EXHIBIT 10.34
DESIGN/BUILD CONTRACT
This Design/Build Contract ("Contract") is made and entered into by and
between AM GENERAL CORPORATION, with principal office located at 000 Xxxxx Xxxxx
Xxxxxx, Xxxxx Xxxx, Xxxxxxx 00000 (the "Owner"), and LAMB TECHNICON BODY &
ASSEMBLY SYSTEMS, with principal office located at 00000 Xxxxxxxx Xxxx.
Xxxxxxxxxxxx Xxx. Xxxxxxxx (the "Contractor"). This Contract shall be used in
conjunction with the 1992 version of A201/CMa and the Owner's Supplementary
Conditions to A201/CMa.
ARTICLE 1: GENERAL PROJECT DESCRIPTION
1.1 The Project requires all work necessary to design, engineer, furnish and
install a turn-key body shop and related ancillary equipment necessary for Owner
to produce a world class quality body for the production of a new "SUV-type"
vehicle (the "HUM II" or "H2"). The Contractor's services include all work
necessary to design, engineer, furnish and install secondary utility
distribution systems with connections to equipment, special task lighting, booth
lighting, duct work, enclosures, equipment, supporting steel, work platforms,
walkways, and associated items. The Contractor shall also provide all process
engineering services, including product and material flow analysis and
simulation throughout the body shop. The Contractor shall also determine and
prescribe job function requirements for all operators involved in the body shop
as well as operator work instructions. The Contractor shall also provide
training, manuals and support services during start-up commissioning, and launch
phases of the Project. Additional details and requirements including Owner's
planned production rate, minimum equipment and process flow specifications, EPA
Air Permit commitments, etc., are included as part of the incorporated Contract
Documents and Addenda outlined in Article 2.
1.2 The Project delivery method will include a Program Manager which shall
report to the Owner and may also include a Construction Manager reporting to the
Program Manager. If a Construction Manager is not retained for the Project, the
Program Manager may assume and be responsible for fulfilling the duties and
responsibilities of the Construction Manager specified in the General
Conditions, Supplementary Conditions or other Contract Documents.
ARTICLE 2: OWNER CONTRACT DOCUMENTS
2.1 The drawings or specifications Owner provides to Contractor are presented
as concept and baseline information with minimum specified material or equipment
requirements (the "Owner Contract Documents"). Upon award of the Contract, the
Contractor shall assume full responsibility for designing and engineering all
equipment and processes to meet the proposed system operations and quality body
finish requirements, with minimal maintenance. The Owner's Contract Documents
contain minimum requirements and information necessary to allow Contractor to
complete the design and are not intended to delineate all items or details of
design and construction. The Owner Contract Documents outline the basic
parameters for the work required to achieve the following objectives: maximum
efficiency, availability, reliability, adequate capacity to perform the work
specified, and utilization of minimum manpower and specify minimum equipment
requirements and standards.
2.2 The Contractor shall not materially deviate from the Owner Contract
Documents or otherwise materially modify or alter the Owner's program for the
Project without first obtaining written consent from the Owner.
ARTICLE 3: CONTRACTOR BASIC SERVICES AND RESPONSIBILITIES
3.1 The design and engineering services provided by the Contractor shall be
performed by qualified design and engineering professionals. Any design or
engineering services performed by professional persons not employed by
Contractor or entities other than Contractor shall be performed pursuant to
contracts issues by the Contractor. Nothing in this Contract shall be construed
as creating a contractual relationship between Owner and any person or entity
other than the Contractor. The Owner, however, is an intended third-party
beneficiary of all contracts for design or engineering services, all
subcontracts, purchase orders, or other agreements between the Contractor and
third parties. The Contractor shall incorporate the obligations of this Contract
into its respective contracts, supply agreements, contracts for engineering
services, and purchase orders.
3.2 The Contractor shall submit to the Owner the completed Preliminary Design
Documents. Preliminary Design Documents shall consist of preliminary process
layout and drawings, additional outline specifications or other documents
sufficient to establish the size, quality and character of the Project, its
architectural, structural, mechanical and electrical systems, and the materials
and such other elements of the Project as may be appropriate. Any deviations
from the Owner Contract Documents shall be disclosed in writing as part of the
Preliminary Design Documents. Division of the design and construction
requirements between Contractor and Owner for process and building will be
established by the Contract Documents and clarified by an approved
Responsibility Matrix.
3.3 The Contractor agrees to provide the services required by this Contract
under a high standard of professional care and with complete cooperation with
Owner's Program Manager. If changes in schedule are requested by the Owner or
otherwise developed during the course of the Project that would require the
Contractor to perform with a lesser standard of care in order to meet the
schedule, it is solely the responsibility of the Contractor to notify the Owner
in advance in writing that such deviation will be required and to provide the
Owner with specific basis for that opinion. The Contractor shall not deviate to
a lesser standard of care in the absence of an express written authorization by
the Owner. This paragraph shall not be construed to authorize performance by the
Contractor at a standard of care that is less than what is required by law or
which is expected by Contractors practicing under similar circumstances and
conditions.
ARTICLE 4: CHANGE ORDERS
4.1 Any changes to the design, engineering and construction services required
to be performed by Contractor under this Contract shall be treated and governed
by Article 7 of the General and Supplementary Conditions. To the extent that any
Change Orders are required as a result of error, omission, inconsistency, or
untimeliness of the Contractor's performance, the Owner shall have no
responsibility for paying the Contractor for any costs the Contractor incurs in
connection with completing such Change Orders.
4.2 In addition to any other remedies available to the Owner under this
Contract or under law, if any change is required, in whole or in part, by error,
omission, inconsistency, or lack of clarity in the Contract Documents prepared
by the Contractor or was otherwise avoidable by full performance by the
Contractor, the professional services required to implement the change shall be
performed by the Contractor and the Contractor's consultants at no cost to the
Owner.
ARTICLE 5: CONTRACTOR'S SCHEDULE AND TIME OF PERFORMANCE
5.1 The Contractor's services shall be performed as expeditiously as possible
and consistent with the professional skill and care necessary for the orderly
progress of the Project. Time is of the essence of this Contract. The Contractor
agrees to complete the performance of its services in accordance with the
Milestone Schedule Requirements of the Contract Documents.
5.2 The Contractor shall prepare for the Owner's review and approval a
comprehensive schedule of the performance of the Contractor's services and work.
This schedule shall indicate dates of (or, where applicable, periods of elapsed
time allowed for) Owner approvals, dates when specific information is required
by the Contractor from the Owner, and anticipated approval periods required for
public authorities having jurisdiction over the Project. Once submitted by the
Contractor, the Contractor will be bound by that schedule and will not deviate
from it without prior written authorization by the Owner. Whether or not
deviations from the schedule have been authorized by the Owner, the Contractor
shall update the schedule as necessary to reflect Owner-approved changes or
unavoidable deviations and to indicate the probable impact of those deviations
on the performance of the Contractor's services and the Project. However,
nothing in this paragraph shall be construed as a waiver of the Owner's right to
obtain full compliance by the Contractor to approved schedules.
5.3 The Milestone Schedule Requirements stated in the Contract Documents and
any other approved schedule for the performance of the Contractor's services and
work cannot be changed or modified unless the changes or modifications are
authorized in accordance with the General and Supplementary Conditions or are
otherwise authorized in writing between Owner and Contractor.
ARTICLE 6: GENERAL CONDITIONS AND SUPPLEMENTARY CONDITIONS
6.1 This Contract incorporates by reference the 1992 version of A201/CMa
"General Conditions of the Contract for Construction" and the Owner's
Supplementary Conditions to A201/CMa dated August 8, 2000 (collectively
----------------
referred to as the "General and Supplementary Conditions").
ARTICLE 7: CONTRACT DOCUMENTS
7.1 In addition to the documents and materials defined as the "Contract
Documents" in this Contract and the General and Supplementary Conditions, the
Contract Documents include the documents and materials listed on Exhibit 1
attached to this Contract.
ARTICLE 8: BASIS OF COMPENSATION
8.1 COMPENSATION FOR BASIC SERVICES
8.1.1 For Basic Services, Owner shall pay Contractor a not-to-exceed sum of
$28,853,541 subject to increase or decrease by approved Change Orders in
accordance with Article 7 of the General and Supplementary Conditions (the
"Contract Sum").
8.1.2 The Owner shall pay the Contract Sum to Contractor specified in Paragraph
8.1.1 above in accordance with the procedures detailed in the General and
Supplementary Conditions unless those procedures are modified by addendum
expressly approved by Owner and Contractor.
8.1.3 Contractor agrees that it shall work with the Owner and the Owner's
representatives (including but not limited to, the Architect, Program Manager,
Construction Manager and Engineering/Design Consultants) to perform value
engineering services directed at achieving cost savings for the Owner to reduce
the final Contract Sum. As incentive compensation to Contractor for achieving
cost savings for the Owner through value engineering, the Owner agrees that
Contractor shall receive ten percent of the net cost savings benefit Owner
realizes from
Contractors value engineering services. The process for approving and accounting
for value engineering cost reductions shall be governed by the Change Order
procedure specified in Article 7 of the General and Supplementary Conditions.
Each Change Order deduction to the Contract Sum resulting from value engineering
performed by Contractor shall state the total approved net deduction from the
Contract Sum and shall then show a ten percent credit back to the Contract Sum
to reflect the incentive compensation to the Contractor so that the final net
deduction from the Contract Sum will equal ninety percent of the total net cost
savings the Contractor's value engineering provides to the Owner. Contractor
further agrees that it shall not be entitled to receive any incentive
compensation resulting from deductions to the Contract Sum relating to the items
listed and described on Exhibit 2 attached to this Contract. Contractor further
agrees that it shall not be entitled to receive any incentive compensation
resulting from deductions to the Contract Sum until and unless the Contract Sum
is first reduced to $27,000,000.00.
8.1.4 As of the date this Contract is executed by the parties, Contractor and
Owner agree that the Contract Sum specified in Paragraph 8.1.1 includes the cost
of the conveyor system presently valued at $2,678,854. Subsequent to execution
of the Contract, Contractor agrees that it shall work with the Owner and the
Owner's representatives (including but not limited to, the Architect, Program
Manager, Construction Manager, and Engineering/Design Consultants) to
competitively bid and subcontract the conveyor systems package for the purpose
of achieving cost savings. The Contractor agrees that any deduction to the
Contract Sum for cost savings relating to the conveyor systems package will be
the difference between the original $2,678,854 and the new contract price.
8.2 COMPENSATION FOR CHANGE ORDERS
8.2.1 The procedure for determining the amount of any increase or decrease to
the Contract Sum and the procedure for accounting for and paying approved Change
Orders is specified in the General and Supplementary Conditions.
ARTICLE 9: ACCEPTANCE OF EQUIPMENT COMPONENTS AND COMPLETED SYSTEM
9.1 Owner shall have a reasonable time within which to inspect each equipment
component and, ultimately, the entire body shop Contractor shall design and
build under this Contract. Owner's inspection and/or acceptance of an equipment
component or the entire body shop and/or full or partial payment of the Contract
Sum shall not prejudice any rights Owner may have under this Contract or
otherwise available at law or equity.
9.2 Owner, with Contractor's assistance, shall conduct one or more acceptance
tests for each equipment component and the entire body shop using tests the
Owner, in its discretion, develops for each equipment component and the entire
body shop. Individual equipment components and the entire body shop shall be
considered accepted under this Contract upon written notification from Owner to
Contractor that Owner has accepted particular equipment components or the entire
body shop, as the case may be, in accordance with the procedures set forth in
Paragraph 9.3. Contractor shall use best efforts to detect and correct defects
in equipment components and the entire body shop prior to or during the
acceptance/rejection testing period.
9.3 Owner agrees to notify Contractor of its acceptance or rejection of each
equipment component or the entire body shop within five (5) business days after
Owner completes its testing of the equipment components or the entire body shop.
In the event Owner rejects an equipment component or the entire body shop, Owner
shall provide written notice to Contractor specifying the reasons for rejection.
Within three (3) business days after receiving a written rejection notice from
Owner, Contractor shall either (i) begin taking steps, at its own expense, to
modify or improve the equipment component or the entire body shop to meet
Owner's requirements and state the date that the modified equipment component or
entire body shop will be available for re-testing, or (ii) Contractor shall
deliver a written response to Owner specifying any disagreement it may have with
respect to the written rejection notice received from Owner.
9.4 The acceptance/rejection procedure specified in Paragraphs 9.1 through
9.3 above shall apply to all modified equipment components or the entire
modified body shop Contractor provides to Owner.
ARTICLE 10: OWNERSHIP OF INVENTIONS AND WORKS
10.1 The following definitions are applicable to Articles 10 and 11:
(a) "Inventions" means discoveries, concepts, and ideas, whether
patentable or not, including, but not limited to, apparatus,
processes, methods, compositions of matter, techniques, formulae, as
well as improvements thereto or know-how related thereto.
(b) "Works" means works of authorship fixed in any tangible medium of
expression, including, but not limited to, notes, specifications,
drawings, blueprints, flow charts, memoranda, correspondence,
records, notebooks, computer programs, data bases and charts, CD
lead sheets, CD Sections, process data sheets, work area layouts,
work area timing, and facility layout, regardless of the medium in
which they are fixed, and all copies, in whole or in part, thereof.
10.2 Contractor hereby assigns to Owner, without reservation, all property
rights including, without limitation, any patent, copyright, trade secret,
trademark or any other intellectual property right of any nature whatsoever to
all equipment components, Inventions or Works (collectively, the "Intellectual
Property") Contractor creates under this Contract. Contractor shall obtain valid
written assignments of intellectual property rights from any consultants
Contractor utilizes in terms identical to those that obligate Contractor to
Owner as expressed in this paragraph, which intellectual property rights
Contractor hereby assigns to Owner. Owner, in turn, grants to Contractor a non-
exclusive license to reproduce any portion of the Intellectual Property for
purposes relating directly to Contractor's performance of duties under this
Contract, and for Contractor's archival records. Otherwise, the Intellectual
Property may not be reproduced without the express written permission of Owner.
This non-exclusive license shall terminate immediately upon breach of this
Contract by Contractor or other termination of this Contract. If Owner
subsequently reproduces any portion of the Intellectual Property or creates (or
causes others to create) a derivative work based upon any portion of the
Intellectual Property created by Contractor, Owner shall remove or completely
obliterate the original professional seals, logos, and other indications on the
Intellectual Property which identify Contractor or Contractor's consultants. To
the extent permitted by law, Owner agrees to indemnify and hold Contractor
harmless from any claim, liability or cost allegedly arising out of any
unauthorized modification of the Intellectual Property by Owner or any person or
entity that acquires or obtains the Intellectual Property from Owner without
written authorization from Contractor.
ARTICLE 11: WARRANTIES & REPRESENTATIONS
11.1 In addition to any other warranties and representations stated in the
Contract Documents, Contractor warrants and represents the following to Owner:
(a) Contractor warrants and represents that it shall use sound and professional
principals and practices in accordance with the highest professional and
industry standards in performing the design/build services and providing
the body shop to Owner under this Contract and that Contractor's personnel
shall utilize best professional knowledge, skill and judgment in performing
the design/build services. If Contractor fails to meet applicable
professional standards, it shall, without additional compensation, correct
or revise any errors or deficiencies in the design/build services and body
shop provided under this Contract.
(b) Contractor warrants and represents that all equipment, systems, Inventions
and Works it provides to Owner under this Contract shall (i) conform to all
performance and design specifications required by Owner, (ii) be
merchantable and fit for the purposes intended, (iii) be new and free from
defects in design, material, workmanship, warranty and instruction, (iv) be
safe and appropriate for the purposes for which such equipment, systems,
Inventions and Works of that kind are normally used, and (v) conform and
comply with all relevant governmental and industry regulatory laws and
standards.
(c) Contractor warrants and represents that all services and property,
including all equipment, systems, Inventions and Works under this Contract,
shall be lawfully developed by Contractor and that such services, property,
equipment, systems, Inventions and Works shall not infringe, directly or
indirectly upon, or violate, any property rights including without
limitation any patent, copyright, trade secret, trademark or any other
intellectual property right of any nature whatsoever held by or asserted by
any third party. Contractor further agrees to defend and hold Owner
harmless from all suits or claims for infringement of any patent rights,
copyright, trade secret, trademark or any other intellectual property
rights relating to the property, equipment, systems, Inventions or Works
Contractor provides to Owner under this Contract. Contractor's obligation
to defend, indemnify and hold Owner harmless from claims, disputes and
lawsuits alleging trademark, copyright and/or patent infringement includes,
but is not limited to, claims based on the "Lemelson" patent claims related
to U.S. Patent Numbers 5,351,078; 5,249,045; 5,283,641; 5,119,190;
5,067,012; 5,023,714; 4,984,073; 4,979,029; 4,511,918; 4,338,626;
4,148,061; 4,118,730; 4,969,038; 5,119,205; 5,128,753; 5,114,421.
WHEREFORE, the Owner and Contractor have executed this Contract effective
August 18, 2000.
AM GENERAL CORPORATION
Date:__________________ By: ________________________________
Its: ________________________________
LAMB TECHNICON
Date:_____ By: ________________________________
Its: ________________________________
