CONFIDENTIAL TREATMENT REQUEST
[ * ] INDICATES INFORMATION THAT HAS BEEN
OMITTED PURSUANT TO A CONFIDENTIAL TREATMENT
REQUEST AND THIS INFORMATION HAS BEEN FILED
UNDER SEPARATE COVER WITH THE COMMISSION.
Date: September 10, 2004
Xx. Xxxx Xxxxx
Midnight Auto Holdings, Inc.
0000 Xxxxxxxxx Xxxx
Xxxx, Xxxxxxxx 00000
RE: Midnight Auto Holdings, Inc. (the "Client")
Strategic Planning & Schematic Design (the "Project")
Dear Xx. Xxxxx:
Thank you for your expressed confidence in having us develop the drawings and
build out the Project. This Letter Agreement will set forth the Agreement by
which XXXXXX, INC. d/b/a Merchandising, Construction & Management ("MCM") will
design the Project and serve as your Construction Manager for the Project.
Defined terms, if not defined in this Letter Agreement, have the meanings set
out in the Standard Terms and Conditions and/or the Design Terms & Conditions,
which are both enclosed and a part of this Agreement.
A DESIGN SERVICES
1) MCM's Design Services consist of preparing for your approval
"Schematic/Design Development Documents" and "Construction Documents"
consisting of architectural drawings and other documents required to fix
and describe the size and character of the Project (the "Design"). Design
Services do not include additional services as listed in Design Terms and
Conditions, paragraph D, specifying or configuring engineering systems,
such as HVAC, Electrical or Plumbing systems. If engineering services are
required, we will be happy to do so and will invoice you separately for
such services.
2) MCM's lump sum fee for Design Services is $[*]. This fee is due in two
installments: $[*] is due upon execution of this Letter Agreement, and the
balance of $[*] is due upon delivery of Schematic Design for Prototype
Building.
3) MCM and Midnight Auto Holdings, Inc agree that all design, ideas,
arrangements, drawings and specifications as well as any plans used in the
Planning and development of are owned by, and are the joint property of MCM
and Midnight Auto Franchise Corp until such time as the first [*]
facilities are constructed at which time, all design, ideas, arrangements,
drawings, specifications and plans shall become the exclusive property of
Midnight Auto Franchise Corp.
B CONSTRUCTION MANAGEMENT SERVICES
1) Description of the work: MCM shall provide construction management services
for the Project as described in the Construction Documents. MCM shall also
act as your agent in finding, qualifying, bidding, hiring and supervising
independent contractors ("Contractors") and in ordering supplies and
materials for the Project. The "Construction Documents" are the drawings
and specifications for the Project, which will be numbered, dated and
signed by both MCM and Client before construction begins. MCM's Fee for
Construction Management Services does not include preparation or
modification of the Construction Documents.
2) Work excluded or to be performed by others: NONE
3) Scheduled Commencement Date: TBD
4) Scheduled Substantial Completion Date: TBD
5) Other Contract Documents: Addendum A
* Portions of this exhibit have been omitted and filed separately pursuant to
an application for confidential treatment filed with the Securities and
Exchange Commission pursuant to Rule 24b-2 under the Securities and
Exchange Act of 1934, as amended.
6) MCM's Fee: MCM's Fee for construction management services shall be [*]
costs and charges incurred by MCM in the performance of the Project plus a
percentage of the Cost of the Work (which includes all costs and charges
incurred by MCM and by all independent Contractors and Suppliers) as
follows: [*]% if the Cost of the Work is under $[*];[*]% if the Cost of the
Work is more than $[*] and less than $[*];[*]% if the Cost of the Work is
more than $[*] and less than $[*]; [*]% if the Cost of the Work is more
than $[*] and less than $[*] and [*]% if the Cost of the Work is over $[*].
7) A Guaranteed Maximum Price (GMP) for the Project, including both MCM's Fee
and the Cost of the Work, may be determined by MCM when all bids from
Contractors and Suppliers are received. The GMP, if determined, will be
specified in an attachment to this Agreement and initialed by MCM and you
and will be based upon the signed and dated Plans at the time the GMP is
determined as well as legal requirements and conditions known to MCM at
that time.
8) Client acknowledges and agrees that the costs of the project, MCM's fee, a
commencement date, substantial completion date and GMP (if provided) are
all based on plans and information the Client has provided to MCM and that
they may be affected by changes in conditions, change orders, extracts,
legal requirements and/or delays caused by concealed or unknown conditions
and/or any other causes beyond MCM's control.
9) Client, agrees to pay MCM as follows:
A. The Deposit for this Project is To Be Determined (TBD) Thousand
Dollars ($ 0), of which TBD Thousand Dollars ($ 0) is due and payable
upon signing of this Agreement. The balance is due thirty (30) days
prior to commencement of construction. The Deposit will be returned to
you upon completion of the Project provided that MCM has received full
payment. MCM may draw on the Deposit to satisfy any sums which are due
and outstanding to MCM.
B. Client agrees to make payments as specified on MCM's invoices within
seven (7) calendar days from the date of any MCM invoice. (See Section
4 of the Standard Terms & Conditions.) You will make all payments to
MCM by Federal Express or other commercial overnight courier service.
Payments to Contractors or Suppliers for which you are responsible
will be delivered by you to MCM for transmittal to the Contractors and
Suppliers. MCM will require lien waivers from Contractors and
Suppliers.
1. Client shall issue one (1) check payable to MCM. MCM shall as
agent for the Client, issue checks to Contractors and Suppliers.
C. Regardless of other payment terms, the full balance of the Contract
Sum (less Retainage) is due and payable upon Substantial Completion as
defined in Paragraph 12 (a) in the Standard Terms & Conditions.
D. Client will hold back [*] percent ([*]%) from each applicable payment
to Contractors only ("the Retainage"). Contractors much satisfy the
Punch List as prepared by MCM and/or Client of incomplete or
improperly completed work before Client will pay their Retainage.
Client agrees to deliver to MCM the Retainage for each Contractor upon
completion of the Punch List work attributable to each Contractor, for
MCM to deliver to the Contractor when MCM has received releases of all
liens and rights to lien by such Contractor.
E. N/A
2
If this Letter Agreement accurately describes our understanding, please sign,
date and return one copy of this letter within 30 days of the date of this
letter with the Deposit. We cannot guarantee that the prices or terms will
remain effective after 30 days. Please note that we may require an acceptable
payment and performance guarantee to be signed below for the Letter Agreement to
be effective. Together with the Design Terms and Conditions and the Standard
Terms and Conditions enclosed, this Letter Agreement, with an acceptable
guarantee, will become our binding agreement under seal. The other copy is for
your records.
Sincerely,
MCMUSA, INC.
d/b/a Merchandising, Construction & Management
By: /s/ Xxxxxxx X. Xxxxxx 9/22/04
--------------------- -------
Xxxxxxx X. Xxxxxx, Director of Operations Date
Agreed to: Midnight Auto Holdings, Inc.
By: [illegible] 9-10-04
------------------- -------
Date
Title: President & CEO
---------------
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DESIGN TERMS & CONDITIONS
-------------------------
for Design Construction Contracts
A. If available, the Client shall deliver to MCM a full set of plans for the
space at the Project, showing all utility and HVAC service to the site.
B. MCM shall review the program furnished by the Client to ascertain the
requirements of the Project and shall arrive at a mutual understanding of
such requirements with the Client.
C. Based on the mutually agreed-upon program and schedule requirements, MCM
shall prepare, for approval by the Client, Design/Schematic Development
Documents, Construction Documents and other plans consisting of drawings
and other documents illustrating the scale and relationship of Project
components.
D. The following services are not included as Design Services unless so
identified. These services and any other services identified as Additional
Services in the Scope of Design Services shall be paid for by the Client
and invoiced on an hourly rate basis or per diem.
Rates as defined below:
a) Project Architect [*]
b) Senior Designer [*]
c) Designer [*]
d) Technical Support [*]
1. Making revisions in drawings, specifications or other documents when
such revisions are:
a. inconsistent with approval or instructions previously given by
the Client, including revisions made necessary by adjustments in
the Client's program or Project budget; or
b. required by the enactment or revision of codes, laws or
regulations subsequent to the preparation of such documents; or
c. due to changes required as a result of the Company's failure to
render decisions in a timely manner; or
x. xxxxxxxxx drawings, specifications, supporting data and providing
other services in connection with any change order.
2. Providing services in connection with a public hearing, arbitration
proceeding or legal proceeding.
3. Providing planning surveys, site evaluations or comparative studies of
prospective sites.
4. Providing special surveys, environmental studies and submissions
required for approvals of governmental authorities or others having
jurisdiction over the Project.
5. Providing services to investigate existing conditions or facilities or
to make measured drawings thereof.
6. Providing services to verify the accuracy of drawings or other
information furnished by the Company.
7. Providing Architectural services by non MCM consultants if required by
City or State Building Departments.
8. Preparing a set of reproducible record drawings showing significant
changes in the Work made during construction based on marked-up
prints, drawings and other data.
9. Providing any other services not otherwise included in this Agreement.
E. Reimbursable expenses shall be invoiced in addition to the base Design Fee.
Reimbursable expenses shall be billed at a multiple of the percentage as
outlined for management services. The costs are: costs of reproduction,
postage and handling of drawings, specifications and other documents;
photographic reproductions; expense of computer-aided design and drafting
equipment time; transportation and or mileage; and other expenses in
connection with out-of-town travel.
F. Claims for Additional Cost and Additional Time - Any design changes
mandated by reviewing regulatory bodies or agencies, which occur prior to
the completion of Construction Documents and which result from conditions
beyond control of MCM, are grounds for Claims for Additional Cost and
Additional Time. These changes include, but are not limited to design
alterations mandated by Landlord's review entities following the initial
design submittals. These alterations do not include those resulting from
omissions of design guidelines, but those resulting from a specific design
directive given by the Client. Compensation for these changes shall be
computed either as a lump sum of $250.00 per instance, or at an hourly
rate. Should these changes include MEP Services, they will be provided and
billed at a multiple of the percentage as outlined for management services.
G. All ideas, arrangements, drawings and specification in the Plan are owned
by, and the property of MCM and were created, evolved or developed for use
on, and in connection with, the specified Project. None of such ideas,
designs, arrangements or Plans shall be used by or disclosed to any person,
firm or corporation for any purpose whatsoever without the written
permission of MCM. Any of the plans and/or drawings prepared by MCM shall
not be used by Client on other projects, for additions to this project or
for completion of this project by others without the express written
consent of MCM. In the event Client terminates MCM prior to the completion
of the construction phase of the project, MCM, at its sole opinion and
discretion, may seek to collect its full construction management fee in
lieu of the second installment of its design fee.
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STANDARD TERMS AND CONDITIONS
-----------------------------
for Design Construction Contracts
The following Standard Terms and Conditions are incorporated and made a part of
the Letter Agreement attached hereto between Client and MCMUSA, INC. d/b/a
Merchandising, Construction & Management Company Name (MCM):
1. CLIENT EFFORTS - Client agrees to exercise best efforts to enable MCM to
perform the Work in the commercially reasonable way and the most
expeditious manner by cooperating with MCM by: approving plans in a timely
way providing MCM with full and unimpeded access to the Project and all
information required, necessary or desirable in connection with the Work,
and making payments to MCM in accordance with the requirements of the
Letter Agreement and these Standard Terms and Conditions (collectively,
"The Contract"). Terms defined in the Letter Agreement shall have the same
meaning when used herein; and terms defined here shall have the same
meaning when used in the Letter Agreement. The term "Contract Time" means
the time from the Commencement Date to the Substantial Completion, subject
to adjustment as herein set forth.
2. CONTRACT SUM - The Client shall pay MCM in current funds for MCM's
performance of the Contract, the contract sum. The contract sum shall only
be guaranteed when a Guaranteed Maximum Price ("GMP") is given by MCM to
Client in writing by way of a separate addendum to this letter agreement.
The costs which would cause the GMP to be exceeded shall be paid by MCM
without reimbursement by the Client unless such costs result from change
orders and/or extras, and/or by concealed and/or unknown conditions (as
described in paragraph 10 below) and/or any other causes beyond MCM's
control. The contract sum is the aggregate of the Cost of the Work (as
defined in Section 3 hereof), as the same may be adjusted, and MCM's Fee.
The contract sum is guaranteed by MCM not to exceed the Guaranteed Maximum
Price subject to additions and deductions as provided in the Contract.
3. COST OF THE WORK - The term "Cost of the Work" means all costs and charges
by Contractors and Suppliers, plus all costs incurred by MCM in the
performance of the Project, including without limitation:
a. Costs of construction workers and other employees, Suppliers or
Contractors directly employed by MCM to perform the engineering and
construction of the Project, (including their travel and
communications) at the following standard (non-overtime) rates:
Xxxxxxxxx - [*] Job Super - [*]
b. Costs, including transportation of materials and equipment
incorporated or to be incorporated in the completed construction.
c. Cost of all materials, temporary facilities and equipment not
customarily provided.
d. The additional cost of insurance premiums and bonds attributable to or
required in connection with this Contract.
e. Losses and expenses, not compensated by insurance or otherwise,
sustained by MCM in connection with the Project, provided they have
resulted from causes other than the fault or neglect of MCM.
f. Cost of removal of debris from the site.
g. Costs incurred in taking action to prevent threatened damage, injury
or loss in case of an emergency affecting the safety of persons and
property. In connection with this, MCM will purchase, as part of the
Cost of the Work, a first aid kit and two ten-pound ABC fire
extinguishers, which will become Client's property during and after
Project completion.
h. Other costs incurred in the performance of the Project if and to the
extent approved by the Client.
i. Sales and all other taxes on any fees or materials used or consumed in
connection with the Project.
j. Cost of labor and/or MCM required supervision to complete punch list
and/or authorized additional work.
k. Reimbursable expenses including: cost of reproduction, postage and
handling of drawings, specifications and other documents; photographic
reproduction; transportation (mileage); and project site telephone,
fax, Internet connection and cell phone.
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The Cost of the Work shall not include compensation of MCM's general office
personnel other than personnel maintaining field office.
4. PAYMENTS
a. PROGRESS PAYMENTS. The Client shall pay to MCM as progress payments on
account of the Contract Sum, the amount shown on periodic invoices
prepared by MCM showing the payment amount then due and the payee
("Invoice").
b. LATE PAYMENTS. Any payments due under the Contract shall bear interest
on the balance remaining unpaid after the due date of the Invoice. The
rate of interest shall be the lesser of (x) [*] per annum, or (y) the
maximum permitted by applicable law. Such interest shall not be
included in the calculation of any payments toward the Guaranteed
Maximum Price. Payments may not be withheld, reduced, escrowed (except
as described in Section 11(E) of the Letter Agreement) or offset for
any reason.
5. CONTRACT DOCUMENTS - The term Contract Documents means the Letter
Agreement, these Standard Terms and Conditions, the Escrow Agreement (if
applicable), the Purchase Orders between Client and the
Subcontractors/Suppliers and the Purchase Order Terms and Conditions.
Subsequent to the execution of the Letter Agreement, the Contract Documents
between MCM and Client shall only be amended and/or modified by written
agreement signed by both parties.
6. PLANS AND PERMITS
a. The Client shall furnish copies of plans, lease outline documents
(L.O.D.), tenant criteria package, as-built drawings or other
documents that may be available for the site.
b. Client shall pay for [*] approvals, consents, permits, easements,
assessments and charges required for the construction, use or
occcupancy of the Project.
7. CONSTRUCTION - MCM shall be [*] responsible for and have control over
design and construction means, methods, techniques, sequences and
procedures and for coordinating all portions of the Project under the
Contract, unless the Contract Documents give other specific instructions
concerning these matters.
8. CONTRACTORS AND SUPPLIERS
a. The term "Contractor" means a person or entity who has a direct
contract with MCM as agent for the Client to perform a portion of the
Project. The term "Supplier" means a person or entity who has a
contract with MCM as agent for the Client to provide supplies or
materials in connection with the Project.
b. Contracts between MCM and Contractors and Suppliers shall be in the
form annexed as Exhibit A hereto, and Client hereby acknowledges its
obligations and MCM's acting as Client's agent thereunder.
9. CHANGE ORDERS
a. The Client may order changes to the project either verbally or in
writing to MCM, consisting of additions, deletions and/or
modifications to the design, scope and/or size of the project. Client
acknowledges and agrees that the costs of the work, a Guaranteed
Maximum Price (if provided), MCM's fees, the commencement date, the
substantial completion date and any other applicable provisions shall
be adjusted accordingly. Except as set forth in paragraphs 10 and 11
below, changes in the projects shall be requested by Client and
authorized only if agreed to by MCM either verbally or in writing
(change order).
b. The Contract Sum and Completion Date shall be changed only by Change
Order.
10. CONCEALED OR UNKNOWN CONDITIONS - Should concealed or unknown conditions be
encountered in the performance of the Project (including without limitation
below the surface of the ground or within the structure), or should
concealed or unknown conditions in an existing structure be at variance
with the conditions indicated by the Contract Documents, the Guaranteed
Maximum Price, if determined, shall be adjusted by Change Order to
accommodate the change.
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11. DELAY - If MCM is delayed at any time in progress of the Project by Change
Orders, labor disputes, fire, unusual delay in deliveries, abnormal adverse
weather conditions, unavoidable casualties or any causes beyond MCM's
control, Client's failure to make payments when due, or by other causes
which justify delay, then the Substantial Completion Date shall be extended
for a reasonable time to adjust for such delay, and the Contract Sum shall
be adjusted (without regard to the Guaranteed Maximum Price) to reflect
MCM'S additional cost due to such delay.
12. COMPLETION
a. "Substantial Completion" of the Project shall be deemed to occur upon
the earlier to occur of (1) when an appropriate municipal official
issues a Certificate of Occupancy for the Project, or (2) The Client
commence, occupancy of the Project including without limitation,
commences the stocking of merchandise or making any sales at the
Project.
b. Upon Final Payment and release of all escrowed funds, MCM shall
deliver to the Client a complete release of all liens arising out of
this Contract or receipts in full concerning all labor, materials and
equipment for which a lien could be filed.
13. COMPLIANCE WITH LAWS - To the extent required by applicable law, MCM shall
be responsible for all safety precautions and programs in connection with
the performance of the Contract. The Client shall comply with applicable
laws, ordinances, rules, regulations and lawful orders of public
authorities and shall notify MCM of any such orders pertaining to the
Project. MCM shall remedy damage and loss to property at the site caused by
MCM or anyone employed by MCM, and, at the Client's expense, by anyone for
whose acts the Client may be liable. The Client shall indemnify and hold
harmless MCM from and against any liability, cost and expense, including
attorney's fees, in connection with asbestos waste or material, or any
substance or condition which presents a danger to human health or the
environment (a "Hazardous Substance") existing on the Project site prior to
commencement of the Project or introduced to the Project thereafter by
Client, anyone for whose actions Client is responsible, or any third party,
other than anyone for whose actions MCM is responsible. Client shall be
responsible for the reporting of Hazardous Substance and for complying with
any and all legal requirements applicable to such Hazardous Substance,
including without limitation, any removal requirements.
14. INSURANCE
a. MCM shall maintain insurance protection from claims under Workers
Compensation acts and other employee benefit acts which are
applicable; claims for damages because of bodily injury, including
death; and claims for damages, other than to work itself, to property
which may arise out of or result from MCM's operations under the
Contract. MCM shall maintain Comprehensive General Liability with the
following combined single limits for bodily injury and property
damage: General - $2,000,000 Aggregate; Products and Completed
Operations - $2,000,000 Aggregate; Personal Injury - $1,000,000
Aggregate, $1,000,000 Per Occurrence; fire and legal liability -
$50,000; medical expense - $5,000 any one person; Automobile liability
- $1,000,000 combined single limit; Umbrella liability - $4,000,000.
Additional limits that may be required by the Client and/or Client's
landlord shall be paid for by the Client.
b. The Client is responsible for purchasing and maintaining Comprehensive
General Liability in limits not less than those stated in section
14(A) above. The Client shall purchase and maintain, with a company or
companies lawfully authorized to do business in the jurisdiction in
which the Project is located, property insurance for the entire
Project to full replacement value thereof. This insurance shall be on
the "all risk" policy form and shall include interests of the Client,
MCM and Contractors in the Project and shall insure against the perils
of fire and extended coverage and physical loss or damage including
without duplication of coverage, theft, vandalism and malicious
mischief. The Client may, but is not required to, purchase and
maintain other insurance for self-protection against claims which may
arise from operations under the contract. MCM shall not be responsible
for purchasing and maintaining the optional Client's liability
insurance unless specifically required by the Contract Documents.
c. Any loss insured under Client's property insurance shall be adjusted
with the Client and made payable to the Client as fiduciary for the
insured, as their interests may appear, subject to the requirements of
any applicable mortgagee clause.
d. The Client and MCM waive all rights against each other and any of the
Contractors, agents and employees, for damages caused by fire or other
perils to the extent covered by property insurance obtained pursuant
to this Section or other property insurance applicable to the Project,
except such rights as they may have to the proceeds of such insurance
held by the Client as fiduciary.
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e. MCM hereby states, and the Client acknowledges, that MCM has no
professional liability (errors and omissions) other insurance except
as set forth in Section 14(a), and is unable to reasonably obtain such
insurance, for claims arising out of the performance of or failure to
perform professional services, including but not limited to the
preparation of reports, designs and drawings and specifications, or
related to the investigation, detection abatement, replacement or
removal of products, materials or processes containing asbestos or
other Hazardous Substance. Accordingly, the Client hereby agrees to
bring no claim for negligence, breach of contracts, indemnity or
otherwise against MCM its principals, officers, stockholders,
employees, agents and consultants if such claim any way would involve
MCM's services for the investigation of or remedial work related to
asbestos or other hazardous materials that may be found in the
project.
15. WARRANTY - MCM shall assign to Client any Warranties for work performed by
Contractors or for material to the extent applicable.
16. DEFAULT
a. If the Client fails to make payment due hereunder for a period of [*]
calendar days or fails to cure any other material default, MCM may,
with notice, suspend work, or may terminate the Contract, and in
either event may recover from the Client payment for all work executed
and for loss with respect to materials, equipment, tools and
construction equipment and machinery, including reasonable overhead
and Contractor's fee, profit and damages applicable to the Project.
Any additional costs incurred by MCM in returning to the Project after
any suspension of work shall be paid by Client. Any additional costs
incurred in suspension or recommencement of work shall not be limited
by Guaranteed Maximum Price or counted towards it. Client agrees to
pay all costs and expenses of collection in the event of its default
in making timely payments under the Contract, including without
limitation attorneys' fees incurred or paid by MCM in collecting any
sums due MCM. Client also agrees to pay all costs and expenses,
including without limitation attorneys' fees, of MCM in defending
against claims for non-payment by Contractors or Suppliers.
b. If MCM defaults or persistently fails or neglects to carry out the
Project in accordance with the Contract Documents or fails to perform
a provision of the Contract, the Client after [*] days written notice
to MCM without MCM having taken steps to correct the deficiencies
described in such notice, they may make good such deficiencies and may
deduct the costs thereof from payment then or thereafter due MCM.
Alternatively, after sending notice of default and MCM's failure to
cure such default within 7 days, Client may terminate the contract by
sending written notice of termination to MCM, whereupon MCM shall have
no further liability whatsoever to Client on the Project and/or under
the contract documents, provided that regardless of any termination,
the Client shall be required to pay MCM for all services rendered,
including MCM's fee, up to the date of termination, subject only to
the such deductions as are expressly set forth herein.
c. Should the Project be stopped due to Client's failure to make payments
on invoices within the agreed upon terms or for other reasons beyond
MCM's control, then the following remobilization charges shall apply:
$[*] shut down - start up charge and a fee of [*] per day for each day
that the Project is shutdown.
17. CLAIMS FOR CONSEQUENTIAL DAMAGES - MCM and Client waive Claims against each
other for consequential damages arising out of or relating to this
Contract. This mutual waiver includes:
A. damage incurred by the Client for rental expenses, for losses of
use, and for delays on the Project including income and profit
and losses associated with, financing, business and reputation,
and for loss of management or employee productivity or of the
services of such person; and
B. damages incurred by MCM for principle office expenses including
the compensation of personnel stationed there, for losses of
financing, business and reputation, and for loss of profit except
anticipated profit arising directly from the Contract and/or
Services to be rendered under this Contract.
This mutual waiver is applicable, without limitation, to all consequential
damages due to the party's termination in accordance with paragraph 16.
Nothing contained in this paragraph 17 shall be deemed to preclude an award
of liquidated direct damages, when applicable, in accordance with the
requirements of the Contract Documents.
18. FINANCIAL ABILITY - Client represents that Client has the financial ability
to pay MCM for the Project in accordance with the Contract. Client shall
provide MCM on request bank and trade references and a copy of its most
recent annual audited or reviewed financial statement. Payment to MCM is
the sole responsibility of Client and guarantors, if any, and is not
subject to third party agreements or availability of funds from other
sources.
19. NOTICES - Any notices to the Client or MCM shall be deemed effective when
actually received in any manner at the address set forth in the Letter
Agreement or such other address as either party shall provide by notice
given in the manner above provided.
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20. MISCELLANEOUS - The Contract Documents shall be governed by and construed
under the Laws of the Commonwealth of Massachusetts applicable to the
contracts made, accepted and performed wholly within the Commonwealth,
without application of principles of conflict of laws and regardless of the
location of the project. Any action regarding any dispute may be brought
only in courts located within the Commonwealth of Massachusetts regardless
of the domicile of the parties and the parties hereby agree that such
courts shall have venue and exclusive subject matter and personal
jurisdiction, and each consents to service of process by Certified Mail,
return receipt requested or by any other manner provided by law.
Section headings have been inserted for convenience, and such headings do
not form part, and shall not be used in construction of the Contract. In
the event that any provision of the Contract Documents shall be determined
to be void, unenforceable, or otherwise invalid, the remainder of the
provisions of the Contract Documents shall remain in full force and effect.
MCM and Client acknowledge and agree that no fiduciary relationship between
the parties has been or will be established by these contract documents,
that neither party will owe the other any fiduciary duties in connection
with MCM's engagement, and that any of the dealings between the parties
will at all times be deemed to be arms length transactions.
21. This Letter Agreement, its Standard Terms and Conditions and Escrow
Agreement (if applicable) is a final writing which represents the entire
agreement between the parties hereto. No other statement, representation or
prior written material extrinsic to the Contract and Standard Design Terms
and Conditions shall have any force or effect, and that no party is relying
on any representation other than those expressly set forth herein as an
inducement to enter into this Letter Agreement.
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PURCHASE ORDER TERMS & CONDITIONS - EXHIBIT "A"
1. MCM IS AGENT ONLY. Subcontractor/supplier acknowledges that MCMUSA, INC.,
("MCM") is functioning as agent for the Client in all regards, and not as
principal. Subcontractor/Supplier hereby agrees to look only to the Client
for payment and under no circumstances will MCM be liable for payment of
invoices for any labor or material supplied.
2. INVOICES AND PAYMENT. Timely invoicing by each Subcontractor/Supplier is
critical to the Client's ability and desire to complete the Project in
accordance with its budget. Subcontractor/supplier will deliver to MCM by
the close of business each Friday an itemized bill for work and materials
rendered during preceding seven (7) calendar days. The Client is not
obligated to pay for any work performed more than 14 days before the
invoice is delivered to MCM by Subcontractor. Invoices are to be prepared
as described in Schedule A to these Terms and Conditions. MCM will review,
approve (if appropriate, in MCM's sole discretion), and forward such
invoices to the Client. Subcontractor/Supplier acknowledges that payment
for all work and materials will be made directly by the Client and not by
MCM, and that the Client will make such payment, delivered to MCM for
transmittal to the Subcontractor/Supplier, upon satisfaction of the
conditions for a delivery of such sum to the Subcontractor/Supplier. It is
a condition precedent to the Subcontractor/Supplier's receipt of payment
for invoices submitted to MCM, that MCM will have received a check in
respect of such invoice from the Client. Subcontractor further acknowledges
that the Client will hold back [*] percent [*] from each payment
("Retainage"). It is a condition precedent to payment of the final invoice
and Retainage that the Subcontractor/Supplier complete the list of
incomplete or improperly completed work prepared by MCM or the Client, the
Client pays the final invoice and Retainage, and that the
Subcontractor/Supplier delivers to MCM releases of all liens and rights to
lien. MCM will notify the Subcontractor/Supplier when checks are received
and ready for distribution. The waiver of lien will be sent to the
Subcontractor/Supplier by MCM upon invoicing the Client.
3. SIGNED MCM PURCHASE ORDERS REQUIRED. Subcontractor/Supplier must sign and
return to MCM one copy of the MCM Purchase Order before making delivery of
any item or performing any work. No verbal orders are acceptable.
AMENDMENTS TO THE PURCHASE ORDER SHALL BE BINDING ON MCM AND CLIENT ONLY IF
IN WRITING AND SIGNED BY XXX'S DIRECTOR OF OPERATIONS OR MCM'S PROJECT
MANAGER. ADDED WORK - CHANGE ORDERS. ABSOLUTELY NO WORK, BEYOND EXISTING
PURCHASE ORDER, SHALL BE PERFORMED WITHOUT A PURCHASE ORDER FROM MCM.
PROJECT FOREMEN ARE NOT AUTHORIZED TO ISSUE VERBAL APPROVALS OR SIGN WORK
SLIPS. INVOICES SUBMITTED FOR PAYMENT OF WORK PERFORMED WITHOUT AN ISSUED
PURCHASE ORDER WILL NOT BE PROCESSED. ALL EXTRA WORK MUST BE INVOICED
AGAINST THE ISSUED PURCHASE ORDER AND NOT AGAINST THE ORIGINAL PURCHASE
ORDER FOR THE BASE JOB.
4. WARRANTY. Subcontractor/Supplier shall warranty its work for [*] year after
the date of Substantial Completion or within [*] year after acceptance from
Client or within such longer period of time as may be prescribed by law or
by terms of any applicable special warranty required by the Contract
Documents. If any of the Work is found to be defective or not in accordance
with the Contract Documents, the Subcontractor/Supplier shall correct it
promptly after receipt of notice from MCM or the Client.
5. INSURANCE REQUIREMENTS. Subcontractor will provide MCM with an insurance
certificate naming MCM and the Client as additional insured. Subcontractor
will not start work until MCM receives an insurance certificate indicating
the following coverage. Telecopier copies of insurance certificates are
acceptable to start a job, but Subcontractor agrees no payment will be made
to the Subcontractor until delivery to MCM of an original executed copy of
the Insurance Certificate. The minimum insurance limits required by MCM and
the Client are as follows:
A. Employee's Commercial General Liability:
Aggregate $2,000,000.
Completed Operations 2,000,000.
Personal Injury 1,000,000.
Each occurrence 1,000,000.
Fire damage 50,000.
Medical expense 5,000.
Contractors doing any excavation work must include Explosion, Collapse
and Underground Hazards coverage (XCL).
B. Comprehensive General and Automobile Liability Insurance:
Bodily injury $500,000 each person/$1,000,000 each occurrence
Property damage $250,000
C. Non-owned and hired vehicles: $1,000,000
D. Worker's Compensation Insurance: As required by law
E. Disability Benefits: As required by law
Initial:______
Date: ______
10
PURCHASE ORDER TERMS & CONDITIONS (continued)
---------------------------------------------
6. The Subcontractor/Supplier shall be responsible for training, initiating,
maintaining and supervising all safety precautions and programs on the
project for their employees, personnel, sub-contractors, laborers,
equipment and for their means and methods of construction.
Subcontractor/Supplier shall also be responsible for giving all notices and
complying with all applicable laws, ordinances, codes, regulations and
orders of any public and/or governmental authorities concerning safety of
such persons or property or their protection from damage, injury or loss.
Subcontractor/Supplier shall fully indemnify and hold MCM and Client
harmless from any losses and damages arising from their breach of this
provision including any violations caused in whole or in part by anyone
acting by through and/or under Subcontract/Supplier.
7. PUNCH LIST PROCEDURE:
A. Subcontractor/Supplier must complete all of its items that appear on
the punch list within ten (10) days from the date of the punch list.
B. Subcontractor/Supplier will be notified three (3) days prior to the
expiration of the ten (10) day period that if its work is not
completed, after 10 days, MCM, at its option, will seek other
solutions to complete the unfinished work and deduct any costs
incurred from the outstanding balance owed to you.
C. MCM will not approve release of any Retainage, and Client is not
obligated to release any Retainage, until all items on the punch list
are satisfactorily completed. It is imperative that all punch list
items be addressed immediately!
8. INDEMNIFICATION. To the fullest extent permitted by law, the
Subcontractor/Supplier shall indemnify and hold harmless the Owner, Client,
Architect, Architect's consultants, Designer, Contractor, Construction
Manager and agents and employees of any of them from and against claims,
damages, penalties, fines, losses and expenses, including but not limited
to attorney's fees, arising out of or resulting from performance of the
Work, 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, including loss of use resulting therefrom, and/or
subcontractor/supplier's violation of any applicable law, code and/or
regulation in connection with the performance of the Work, but only to the
extent caused in whole or in part by negligent acts or omissions of the
Subcontractor/Supplier, anyone directly or indirectly employed by it, or
anyone for whose acts it may be liable, regardless of whether or not such
claim, damage, loss of expense is caused in part by a party indemnified
hereunder. Subcontractor /supplier shall also indemnify and hold MCM, Owner
and/or Client harmless from any and all claims, demands and/or causes of
action asserted by any subcontractor, supplier, materialmen and/or laborer
who has been engaged by Subcontractor/Supplier for the payment of any sums
due for labor and/or materials provided to the project.
Subcontractor/Supplier further agrees to indemnify and hold MCM, Owner
and/or Client harmless from any lien asserted by any subcontractor,
supplier, materialmen and/or laborer claiming through Subcontractor
/Supplier and such indemnification shall include the Subcontractor/Supplier
in order to dissolve any such lien.
9. COVENANT NOT TO SUE; ADDITIONAL INDEMNIFICATION. For good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Subcontractor/Supplier hereby agrees, for itself and its
successors, heirs and assigns, not to sue and forever to refrain from
instituting, pressing, or in any way aiding any claims, which against MCM
the Subcontractor /Supplier may have in connection with any payment due or
claimed to be due Subcontractor/Supplier for any work performed or services
rendered or supplies delivered to or used on the Project, it being
acknowledged that any such obligations are obligations solely of the
Client. Subcontractor /Supplier hereby agrees that in the event of any such
claim, demand or action asserted by Subcontractor/Supplier against MCM for
payment of any invoices or for payment of any work on the Project, it will
pay all legal fees incurred by MCM in defending against such claim or
action, regardless of whether Subcontractor/Supplier prevails in such
claim, demand or action, whether or not Subcontractor/Supplier ultimately
receives payment,
10. If the Subcontractor does not sign this Purchase Order, or does not notify
us in writing of any discrepancy on the Purchase Order and work is
performed, this Purchase Order is accepted in its entirety.
11. TERMINATION BY THE CLIENT OR MCM FOR CONVENIENCE - The Client or MCM may,
at anytime, terminate the Contract for the Client of MCM's convenience and
without cause. Upon receipt of written notice from the Client or MCM of
such termination for the Client or MCM's convenience, the Contractor or
Subcontractor shall:
A. cease operations as directed by the Client or MCM in notice;
B. take actions necessary, or that the Client or MCM may direct, for the
protection and preservation of the Work; and except for Work directed
to be performed prior to the effective date of termination stated in
the notice, terminate all existing subcontracts and purchase orders
and enter into no further subcontracts and purchase orders.
In cases of such termination for the Client or MCM's convenience, the
Contractor or Subcontractor shall be entitled to receive payment only for
labor and/or materials properly supplied and/or executed up to the date of
termination.
Initial:______
Date: ______
11
12. WAIVER OF LIEN POLICY - MCM will automatically send all Subcontractors, via
fax or mail (if no fax number is in our system) a Waiver of Lien, when the
Client is invoiced. The Waiver of Lien dollar amount will only be for the
amount billed to the Client, less [*] Retainage, on the specified Client
invoice. The top right hand corner of the Waiver will indicate the job
number, Client invoice number and MCM's purchase order number. Do not
change the dollar amount on the Waiver of Lien! All of the [*] Retainage
amounts are released at the end of the job and are all included on a
separate Waiver of Lien, noted as invoice # "Retainage". You must have the
Waiver of Lien signed by a Corporate Officer and notarized. Return it to
MCM via fax or mail. Upon our receipt of your payment from the Client, your
check will immediately be mailed. If you have requested in advance, that
you want to pick it up at MCM's office, you will be notified via fax or
mail. Please call our office, if you have any questions regarding the
Waiver of Lien. No checks can be released until MCM has received your
signed and notarized Waiver of Lien.
13. This Purchase Order and its Terms and Conditions shall be governed by and
construed under the Laws of the Commonwealth of Massachusetts applicable to
the contracts made, accepted and performed wholly within the Commonwealth,
without application of principles of conflict of laws and regardless of the
location of the project. Any action regarding any dispute may be brought
only in courts located within the Commonwealth of Massachusetts regardless
of the domicile of the parties and the parties hereby agree that such
courts shall have venue and exclusive subject matter and personal
jurisdiction, and each consents to service of process by Certified Mail,
return receipt requested or by any other manner provided by law.
14. This Purchase Order and its Terms and Conditions is a final writing which
represents the entire agreement between the parties hereto. No other
statement, representation or prior written material extrinsic to this
Purchase Order and Terms and Conditions shall have any force or effect, and
that no party is relying on any representation other than those expressly
set forth herein as an inducement to enter into this Purchase Order.
Initial:______
Date: ______
(rev March 05,2003)
12
MCMUSA, INC.
INVOICING PROCEDURE - Exhibit "A"
o All subcontractors, suppliers and consultants are to invoice each project
weekly.
o Invoices are to be sent to MCM for approval. MCM will forward to Client for
payment.
o Bills must arrive at MCM on Friday of each week. Invoices are to include
all labor and materials used on the project from Saturday AM through Friday
PM.
o MCM will accept invoices via fax, provided that it is readable and can be
xeroxed. The original invoice (that is mailed) must be clearly marked with
a stamp showing that is was faxed (on date).
o Invoice for the bill for the GROSS AMOUNT. DO NOT CALCULATE RETAINAGE
DEDUCTION. DO NOT bill the Retainage at the end of the project. MCM's
system tracks it and automatically invoices all Retainage that is on hold.
o Your requisition for payment must include the following information:
Total Contract Amount:
Amount Previously Applied for:
Balance:
Amount of Current Requisition:
If your invoice is different than what we require, you may submit a backup
sheet that resembles the example.
o All invoices must include MCM's purchase order number and project number.
o Separate purchase orders will be issued for all change orders. DO NOT bill
changes with base job or group several purchase orders on one invoice.
o If your invoice for partial payment is determined to be too high, MCM at
its option will reduce the amount and submit it for payment. We will send
you a copy of the reduced invoice. You will be required to reinvoice that
portion that was not approved. MCM will not automatically do this.
o Upon notification that the project is being "closed out", all invoices must
be submitted immediately.
Any invoice not submitted may not be honored by the Client at a later date.
(SAMPLE INVOICE - Exhibit "A")
Date:
To: MCMUSA, INC. MCM's PO# _________________
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000 MCM'S Project # ___________
Project/Client: Sample Store
Address
Town, St, Zip Code
INVOICE #3
Contract Amount $8,000
Previous Invoices (total) 4,800
------
Balance $3,200
TOTAL THIS INVOICE #3 $2,000
------
Initial:______
Date: ______
13
MCMUSA, INC.
"ADDENDUM 1" - Exhibit "A"
SHOP DRAWINGS & SUBMITTALS
1. The Subcontractor/Supplier shall review 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. Submittals made by the Subcontractor/Supplier which are not
required by the Contract Documents may be returned without action.
2. The Subcontractor/Supplier 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. By approving and submitting Shop Drawings, Product Data, Samples and
similar submittals, the Subcontractor/Supplier represents that the
Subcontractor/Supplier 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.
4. The Subcontract/Supplier 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 Subcontractor/Supplier 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
Subcontractor/Supplier shall not be relieved of responsibility for errors
or omissions in Shop Drawings, Product Data, Samples or similar submittals
by the Architect's approval thereof.
PROJECT CLOSE OUT
All mechanical, electrical, plumbing and sprinkler subcontractors are required
to submit the following at the completion of their work:
1. As-Built Drawings
2. Operation and Maintenance (O & M) manuals
3. Equipment manufacturer's warranties
4. Extended Warranties and Bonds, if applicable
5. The name and phone number for the person to contact for emergency service
Initial:______
Date: ______
ver (March 5, 2003)
14
Xx. Xxxx Xxxxx
Midnight Auto Holdings, Inc.
0000 Xxxxxxxxx Xxxx
Xxxx, Xxxxxxxx 00000
RE: Midnight Auto Holdings, Inc. (the "Client")
Strategic Planning & Schematic Design (the "Project")
ADDENDUM A
Should the project not commence construction within 2 years from the date of
this Letter Agreement, the Construction portion of this Agreement shall be void.
15
