest or other amount due, payable or paid hereunder, or
pursuant to any other provision of this Agreement or any Contract Documents,
exceed the maximum applicable legal interest rate in effect from time to time.
.18 Drawings and Specifications. The drawings, specifications and
other documents which fix and describe the size and character of the entire
Project as to, without limitation, architecture, structure, electrical systems,
mechanical systems, civil engineering and landscaping.
.19 Equipment Schedule. Defined in Subparagraph 9.1.5 of the
Agreement.
.20 Event of Default. Defined in Paragraph 16.3 of the Agreement.
.21 Final Application for Payment. An Application for Payment for the
Final Payment, which shall only be made in accordance with the provisions of
Paragraph 15.8 of the Agreement.
.22 Final Completion. The status of the Work when all Punch List
items have been fully and finally completed, and all final releases, documents
and manuals required by the Contract Documents have been delivered.
.23 Final Payment. Defined in Paragraph 15.8 of the Agreement.
.24 Force Majeure Delay. A delay in Contractor's performance under
this Agreement due to: an act or omission of Owner or Architect or any of their
respective employees or agents; labor disputes not caused by Contractor, fire,
unusual delay in transportation, adverse weather conditions not reasonably
foreseeable, unavoidable casualties, or any similar causes beyond the reasonable
control of Contractor and not reasonably foreseeable by Contractor, for which a
written claim of justifiable delay is made by Contractor pursuant to Paragraph
8.3 below.
General Conditions
January 10, 1996
Page 2
47
.25 General Conditions. These "General Conditions of the Contract for
Construction" which are attached to the Agreement.
.26 General Work Requirements. The portions of the Work and related
requirements that apply generally to site conditions, site safety, permits,
taxes, insurance, jobsite administration, and so forth, as described more
specifically in Exhibit E attached to the Agreement.
.27 Guaranteed Maximum Price. Defined in Paragraph 6.2 of the
Agreement.
.28 Laws. All Federal, State and local laws, statutes, ordinances,
rules, regulations, building codes and orders applicable to the Project, the
Work, the parties to this Agreement or otherwise governing the foregoing, as
well as those certain covenants, conditions and restrictions (CC&R's) recorded
in the Official Records of Santa Xxxxx County on February 7, 1980 in Book F 128,
Page 480, as amended (the Protea CC&R's), and on February 7, 1985 in Book J 232,
Page 651, as amended (the NELO CC&R's).
.29 Mechanics' Lien. Any mechanics' lien, materialmen's lien, stop
notice, charge, imposition, garnishment or attachment upon or against the
Property, the Project or Owner.
.30 Notice of Completion. A written notice verified by Owner or
Owner's authorized agent, and recorded with the Santa Xxxxx County Recorder
within 10 days after completion of a Segment of the Work, pursuant to Section
3093 of the California Civil Code.
.31 Notice to Proceed. Owner's issuance to Contractor of an
instruction to proceed with a defined scope of Work prior to Owner's having
approved the Guaranteed Maximum Price.
.32 Owner. Altera Corporation, a California corporation.
.33 Preconstruction Services. Services performed by Contractor prior
to commencement of construction, as defined in Subparagraph 9.1.16 of the
Agreement.
.34 Project. The total construction of which the Work performed
under the Contract Documents may be the whole or a part, and which may include
construction by the Owner or by separate contractors as described in Paragraph
3.1 of the Agreement. The Project will include (i) approximately 360,000 square
feet consisting of a Corporate Building with 4 levels, a Production Building
with 2 levels, and an Engineering Building with 3 levels, all with shell, core,
sitework and interior improvements; and (ii) approximately 150,000 square feet
consisting of an Expansion Building with 3 levels, with shell, core, sitework,
and partial interior improvements.
.35 Property. The real property described in Exhibit A attached to
the Agreement, which is also the site of the Project.
.36 Punch List. A comprehensive list of minor items to be completed
or corrected
General Conditions
January 10, 1996
Page 3
48
following Substantial Completion of the Work, which items shall not materially
affect the use or aesthetic appearance of the Project.
.37 Schedule of Values. Defined in Paragraph 6.3 of the Agreement.
.38 Segment. Each separate building, design/build system, or
distinct portion of the Work covered by a separate Notice to Proceed.
.39 Subcontract. A written agreement between the Contractor and
another party to perform a portion of the Work or to supply equipment,
materials or labor to the Project, as defined in Paragraph 12.1 of the
Agreement.
.40 Subcontractor. A person or entity who, pursuant to a Subcontract,
is retained by Contractor to perform a portion of the Work or to supply
equipment, materials or labor to the Project, including without limitation any
subcontractor, sub-subcontractor, laborer, design professional, engineer,
surveyor, consultant, equipment lessor, supplier or other materialman so
retained, but excluding any separate contractor retained by Owner to construct
any portion of the Project that is not within the scope of the Work.
.41 Substantial Completion. The status of the Work when (i) Owner and
Architect agree that the Work is sufficiently complete to permit Owner to occupy
or utilize the Work (or designated portion thereof) for the use for which it is
intended and (ii) Contractor has delivered to the Owner all information showing
the Work to be sufficiently complete to allow Owner to obtain a Certificate of
Occupancy.
.42 Work. The construction and services required and reasonably
implied or inferred to be required by the Contract Documents, whether such wor
is completed or partially completed, and includes all other labor, materials,
equipment and services provided or to be provided by the Contractor to fulfill
the Contractor's obligations. The Work includes all Work which would reasonably
be inferred or anticipated by a contractor with Contractor's experience and
expertise after reviewing the Contract Documents. The Work may constitute the
whole or a part of the Project.
1.2 EXECUTION, CORRELATION AND INTENT
1.2.1 The Contract Documents shall not be construed to create a contractual
relationship of any kind (i) between the Architect and the Contractor, (ii)
between the Owner and a Subcontractor, or (iii) between any persons or entities
other than the Owner and the Contractor. The Architect shall, however, be
entitled to performance and enforcement of obligations of the Contractor under
the Agreement intended to facilitate performance of the Architect's duties, and
the Contractor shall be entitled to the performance and enforcement of the
obligations of the Architect intended to facilitate performance of the
Contractor's duties. The Contractor and the Architect are independent
contractors of the Owner. Neither the Contractor nor the Architect is the
employee, agent, joint venturer, or partner of the Owner. The Contractor shall
have the sole responsibility for performance under any Subcontract entered into
by the Contractor with respect to the Work.
General Conditions
January 10, 1996
Page 4
49
1.2.2 Execution of the Agreement by the Contractor is a representation that the
Contractor has visited the Property, become familiar with local conditions under
which the Work is to be performed and correlated personal observations with
requirements of the Contract Documents.
1.2.3 The intent of the Contract Documents is to include all items necessary for
the proper execution and completion of the Work by the Contractor. The Contract
Documents are complementary, and what is required by one shall be as binding as
if required by all; performance by the Contractor shall be required only to the
extent consistent with the Contract Documents and reasonably inferable from them
as being necessary to produce the intended results. Conflicts or discrepancies
among the Contract Documents shall be resolved in the following order of
priority:
.1 The Agreement;
.2 Supplementary Conditions, if any;
.3 The General Conditions;
.4 Drawings and Specifications (drawings govern specifications
for quantity and location, and specifications govern drawings
for quality and performance; in the event of ambiguity in
quantity or quality, the greater quantity and the better
quality shall govern);
.5 Figured dimensions govern scale dimensions, and large scale
drawings govern small scale drawings; and
.6 Approved revisions and addenda take precedence over the
original documents, and those of later date take precedence
over those of earlier date.
1.2.4 Organization of the specifications into divisions, sections and articles,
and arrangement of drawings, shall not control the Contractor in dividing the
Work among Subcontractors or in establishing the extent of Work to be performed
by any trade. The Contractor represents that the Subcontractors engaged or to be
engaged by it are and will be familiar with the requirements for performance by
them of their obligations.
1.2.5 Unless otherwise defined in the Contract Documents, words which have
well-known technical or construction industry meanings are used in the Contract
Documents in accordance with such recognized meanings.
1.3 OWNERSHIP AND USE OF ARCHITECT'S DRAWINGS, SPECIFICATIONS
AND OTHER DOCUMENTS
1.3.1 The Owner shall be deemed the owner of all Drawings and Specifications and
other documents (including any and all copies thereof) furnished by the
Architect to the Owner, and the Owner shall have and retain all common law,
statutory and other reserved rights with respect thereto.
General Conditions
January 10, 1996
Page 5
50
Any such Drawings and Specifications and other documents shall not be used by
Architect on any other project without the prior written consent of the Owner.
Submittal or distribution to meet official regulatory requirements or for other
purposes in connection with the Project is not and shall not be construed as a
publication in derogation of the Owner's or the Architect's copyright or other
reserved rights.
1.4 CAPITALIZATION
1.4.1 Terms capitalized in these General Conditions include those which are (i)
specifically defined in Subparagraph 1.1.1 above, (ii) the titles of numbered
articles and identified references to Paragraphs, Subparagraphs and Clauses in
the document, (iii) the titles of other documents published by the American
Institute of Architects, or (iv) terms otherwise defined in the Contract
Documents.
1.5 INTERPRETATION
1.5.1 In the interest of brevity, the Contract Documents frequently omit
modifying words such as "all" and "any", and articles such as "the" and "an,"
but the fact that a modifier or an article is absent from one statement and
appears in another is not intended to affect the interpretation of either
statement.
ARTICLE 2
OWNER
2.1 DEFINITION
2.1.1 The Owner is the person or entity identified as such in the Agreement and
is referred to throughout the Contract Documents as if singular in number. The
term "Owner" means the Owner or the Owner's authorized representative.
2.1.2 The Owner, upon reasonable written request, shall furnish to the
Contractor, in writing, a statement of the record legal title to the real
property on which the Project is located and the Owner's interest therein as of
the date of such request.
General Conditions
January 10, 1996
Page 6
51
2.2 INFORMATION AND SERVICES REQUIRED OF THE OWNER
2.2.1 [Intentionally omitted]
2.2.2 The Owner shall furnish a soil report and survey of the Property
containing information about the physical characteristics and utility locations
for the Property.
2.2.3 The Owner shall pay all costs for the following: building, Health
Department and utility permits, connection fees and assessments: plan check,
energy fee, seismic fee, school tax, construction tax, gas and electric, sewer
treatment, sanitary sewer, storm drain, water, Housing Fund, Planning
Department, and similar charges and fees.
2.2.4 Upon receipt of a written request therefor from the Contractor,
information or services under the Owner's control shall be furnished by the
Owner with reasonable promptness to avoid delay in orderly progress of the Work.
2.2.5 The Owner shall furnish to the Contractor, free of charge, twenty-five
(25) sets of bid documents, a reproducible copy of the Drawings and
Specifications prepared by the Architect, and the Contractor shall furnish at
its sole expense all other drawings and documents necessary for the execution
and completion of the Work.
2.2.6 The foregoing are in addition to other duties and responsibilities of the
Owner enumerated herein and especially those in respect to Article 6
(Construction by Owner or by Separate Contractors), Article 9 (Payments and
Completion) and Article 11 (Insurance and Bonds).
2.2.7 No action taken by the Owner pursuant to the Contract Documents requires
the approval of the Architect. However, the Owner will not have control over or
charge of, and will not be responsible for, construction means, methods,
techniques, sequences or procedures, or for safety precautions and programs in
connection with the Work, since those are solely the Contractor's responsibility
as provided in the Contract Documents. The Owner will not be responsible for the
Contractor's failure to carry out the Work in accordance with the Contract
Documents. The Owner will not have control over or charge of, and will not be
responsible for, negligent acts or omissions of the Contractor, Subcontractors,
or their respective agents or employees.
2.3 OWNER'S RIGHT TO STOP THE WORK
2.3.1 If suspension of the Work is warranted by reason of unforeseen conditions
which may adversely affect the quality and/or progress of the Work if the Work
were continued, the Owner (but not the Architect) by written notice to the
Contractor may do either or both of the following, to the extent necessary to
address such unforeseen conditions: (i) entirely suspend the Work; or (ii) cause
the Work, or portions thereof, to be partially suspended or delayed, while other
portions of the Work continue on the same or a different schedule
redetermined by the Owner and the Contractor. In such event, the Contract Time
shall be extended by such reasonable amount of time as is appropriate as
General Conditions
January 10, 1996
Page 7
52
a consequence of the delay caused by the exercise by the Owner of such remedies
and the Guaranteed Maximum Price shall be increased by the additional cost
occasioned by the suspension, if any, as approved by the Owner and the
Contractor, which approvals shall not be unreasonably withheld or delayed. If
the Contractor reasonably believes that a suspension of the Work is warranted by
reason of unforeseen circumstances which may adversely affect the quality of the
Work if the Work were continued, the Contractor shall immediately notify the
Owner of such belief, but the Contractor shall have no right to suspend the
Work, except with the written consent of the Owner or except in the case of an
emergency (in which event the Contractor shall resume work upon cessation of the
emergency).
2.3.2 If the Contractor fails to correct defective Work as required by Paragraph
12.2, fails to complete the Work on time as required by the Agreement, or is in
material default of its obligations hereunder, the Owner may order the
Contractor to stop the Work, or any portion thereof, until the cause for such
order has been eliminated and/or Owner may pursue its remedies as set forth in
the Agreement.
ARTICLE 3
CONTRACTOR
3.1 DEFINITION
3.1.1 The Contractor is the person or entity identified as such in the Agreement
and is referred to throughout the Contract Documents as if singular in number.
The term "Contractor" means the Contractor or the Contractor's authorized
representative.
3.2 REVIEW OF CONTRACT DOCUMENTS AND FIELD CONDITIONS BY
CONTRACTOR
3.2.1 The Contractor, as a competent and experienced general contractor (without
assuming any of the obligations of the Architect, as more particularly set forth
in Paragraph 4.4 of the Agreement), acknowledges that it is responsible for the
General Work Requirements as defined in Subparagraph 1.1.1 above. The Contractor
also acknowledges that it has provided Preconstruction Services as defined in
Subparagraph 1.1.1 above. The Contractor shall carefully study and compare the
Contract Documents with each other and with any information furnished by the
Owner pursuant to Subparagraph 2.2.2, and shall at once report to the Architect
and the Owner errors, inconsistencies, omissions or violations of applicable
Laws of which the Contractor, as a competent and experienced general contractor,
is or should be aware. If the Contractor fails to so report such errors,
inconsistencies, omissions or violations of such applicable Laws, then the
Contractor shall be responsible for the cost of correction or the reduction in
value of any defective portion of the Work thereafter performed, if the
Contractor, as a competent and experienced general contractor (without assuming
any of the obligations of the Architect, as more particularly set forth in
Paragraph 4.4 of the Agreement) knew or should have known of
such errors, inconsistencies, omissions or violations of such applicable Laws
By its execution of the Agreement, the Contractor acknowledges, agrees and
represents to the Owner that:
General Conditions
January 10, 1996
Page 8
53
(i) the Contractor has inspected, to the extent necessary for
its purposes, the General Work Requirements and has received
all information it needs concerning the condition of the site;
(ii) the Contractor has inspected the location of the Work and
has satisfied itself as to the condition thereof, including,
without limitation, all structural, surface and subsurface
conditions which (a) have been disclosed by the Owner and/or
the Architect, (b) are visible or (c) reasonably should be
known to the Contractor following such review of records,
files and documents in local building, planning and/or public
works departments, and/or the recorder's or other public
offices which the Contractor, as a competent and experienced
general contractor, deems prudent and reasonable in the
circumstances, including a review of all reasonably accessible
records, files and documents;
(iii) the Contractor's knowledge of the General Work
Requirements as of the execution of the Agreement is
sufficient to enable the Contractor to determine the cost of
the Work;
(iv) to the best of the Contractor's knowledge, as an
experienced and competent general contractor (but without
assuming the obligations of the Architect, as more
particularly provided in Paragraph 4.4 of the Agreement), the
Work described in the Contract Documents can be performed in
strict compliance with all Laws; and
(v) the Contract Documents are adequate and sufficient to
provide for the completion of the Work, and include all work,
whether or not shown or described, which reasonably may be
inferred to be required or useful for the completion of the
Work in accordance with all applicable Laws and professional
standards of which the Contractor, as a competent and
experienced general contractor (but without assuming the
obligations of the Architect, as more particularly provided in
Paragraph 4.4 of the Agreement) knows or should know.
The Contractor also shall review specified construction and
installation procedures and shall advise the Owner if it becomes aware that any
such procedures would result in finished Work not in conformance with the
Contract Documents or if it becomes aware that such procedures would affect any
warranties, and the Contractor shall propose alternative procedures which will
comply with the Contract Documents and which the Contractor will warrant.
Based upon the foregoing inspections, understandings, agreements and
acknowledgments, the Contractor agrees and acknowledges (x) that the Guaranteed
Maximum Price is just and reasonable compensation for all the Work, (y) that the
Contract Time is adequate for the performance of the Work, and (z) that the
construction means and methods for the Work shall not result in any lateral or
vertical movement of any adjacent structure. The Contractor shall exercise
special care in executing subsurface work in proximity of known subsurface
utilities, improvements and easements. At the Owner's request, the Contractor
shall make available to the Owner the results of any Property
General Conditions
January 10, 1996
Page 9
54
investigation, test borings, analyses, studies or other tests conducted by or in
the possession of the Contractor or any of its agents.
3.2.2 The Contractor shall take field measurements and verify field conditions,
and shall carefully compare such field measurements and conditions and other
information known to the Contractor with the Contract Documents before
commencing activities. Errors, inconsistencies or omissions discovered shall be
reported to the Architect at once.
3.2.3 The Contractor shall perform the Work in accordance with the Contract
Documents and submittals approved pursuant to Paragraph 3.12.
3.3 SUPERVISION AND CONSTRUCTION PROCEDURES
3.3.1 The Contractor shall supervise and direct the Work, using the Contractor's
best skill and attention. The Contractor shall be solely responsible for and
have control over construction means, methods, techniques, sequences and
procedures, and for coordinating all portions of the Work under the Agreement,
including coordination of the duties of all trades, unless the Contract
Documents give other specific instructions concerning these matters.
3.3.2 The Contractor shall be responsible to the Owner for acts and omissions of
the Contractor's employees, Subcontractors and their agents and employees, and
other persons performing portions of the Work under a contract with the
Contractor.
3.3.3 The Contractor shall not be relieved of its obligation to perform the Work
in accordance with the Contract Documents either by activities or duties of the
Architect in the Architect's administration of the Contract, or by tests,
inspections or approvals required or performed by persons other than the
Contractor.
3.3.4 The Contractor shall be responsible for inspection of portions of Work
already performed under the Contract to determine that such portions are in
proper condition to receive subsequent Work.
3.3.5 If the Contractor knows or reasonably should know, as a competent and
experienced general contractor, but without imposing an architect's or
engineer's responsibilities (subject, however, to the provisions of Paragraph
4.3 of the Agreement), that any of the Work is required to be inspected or
approved by any public authority, or if Owner or Architect requires that any of
the Work be inspected or approved, then the Contractor shall cause such
inspection or approval to be performed. No inspection performed or failed to be
performed by the Owner hereunder shall be a waiver of any of the Contractor's
obligations hereunder, or be construed as an approval or acceptance of the Work
or any part thereof.
3.3.6 The Contractor acknowledges that it is the Contractor's responsibility to
hire all personnel for the proper and diligent prosecution of the Work, and the
Contractor shall use its best efforts to maintain labor peace for the duration
of the Project. In the event of a labor dispute within the
General Conditions
January 10, 1996
Page 10
55
Contractor's control, the Contractor shall not be entitled to any increase in
the Guaranteed Maximum Price.
3.4 LABOR AND MATERIALS
3.4.1 Unless otherwise provided in the Contract Documents, the Contractor shall
provide and pay for labor, materials, equipment, tools, construction equipment
and machinery, water, heat, utilities, transportation, and other facilities and
services necessary for proper execution and completion of the Work, whether
temporary or permanent, and whether or not incorporated or to be incorporated in
the Work. The Contractor shall check all materials and labor entering into the
Work and shall keep full detailed accounts thereof.
3.4.2 The Contractor shall enforce strict discipline and good order among the
Contractor's employees and other persons carrying out the Agreement. The
Contractor shall not permit employment of unfit persons or persons not skilled
in tasks assigned to them.
3.4.3 Neither the Contractor nor any Subcontractor shall incorporate into the
Work any materials (i) to which its title is imperfect, (ii) against which there
is any claim by a manufacturer or other entity, or (iii) which are encumbered by
any security interest other than vendor's liens incurred in the ordinary course
of business prior to the Owner's payment for the materials involved. The
Contractor shall be solely responsible for all materials specified by the
Contract Documents which are delivered to the Property. Any materials delivered
to the Property, which are not to be used in or incorporated into the Work under
the Contract Documents, shall be forthwith removed from the Property and the
Contractor shall be solely responsible for all costs incurred with respect to
such materials.
3.4.4 After a Notice to Proceed has been executed, the Owner and the Architect
will consider a formal request for the substitution of products in place of
those specified only under the conditions set forth in the Drawings and
Specifications.
3.4.5 By making requests for substitutions based on Subparagraph 3.4.4 above,
the Contractor:
.1 Represents that the Contractor has personally investigated the
proposed substitute product and determined that it is equal or
superior in all respects to that specified;
.2 Represents that the Contractor will provide the same warranty
for the substitute product that the Contractor would for the
product originally specified;
.3 Certifies that the cost data presented is complete and includes
all related costs and/or savings under the Agreement, and
waives all claims for additional costs related to the
substitution which subsequently become apparent; and
.4 Will coordinate the installation of the accepted substitute,
making such changes as may be required for the Work to be
complete in all respects.
General Conditions
January 10, 1996
Page 11
56
3.5 WARRANTY
3.5.1 The Contractor warrants to the Owner and the Architect that materials and
equipment furnished under the Agreement will be of good quality and new unless
otherwise required or permitted by the Contract Documents, that the Work will be
free from defects not inherent in the quality required or permitted, and that
the Work will conform with the requirements of the Contract Documents. Work not
conforming to these requirements, including substitutions not properly approved
and authorized, shall be considered defective. The Contractor's warranty
excludes damage or defect caused by abuse, modifications not executed by the
Contractor, improper or insufficient maintenance, improper operation, or normal
wear and tear under normal usage. If required by the Architect or the Owner, the
Contractor shall furnish satisfactory evidence as to the kind and quality of
materials and equipment. If, notwithstanding that Contractor furnishes such
evidence, Owner still requires testing to confirm the kind and quality of
materials and equipment, then the cost of any such testing shall be borne by the
Owner. The Contractor's warranty shall include all specified procedures or
accepted alternative procedures and all specified or accepted substituted
products and, notwithstanding Paragraph 12.2, shall continue with respect to
latent defects, as defined in California Code of Civil Procedure Section 337.15,
for a period of ten (10) years following Final Completion of the Work, and, with
respect to patent defects, as defined in California Code of Civil Procedure
Section 337.1, for a period of four (4) years following Substantial Completion
of the Work; provided, however that the Contractor's obligation to return to the
Property and actually correct defects (as distinguished from the Contractor's
liability for defects) shall be governed by Xxxxxxxxx 0.00, Xxxxxxxxx 12.2 and
Subparagraph 12.2.4 below. All guaranties and warranties of materials used or
incorporated into the Work shall be assigned and delivered by the Contractor to
the Owner upon demand, or without demand upon completion of the Work. The
warranties in the Contract Documents or assigned to the Owner (i) shall not be
deemed exclusive of any other warranty or guaranty, whether express or implied,
(ii) shall survive the completion of the Work and the termination of the
Contract Documents, and (iii) shall inure to the benefit of the Owner's
successors and assigns.
3.6 TAXES
3.6.1 The Contractor shall pay sales, consumer, use and similar taxes for the
Work or portions thereof provided by the Contractor which are legally enacted
when bids are due whether or not then effective or merely scheduled to go into
effect.
3.7 PERMITS, FEES AND NOTICES
3.7.1 The Contractor shall provide and pay for all permits, licenses and
certificates of inspection, use and occupancy required for the Work unless
otherwise provided in Subparagraph 2.2.3 or elsewhere in the Contract Documents.
The cost of permits which are not paid for by the Contractor shall be excluded
from the Cost of the Work for the purpose of calculating the Contractor's Fee.
The Contractor shall furnish the Owner with copies of all permits, licenses and
certificates of inspection, use and occupancy obtained during the course of the
Work.
General Conditions
January 10, 1996
Page 12
57
3.7.2 The Contractor shall comply with and give all notices required by any Laws
bearing on performance of the Work.
3.7.3 The Contractor shall comply with all Laws applicable to the performance of
the Work and the employment of labor. The Contractor shall review the Contract
Documents and shall (i) notify the Owner and the Architect of any deviation of
the Contract Documents from the requirements of applicable Laws and/or private
restrictions of which the Contractor is aware or reasonably should be aware, as
a competent and experienced general contractor (but without assuming any of the
obligations of the Architect or an engineer with respect to the Project and the
Work, all as more particularly set forth in Paragraph 4.4 of the Agreement, but
subject, however, to the provisions of Paragraph 4.3 of the Agreement) and (ii)
perform no Work which the Contractor knows or reasonably should know, as a
competent and experienced general contractor (but without assuming any of the
obligations of the Architect with respect to the Project and the work, all as
more particularly set forth in Paragraph 4.4 of the Agreement), to be contrary
to applicable Laws and/or private restrictions.
3.7.4 If the Contractor or any of its Subcontractors performs Work which the
Contractor, as a competent and experienced general contractor (but without
assuming any of the obligations of the Architect with respect to the Project and
the Work, all as more particularly set forth in Paragraph 4.4 of the Agreement),
knows or reasonably should know is contrary to any Laws, without such notice to
the Architect and the Owner, then the Contractor shall assume full
responsibility for such Work and shall bear the attributable costs.
3.7.5 The Contractor shall send all notices, make all necessary arrangements,
and provide all labor and materials, required to protect and maintain in
operation all public utilities within the Property or affected by the Work.
3.8 ALLOWANCES
3.8.1 The Contractor shall include in the Guaranteed Maximum Price all
allowances stated in the Contract Documents. Items covered by allowances shall
be supplied in such amounts and by such persons or entities as the Owner may
direct, but the Contractor shall not be required to employ persons or entities
as to which the Contractor makes reasonable objection.
3.8.2 Unless otherwise provided in the Contract Documents, the following shall
apply to any allowance for materials:
.1 Materials and equipment under an allowance shall be selected
promptly by the Owner to avoid delay in the Work;
.2 Allowances shall cover the cost to the Contractor of materials
and equipment delivered to the Property, and all required
taxes, less applicable trade discounts; and
.3 The Contractor's and its Subcontractors' overhead, profit and
other expenses
General Conditions
January 10, 1996
Page 13
58
contemplated for stated allowance amounts shall be included in
the Guaranteed Maximum Price and not in the allowance.
3.8.3 Owner and Contractor acknowledge that, at the date of the Agreement, there
are items which constitute part of the Work, which cannot be quantified in
detail, as otherwise provided in the Contract Documents. For purposes of
determining the Guaranteed Maximum Price, with respect to these undetermined
items, Contractor shall include one or more estimated allowances, which shall
include estimated amounts for labor, materials, equipment, Subcontractor
overhead, profit and taxes.
3.8.4 Whenever actual costs for any allowance item or category are more than or
less than the stated allowance, the Guaranteed Maximum Price shall be adjusted
accordingly by Change Order. The amount of the Change Order shall reflect (i)
the difference between actual costs and the allowance under Subsection 3.8.2.2
and (ii) changes in the Contractor's costs under Subsection 3.8.2.3.
3.9 PROJECT MANAGER, SUPERINTENDENT; OTHER CONTRACTOR'S PERSONNEL
3.9.1 The Contractor shall employ a competent project manager, superintendent
and necessary assistants who shall be in attendance at the Property during
performance of the Work. The project manager shall represent the Contractor, and
communications given to the project manager shall be as binding as if given to
the Contractor. Important communications shall be confirmed in writing. Other
communications shall be similarly confirmed on written request in each case.
Contractor shall also employ such other competent personnel, including
management, estimators, engineering and other personnel, as shall be necessary
or appropriate for the performance of the Work as required by the Agreement.
3.9.2 All reimbursable personnel employed by Contractor with respect to the
performance of the Work (as provided in Exhibit D attached to the Agreement)
shall be subject to Owner's prior approval, and satisfactory to Owner in all
respects. Owner shall have the right to require Contractor to dismiss from the
Project any such personnel whose performance is not satisfactory, in Owner's
reasonable discretion. Any such dismissed personnel shall be replaced with
personnel reasonably satisfactory to Owner, and shall be subject to all
provisions of this Paragraph 3.9. Contractor shall not replace any of the
reimbursable personnel without Owner's prior written consent. If any of the
reimbursable personnel dies, becomes disabled or voluntarily terminates his or
her employment with Contractor, then Contractor shall promptly replace any such
personnel as provided in this Subparagraph 3.9.2. Any failure or refusal on
Contractor's part to comply with the requirements of this Paragraph 3.9 shall be
deemed a material breach of the Agreement by Contractor.
3.10 CONTRACTOR'S CONSTRUCTION SCHEDULES
3.10.1 Included as an exhibit to the Agreement is the Contractor's Construction
Schedule for the Work prepared in consultation with the Owner and the Architect.
The Construction Schedule shall not exceed time limits provided for in the
Contract Documents. Said Construction Schedule relates
General Conditions
January 10, 1996
Page 14
59
to the Work for which Drawings and Specifications have not yet been issued. The
Construction Schedule shall be updated and revised at appropriate intervals as
required by the General Work Requirements and the Project, shall be related to
the entire Project to the extent required by the Contract Documents, shall
provide for expeditious and practicable execution of the Work, and shall not
modify or extend critical dates (milestones) without the prior approval of the
Owner in each instance.
3.10.2 The Contractor shall prepare, not later than twenty (20) days after the
date of the Subcontractor award for each trade, a shop drawing schedule which
shall include a complete list of suppliers and fabricators, under contract items
to be purchased from the suppliers or fabricators, time required for fabrication
and the scheduled delivery dates for each item to be purchased. As soon as
available, the Contractor shall furnish copies of purchase orders to the Owner.
The Contractor shall prepare any additional reports that the Owner or
the Owner's lender for the Project, if any, may reasonably request, considering
the size, type and complexity of the Project and the Work.
The Contractor shall prepare and keep current, for the Architect's and
the Owner's approval, a schedule of submittals which shall be coordinated with
the Contractor's Construction Schedule and allows the Architect and the Owner
reasonable time to review submittals.
The Contractor shall hold weekly progress meetings at the Property, or
at such other time and frequency as the Owner requests, and Contractor shall
keep written minutes of each such meeting, and distribute true and correct
copies of the same to Owner and Architect promptly following each such meeting.
At each such meeting, progress of the Work shall be reported in detail with
reference to the Construction Schedule. Each interested Subcontractor shall have
a competent representative present at each such progress meeting to report the
condition of its Work and receive information.
3.10.3 [Intentionally omitted]
3.10.4 The Contractor acknowledges that independent of the Contractor's schedule
requirements the Owner may retain the services of a scheduling consultant at the
Owner's expense. The Contractor shall cooperate with any such scheduling
consultant at the Owner's direction with regard to the preparation of the
Project schedule.
3.11 DOCUMENTS AND samples AT THE PROPERTY
3.11.1 The Contractor shall maintain at the Property, for the Owner, one record
copy of the Drawings and Specifications, addenda, Change Orders and other
modifications, in good order and marked currently to record changes and
selections made during construction, and in addition approved shop drawings,
product data, samples and similar required submittals. These shall be available
to the Architect and shall be delivered to the Architect for submittal to the
Owner upon completion of the Work. They shall be signed by the Contractor,
certifying that they show complete and accurate "as-built" conditions, stating
sizes, kind of materials, vital piping, conduit locations and
General Conditions
January 10, 1996
Page 15
60
similar matters.
3.11.2 The Contractor shall maintain all approved permit drawings in a manner
which allows access to governmental inspectors and other authorized agencies.
3.12 SHOP DRAWINGS, PRODUCT DATA AND SAMPLES
3.12.1 Shop drawings are drawings, diagrams, schedules and other data specially
prepared for the Work by the Contractor or a Subcontractor to illustrate some
portion of the Work.
3.12.2 Product data are illustrations, standard schedules, performance charts,
instructions, brochures, diagrams and other information furnished by the
Contractor to illustrate materials or equipment for some portion of the Work.
3.12.3 samples are physical examples which illustrate materials, equipment or
workmanship and establish standards by which the Work will be judged.
3.12.4 Shop drawings, product data, samples and similar submittals are not
Contract Documents. The purpose of their submittal is to demonstrate, for those
portions of the Work for which submittals are required, the way the Contractor
proposes to conform to the information given and the design concept expressed in
the Contract Documents.
3.12.5 The Contractor shall review, approve and submit to the Architect shop
drawings, product data, samples and similar submittals required by the Contract
Documents with reasonable promptness and in such sequence as to cause no delay
in the Work or in the activities of the Owner or of separate contractors.
3.12.6 The Contractor shall perform no portion of the Work requiring submittal
and review of shop drawings, product data, samples or similar submittals until
the respective submittal has been approved by the Architect. Such Work shall be
in accordance with approved submittals.
3.12.7 By approving and submitting shop drawings, product data, samples and
similar submittals, the Contractor represents that the Contractor has determined
and verified materials, field measurements and field construction criteria
related thereto, or will do so, and has checked and coordinated the information
contained within such submittals with the requirements of the Work and of the
Contract Documents.
3.12.8 The Contractor shall not be relieved of responsibility for deviations
from requirements of the Contract Documents by the Architect's approval of shop
drawings, product data, samples or similar submittals unless the Contractor has
specifically informed the Architect in writing of such deviation at the time of
submittal and the Architect has given written approval to the specific
deviation. The Contractor shall not be relieved of responsibility for errors or
omissions in shop drawings, product data, samples or similar submittals by
reason of the Architect's approval thereof.
General Conditions
January 10, 1996
Page 16
61
3.12.9 The Contractor shall direct specific attention, in writing or on
resubmitted shop drawings, product data, samples or similar submittals, to
revisions other than those requested by the Architect on previous submittals.
3.12.10 Informational submittals upon which the Architect is not expected to
take responsive action may be so identified in the Contract Documents.
3.12.11 When professional certification of performance criteria of materials,
systems or equipment is required by the Contract Documents, the Architect shall
be entitled to rely upon the accuracy and completeness of such calculations and
certifications.
3.12.12 Shop drawings for the architectural, structural, mechanical, electrical
and other work as delineated in the Specifications shall be submitted for
approval to the Architect.
3.12.13 The Contractor shall assemble for the Architect's approval three (3)
complete copies, in loose-leaf binders, of all operating and maintenance data
from all manufacturers whose equipment is or will be installed in the Work. The
Contractor shall also prepare a checklist or schedule showing the type of
lubricant to be used at each point of application, and the intervals between
lubrication for each item of equipment.
3.12.14 The Contractor shall submit to the Owner one copy of all submissions
made to the Architect pursuant to this Paragraph 3.12 unless directed otherwise
by Owner.
3.13 USE OF PROPERTY
3.13.1 The Contractor shall confine operations at the Property to areas
permitted by Laws, permits and the Contract Documents, and shall not
unreasonably encumber the Property with materials. In performing the Work, the
Contractor shall not cause or allow water, dust, nauseous vapors, noise, or
other intrusions to go beyond the boundaries of the Property in any manner that
would constitute a nuisance or a violation of Law.
3.13.2 The Contractor shall assure free, convenient, unencumbered and direct
access to properties neighboring the Property for the owners of such properties
and their respective tenants, agents, invitees and guests.
3.14 CUTTING AND PATCHING
3.14.1 The Contractor shall be responsible for cutting, fitting or patching
required to complete the Work or to make its parts fit together properly.
3.14.2 The Contractor shall not damage or endanger a portion of the Work, or
fully or partially completed construction of the Owner or separate contractors,
by cutting, patching or otherwise altering such construction, or by excavation.
The Contractor shall not cut or otherwise alter such construction by the Owner
or a separate contractor except with written consent of the Owner and
General Conditions
January 10, 1996
Page 17
62
of such separate contractor; such consent shall not be unreasonably withheld.
The Contractor shall not unreasonably withhold from the Owner or a separate
contractor the Contractor's consent to cutting or otherwise altering the Work.
3.15 CLEANING UP
3.15.1 The Contractor shall keep the premises and surrounding area free from
accumulation of waste materials or rubbish caused by operations under the
Agreement. At completion of the Work, the Contractor shall remove from and about
the Project site waste materials, rubbish, the Contractor's tools, construction
equipment, machinery and surplus materials. The Contractor shall maintain
streets and sidewalks around the Property in a clean condition. The Contractor
shall remove all spillage and tracking arising from the performance of the Work
from such areas, and shall establish a regular maintenance program of sweeping
and hosing to minimize accumulation of dirt and dust upon such areas.
3.15.2 If the Contractor fails to clean up as provided in the Contract
Documents, the Owner may do so and the cost thereof shall be charged to the
Contractor.
3.15.3 The Contractor shall be responsible for broken glass, and at the
completion of the Work shall replace such damaged or broken glass, except as
caused by the act of God or Owner. The Contractor shall remove all labels and
shall wash and polish both sides of all glass.
In addition to general broom cleaning, the Contractor shall perform the
following final cleaning for all trades at completion of the Work:
.1 Remove temporary protections;
.2 Remove marks, stains, fingerprints and other soil
or dirt from painted, decorated and
natural-finished woodwork and other Work;
.3 Remove spots, plaster, soil and paint from ceramic
tile, marble and other finished materials, and
wash or wipe clean;
.4 Clean fixtures, cabinet work and equipment and
remove stains, paint, dirt and dust, and leave
same in undamaged, new condition;
.5 Clean aluminum in accordance with recommendations
of the manufacturer; and
.6 Clean resilient floors thoroughly with a well
rinsed mop containing only enough moisture to
clean off any surface dirt or dust, and buff dry
by machine to bring the surfaces to sheen.
3.16 ACCESS TO WORK
General Conditions
January 10, 1996
Page 18
63
3.16.1 The Contractor shall provide the Owner and the Architect access to the
Work in preparation and progress wherever located.
3.17 ROYALTIES AND PATENTS
3.17.1 The Contractor shall pay all royalties and license fees. The Contractor
shall defend suits or claims for infringement of patent rights and shall hold
the Owner and the Architect harmless from loss on account thereof, but shall not
be responsible for such defense or loss when a particular design, process or
product of a particular manufacturer or manufacturers is required by the
Contract Documents. However, if the Contractor, as a competent and experienced
general contractor (but without assuming the design obligations of the
Architect, as more particularly set forth in Paragraph 4.4 of the Agreement),
has reason to believe that the required design, process or product is an
infringement of a patent, then the Contractor shall be responsible for such loss
unless such information is promptly furnished to the Architect.
3.18 INDEMNIFICATION
3.18.1 Contractor shall indemnify, defend, protect and hold harmless Owner and
its officers, agents and employees, and any lender on all or any portion of the
Project, from and against any and all causes of action, demands, losses,
violations, infringements of Law, patent, license or trademark, costs,
attorneys' and experts' fees, claims, damages, and liabilities of every kind and
nature arising out of, alleged to have risen out of, or resulting in any way
from, the Work to be performed under the Agreement by Contractor and its
Subcontractors which are the result of any willful misconduct, negligence,
breach, act or omission of Contractor or its Subcontractors, or by the
respective agents, officers, employees, contractors or subconsultants of any of
them, except to the extent such claims are caused by the negligence or a design
deficiency on the part of Owner and/or its officers and employees. Acceptance of
any Work by Owner shall not operate as a waiver of the foregoing
indemnification, and the foregoing indemnification shall survive the completion
of the Project and the termination of the Agreement.
3.18.2 In claims against any person or entity indemnified under this Paragraph
3.18 by an employee of the Contractor, a Subcontractor, anyone directly or
indirectly employed by them or anyone for whose acts they may be liable, the
indemnification obligation under this Paragraph 3.18 shall not be limited by a
limitation on amount or type of damages, compensation or benefits payable by or
for the Contractor or a Subcontractor under workers' or workmen's compensation
acts, disability benefit acts or other employee benefit acts.
3.18.3 The obligations of the Contractor under this Paragraph 3.18 shall not
extend to the liability of the Architect, the Architect's consultants, and the
agents and employees of either of them arising out of their negligence.
3.19 LENDER REQUIREMENTS
3.19.1 With approval from Owner, Contractor shall deliver and, if appropriate,
execute, all
General Conditions
January 10, 1996
Page 19
64
documents, reports and other information reasonably requested by any lender,
escrowee under any construction loan escrow, or title insurer, and shall
cooperate with such lender, escrowee or insurer to the fullest extent possible.
3.19.2 If the Owner's lender (if any) shall designate an inspecting architect or
other representative, the Owner may require the concurrence of such architect or
representative in each instance in which the approval of the Architect is
required by any provision of these General Conditions or other Contract
Documents. The Contractor shall cooperate with such inspecting architect or
representative to the fullest extent possible.
3.20 LABOR RELATIONS
3.20.1 Employment of labor by the Contractor shall be effected under conditions
which are satisfactory to the Owner. If the Contractor has entered into any
labor agreements covering work at the Property, the Contractor shall comply with
all of the terms and conditions of those labor agreements, including without
limitation the procedure contained therein for resolution of jurisdictional
disputes. In the absence of any such procedure, or if such procedure fails to
promptly resolve any jurisdictional dispute, the Contractor agrees, at its own
cost, upon request of the Owner, to take any and all lawful steps to secure
binding and final determination of said jurisdictional dispute by the National
Labor Relations Board. Should there be picketing on the Property and if the
Owner establishes a reserved gate for the Contractor's purposes, the Contractor
shall continue the proper performance of the Work, without interruption or
delay, using such gate.
By its execution of the Agreement, the Contractor acknowledges that the
Owner has reserved the right to contract with non-union contractors for work on
the Project, including without limitation for the installation of Owner's office
systems furniture, which work is not within the scope of the Work covered by the
Agreement. The Contractor, by its execution of the Agreement, expressly agrees
that it shall, in each bid package which it prepares for any subcontract trade,
include a provision advising all potential bidders of such reserved right on the
part of the Owner, requiring any successful bidder to agree, in writing, to
cooperate reasonably with the Owner and the Contractor if the Owner exercises
such right and employs non-union contractors on any portion of the Project, and
holding any such bidder liable for any damages incurred by Owner because of any
failure on the part of such bidder to so cooperate. A similar provision shall be
included in each Subcontract into by Contractor and any Subcontractor. If the
Owner elects to contract with non-union contractors for work which is not part
of the Agreement, the Contractor shall cooperate reasonably with Owner.
If, notwithstanding the foregoing, it becomes necessary to establish a
separate gate because of labor problems related to Owner's use of non-union
labor, Owner shall bear the direct cost of such gate, and any delay related to
the same which is not reasonably within the control of Contractor shall be
treated as a Force Majeure Delay in accordance with Paragraph 8.3 below.
However, in no event shall Owner be liable for any indirect or consequential
costs suffered or incurred by Contractor or any Subcontractor which may arise
out of or as a result of any employment by Owner of non-union contractors
(including without limitation any costs because of any labor stoppage,
disturbance or
General Conditions
January 10, 1996
Page 20
65
other action by union contractors employed by Contractor or any Subcontractor in
violation of the terms of this Subparagraph 3.20.1 or in violation of the terms
of any Subcontract entered into by the Contractor and any Subcontractor), nor
shall the Contractor be entitled to any increase in the Guaranteed Maximum Price
because of any such labor stoppage, disturbance or other action, except pursuant
to Paragraph 8.3.
3.20.2 The Contractor and all Subcontractors shall not discriminate against any
employee or applicant for employment because of handicap, age, religion, color,
sex, or national origin. The Contractor shall take affirmative action to insure
that applicants are employed, and that employees are treated during employment,
without regard to their handicap, age, race, religion, color, sex, or national
origin. Such action shall include, but not be limited to the following:
employment, upgrading, demotion, transfer, recruitment, advertising, layoff or
termination, rates of pay or other forms of compensation, and selection for
training, including apprenticeship. The Contractor agrees to post in conspicuous
places, available to employees and applicants for employment, notices setting
forth its policies of nondiscrimination. The Contractor and each Subcontractor
shall, in all solicitations or advertisements for employees placed by them or on
their behalf, state that all qualified applicants will receive consideration for
employment without regard to handicap, age, race, religion, color, sex or
national origin. The Contractor will not discriminate in the selection
of Subcontractors because of age, sex, race, creed, color, national origin, age
or handicap. The Contractor shall comply with all laws, rules and regulations of
the Immigration and Naturalization Service.
ARTICLE 4
ADMINISTRATION OF THE CONTRACT
4.1 ARCHITECT
4.1.1 The Architect is that person or entity identified in the preamble to the
Agreement, or any successor to the Architect whom the Owner may appoint by
written notice to the Contractor from time to time. The term "the Architect"
means the Architect or the Architect's authorized representative.
4.1.2 Duties, responsibilities and limitations of authority of the Architect as
set forth in the Contract Documents shall not be restricted, modified or
extended without written consent of the Owner, the Contractor and the Architect.
4.2 ARCHITECT'S ADMINISTRATION OF THE CONTRACT
4.2.1 The Architect will provide administration of the Agreement as described in
the Contract Documents, and will be the Owner's representative (i) during
construction, (ii) until Final Payment is due, and (iii) with the Owner's
concurrence, from time to time during the correction period described in
Paragraph 12.2. The Architect will advise and consult with the Owner. The
Architect will have authority to act on behalf of the Owner only to the extent
provided in the Contract Documents. Notwithstanding anything to the contrary in
the Contract Documents (including without limitation Paragraphs 4.1, 4.2 and
4.4, and Subparagraphs 1.1.2 and 8.3.1 of these General
General Conditions
January 10, 1996
Page 21
66
Conditions), the Owner may replace the Architect at any time, and from
time to time. The Owner (a) shall have the right to exercise any right or power
given to the Architect by the Contract Documents, which the Owner or a
representative appointed by the Owner may do either in conjunction with the
Architect or by itself, with or without consultation with or involvement of the
Architect, (b) shall receive or obtain any notices, plans, or other documents
the Architect is entitled to receive or obtain pursuant to the Contract
Documents, and (c) shall communicate directly with the Contractor with a copy to
Architect. Except as the Owner may hereafter notify the Contractor in writing,
the Architect shall have no right to act on behalf of the Owner, to provide any
approval for the Owner, or to otherwise bind the Owner to any action or promise.
The Architect's approval, decision, or determination as to any matter is
advisory only and shall not be binding upon the Owner. If the Architect requests
additional inspection, testing, labor, materials or other Work, the Owner shall
not be bound to pay the cost thereof, unless the Owner has agreed in writing to
do so. Nothing in the Agreement shall limit or modify the Architect's duties
under the agreement between Owner and Architect.
4.2.2 The Architect will make on-site observations of the Work (i) to endeavor
to protect the Owner's interest, and (ii) to determine to the best of its
ability that the Work is progressing in general accordance with the Contract
Documents. The Architect shall keep the Owner informed of its findings.
4.2.3 [Intentionally omitted]
4.2.4 Except as otherwise provided in the Contract Documents or when direct
communications have been specially authorized, the Owner and the Contractor
shall endeavor to communicate through the Architect. Communications by and with
the Architect's consultants shall be through the Architect. Architect's and
Owner's communications by and with Subcontractors shall be through the
Contractor. The Contractor shall provide the Owner with copies of all material
correspondence with Subcontractors (that is, correspondence dealing with
financial issues respecting the Work or any portion of the Work or with matters
of substantial importance respecting the Work or any portion of the Work,
including without limitation any accidents on the Property, claims of
Subcontractors which may lead to any Mechanics' Lien on the Work or any portion
thereof, or similar matters). Contractor shall make its files with respect to
the Work accessible to the Owner and the Architect, and any lender on the
Project, at all reasonable times.
4.2.5 Architect shall participate in the review and approval of Applications for
Payment as set forth in the Agreement.
4.2.6 The Architect shall have the authority to advise Owner to reject Work
which does not conform to the Contract Documents. Whenever the Architect
considers it necessary or advisable for implementation of the intent of the
Contract Documents, with the prior written approval of the Owner, the Architect
will have authority to require additional inspection or testing of the Work in
accordance with Subparagraphs 13.5.2 and 13.5.3, whether or not such Work is
fabricated, installed or completed. However, neither this authority of the
Architect nor a decision made in good faith either to exercise or not to
exercise such authority shall give rise to a duty or responsibility of the
General Conditions
January 10, 1996
Page 22
67
Architect to the Contractor, Subcontractors, their agents or employees, or other
persons performing portions of the Work.
4.2.7 The Architect shall review and approve or take other action on the
Contractor's submittals, including, but not limited to, shop drawings (which
drawings shall be submitted to the Architect according to the schedule prepared
by Contractor, and approved by Owner, pursuant to Paragraph 3.10.2, above, so as
to ensure an appropriate flow and sequence of review and approval by the
Architect), product data, prototypes, mock-ups and samples. The Architect's
review of a specific item shall include consideration of the assembly of which
the item is a component. Based on such review, the Architect shall indicate in
writing whether or not such submittals conform (i) with the design concept of
the Work, including, but not limited to, adequacy, completeness and basic
engineering principles, and (ii) to the Contract Documents. With respect to each
determination that a submittal fails to conform with the design concept of the
Work and/or fails to conform to the Contract Documents, the Architect shall
either (a) indicate in writing all necessary corrective measures, or (b) return
such submittal to the Contractor with a directive that such submittal be redone
and resubmitted to the Architect for review. The Architect's review of the
Contractor's submittals shall be taken with reasonable promptness in order to
cause no delay. "Reasonable promptness" shall mean that, within two weeks
following receipt of each submittal, the Architect will, with respect to each
such submittal, (1) perform the review specified above, (2) make the
determinations specified above and (3) take the actions specified above with
respect to any deficient submittal. Since some drawings are more critical to the
timely performance of the Work than others, the Owner and the Contractor agree
that if Architect fails, with respect to any such "critical path" submittals (as
identified by the Contractor, subject to the Owner's reasonable approval), to
take any such action within the two-week period provided for in the preceding
sentence, the respective Contract Time for the Segment of the Work in question
shall be extended, on a day-for-day basis, for each day of any such delay by
Architect. The Architect, the Owner and the Contractor may agree, prior to the
Architect's receipt of a particular submittal, that such two-week period may be
extended with respect to such submittal. Owner and Contractor agree that they
shall be reasonable in agreeing to any such extension of the two-week period
provided for in this Subparagraph 4.2.7. If such an extension is agreed upon,
the Construction Schedule (and, if necessary, the projected date of Substantial
Completion of the Work, or the affected Segment of the Work) shall be revised to
appropriately reflect any such extension. In order to expedite the Architect's
review, the Contractor shall review shop drawings prior to submittal to the
Architect. The Architect's review of the Contractor's submittals shall not
relieve the Contractor of its responsibilities under the Contract Documents,
including, without limitation, those imposed by Article 3 of these General
Conditions.
4.2.8 The Architect will prepare Drawings and Specifications for Change Orders
prepared by the Contractor pursuant to the Agreement. The Architect may
authorize minor changes in the Work. Minor changes are defined as changes which
have no schedule or cost implications.
4.2.9 The Architect will conduct inspections to determine the date or dates of
Substantial Completion and the date of Final Completion, will receive and
forward to the Owner for the Owner's review and records written warranties and
related documents required by the Contract Documents and assembled by the
Contractor, and will review and approve the Final Application for Payment
General Conditions
January 10, 1996
Page 23
68
upon compliance with the requirements of the Contract Documents.
4.2.10 If the Owner and the Architect agree, the Architect will provide one or
more Project representatives to assist in carrying out the Architect's
responsibilities at the Property. The duties, responsibilities and limitations
of authority of such Project representatives shall be as set forth in an exhibit
to be incorporated in the Contract Documents.
4.2.11 The Architect will interpret, and advise the Owner on matters concerning
performance under, the requirements of the Contract Documents, on written
request of the Owner or the Contractor. The Architect's response to any requests
for its advice shall be made within five (5) working days following request
therefor and will be delivered simultaneously to the Owner and the Contractor.
If the Contractor has been notified in writing by the Architect that such
interpretations are to be issued, any Work done before receipt of such
interpretations, if not in accord with the same, shall be removed and replaced
or adjusted as directed by the Architect, without additional expense to the
Owner.
4.2.12 Interpretations and decisions of the Architect will be consistent with
the intent of and reasonably inferable from the Contract Documents, and will be
in writing or in the form of drawings.
4.2.13 [Intentionally omitted]
4.3 CLAIMS AND DISPUTES
4.3.1 A Claim (as defined in Subparagraph 1.1.1) must be made by written notice.
The responsibility to substantiate Claims shall rest with the party making the
Claim.
4.3.2 Claims, including those alleging an error or omission by the Architect,
may, upon request of both the Contractor and the Owner, be referred initially to
the Architect for action as provided in Paragraph 4.4. The decision by the
Architect in response to a Claim shall not be a condition precedent to
arbitration or litigation.
4.3.3 Except as provided in Subparagraphs 4.3.5 and 4.3.6 below, Claims by any
party must be made within twenty-one (21) days after occurrence of the event
giving rise to such Claim, or within twenty-one (21) days after the claimant
first recognizes the condition giving rise to the Claim, whichever is later.
Claims must be made by written notice to the other party containing a
description thereof. An additional Claim made after the initial Claim has been
implemented by Change Order will not be considered unless submitted in a timely
manner.
4.3.4 Pending final resolution of a Claim (whether by mediation, arbitration, or
litigation), unless otherwise agreed in writing, the Contractor shall proceed
diligently with performance of the Agreement and the Owner shall continue to
make payments in accordance with the Contract Documents.
4.3.5 The making of Final Payment shall constitute a waiver of Claims by the
Owner except those arising from:
General Conditions
January 10, 1996
Page 24
69
.1 Mechanics' Liens, Claims, security interests or encumbrances
arising out of the Agreement and unsettled;
.2 Failure of the Work to comply with the requirements of the
Contract Documents;
.3 Terms of special warranties required by the Contract Document
and warranties and indemnifications granted through the
Contract Documents; or
.4 Defects (both latent and patent) in the Work.
4.3.6 If conditions are encountered at the Property which are (i) subsurface or
otherwise concealed physical conditions which differ materially from those
indicated in the Contract Documents or (ii) unknown physical conditions of an
unusual nature, which differ materially from those ordinarily found to exist and
generally recognized as inherent in construction activities of the character
provided for in the Contract Documents, then notice by the observing party shall
be given to the other party promptly, before such conditions are disturbed, and
in no event later than twenty-one (21) days after first observance of the
conditions. The Architect will promptly investigate such conditions and, if they
differ materially and cause an increase or decrease in the Contractor's cost of,
or time required for, performance of any part of the Work, will recommend to
Owner an equitable adjustment in the Guaranteed Maximum Price or Contract Time,
or both. If the Architect determines that the conditions at the Property are not
materially different from those indicated in the Contract Documents and that no
change in the terms of the Agreement is justified, the Architect shall so notify
the Owner in writing, stating the reasons. Based on the Architect's
recommendation, Owner will make its determination. If Contractor is opposed to
such determination, Contractor must make a Claim within twenty-one (21) days
after notice of Owner's decision.
4.3.7 If the Contractor wishes to make a Claim for an increase in the Guaranteed
Maximum Price, the Contractor shall give written notice to the Owner and the
Architect, and the Architect shall be given reasonable time to evaluate the
condition giving rise to such Claim prior to the time the Contractor proceeds to
execute the Work. Prior notice is not required for Claims relating to an
emergency endangering life or property arising under Paragraph 10.3. If the
Contractor believes additional cost is involved for reasons including but not
limited to (i) a written interpretation from the Architect, (ii) an order by the
Owner to stop the Work where the Contractor was not at fault, (iii) a written
order for a minor change in the Work issued by the Architect, (iv) failure of
payment by the Owner, (v) termination of the Agreement by the Owner, (vi) the
Owner's suspension of the Work, or (vii) other reasonable grounds, such Claim
shall be filed in accordance with the procedure established herein.
4.3.8 If the Contractor wishes to make a Claim for an increase in the Contract
Time, written notice as provided herein shall be given. The Contractor's Claim
shall include an estimate of cost and of probable effect of delay on progress of
the Work. In the case of a continuing delay only one Claim is necessary.
4.3.9 If either party to the Agreement suffers injury or damage to persons or
property because of
General Conditions
January 10, 1996
Page 25
70
an act or omission of the other party, of any of the other party's employees or
agents, or of others for whose acts such party is legally liable, written notice
of such injury or damage, whether or not insured, shall be given to the other
party within a reasonable time not exceeding twenty-one (21) days after first
observance or occurrence of such injury or damage. Written notice of delay due
to inclement weather shall be given within twenty-four (24) hours. The notice
shall provide sufficient detail to enable the other party
to investigate the matter. If a Claim for additional cost or time related to
this Claim is to be asserted, it shall be filed as provided in Subparagraphs
4.3.7 or 4.3.8, above.
4.4 RESOLUTION OF CLAIMS AND DISPUTES
4.4.1 The Architect will review Claims and take one or both of the following
preliminary actions within ten days of receipt of a Claim: (i) request
additional supporting data from the claimant, or (ii) submit a schedule to the
parties indicating when the Architect expects to make a recommendation to Owner.
4.4.2 If a Claim has been resolved, the Architect will prepare or obtain
appropriate documentation.
4.4.3 If a Claim has not been resolved, the party making the Claim shall, within
ten (10) days after the Owner's preliminary response, take one or more of the
following actions: (i) submit additional supporting data, (ii) modify the
initial Claim or (iii) notify the Owner that the initial Claim stands.
4.4.4 When requested by Owner, Architect (i) shall interpret the requirements of
the Contract Documents and (ii) shall render written opinions within a
reasonable time on all Claims, disputes, Contractor requests for Change Orders,
matters relating to the sufficiency of the execution and progress of the Work,
and other matters in question between Owner and Contractor relating to the
execution or progress of the Work or interpretation of the Contract Documents.
Architect shall consult with its subconsultants or others as appropriate prior
to rendering any such decisions and/or interpretations unless instructed
otherwise by Owner. Architect's decisions on any Claim, disputes, or other
matters, including those in question between Owner and Contractor, shall be
advisory only.
4.4.5 Notwithstanding any provisions to the contrary in Paragraph 4.3 and
Paragraph 4.5 of these General Conditions, if any dispute arises between the
Owner and the Contractor which relates to the Contract Documents or the Work,
the Contractor shall not interrupt the progress of the Work during the pendency
of any such dispute, unless ordered to do so by the Owner in writing and Owner
shall make all progress payments for the Cost of the Work incurred by the
Contractor other than disputed amounts. The Contractor must submit Claims on or
before the earlier of (i) the twenty-first (21st) day after the first occurrence
of the event giving rise to such Claim, or (ii) the delivery to the Owner of the
Contractor's Final Application for Payment; and no additional Claim made by the
Contractor after an initial Claim on the same matter has been implemented by a
Change Order will be considered. If either party becomes involved in litigation
or arbitration in connection with the Contract Documents or the Work, the court
or tribunal in such arbitration or litigation, or in a separate suit, may award
reasonable costs and expenses of litigation, including court costs, experts'
fees and attorneys' fees, to be paid by the losing party to the prevailing
party. If either party becomes the subject of any bankruptcy or insolvency
proceeding, the other party shall be entitled to reimbursement
General Conditions
January 10, 1996
Page 26
71
of all costs and expenses, including attorneys' fees and court costs, incurred
by such other party to obtain adequate protection of its rights under the
Contract Documents or to obtain other requested relief in such bankruptcy or
insolvency proceeding.
4.5 ARBITRATION OF DISPUTES
4.5.1 All Claims (as defined in Subparagraph 1.1.1 above) between the parties
shall be handled as follows:
.1 The parties shall endeavor, in good faith, to settle a Claim
in an amicable fashion pursuant to Paragraph 4.4.
.2 If the parties are unable to resolve a Claim pursuant to
Paragraph 4.4 within a reasonable period (but in no event
longer than forty-five (45) days) after the Claim is submitted
to the Architect, or the Architect fails to act or continue to
act for any reason, then either party shall submit the Claim
to non-binding mediation under the Construction Industry
Mediation Rules of the American Arbitration Association
("AAA"). Mediation shall be initiated by the written request
of either party, and shall be commenced within five (5) days
after delivery of such notice. The mediator shall be a neutral
third party selected by the AAA. Upon request of the
initiating party or the AAA, the other party shall promptly
evidence its consent to the mediation if such consent is
required to proceed.
.3 If the parties are unable to resolve any Claim through
mediation within thirty (30) days of delivery of the notice to
mediate, then, except for Reserved Claims (as defined below),
the Claim shall be decided by arbitration as provided in
Subparagraph 4.5.2.
4.5.2 Demand for arbitration of any Claim may not be made until thirty (30) days
after delivery of the notice to mediate. Any unresolved Claim other than a
Reserved Claim (as defined below) shall be decided by arbitration in accordance
with the Construction Industry Arbitration Rules of the AAA in effect as of the
date of the Agreement, as amended by the following:
.1 Written notice of demand for arbitration shall be given to the
other party to the Agreement, the AAA, and the Architect. The
demand shall specifically describe the Claim, including the
amounts in controversy and/or other relief sought.
.2 Any Claim (including counterclaims but excluding relief other
than monetary damages) valued at up to [$250,000] shall be
heard and decided by a single arbitrator and any Claim valued
in excess of [$250,000] shall be heard and decided by a panel
of three arbitrators; provided, however, that each party
reserves the right to proceed with legal action and not to
arbitrate (i) any Claim valued in excess of [$1,000,000]; or
(ii) any Claim that seeks damages or other relief for latent
construction defects (collectively, "Reserved Claims").
Reserved Claims shall not be arbitrated unless the parties
agree to do so in a separate signed writing. Legal fees and
costs shall not be
General Conditions
January 10, 1996
Page 27
72
included in determining the valuation thresholds set forth
herein and any dispute over the valuation of a Claim or the
jurisdiction of the arbitrator(s) as provided herein shall be
conclusively determined by the AAA on application of either
party.
.3 Each arbitrator shall be a neutral third party, shall have at
least ten (10) years experience in construction matters, shall
reside in the San Francisco Bay Area, and shall otherwise meet
the AAA qualification requirements. For Claims decided by a
single arbitrator, the arbitrator also shall be a licensed
practicing attorney or retired judge. For Claims decided by a
panel of three arbitrators, the additional requirements shall
apply: one arbitrator shall be a licensed practicing attorney
or retired judge; one arbitrator shall have been in the
business of, or shall have been employed by a company in the
business of, performing general construction contracts with a
volume of at least $50 Million per year; and one arbitrator
shall have been in the business of, or shall have been
employed by a company in the business of, representing owner's
interests in construction projects or managing such projects
on behalf of the owner. In the event the parties cannot agree
on the selection of an arbitrator or arbitrators within ten
(10) days after the arbitration demand, any unfilled
appointments shall be selected by the AAA from a list of
arbitrators approved by the parties in accordance with this
Subparagraph 4.5.2.3.
Upon filing of the demand to arbitrate, each party shall
receive an identical list of names of potential arbitrators
from the AAA. Each party may disapprove an entire list without
cause on one occasion by notifying the AAA and the other
party. Each party shall have ten (10) days from transmittal of
a list to notify the AAA and the other party of its
disapproval thereof (as permitted herein) or to strike names
objected to, number the remaining names in order of
preference, and return the list to the AAA. Each party may
strike up to five (5) names from a list on a preemptory basis.
Failure of a party to return a list within the specified time
shall constitute acceptance of all persons listed thereon.
From among the persons approved on both lists, and in
accordance with the designated orders of mutual preference,
the AAA shall invite the acceptance of the selected
arbitrator(s) to serve. If for any reason the appointment of a
sufficient number of arbitrators cannot be made from the
submitted lists, the process shall be continued until the
additional required arbitrators are appointed.
.4 Prior to the initial arbitration hearing, all appointees
shall be required to disclose to the AAA in writing any facts
or circumstances within his or her knowledge or belief that
are likely to affect impartiality in arbitrating the Claim,
including any bias, any financial or personal interest in the
result of the arbitration, or any past or present financial or
other relationship with the parties or their representatives.
Upon receipt of such information from the arbitrator or
another source, the AAA shall communicate the information to
the parties. Each party shall have the right to disqualify an
arbitrator for cause by submitting a written request to the
AAA setting forth the basis for disqualification. In
evaluating evidence of cause, the AAA shall determine whether
there is reasonable evidence of any facts or circumstances
that are likely to materially affect the impartiality of the
challenged appointee. Absent fraud,
General Conditions
January 10, 1996
Page 28
73
collusion or willful misconduct by the arbitrator(s), the
determination of the AAA as to whether there is sufficient
cause for disqualification shall be conclusive. In the event
an appointee is disqualified, the vacancy shall be filled by
an alternate appointee selected by the procedure set forth in
Subparagraph 4.5.2.3 above.
.5 There shall be no absolute right of discovery or dispositive
motion practice except that the arbitrators may authorize such
discovery as is deemed to be reasonably necessary or
appropriate to ensure a fair hearing, and no such discovery
shall extend the time limits contained herein. The arbitrators
shall not be bound by the rules of evidence or of civil
procedure, but rather may consider such writings and oral
presentations as reasonable business people would use in the
conduct of their daily business affairs, and may require the
parties to submit some or all of their case by written
declaration or such other manner of presentation as the
arbitrator may determine to be appropriate. The arbitrators
shall also have the right to limit live testimony and cross-
examination, provided that such limitation does not prevent a
party from obtaining a fair hearing on material issues. The
arbitrators shall have the right to use experts to render
opinions as to matters requiring expert opinion. Unless
otherwise provided in the award, the cost of such experts
shall be shared equally by the parties.
.6 The arbitrators shall take such reasonable steps as may be
necessary to hold a private hearing within sixty (60) days
after the initial demand for arbitration and to conclude the
hearing within two (2) days. All arbitration hearings shall be
held in Santa Xxxxx County at a place selected by the
arbitrators. Unless otherwise provided in the award, the cost
of the hearing site, if any, shall be shared equally by the
parties. The parties irrevocably submit to the venue of Santa
Xxxxx County with respect to Claims that are subject to
arbitration pursuant to the Agreement.
The arbitrators' preliminary written decision shall be made
not later than fifteen (15) calendar days after the hearing,
and their final award shall be made not later than thirty (30)
calendar days after the hearing, as described in Subparagraph
4.5.2.10. The parties have included these time limits in order
to expedite the proceeding, but they are not jurisdictional,
and the arbitrators may for good cause afford or permit
reasonable extensions or delays, which shall not affect the
validity of the award.
.7 Unless otherwise agreed by the parties in writing, all
hearings shall be transcribed by a stenographer, with the cost
shared equally by the parties. Each transcript shall be made
available to the arbitrators and the parties for inspection
and correction at a mutually convenient time and place
selected by the arbitrators and shall be the official
transcript of the proceeding.
.8 The arbitrators may award only such relief or remedy as would
be available pursuant to judicial proceedings in a court of
competent jurisdiction, including, without limitation,
injunctive and affirmative relief; provided, however, that the
arbitrators
General Conditions
January 10, 1996
Page 29
74
may not award punitive damages. Reasonable attorneys' fees and
costs shall be awarded to the prevailing party in the
arbitration, as determined by the arbitrators, whether or not
such fees and costs could be awarded under applicable
California law.
.9 The arbitrators' award shall be in a writing signed by all of
the arbitrators, and the written decision shall contain a
statement of all of the Claims determined and the award made
on each Claim. The award rendered by the arbitrators shall set
forth findings of fact and conclusions of law and the
arbitrators shall endeavor to correctly apply the substantive
law of the State of California and to base the award on
substantial evidence.
.10 Within fifteen (15) calendar days after the last day of
the arbitration proceeding, the arbitrators shall deliver to
the parties and their counsel a preliminary decision,
including proposed written findings of fact and conclusions of
law. Within five (5) calendar days following the delivery of
such preliminary decision, the parties may deliver written
comments to the arbitrators, a copy of which comments shall be
sent to the other parties and their counsel. Within ten (10)
calendar days after the five (5) day comment period, the
arbitrators shall make a final award, including written
findings of fact and conclusions of law.
4.5.3 Any decision of the arbitrators regarding an item outside of the scope of
"Claims" as defined in Paragraph 4.3.1, shall be deemed to have been made in
excess of the arbitrators' powers in violation of section 1286.2 of the
California Code of Civil Procedure.
4.5.4 A demand for arbitration shall be made within a reasonable time after the
right to demand arbitration of the Claim under this Agreement has arisen, and in
no event shall it be made after the date when institution of legal or equitable
proceedings based on such Claim would be barred by the applicable statute of
limitations as determined pursuant to Paragraph 13.7 below.
4.5.5 A party who files a notice of demand for arbitration must assert in the
demand all Claims then known to that party. When a party fails to include a
Claim through oversight, inadvertence or excusable neglect, or when a Claim has
matured or been acquired subsequently, the arbitrator(s) may permit the
additional Claim to be included in the pending arbitration provided that the
party against whom the additional Claim is asserted has been given reasonable
advance notice of the additional Claim prior to the arbitration hearing.
4.5.6 In the event of any inconsistency or discrepancy between the matters set
forth in this Paragraph 4.5 and the above-referenced Construction Industry
Arbitration Rules, the provisions of this Paragraph 4.5 shall control.
4.5.7 Provided that the arbitration award sets forth findings of fact and
conclusions of law, and absent fraud, collusion, or willful misconduct by the
arbitrator(s), the award shall be final and binding on the parties, except as
otherwise provided by California law, and judgment may be entered upon
General Conditions
January 10, 1996
Page 30
75
it in accordance with applicable law in any court having jurisdiction thereof. A
FAILURE BY THE ARBITRATORS TO MAKE FINDINGS OF FACT AND CONCLUSIONS OF LAW SHALL
BE DEEMED TO RENDER THE AWARD NON-BINDING, AND SHALL BE GROUNDS FOR OVERTURNING
THE AWARD. HOWEVER, ABSENT FRAUD, COLLUSION, WILLFUL MISCONDUCT OR OTHER GROUNDS
FOR OVERTURNING AN AWARD UNDER CALIFORNIA LAW, AN AWARD THAT SETS FORTH FINDINGS
OF FACT AND CONCLUSIONS OF LAW SHALL BE FINAL AND BINDING ON THE PARTIES AND
SHALL NOT BE OVERTURNED ON THE BASIS THAT THE ARBITRATOR BASED THE AWARD ON, OR
STATED, INCORRECT CONCLUSIONS OF LAW.
4.5.8 This agreement to arbitrate shall be specifically enforceable under the
prevailing arbitration law. Nothing herein shall restrict the right of either
party to apply to a court of competent jurisdiction for interim relief or a
provisional remedy pending the decision of the arbitrator.
4.5.9 BY INITIALLING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF THE MATTERS INCLUDED IN THIS "ARBITRATION OF DISPUTES" PROVISION
DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING
UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY
TRIAL. BY INITIALLING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS
TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE
"ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION
AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE
AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS
ARBITRATION PROVISION IS VOLUNTARY.
General Conditions
January 10, 1996
Page 31
76
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION
TO NEUTRAL ARBITRATION.
OWNER'S CONTRACTOR'S
INITIALS: INITIALS:
----- ------
ARTICLE 5
SUBCONTRACTORS
5.1 DEFINITIONS
5.1.1 A Subcontractor is as defined is Subparagraph 1.1.1 above. The term
"Subcontractor" is referred to throughout the Contract Documents as if singular
in number and means a Subcontractor or an authorized representative of the
Subcontractor. The term "Subcontractor" does not include a separate contractor
or subcontractors of a separate contractor.
5.1.2 A sub-subcontractor is included within the definition of "Subcontractor"
for purposes of the Contract Documents.
5.2 AWARD OF SUBCONTRACTS FOR PORTIONS OF THE WORK
5.2.1 [Intentionally omitted]
5.2.2 [Intentionally omitted]
5.2.3 [Intentionally omitted]
5.2.4 The Contractor shall not change a Subcontractor, person or entity
previously selected if the Owner or Architect makes reasonable objection to such
change. The Owner may require the Contractor to change any Subcontractor or
Sub-subcontractor previously approved and, if at such time the Contractor is not
in default under the Agreement, the Guaranteed Maximum Price shall be increased
or decreased by the difference in cost occasioned by such change.
5.3 SUBCONTRACTUAL RELATIONS
5.3.1 By appropriate agreement, written where legally required for validity, the
Contractor shall require each Subcontractor, to the extent of the Work to be
performed by the Subcontractor, to be bound to the Contractor by the terms of
the Contract Documents, and to assume toward the Contractor all the obligations
and responsibilities which the Contractor, by the Contract Documents, assumes
toward the Owner and the Architect. Each Subcontract shall preserve and protect
the rights of the Owner and the Architect under the Contract Documents with
respect to the Work to be
General Conditions
January 10, 1996
Page 32
77
performed by the Subcontractor so that subcontracting thereof will not prejudice
such rights, and shall allow to the Subcontractor, unless specifically provided
otherwise in the Subcontract, the benefit of all rights, remedies and redress
against the Contractor that the Contractor, by the Contract Documents, has
against the Owner. Where appropriate, the Contractor shall require each
Subcontractor to enter into similar agreements with its respective
sub-subcontractors. The Contractor shall make available to each proposed
Subcontractor, prior to the execution of the Subcontract, copies of the Contract
Documents to which the Subcontractor will be bound.
5.3.2 Notwithstanding any provision of Subparagraph 5.3.1, any part of the Work
performed for the Contractor by a Subcontractor shall be pursuant to a written
Subcontract between the Contractor and such Subcontractor (or the Subcontractor
and its sub-subcontractor at any tier), which shall be prepared on a form of
Subcontract satisfactory to the Owner in all respects. Each such Subcontract
shall, where the context so requires, contain provisions that:
.1 Include a fixed amount for the Subcontractor's overhead and
profit in connection with changes in the Work (i.e., (i) for
each Subcontractor, for any Work performed by that
contractor's own forces, not to exceed fifteen percent (15%)
of the cost for amounts up to $10,000 and not to exceed seven
and a half percent (7-1/2%) for amounts in excess of $10,000,
and (ii) for each Subcontractor, for any Work performed by its
sub-subcontractors, not to exceed ten percent (10%) of the
amount due to the sub-subcontractor for costs for amounts up
to $5,000 and not to exceed five percent (5%) of the amount
due for costs for amounts in excess of $5,000);
.2 Require that such Work be performed in strict accordance with
the requirements of the Contract Documents, including, without
limitation, the labor and employment provisions thereof;
.3 Waive all rights the contracting parties may have against one
another or that the Subcontractor may have against the Owner
for damages caused by fire or other perils covered by the
insurance described in the Contract Documents or which is
otherwise covered by insurance;
.4 Require the Subcontractor to carry and maintain insurance
coverage in accordance with the Contract Documents, and to
file certificates of such coverage with the Contractor;
.5 Require the Subcontractor to submit certificates and
unconditional waivers of Mechanics' Liens for Work completed
by it and by its sub-subcontractors to the extent included in
the current and in any previous progress payments as a
condition to the disbursement of the progress payment next due
and owing;
.6 Require submission to the Contractor or Subcontractor, as the
case may be, of Applications for Payment in a form approved by
the Owner, together with clearly defined invoices and xxxxxxxx
supporting all such applications under each Subcontract
General Conditions
January 10, 1996
Page 33
78
to which the Contractor is a party;
.7 Report, so far as practicable, unit prices and any other
feasible formula for use in the determination of costs of
changes in the Work;
.8 Require each Subcontractor to furnish to the Contractor in a
timely fashion all information necessary for the preparation
and submission of the reports required herein;
.9 Require that each Subcontractor continue to perform under its
Subcontract if the Agreement is terminated, and permit the
Owner to take an assignment of such Subcontract and request
such Subcontractor to continue such performance;
.10 Require each Subcontractor to remove all debris created by its
activities;
.11 Require that each Subcontractor warrant the Work and materials
supplied and/or installed by them in the same manner and for
the same period as is required of Contractor under the
Agreement and other Contract Documents or in such broader
manner and for such longer period as may be required by the
Drawings and Specifications; and
.12 Require Contractor and each Subcontractor to coordinate its
respective Work with all adjacent work and all other trades so
as to facilitate the general progress of all Work, and require
each Subcontractor to afford all other contractors every
reasonable opportunity to install other work and materials.
ARTICLE 6
CONSTRUCTION BY OWNER OR BY
SEPARATE CONTRACTORS
6.1 OWNER'S RIGHT TO PERFORM CONSTRUCTION AND TO AWARD
SEPARATE CONTRACTS
6.1.1 The Owner reserves the right to perform construction or operations related
to the Project with the Owner's own forces, and to award separate contracts in
connection with other portions of the Project or other construction or
operations on the Property under Conditions of the Contract identical or
substantially similar to these General Conditions, including those portions
related to insurance and waiver of subrogation. If the Contractor claims that
delay or additional costs are involved because of such action by the Owner, the
Contractor shall make such claims as provided elsewhere in the Contract
Documents.
6.1.2 When separate contracts are awarded for different portions of the Project
or other construction or operations on the Property, the term "the Contractor"
in the Contract Documents in
General Conditions
January 10, 1996
Page 34
79
each case shall mean the contractor who executeseach separate agreement between
the Owner and such contractor.
6.1.3 The Owner, at its option, either (i) shall provide for coordination of the
activities of the Owner's own forces and of each separate contractor with the
Work of the Contractor, who shall cooperate with them, or (ii) shall require
that the Contractor provide for such coordination, which the Contractor shall
perform when directed by the Owner to do so. The Contractor shall participate
with other separate contractors and the Owner in reviewing their respective
Construction Schedules when directed by the Owner to do so. The Contractor shall
make any revisions to the Construction Schedule and Guaranteed Maximum Price
deemed necessary after a joint review and mutual agreement. The Construction
Schedules shall then constitute the schedules to be used by the Contractor,
separate contractors and the Owner until subsequently revised.
6.1.4 Unless otherwise provided in the Contract Documents, when the Owner
performs construction or operations related to the Project with the Owner's own
forces, then the Owner shall be deemed to be subject to the same obligations and
to have the same rights which apply to the Contractor under these General
Conditions, including, without limitation, those stated in Article 3, this
Article 6, and Articles 10, 11 and 12.
6.2 MUTUAL RESPONSIBILITY
6.2.1 The Contractor shall afford the Owner and separate contractors reasonable
opportunity for introduction and storage of their materials and equipment and
performance of their activities, and shall connect and coordinate the
Contractor's construction and operations with theirs as required by the Contract
Documents.
6.2.2 If part of the Contractor's Work depends for proper execution or results
upon construction or operation by the Owner or a separate contractor, the
Contractor shall, prior to proceeding with that portion of the Work, promptly
report to the Architect and the Owner apparent discrepancies or defects in such
other construction that would render it unsuitable for such proper execution and
results. Failure of the Contractor to so report shall constitute an
acknowledgment that the Owner's or separate contractors' completed or partially
completed construction is fit and proper to receive the Contractor's Work,
except as to defects not then reasonably discoverable.
6.2.3 Costs caused by delays or by improperly timed activities or defective
construction shall be borne by the party responsible therefor.
6.2.4 The Contractor shall promptly remedy damage caused by the Contractor to
completed or partially completed construction or to property of the Owner or
separate contractors as provided in Subparagraph 10.2.5, below.
6.2.5 Claims and other disputes and matters in question between the Contractor
and a separate contractor shall be subject to the provisions of Paragraph 4.3
above, provided the separate contractor has reciprocal obligations. If such
separate contractor initiates legal or any other proceedings against
General Conditions
January 10, 1996
Page 35
80
the Owner on account of any damage alleged to have been caused by the
Contractor, the Owner shall notify the Contractor, who shall defend such
proceedings at its own expense, and if any judgment or award against the Owner
arises therefrom, the Contractor shall pay or satisfy it, and shall reimburse
the Owner for all attorneys' fees and court or other costs which the Owner has
incurred over and above those paid for directly by the Contractor.
6.2.6 The Owner and each separate contractor shall have the same
responsibilities for cutting and patching as are described for the Contractor in
Paragraph 3.14, above.
6.3 OWNER'S RIGHT TO CLEAN UP
6.3.1 If a dispute arises among the Contractor, separate contractors and the
Owner as to the responsibility under their respective contracts for maintaining
the Property and surrounding area free from waste materials and rubbish as
described in Paragraph 3.15, the Owner may clean up and allocate the cost among
those responsible in the Owner's reasonable discretion.
ARTICLE 7
CHANGES IN THE WORK
7.1 CHANGES
7.1.1 Changes in the Work may be accomplished after execution of the Agreement,
and without invalidating the Agreement, by Change Order as specified in Article
8 of the Agreement, or order for a minor change in the Work, subject to the
limitations stated in this Article 7 and elsewhere in the Contract Documents.
The Architect shall notify the Owner in writing of each such minor change.
7.2 CHANGE ORDERS
7.2.1 [Intentionally omitted]
7.2.2 [Intentionally omitted]
7.2.3 The Guaranteed Maximum Price may be adjusted and the Contract Time may be
extended or shortened only upon written approval of a Change Order by the Owner
and the Contractor. The Architect shall execute all Change Orders, but a Change
Order executed by the Architect shall be ineffective unless executed by the
Owner. If the parties cannot agree with respect to any Change Order, then the
dispute shall be resolved pursuant to the dispute resolution provisions of
Article 4 of these General Conditions.
7.4 MINOR CHANGES IN THE WORK
7.4.1 The Architect will have authority to order minor changes in the Work not
involving adjustment in the Guaranteed Maximum Price or extension of the
Contract Time and not inconsistent with the intent of the Contract Documents.
Such changes shall be effected by written order and shall
General Conditions
January 10, 1996
Page 36
81
be binding on the Owner and the Contractor. The Architect shall deliver a copy
of each order for each such minor change to the Owner immediately after
preparation thereof. The Contractor shall carry out such written orders
promptly.
ARTICLE 8
TIME
8.1 DEFINITIONS
8.1.1 Unless otherwise provided, Contract Time (as defined in Subparagraph
1.1.1) is the period of time, including authorized adjustments, allotted in the
Contract Documents for Substantial Completion of the Work.
8.1.2 The date of commencement of the Work is the date established in the
Agreement. The date shall not be postponed by any failure to act by the
Contractor or by persons or entities for whom the Contractor is responsible.
8.2 PROGRESS AND COMPLETION
8.2.1 [Intentionally omitted]
8.2.2 The Contractor shall not knowingly, except by agreement or instruction of
the Owner in writing, prematurely commence operations on the Property or
elsewhere prior to the effective date of insurance required by Article 11 to be
furnished by the Contractor. The date of commencement of the Work shall not be
changed by the effective date of such insurance.
8.3 DELAYS AND EXTENSIONS OF TIME
8.3.1 If the Contractor is delayed at any time in the progress of the Work by
any act or omission of the Owner or the Architect, or by any employee of either
the Owner or the Architect, or by any separate contractor employed by the Owner,
or by changes ordered in the Work, or (subject to the provisions of Subparagraph
3.20.1 of these General Conditions) by labor disputes, or by fire, unusual delay
in transportation, adverse weather conditions not reasonably anticipatable (as
more particularly set forth in Subsection 4.3.8.2, above), unavoidable
casualties, or any similar causes reasonably beyond the Contractor's control and
which could not have been reasonably foreseen by the Contractor, then the
Contract Time shall be extended by Change Order for a reasonable period of time
which is appropriate under the circumstances and is approved by the Owner and
the Contractor, which approvals shall not be unreasonably withheld. No
justifiable delay shall be deemed to have occurred unless the Contractor
delivers a written claim of justifiable delay to the Owner within twenty-one
(21) days following the commencement of the delay or the date the Contractor
delivers to the Owner its final Application For Payment, whichever date is
earlier. In the case of delays due to inclement weather, written notice shall be
given within twenty-four (24) hours. A delay for which a written claim of
justifiable delay is made pursuant to this provision is referred to in the
Contract Documents as a "Force Majeure Delay." Immediately upon the Contractor's
becoming aware of an
General Conditions
January 10, 1996
Page 37
82
event causing a Force Majeure Delay, the Contractor shall take all steps
reasonably available to lessen the adverse impact of such delay upon the Owner.
No increase in the Contract Time shall be granted for periods of delay for which
the Contractor would otherwise be entitled to an increase in Contract Time, if
such periods of delay are concurrent with delays for which the Contractor is not
entitled to such increase under the Contract Documents.
8.3.2 Notwithstanding the provisions of Subparagraph 8.3.1, above, if either
Owner or Contractor believes at any time that an event causing a Force Majeure
Delay has occurred which event could reasonably lead to a delay in the
Substantial Completion of any Segment of the Work, such party shall give the
other party written notice of such alleged event not more than two (2) business
days after the commencement of any such alleged Force Majeure Delay; provided,
however, that (i) if the alleged Force Majeure Delay is a weather delay, the
appropriate notice period for any such alleged delay shall be twenty-four (24)
hours, as provided in Subparagraph 8.3.1, above, and (ii) if the notice is given
more than two (2) business days after the commencement of any such alleged Force
Majeure Delay (i.e., other than a weather delay), the claim will still be
effective but the delay period will be deemed to have commenced two (2) business
days before the notice is given.
Any such notice shall contain a reasonably detailed description of the
reason for the delay and the occurrence causing the delay, and a reasonably
detailed explanation of how such delay will affect the Construction Schedule for
that Segment of the Work affected by the delay, and the party's anticipated
course of action to cause the Construction Schedule to be completed within any
applicable Force Majeure Delay extension period. Any such notice shall
specifically describe the number of days which the extension will cover. The
other party shall have the right to contest the need for any such Force Majeure
Delay extension, or the issue of whether the delay is a Force Majeure Delay as
opposed to a delay for which the party is responsible. If the parties are unable
to resolve this dispute between themselves, the matter shall be referred to
arbitration as provided for in Section 4.5, above.
8.3.3 This Paragraph 8.3 does not preclude recovery of damages for delay by
either party under other provisions of the Contract Documents.
ARTICLE 9
PAYMENTS AND COMPLETION
9.1 [Intentionally omitted]
9.2 [Intentionally omitted]
9.3 [Intentionally omitted]
9.4 [Intentionally omitted]
9.5 [Intentionally omitted]
9.6 [Intentionally omitted]
General Conditions
January 10, 1996
Page 38
83
9.7 [Intentionally omitted]
9.8 SUBSTANTIAL COMPLETION
9.8.1 Upon Substantial Completion the Contractor shall secure and deliver to the
Owner written warranties and guarantees from its Subcontractors bearing the date
of Substantial Completion (or other date agreed to by the Owner) and stating the
period of warranty as required by the Contract Documents. The Contractor is
responsible for the warranty of all Work and materials, whether performed by it
or provided by its Subcontractors at any tier.
9.8.2 When the Contractor considers that the Work, or any portion thereof which
the Owner agrees to accept separately, is Substantially Complete, the Contractor
shall prepare and submit to the Architect a comprehensive Punch List of items to
be completed or corrected. The Contractor shall proceed promptly to complete and
correct all items on the Punch List. Failure to include an item on such Punch
List does not alter the responsibility of the Contractor to complete all Work in
accordance with the Contract Documents. Upon receipt of the Contractor's Punch
List, the Architect will make an inspection to determine whether the Work or
designated portion thereof is Substantially Complete. If the Architect's
inspection discloses any item, whether or not included on the Contractor's Punch
List, which is not in accordance with the requirements of the Contract
Documents, the Contractor shall, before issuance of the Certificate of
Substantial Completion, complete or correct such item upon notification by the
Architect.
The Contractor shall then submit a request for another inspection by
the Architect to determine Substantial Completion. When the Work or designated
portion thereof is Substantially Complete, the Architect will prepare a
Certificate of Substantial Completion which shall (i) establish the date of
Substantial Completion, (ii) establish responsibilities of the Owner and the
Contractor for security, maintenance, heat, utilities, damage to the Work and
insurance, and (iii) fix the time within which the Contractor shall finish all
items on the Punch List accompanying the Certificate of Substantial Completion.
Warranties required by the Contract Documents shall commence on the date of
Substantial Completion of the Work or designated portion thereof unless
otherwise provided in the Certificate of Substantial Completion. The Certificate
of Substantial Completion shall be submitted to the Owner and the Contractor for
their written acceptance of the responsibilities assigned to them in such
certificate.
General Conditions
January 10, 1996
Page 39
84
9.9 PARTIAL OCCUPANCY OR USE
9.9.1 [Intentionally omitted]
9.9.2 Immediately prior to partial occupancy or use, the Owner, the Contractor
and the Architect shall jointly inspect the area to be occupied or Segment of
the Work to be used in order to determine and record the condition of the Work.
The Owner may withhold a reasonable sum from payments otherwise payable to the
Contractor until the Contractor delivers to the Owner record Drawings and
Specifications, addenda, Change Orders and other modifications maintained at the
Property pursuant to Subparagraph 3.11.1, and the warranties, instructions and
maintenance manuals required to be furnished pursuant to Subparagraph 3.12.14,
and a final statement of the Cost of the Work allocated in accordance with the
official construction budget and in a form approved by the Owner's lender, if
any.
9.10 FINAL COMPLETION AND FINAL PAYMENT
9.10.1 Upon receipt of written notice that the Work (or applicable Segment of
the Work) is ready for final inspection and acceptance, and upon receipt of a
Final Application for Payment, the Architect and Owner will promptly make such
inspection. When the Architect finds the Work acceptable under the Contract
Documents and the Contract fully performed, the Architect will notify the Owner
in writing, stating that to the best of the Architect's knowledge, information
and belief, and on the basis of the Architect's observations and inspections,
the Work has been fully and finally completed in accordance with the terms and
conditions of the Contract Documents and that the Final Payment to the
Contractor is due and payable.
9.10.2 [Intentionally omitted]
9.10.3 If, after Substantial Completion of the Work, Final Completion thereof is
materially delayed through no fault of the Contractor or by issuance of Change
Orders affecting Final Completion, and the Architect so confirms, the Owner
shall, upon application by the Contractor and certification by the Architect,
and without terminating the Agreement, make payment of the balance due for that
Segment of the Work fully completed and accepted. If the remaining balance for
Work not fully completed or corrected is less than the retention stipulated in
the Contract Documents, and if bonds have been furnished, the written consent of
surety to payment of the balance due for that Segment of the Work fully
completed and accepted shall be submitted by the Contractor to the Architect
prior to certification of such payment. Such payment shall be made under terms
and conditions governing Final Payment, except that it shall not constitute a
waiver of Claims. The making of Final Payment shall constitute a waiver of
Claims by the Owner only as provided in Subparagraph 4.3.5, above.
9.10.4 Acceptance of Final Payment by the Contractor or a Subcontractor shall
constitute a waiver of Claims by that payee except those previously made in
writing and identified bythat payee as unsettled at the time of Final
Application for Payment. Such waivers shall be in addition to the waiver
described in Subparagraph 4.3.5, above.
General Conditions
January 10, 1996
Page 40
85
ARTICLE 10
PROTECTION OF PERSONS AND PROPERTY
10.1 HAZARDOUS MATERIALS
10.1.1 If there is any conflict between the provisions of this Paragraph 10.1
and the provisions of Subparagraph 17.15.1 of the Agreement, then the provisions
of the Agreement shall control.
10.1.2 If the Contractor encounters on the Property material reasonably
believed to be hazardous material not placed at the Property by the Contractor
or by any Subcontractor or by any person under the control of either of them,
which has not been rendered harmless, the Contractor shall immediately stop Work
in the area affected and report the condition to the Owner and the Architect in
writing. The Work in the affected area shall not thereafter be resumed except by
written agreement of the Owner and the Contractor if in fact the material is
hazardous material not placed at the Property by the Contractor or any
Subcontractor or any person under the control of either of them, and has not
been rendered harmless. The Work in the affected area shall be resumed in the
absence of hazardous material not placed at the Property by the Contractor or
any Subcontractor or any person under the control of either of them, or when it
has been rendered harmless, by written agreement of the Owner and the
Contractor, or in accordance with final determination by the Architect on which
arbitration has not been demanded, or by arbitration under Article 4.
10.1.3 The Contractor shall not be required pursuant to Article 7 to perform,
without consent, any Work relating to hazardous material not placed at the
Property by the Contractor or any Subcontractor or any person under the control
of either of them.
10.1.4 Neither the Contractor nor any Subcontractor shall cause or permit any
hazardous material to be brought upon the Property or used in the Work without
the prior written consent of the Owner. The Contractor and each Subcontractor
shall comply with all Laws regarding the use, storage, transportation, exposure
of employees to, and disposal of, hazardous materials brought onto the Property
by them or any of them.
If the foregoing obligations are breached, or if the presence of a hazardous
material brought on the Property by the Contractor or its Subcontractors results
in contamination of the Property, or if contamination of the Property by
hazardous materials for which the Contractor is legally liable to the Owner for
damage resulting therefrom otherwise occurs, then the Contractor shall
indemnify, defend, protect and hold the Owner harmless from any and all Claims
which arise as a result of the breach of such obligation or such contamination.
This indemnification of the Owner by the Contractor includes, without
limitation, costs incurred by Owner in connection with any investigation of the
Property, or any clean-up, remedial, removal, or restoration work required by
any federal, state or local governmental agency, because of hazardous materials
present in the soil or ground water on or under the Property. If the Owner fails
to disclose the presence of hazardous materials on the Property to the
Contractor, then the Owner shall indemnify and hold the Contractor harmless from
all Claims caused by the Owner's concealment of the presence of such hazardous
materials, except to the extent that such Claim is covered by insurance or other
sources of reimbursement to the Contractor, and
General Conditions
January 10, 1996
Page 41
86
except to the extent that the Claim results as a consequence of the negligence
or willful misconduct of the Contractor or any Subcontractor.
10.1.5 As used in this Paragraph 10.1 and in the Agreement, the term
"hazardous material" shall mean any hazardous or toxic substance or material or
radioactive material which is or becomes regulated by any local, state or
federal governmental authority.
10.1.6 To the fullest extent permitted by law, the Owner shall indemnify and
hold the Contractor, its consultants, agents and employees, harmless from and
against claims, damages, losses and expenses, including but not limited to
reasonable attorneys' fees and costs, arising out of or resulting from the
performance of the Work in any affected area, if in fact the hazardous material
affecting the area is asbestos, PCB's or any other hazardous substances not
brought onto or permitted on the Property by Contractor, its consultants, agents
and employees, and has not been rendered harmless, provided that such claim,
damage, loss or expense is attributable to bodily injury, sickness, disease or
death, or to injury to or destruction of tangible property (other than the Work
itself), including loss of use resulting therefrom, but only to the extent
caused in whole or in part by negligent acts or omissions of the Owner, its
consultants, agents and employees, regardless of whether or not such claim,
damage, loss or expense is caused in part by any party indemnified pursuant to
this Subparagraph 10.1.6. The obligation of Owner pursuant to this Subparagraph
10.1.6 shall not be construed to negate, abridge or reduce other rights or
obligations of indemnity which would otherwise exist as to a party or person
described in this Subparagraph 10.1.6.
10.2 SAFETY OF PERSONS AND PROPERTY
10.2.1 The Contractor shall be responsible for initiating, maintaining and
supervising all safety precautions and programs in connection with the
performance of the Agreement. The Contractor shall take reasonable precautions
for safety of, and shall provide reasonable protection to prevent damage, injury
or loss to:
.1 Employees on the Work and other persons who may be affected
thereby;
.2 The Work and materials and equipment to be incorporated therein
or used in connection therewith, whether in storage on or off the
Property, under care, custody or control of the Contractor or the
Subcontractors; 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.
10.2.2 The Contractor shall give all notices required by and comply with, all
applicable Laws bearing on safety of persons or property or their protection
from damage, injury or loss.
10.2.3 The Contractor shall erect and maintain, as required by existing
conditions and performance of the Agreement, reasonable safeguards for safety
and protection of persons and property, including
General Conditions
January 10, 1996
Page 42
87
posting danger signs and other warnings against hazards, promulgating safety
regulations and notifying owners and users of adjacent sites and utilities.
10.2.4 When use or storage of explosives or other hazardous materials or
equipment or unusual methods are necessary for execution of the Work, the
Contractor shall exercise utmost care and carry on such activities under
supervision of properly qualified personnel.
10.2.5 The Contractor shall promptly remedy damage and loss (other than damage
or loss insured under property insurance required by the Contract Documents) to
property referred to in Subparagraphs 10.2.1.2 and 10.2.1.3 caused in whole or
in part by the Contractor, a Subcontractor, or anyone directly or indirectly
employed by any of them, or by anyone for whose acts they may be liable, and for
which the Contractor is responsible under Subparagraphs 10.2.1.2 and 10.2.1.3,
except damage or loss attributable to acts or omissions of the Owner or the
Architect or anyone directly or indirectly employed by either of them, or by
anyone for whose acts either of them may be liable, and not attributable to the
fault or negligence of the Contractor. The foregoing obligations of the
Contractor are in addition to the Contractor's obligations under Paragraph 3.18,
above.
10.2.6 The Contractor shall designate a responsible member of the Contractor's
organization at the Property whose duty shall be the prevention of accidents.
This person shall be the Contractor's superintendent unless otherwise designated
by the Contractor in writing to the Owner and the Architect.
10.2.7 The Contractor shall not load or permit any part of the construction or
Property to be loaded so as to endanger its safety.
10.2.8 The Contractor assumes all risk of loss of, or damage to, its materials
or equipment and the materials and equipment of its Subcontractors and employees
due to theft or vandalism in excess of the proceeds of the Owner's builder's
risk insurance policy. Until incorporated into the Work, all materials ordered
by the Contractor or any of its Subcontractors which are delivered to the
Property shall be the responsibility of the Contractor, who shall provide for
the care, protection and security of such materials. The Contractor shall bear
the risk of loss with respect to such materials until they are incorporated into
the Work. Notwithstanding the foregoing, if the premium for any applicable
insurance policy covering the Work is paid by Owner, then Owner shall bear the
risk of loss, to the extent of such insurance coverage; provided, however, that
if any loss or claim arises or occurs under any such policy, and such loss or
claim is caused by, or arises out of or in connection with, or as a result of,
any negligence or willful misconduct on the part of Contractor or any
Subcontractor, then Contractor shall bear the risk of loss to such extent, and
Owner shall be entitled to offset any and all amounts so paid by Owner against
amounts otherwise payable to Contractor under the Agreement. Unless prohibited
by the terms of any insurance policy or the rules and regulations of any
insurer, Owner shall deliver to the Contractor, upon request by the Contractor,
a true and correct copy of any policy of insurance referred to in this
Subparagraph 10.2.8. The Contractor shall furnish any watchman's or other
security services reasonably required to protect the Work.
10.2.9 The Contractor shall maintain Work, materials and equipment free from
injury or damage
General Conditions
January 10, 1996
Page 43
88
from rain, wind, storms, frost or heat. If adverse weather makes it impossible
to continue operations safely in spite of weather precautions, the Contractor
shall cease Work and notify the Owner and the Architect of such cessation. The
Contractor shall not permit open fires on the Property.
10.2.10 The Contractor shall protect adjoining private or municipal property
and shall provide barricades, temporary fences, and covered walkways required to
protect the safety of passers-by, as required by prudent construction practices,
Laws, or the Contract Documents.
10.2.11 In addition to its other obligations pursuant to this Article 10, the
Contractor shall, at its sole cost and expense, promptly repair any damage or
disturbance to walls, utilities, sidewalks, curbs and the property of third
parties (including municipalities) resulting from the performance of the Work,
whether such damage or disturbance is caused by it or by any of its
Subcontractors at any tier. The Contractor shall maintain streets in good repair
and traversable condition.
10.3 EMERGENCIES
10.3.1 In an emergency affecting safety of persons or property, the Contractor
shall act, at the Contractor's discretion, to prevent threatened damage, injury
or loss. Additional compensation or extension of time claimed by the Contractor
on account of an emergency shall be determined as provided in Paragraph 4.3 and
Article 7.
ARTICLE 11
INSURANCE AND BONDS
11.1 CONTRACTOR'S LIABILITY INSURANCE
11.1.1 The Contractor shall purchase and maintain insurance which will protect
the Contractor and the Owner from the types of claims set forth below which may
arise out of or result from the Contractor's operations under the Agreement and
for which the Contractor may be legally liable, whether such operations be by
the Contractor or by a Subcontractor or by anyone directly or indirectly
employed by any of them, or by anyone for whose acts any of them may be liable:
.1 claims under workers' or workmen's compensation, disability
benefit and other similar employee benefit acts which are
applicable to the Work to be performed;
.2 claims for damages because of bodily injury, occupational
sickness or disease, or death, of the Contractor's employees;
.3 claims for damages because of bodily injury, sickness or disease,
or death of any person other than the Contractor's employees;
.4 claims for damages insured by usual personal injury liability
coverage which are sustained (i) by a person as a result of an
offense directly or indirectly related to
General Conditions
January 10, 1996
Page 44
89
employment of such person by the Contractor, or (ii) by another
person;
.5 claims for damages, other than to the Work itself, because of
injury to or destruction of tangible property, including loss of
use resulting therefrom (whether resulting from operations of
Contractor, any Subcontractor or anyone directly or indirectly
employed by any of them);
.6 claims for damages because of bodily injury, death of a person or
property damage arising out of ownership, maintenance or use of a
motor vehicle; and
.7 claims involving contractual liability insurance applicable to
the Contractor's obligations under Paragraph 3.18, above.
All insurance coverage required to be obtained and maintained by the
Contractor pursuant to the terms of the Contract Documents shall be primary in
the event of any loss, with any insurance carried by the Owner to be excess
capacity to Contractor's coverage. All insurance policies required of the
Contractor by the Contract Documents and any modifications thereto shall be
subject to the Owner's reasonable approval as to form, insurer, and adequacy of
protection. The Contractor and each Subcontractor shall carry insurance with
coverage and limits of liability as specified on Exhibit F to the Agreement,
entitled "Minimum Insurance Requirements." All insurance required by this
Paragraph 11.1.1 shall be purchased from and maintained with a company or
companies lawfully authorized to do business in the State of California, and who
are incorporated admitted insurance companies in such State.
11.1.2 All coverages, written on an occurrence basis, shall be maintained
without interruption from date of commencement of the Work until date of Final
Payment and termination of any coverage required to be maintained after Final
Payment. Such coverages shall be maintained by insurance carriers acceptable to
the Owner and the Owner's lender in all respects.
11.1.3 Certificates of insurance acceptable to the Owner shall be filed with
the Owner prior to commencement of the Work. These certificates and the
insurance policies required by this Paragraph 11.1 shall contain a provision
that coverages afforded under the policies will not be canceled or allowed to
expire until at least 30 days' prior written notice has been given to the Owner.
If any of the foregoing insurance coverages are required to remain in force
after Final Payment and are reasonably available, an additional certificate
evidencing continuation of such coverage shall be submitted with the Final
Application for Payment as required by the Agreement. Information concerning
reduction of coverage shall be furnished by the Contractor with reasonable
promptness in accordance with the Contractor's information and belief.
11.1.4 The Owner and the Contractor each acknowledge that Owner's insurance
carrier may require that those provisions of the Contract Documents setting
forth the respective insurance coverages required of Owner and Contractor,
respectively, be varied. In such event, Contractor and each Subcontractor shall,
upon the request of the Owner, obtain any other or additional insurance coverage
so required, provided the Owner bears any additional costs occasioned thereby.
All policies of
General Conditions
January 10, 1996
Page 45
90
insurance (excepting only the worker's or xxxxxxx'x compensation insurance)
shall name the Owner and, at the Owner's option, any other person(s) the Owner
deems to have an insurable interest in the Owner's real property and/or the
Work, as additional insured(s) under the policy. Upon request by the Owner, each
Subcontractor shall furnish policies (or certificates thereof) to the Owner
before commencement of the Work, evidencing all coverage required hereto. The
Contractor and each Subcontractor shall promptly furnish to the Owner copies of
all endorsements which are subsequently issued, which amend coverage of limits;
but delivery of such endorsements will not release such parties from their
obligation to obtain the insurance required by the Contract Documents. The
requirements for the foregoing insurance shall not diminish or limit the
Contractor's obligations to indemnify the Owner under the Contract Documents.
11.1.5 Notwithstanding any provision in any of the Contract Documents to the
contrary, the Contractor shall obtain Products and Completed Operations Coverage
required under the Agreement, which coverage shall be maintained in force until
expiration of the applicable statute of limitations for claims related to latent
defects in construction of improvements to real property.
11.1.6 If the Contractor fails to secure and maintain the required insurance,
the Owner shall have the right (without the obligation to do so, however) to
secure same in the name and for the account of the Contractor, in which event
the Contractor shall pay the cost thereof and shall furnish upon demand all
information that may be required in connection therewith.
11.2 [Intentionally omitted]
11.3 PROPERTY INSURANCE
11.3.1 Unless otherwise provided in any provision of the Contract Documents,
the Owner shall purchase and maintain property insurance, in the amount of the
initial Guaranteed Maximum Price as well as subsequent modifications thereto,
for the entire Work at the Property on a replacement cost basis without
voluntary deductibles. Such property insurance shall be maintained, unless
otherwise provided in the Contract Documents or otherwise agreed in writing by
all persons and entities who are beneficiaries of such insurance, until Final
Payment has been made as provided in Paragraph 9.10 or until no person or entity
other than the Owner has an insurable interest in the property required by this
Paragraph 11.3 to be covered, whichever is earlier. This insurance shall include
interests of the Owner, the Contractor, and Subcontractors in the Work, as well
as the interests of any lender with respect to the Work or any applicable
portion thereof. The deductible amount of the Owner's property insurance
required by this Subparagraph 11.3.1 shall be the amount approved by the Owner.
The Owner's insurance (i) shall be placed in the name of the Owner and, at the
Owner's option, any other person(s) whom the Owner deems to have an insurable
interest in the Owner's real property and/or the Work, or any part thereof, and
(ii) shall be payable as the respective interests of such named insureds may
appear. Except as expressly provided herein, the policy will not insure any
interest which the Contractor or Subcontractors may have in the Project. Such
insurance shall not insure against loss, damage, or destruction of any
materials, supplies, equipment or temporary structures or other property located
in, on or about the Owner's Property, which are the property of the Contractor,
or any Subcontractor, or any person directly or indirectly employed by or under
General Conditions
January 10, 1996
Page 46
91
contract with the Contractor or its Subcontractors. The policy shall be retained
and held by the Owner. A copy of a certificate for each policy required of the
Owner by the Contract Documents shall be delivered to the Contractor upon
demand.
The Contractor acknowledges that the amount of any property insurance
to be obtained and maintained by the Owner as provided in this Paragraph 11.3,
or any other insurance which the Owner may elect to obtain and maintain with
respect to the Project and/or the Work, may be less than the full value of the
Project and/or the Work, as the case may be, and may not provide coverage
(either in full or in part) from all types of casualty losses (such as
earthquake and flood). The Contractor further acknowledges that the Contractor
has no right to require Owner to obtain any additional amounts or types of
insurance other than as expressly required by the Agreement and these General
Contract Conditions. The Owner acknowledges that if the Project and/or the Work
is damaged in an amount which exceeds any applicable insurance coverage or the
proceeds of any applicable policy of insurance, or is damaged by a casualty that
the Owner elects not to insure against, the Contractor shall not be obligated to
contribute any sums to cover the cost of any repair or restoration which the
Owner is required or may elect to do.
.1 Property insurance shall be on an all-risk policy form, and shall
insure against the perils of fire and extended coverage and
physical loss or damage including, without duplication of
coverage, theft, vandalism, malicious mischief, collapse,
false-work, temporary buildings and debris removal, including
demolition occasioned by enforcement of any applicable legal
requirements, and shall cover reasonable compensation for the
Architect's services and expenses required as a result of such
insured loss. Coverage for other perils shall not be required
unless otherwise provided in the Contract Documents.
.2 The Owner shall purchase and maintain boiler and machinery
insurance required by the Contract Documents or by any applicable
Laws, which insurance shall specifically cover such insured
objects during installation and until final acceptance by Owner.
Such insurance shall include the interests of Owner, Contractor,
all appropriate Subcontractors, and any lenders in the Work. The
Owner, the Contractor and any lender shall be named insureds.
.3 The Owner, at the Owner's option, may purchase and maintain such
insurance as well insure the Owner against loss of use of the
Owner's property due to fire or other hazards, however caused.
.4 If the Owner does not intend to purchase such property insurance
as may be required by the Agreement and with all of the coverages
in the amount described above, the Owner shall so inform the
Contractor in writing prior to commencement of the Work. The
Contractor may then obtain insurance which will protect the
interests of the Contractor and the Subcontractors in the Work,
and by the appropriate Change Order the cost thereof shall be
charged to the Owner. If the Contractor is damaged by the failure
or neglect of the Owner to purchase or maintain insurance as
above, without
General Conditions
January 10, 1996
Page 47
92
so notifying the Contractor, then the Owner shall bear all
reasonable costs properly attributable to the failure or neglect.
.5 If the Owner or any insurer with respect to the Work increases
the required minimum deductibles above the amounts so identified,
or if the Owner elects to purchase this insurance with voluntary
deductible amounts, the Owner shall be responsible for payment of
the additional costs not covered because of such increased or
voluntary deductibles. If deductibles are not identified in the
Contract Documents, the Owner shall pay costs not covered because
of deductibles.
.6 Unless otherwise provided in the Contract Documents, this
property insurance shall cover portions of the Work stored off
the Property after written approval of the Owner at the value
established in the approval, and also portions of the Work in
transit.
11.3.2 [Intentionally omitted]
11.3.3 [Intentionally omitted]
11.3.4 [Intentionally omitted]
11.3.5 If, during the Project construction period the Owner insures
properties, real or personal or both, adjoining or adjacent to the Property by
property insurance under policies separate from those insuring the Project, or
if after Final Payment property insurance is to be provided on the completed
Project through a policy or policies other than those insuring the Project
during the construction period, the Owner shall waive all rights in accordance
with the terms of Subparagraph 11.3.7 for damages caused by fire or other perils
covered by this separate property insurance. All separate policies shall provide
this waiver of subrogation by endorsement or otherwise.
11.3.6 If requested by Contractor, Owner shall obtain and provide Contractor
with a certificate (or certificates) of any insurance carried by Owner covering
the Work during the course of construction, to the extent any such insurance
affects or covers any interest of Contractor in the Work.
11.3.7 By their execution of the Agreement, the Owner and the Contractor each
waive all rights against (i) each other and any of their respective
Subcontractors, agents and employees, and (ii) the Architect, the Architect's
consultants, separate contractors described in Article 6, if any, and any of
their respective Subcontractors, agents and employees, for damages caused by
fire or other perils to the extent covered by property insurance obtained
pursuant to this Paragraph 11.3 or other property insurance applicable to the
Work, except such rights as they have to proceeds of such insurance held by the
Owner. The foregoing waiver afforded the Architect, its consultants, agents and
employees or any of them shall not extend to the liability imposed by
Subparagraph 3.18.3, above. The Owner shall require of the Architect, the
Architect's consultants, separate contractors described in Article 6, if any,
and the Subcontractors, agents and employees of any of them, by appropriate
written agreements, similar waivers in favor of other parties enumerated herein.
The policies shall provide
General Conditions
January 10, 1996
Page 48
93
such waivers of subrogation by endorsement or otherwise. A waiver of subrogation
shall be effective as to a person or entity (i) even though that person or
entity would otherwise have a duty of indemnification, contractual or otherwise,
(ii) did not pay the insurance premium directly or indirectly, and (iii) whether
or not the person or entity had an insurable interest in the property damaged.
11.3.8 A loss covered under the Owner's property insurance shall be adjusted
by the Owner and made payable to the Owner for the insureds, as their interests
may appear. The Contractor shall pay Subcontractors their just portion of any
insurance proceeds received by the Contractor and, by appropriate written
agreements, shall require Subcontractors to make payments to their
sub-subcontractors in similar manner.
11.3.9 The Owner shall deposit in a separate account any insurance proceeds
actually received by Owner under any of the applicable policies, which the Owner
shall distribute in accordance with such agreement as the parties in interest
may reach. If, after such loss, no other special agreement is made, replacement
of damaged property shall be covered by appropriate Change Order.
11.3.10 The Owner shall have the sole power to adjust and settle a loss with
insurers.
11.3.11 Partial occupancy or use of the Work or any portion thereof in
accordance with Paragraph 9.9 shall not commence until the insurance company or
companies providing property insurance have consented to such partial occupancy
or use, by endorsement or otherwise. The Owner and the Contractor shall take
reasonable steps to obtain consent of the insurance company or companies and
shall not, without mutual written consent, take any action with respect to
partial occupancy or use that would cause cancellation, lapse or reduction of
insurance.
11.4 PERFORMANCE BOND AND PAYMENT BOND
11.4.1 At the request of the Owner, the Contractor shall furnish to the Owner,
and keep in force during the term of the Agreement performance and labor and
material payment bonds guaranteeing that the Contractor will perform its
obligations under the Agreement and will pay for all labor and materials
furnished for the Work. Such bonds shall be issued in a form and by a surety
reasonably acceptable to the Owner, shall be submitted to the Owner for prior
approval as to form and content, shall name the Owner and its lender as
obligees, and shall be in an amount equal to at least one hundred percent (100%)
of the Guaranteed Maximum Price (as the same may be adjusted from time to time
pursuant to the Agreement). The Contractor shall deliver the executed, approved
bonds to the Owner within fourteen (14) days after the Owner's request therefor.
11.4.2 At the Owner's request, Subcontractors shall also obtain and provide
performance and labor and material payment bonds, issued in an amount and form
and by a surety reasonably acceptable to the Owner, and naming the Owner and its
lender as obligees.
11.4.3 If bonds are required by Owner, they shall be a specific line item in
the Schedule of Values.
11.4.4 Upon the request of any person or entity appearing to be a potential
beneficiary of any of the
General Conditions
January 10, 1996
Page 49
94
bonds required under this Paragraph 11.4, the Contractor promptly shall furnish
a copy of the bonds or shall permit a copy thereof to be made and delivered to
such person or entity.
ARTICLE 12
UNCOVERING AND CORRECTION OF WORK
12.1 UNCOVERING OF WORK
12.1.1 If a portion of the Work is covered contrary to the Architect's request
or to requirements specifically expressed in the Contract Documents, it must, if
required in writing by the Architect, the Owner or any governmental authority,
be uncovered for their observation and be replaced, at the Contractor's expense,
without change in the Contract Time. The Contractor will cooperate with the
Architect to establish a mutually acceptable procedure for inspection of Work
which will be covered by other Work.
12.1.2 If a portion of the Work has been covered which the Architect, the
Owner or any governmental authority has not specifically requested to observe
prior to its being covered, the Architect may request to see such Work and it
shall be uncovered by the Contractor. If such Work is in accordance with the
Contract Documents, costs of uncovering and replacement shall, by appropriate
Change Order, be charged to the Owner. If such Work is not in accordance with
the Contract Documents, the Contractor shall pay such costs unless the condition
was caused by the Owner or a separate contractor in which event the Owner shall
be responsible for payment of such costs.
12.2 CORRECTION OF WORK
12.2.1 The Contractor shall promptly correct Work rejected by the Architect,
the Owner or any governmental authority, or which fails to conform to the
requirements of the Contract Documents, whether such Work is observed before or
after Substantial Completion and whether or not fabricated, installed or
completed. The Contractor shall bear costs of correcting such rejected Work,
including additional testing and inspections and compensation for the
Architect's services and expenses made necessary thereby.
12.2.2 If, within one year after the date of Substantial Completion of the
Work or designated portion thereof, or after the date for commencement of
warranties established under Subparagraph 9.9.1, or by terms of an applicable
special warranty required by the Contract Documents, any of the Work is found to
be not in accordance with the requirements of the Contract Documents, the
Contractor shall correct it promptly after receipt of written notice from the
Owner to do so unless the Owner has previously given the Contractor a written
acceptance of such condition. The Owner shall give such notice promptly after
discovery of the condition. This period of one year shall be extended with
respect to portions of Work first performed after Substantial Completion by the
period of time between Substantial Completion and the actual performance of the
Work. This obligation under this Subparagraph 12.2.2 shall survive acceptance of
the Work under the Agreement and termination of the Agreement.
General Conditions
January 10, 1996
Page 50
95
12.2.3 The Contractor shall remove from the Property portions of the Work
which are not in accordance with the requirements of the Contract Documents, and
which are neither corrected by the Contractor nor accepted by the Owner.
12.2.4 The Owner may correct any nonconforming Work (i) which the Contractor
does not undertake to correct within ten (10) days following written notice from
the Owner or the Architect to the Contractor of the need for such correction or
which the Contractor fails to continue to correct thereafter with due diligence,
or (ii) without notice, in the case of an emergency. If the Contractor does not
proceed with correction of such nonconforming Work within ten (10) days
following written notice from the Owner, and thereafter diligently continue such
correction until completed, the Owner may remove it and store the salvageable
materials or equipment at the Contractor's expense. If the Contractor does not
pay costs of such removal and storage within ten days after written notice, the
Owner may, upon ten (10) additional days' written notice, sell such materials
and equipment at auction or at private sale and shall account for the proceeds
thereof after deducting costs and damages that should have been borne by the
Contractor, including compensation for the Architect's services and expenses
made necessary thereby. If such proceeds of sale do not cover costs which the
Contractor should have borne, the Guaranteed Maximum Price shall be reduced by
the deficiency. If payments then or thereafter due the Contractor are not
sufficient to cover such amount, the Contractor shall pay the difference to the
Owner. The Contractor shall repair any consequential damage to the Owner's
property caused by any Work furnished by the Contractor which does not conform
to the Drawings and Specifications or the other Contract Documents.
12.2.5 The Contractor shall bear the cost of correcting destroyed or damaged
construction, whether completed or partially completed, of the Owner or separate
contractors caused by the Contractor's correction or removal of Work which is
not in accordance with the requirements of the Contract Documents.
12.2.6 Nothing contained in this Paragraph 12.2 shall be construed to
establish a period of limitation with respect to other obligations which the
Contractor might have under the Contract Documents. Establishment of the time
period of one year as described in Subparagraph 12.2.2 relates only to the
specific obligation of the Contractor to correct the Work, and has no
relationship to the time within which the obligation to comply with the Contract
Documents may be sought to be enforced, nor to the time within which proceedings
may be commenced to establish the Contractor's liability with respect to the
Contractor's obligations other than specifically to correct the Work.
12.3 ACCEPTANCE OF NONCONFORMING WORK
12.3.1 If the Owner, in its sole discretion, elects to accept Work which is
not in accordance with the requirements of the Contract Documents, the Owner may
do so instead of requiring its removal and correction, in which case the
Guaranteed Maximum Price will be reduced as appropriate and equitable. Such
adjustment shall be effected whether or not Final Payment has been made.
ARTICLE 13
General Conditions
January 10, 1996
Page 51
96
MISCELLANEOUS PROVISIONS
13.1 GOVERNING LAW AND SEVERABILITY
13.1.1 The Contract Documents shall be governed by and construed in accordance
with the laws of the place where the Project is located. The invalidity of any
provision of the Contract Documents (other than the amount of the Guaranteed
Maximum Price) shall not impair or affect in any manner whatsoever the validity
or enforceability of any other provision of the Contract Documents, and the
Contract Documents shall remain in full force and effect to the maximum extent
permitted by applicable law.
13.1.2 Historical lack of enforcement of any local Law shall not constitute a
waiver of the Contractor's responsibility for compliance with such Law in a
manner consistent with the Contract Documents unless and until the Contractor
has received written consent for the
General Conditions
January 10, 1996
Page 52
97
waiver of such compliance from the Owner and the agency responsible for the
local Law enforcement.
13.2 SUCCESSORS AND ASSIGNS
13.2.1 [Intentionally omitted]
13.3 WRITTEN NOTICE
13.3.1 [Intentionally omitted]
13.4 RIGHTS AND REMEDIES
13.4.1 Duties and obligations imposed by the Contract Documents, and rights
and remedies available thereunder, shall be in addition to and not a limitation
of duties, obligations, rights and remedies otherwise imposed or available by
law.
13.4.2 No action or failure to act by the Owner, the Architect or the
Contractor shall constitute a waiver of any right or duty afforded them under
the Contract Documents, nor shall such action or failure to act constitute
approval of or acquiescence in a breach thereunder, except as may be
specifically agreed in writing.
13.5 TESTS AND INSPECTIONS
13.5.1 Tests, inspections and approvals of portions of the Work required by
the Contract Documents or by Laws shall be made at an appropriate time. At the
Owner's election, the Owner shall contract with one or more independent testing
or laboratory entities to conduct inspections and/or tests of the Work. Unless
otherwise provided, the Contractor shall make arrangements for the inspections
and tests of the work to be conducted by such independent testing or laboratory
entities and/or with any appropriate public authority. The Owner shall bear all
initial related costs of tests, inspections and approvals. The Contractor shall
give the Architect timely notice of when and where tests and inspections are to
be made so the Architect may observe such procedures.
13.5.2 If the Architect, the Owner or public authorities having jurisdiction
determine that portions of the Work require additional testing, inspection or
approval not included under Subparagraph 13.5.1, the Architect will, upon
written authorization from the Owner, instruct the Contractor to make
arrangements for such additional testing, inspection or approval by an entity
acceptable to the Owner, and the Contractor shall give timely notice to the
Architect of when and where tests and inspections are to be made so the
Architect may observe such procedures. The Owner shall bear such costs except as
provided in Subparagraph 13.5.3.
13.5.3 If such procedures for testing, inspection or approval under
Subparagraphs 13.5.1 and 13.5.2 reveal failure of the portions of the Work to
comply with requirements established by the Contract
General Conditions
January 10, 1996
Page 53
98
Documents, the Contractor shall bear all costs made necessary by such failure
including those of repeated procedures and compensation for the Architect's
services and expenses, including the cost of retesting for verification of
compliance if necessary, until the Architect certifies that the Work in question
does comply with the requirements of the Contract Documents, and all such costs
shall be excluded in computing the Guaranteed Maximum Price.
13.5.4 Required certificates of testing, inspection or approval shall, unless
otherwise required by the Contract Documents, be secured by the Contractor and
promptly delivered to the Architect.
13.5.5 If the Architect is to observe tests, inspections or approvals required
by the Contract Documents, the Architect will do so promptly and, where
practicable, at the normal place of testing.
13.5.6 Tests or inspections conducted pursuant to the Contract Documents shall
be made promptly to avoid unreasonable delay in the Work.
13.5.7 The Contractor shall furnish, promptly, and without additional charge,
all facilities, labor and materials necessary to permit safe, thorough and
convenient inspection and testing as required in the Contract Documents. The
Contractor shall pay any costs of inspection or testing when material and
workmanship is not ready for such inspection or testing at the time that it was
requested by the Contractor, unless previously agreed to by the parties.
13.6 [Intentionally omitted]
13.7 COMMENCEMENT OF STATUTORY LIMITATION PERIOD
13.7.1 As between the Owner and the Contractor:
.1 As to acts or failures to act occurring prior to the relevant
date of Substantial Completion of the applicable Segment of the
Work, any applicable statute of limitations shall commence to run
and any alleged cause of action shall be deemed to have accrued
in any and all events not later than such date of Substantial
Completion;
.2 As to acts or failures to act occurring subsequent to the
relevant date of Substantial Completion of the applicable Segment
of the Work, and prior to issuance of the Final Application for
Payment for such Segment of the Work, any applicable statute of
limitations shall commence to run and any alleged cause of action
shall be deemed to have accrued in any and all events not later
than the date of issuance of the Final Application for Payment;
and
.3 As to acts or failures to act occurring after the relevant date
of issuance of the Final Application for Payment covering a
Segment of the Work, any applicable statute of limitations shall
commence to run and any alleged cause of action shall be deemed
to have accrued in any and all events not later than the date of
any act or failure to act by the Contractor pursuant to any
warranty provided under Paragraph 3.5, the date
General Conditions
January 10, 1996
Page 54
99
of any correction of the Work in question or failure to correct
such Work by the Contractor under Paragraph 12.2, or the date of
actual commission of any other act or failure to perform any duty
or obligation by the Contractor or the Owner, whichever occurs
last.
13.8 CONTRACTOR'S CERTIFICATIONS
13.8.1 Within ten (10) days after the Owner's request, the Contractor shall
execute and deliver such representations and certifications which the Owner may
be required to provide in connection with financing for the Project.
ARTICLE 14
[Intentionally omitted]
ARTICLE 15
NOTICE TO PROCEED;
GUARANTEED MAXIMUM PRICE
15.1 NOTICE TO PROCEED; GUARANTEED MAXIMUM PRICE
15.1.1 The parties acknowledge that the Work shall proceed in segments, and
that the Guaranteed Maximum Price applicable to all Work pursuant to the
Agreement cannot be determined at the time of the execution of the Agreement.
Therefore, the total Guaranteed Maximum Price for all Work shall be established
based on the final Drawings and Specifications, as well as Subcontractors' bids,
in accordance with this Article 15. Concurrently with the execution of the
Agreement, the parties have prepared and signed "Notice(s) To Proceed" (defined
in Subparagraph 1.1.1), for various "Segments" of the Work authorized to date
(each such Notice To Proceed covering a "Segment" of the Work), all as more
particularly described in the Drawings and Specifications referred to in such
Notice(s) to Proceed. From time to time during the term of the Agreement, the
Owner may elect, in its discretion, to submit to the Contractor Drawings and
Specifications for additional "Segments" of the Work. However, the Owner does
not guarantee to the Contractor or the Architect that any Work, other than that
authorized by any initial Notice(s) To Proceed attached hereto, will be
authorized by the Owner. Upon receipt of Drawings and Specifications for
additional Segments of Work, the Contractor shall immediately prepare bid
packages for such Work, for submission to Subcontractors who have been approved
by the Owner. Based on Subcontractor bids approved by the Owner, the Contractor
shall deliver to the Owner a proposed Notice To Proceed for the Segment
General Conditions
January 10, 1996
Page 55
100
of the Work described in the Drawings and Specifications so delivered to the
Contractor and the bid packages approved by the Owner. If, after requesting
bids, the Owner and the Contractor are unable to agree upon the terms of a
Notice To Proceed for the particular Segment of the Work, the Owner may rescind
its request for such Segment of the Work and may obtain performance of the
Segment of the Work by others. The Contractor shall be authorized to undertake
only those portions of the Work authorized in writing by the Owner in a Notice
To Proceed complying with this Article 15.
15.1.2 Each "Notice To Proceed" shall (i) describe the Work to be performed in
each Segment and the Drawings and Specifications and any other additional
Contract Documents applicable to such Work, (ii) set forth the "Maximum Segment
Cost", as defined below, proposed by the Contractor and approved by the Owner,
in its sole discretion, for such Work, and (iii) specify the Contract Time(s)
agreed upon by the Owner and the Contractor for the Segment(s) of the Work
covered by the Notice To Proceed. The Owner and the Contractor agree that the
"Maximum Segment Cost" for the Work authorized by each Notice To Proceed shall
be equal to the sum of the total of all Subcontractors' bids and the
Contractor's work approved by the Contractor and the Owner for the Segment in
question. The Contractor's Fee for Work covered by each Notice To Proceed shall
be equal to that percentage set forth in the Agreement. The Contractor's Fee for
each Segment shall be specified in the Notice To Proceed for the Segment. The
Contractor shall complete all Work specified in Notices To Proceed executed by
the Owner and the Contractor in accordance with the Contract Documents within
the Contract Time for each Segment of the Work as specified in the Notice To
Proceed for such Segment, at a cost not exceeding the Maximum Segment Cost for
such Segment of the Work, as stated in the Notice(s) To Proceed as adjusted by
Change Order for such Segment of the Work.
15.1.3 As each segment of the Work is authorized, the Guaranteed Maximum Price
shall be increased by the amount of the Guaranteed Maximum Price of the work
authorized in the segment. There shall be no separate Guaranteed Maximum Price
for each segment after it has been authorized and added to the Work previously
authorized.
General Conditions
January 10, 1996
Page 56
