EXHIBIT 10.2
AIA DOCUMENT A191
STANDARD FORM OF AGREEMENT BETWEEN
OWNER AND DESIGN/BUILDER
(MODIFIED)
1985 EDITION
This document is comprised of two separate agreements: Part 1
Agreement -- Preliminary Design and Budgeting; and, Part 2
Agreement -- Acceptance of Design and Bid and Construction.
Hereafter, the Part 1 Agreement is referred to as Part 1 and the
Part 2 Agreement is referred to as Part 2.
PART 2 AGREEMENT -- ACCEPTANCE OF DESIGN AND BID AND
CONSTRUCTION
AGREEMENT made as of November 14, 1995
BETWEEN the Owner ▇▇▇▇▇▇▇ REAL ESTATE HOLDINGS, INC.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
and the Design/Builder: ▇▇▇▇▇▇ & MIDGLEY INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
For the following project:
The total construction of on-site improvements, offices,
warehouse-manufacturing facilities, parking lots, loading docks,
expansion facilities, sidewalks, driveways, and landscaping for
the ▇▇▇▇▇▇▇ Medical Products located at ▇▇▇▇▇ ▇▇▇▇▇▇ Drive in
Pocatello, ID., except for such portions thereof to be completed
by Owner's separate contractors as provided herein. Improvements
will be constructed by Design/Builder in accordance with the
Design Documents obtained from Design/Builder after acceptance of
the Project design by Owner as described in Part 1 of this
Agreement. The construction may be executed in phases, each of
which may be treated as a separate Project by Owner.
Design/Builder shall not be responsible for off-site
improvements.
The architectural services described in Article 2 will be
provided by the following person or entity who is lawfully
licensed to practice architecture.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
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The Owner and the Design/Builder agree as set forth below.
Terms and Conditions -- Part 1 Agreement
ARTICLE 1
GENERAL PROVISIONS
1.1 BASIC DEFINITIONS
1.1.1 The Contract Documents consist of the Design/Builder's
Proposal identified in Article 13, this Part 2, the Construction
Documents approved by the Owner in accordance with Subparagraph
2.2.2 below and Modifications issued after execution of Part 2. A
Modification is a Change Order or a written amendment to Part 2
signed by both parties. These form the Contract, and are as fully
a part of the Contract as if attached to this Part 2 or repeated
herein.
1.1.2 The "Project" is the total design and construction for
which the Design/Builder is responsible under Parts 1 and 2,
including all professional design services and all labor,
materials and equipment used or incorporated in such design and
construction, all as more fully described at page 1 of this Part
2.
1.1.3 The "Work" comprises the performance of the construction of
the Project and includes labor necessary to perform such
construction, materials and equipment incorporated or to be
incorporated into the Project, obtaining all licenses or permits
necessary to effect the Work, and obtaining all insurance
required hereunder to be carried by Design/Builder. The work
shall also include the clean-up of the construction site. Except
as provided herein, the Design/Builder shall obtain all
information, pay all fees, costs and expenses, including
professional and design services, all of which shall be part of
the Work.
1.2 EXECUTION, CORRELATION AND INTENT
1.2.1 This Part 2 shall be signed in not less than duplicate by
the Owner and Design/Builder
1.2.2 It is the intent of the Owner and Design/Builder that the
Contract Documents include all items necessary for proper
execution and completion of the Work. The Contract Documents are
complementary, and what is required by any one shall be as
binding as if required by all. Work not covered in the Contract
Documents as approved by local regulatory officials, will not be
required unless it is contrary to requirements of applicable
building codes. Words and abbreviations which leave well-known
technical or trade meanings are used in the Contract Documents in
accordance with recognized meanings.
1.2.3 It is recognized that the Work may be completed in phases,
each phase relating to the total Project, Unless otherwise
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directed by the Owner, it is the intent that the satisfactory
completion of all phases of Work will complete the entire Project
according to the requirements of the Owner.
1.3 OWNERSHIP AND USE OF DOCUMENTS
1.3.1 The designs, drawings, specifications and other documents
furnished by the Design/Builder or its architect are instruments
of service and shall remain the property of the Design/Builder or
its architect, whether or not the Project or any Phase of the
Project for which they are prepared is commenced. At its expense,
the Owner shall have the right to obtain such copies of the
designs, plans and specifications as Owner deems necessary for
its own use at the Project site. Design/Builder shall be supplied
with at least two (2) complete copies of all designs, plans and
specifications for its use in construction.
ARTICLE 2
DESIGN/BUILDER
2.1 SERVICES AND RESPONSIBILITIES
2.1.1 Design services shall be performed by qualified architects,
engineers and other professionals selected and paid by the
Design/Builder in accordance with Part 1 and as required in this
Part 2. The professional obligations of such persons shall be
undertaken and performed in the interest of the Design/Builder
and Owner. Construction services shall be performed by qualified
construction contractors and suppliers, selected and paid by the
Design/Builder and acting in the interest of the Design/Builder
and Owner. Nothing contained in Part 2 shall create any
contractual relationship between such persons and the Owner.
2.2 BASIC SERVICES
2.2.1 The Design/Builder's Basic Services are described below.
2.2.2 As the design for any Phase of the Project is completed in
accordance with Part 1, Design/Builder shall prepare a Proposal
for construction of that Phase, as designed, and shall submit
that Proposal to Owner. The Proposal shall include bids for
construction of that Phase of the Work to be constructed and
other information as described in paragraph 2.2.3. Owner shall
have a period of five (5) working days for acceptance or
rejection of the Proposal. If Owner fails to act, the Proposal
shall be deemed accepted. If the Proposal is rejected, the
Design/Builder shall have no further responsibilities for the
proposed Work on that Phase unless otherwise instructed by the
Owner. Owner may request modifications to the design or Proposal
and Design/Builder shall prepare revisions thereto as needed.
Upon acceptance of a Proposal, the Design/Builder and the Owner
shall be bound to complete the construction as agreed upon in the
Proposal in accordance with the terms of this Part 2. The
Design/Builder shall not be separately compensated for its time
and effort or materials in preparing Proposals.
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2.2.3 The Design/Builder's Proposal for each phase shall include:
a. Actual Cost Detail;
b. The total price for the phase of Work contemplated;
c. Detailed building plans showing floor plans, elevations,
engineering requirements, structural requirements, electrical,
heating, cooling, plumbing requirements and details, material
requirements and all other specifications for completion of the
Work for the phase described in the Proposal;
d. Detailed time schedules for completion of the Work;
e. List of subcontractors and suppliers and cost bids received
from such subcontractors and suppliers.
2.2.4 Based on the Design/Builder's Proposal for each phase of
the Project, which is accepted by Owner, the Design/Builder shall
submit Construction Documents for such phase of construction for
review and approval by the Owner which, when approved, shall
become a part of this Part 2 Agreement. Construction Documents
shall include all designs, plans, technical drawings, schedules,
diagrams and specifications, and cost bids which are consistent
with the Proposal, setting forth in detail the requirements for
construction of the Work, and shall:
.1 develop the intent of the Design/Builder's Proposal;
.2 provide all information which is reasonably necessary for the
use of those in the building trades to interpret and construct
the Project and perform all or part of the Work;
.3 include all documents reasonably required for regulatory
agency approvals for the Project, or for that phase of the
Project.
2.2.5 The Design/Builder shall assist the Owner in filing
documents required to obtain necessary approval of governmental
authorities having jurisdiction over the Project by preparing
such documents and delivering them where required in order to
obtain such approvals as may be necessary.
2.2.6 Unless otherwise provided in the Contract Documents, the
Design/Builder shall provide or cause to be provided and shall
pay for design, architect, engineering, or other professional
services, 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.
2.2.7 Design/Builder shall be responsible for and shall
coordinate all construction means, methods, techniques, sequences
and procedures.
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2.2.8 The Design/Builder shall keep the Owner informed of the
progress and quality of the Work. This requirement may be met by
properly prepared Applications for Payment prepared and delivered
on the first day of each month, or by a monthly report delivered
on the same date. Owner may request reports more frequently if
Owner deems such reports reasonably necessary.
2.2.9 Except as limited at paragraph 5.2.3.3, the Design/Builder
shall correct Work which does not conform to the Construction
Documents, as such Construction Documents may be amended from
time to time by Change Orders.
2.2.10 The Design/Builder warrants to the Owner that materials
and equipment incorporated in the Work will be new unless
otherwise specified, and that the workmanship, materials and
equipment shall be in conformance with the Contract Documents and
suitable for the purpose intended by Owner as set forth in
criteria. Upon completion of the Project, Design/Builder will
assign to Owner all warranties and guarantees Design/Builder has
reserved for materials incorporated into the Project. Work not
conforming to these requirements shall be corrected in accordance
with Article 9.
2.2.11 The Design/Builder shall pay all sales, consumer, use and
similar taxes and shall secure and pay for building and other
permits and governmental fees, licenses and inspections necessary
for the proper execution and completion of the Work which are
either customarily secured or are legally required.
2.2.12 The Design/Builder shall give notices and comply with
laws, ordinances, rules, regulations and lawful orders of public
authorities relating to the Project.
2.2.13 The Design/Builder shall pay royalties and license fees.
The Design/Builder shall defend suits or claims for infringement
of patent rights and shall save the Owner harmless from loss on
account thereof, except that the Owner shall be responsible for
such loss when a particular design, process or product of a
particular manufacturer is required by the Owner. However, if the
Design/Builder has reason to believe the use of a required
design, process or product is an infringement of a patent, the
Design/Builder shall be responsible for such loss unless such
information is promptly given to the Owner.
2.2.14 The Design/Builder shall be responsible to the Owner for
acts and Omissions of the Design/Builder's officers and employees
and all parties performing a portion of the Work, including their
agents and employees, provided that such parties are engaged in
Work within the scope of the Project and their respective
contracts.
2.2.15 The Design/Builder shall keep the premises free from
accumulation of waste materials or rubbish caused by
Design/Builder's operations. At the completion of the Work, the
Design/Builder shall remove from and about the Project the
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Design/Builder's tools, construction equipment, machinery,
surplus materials, waste materials and rubbish.
2.2.16 The Designer/Builder shall be responsible to prepare
Change Orders for the Owner's approval and execution in
accordance with Part 2. The Design/Builder shall be entitled to
no compensation for any Work claimed to be additional Work unless
an executed Change Order is in force, unless this requirement is
waived by Owner at the time payment is requested. Whenever
payment for additional Work is claimed, Design/Builder shall
specifically identify it as such in the Application for Payment,
and shall further identify Change Order, if any which authorized
it, or shall state that no Change Order then exists.
2.2.17 The Design/Builder shall notify the Owner when the Work is
completed by issuing a Certificate of Substantial Completion,
certified by Design/Builder and the architect, which shall
establish the Date of Completion, and shall state the
responsibility of each party for security, maintenance, heat,
utilities, damage to the Work and insurance.
2.2.18 The Design/Builder shall maintain in good order at the
site one record copy of the drawings, specifications, product
data, samples, shop drawings, Change Orders and other
Modifications, marked currently to record changes made during
construction. These shall be delivered to the Owner upon
completion of the design and construction and prior to final
payment. The final set of plans shall conform to the construction
of the Project "as built". A complete set of approved Contract
Documents for each Phase of the Project shall be delivered to
Owner prior to the beginning of construction for each Phase.
2.2.19 The Design/Builder shall furnish services by land
surveyors, geotechnical engineers and other consultants for
subsoil, air and water conditions, in addition to those provided
under Part 1 when such services are deemed necessary by the
Design/Builder to carry out properly the construction services
under this Part 2.
2.2.20 The Design/Builder shall furnish structural, mechanical,
chemical, geotechnical and other laboratory or on-site tests,
inspections and reports as required by law or the Contract
Documents, or to properly effect the Work.
2.2.21 The services, information, surveys and reports required by
paragraph 2.2.18 and 2.2.19 shall be furnished at the
Design/Builder's expense as part of the Work.
2.2.22 Subject to the limitations contained in paragraph 10.7.1
the Design/Builder shall maintain site security and shall be
liable for any loss, damage, property damage, injury, or death
occurring on the site of the Project during the period of
construction. The Design/Builder shall obtain liability insurance
and property damage insurance with liability limits of
$1,000,000.00 per occurrence and $3,000,000.00 aggregate, to
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provide insurance coverage for such events. Owner shall be named
as an additional insured for any such insurance. Design/Builder
shall promptly deliver a copy of insurance policies or
certificate to Owner. Each policy of insurance shall contain a
clause providing that the insurance may not be canceled except
upon 30 days notice to Owner.
2.2.23 The Design/ Builder shall designate a representative who
shall have authority to represent and bind the Design/Builder in
all aspects of the Project, including modifications to the
Contract Documents. The representative for the Design/Builder
shall be ▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇ ▇▇▇▇▇▇▇▇.
ARTICLE 3
OWNER
3.1 The Owner shall designate a representative authorized to act
on the Owner's behalf with respect to the Project. The
representatives for Owner shall be ▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
unless otherwise directed in writing to the Design/Builder. The
Owner or such authorized representative shall examine documents
submitted by the Design/Builder and shall, with reasonable
promptness render decisions pertaining thereto to avoid delay in
the orderly progress of the Work.
3.2 The Owner may appoint an on-site project representative to
observe the Work and to have such other responsibilities as the
Owner may designate.
3.3 The Owner shall cooperate with the Design/Builder in securing
building and other permits, licenses and inspection.
3.4 If the Owner observes or otherwise becomes aware of a fault
or defect in the Work or nonconformity with the Design or
Construction Documents, the Owner shall give prompt written
notice thereof to the Design/Builder.
3.5 The Owner shall furnish required information and services and
shall, with reasonable promptness, render decisions pertaining
thereto to avoid delay in the orderly progress of the design and
construction.
3.6 Upon request of Design/Builder, Owner shall provide to
Design/Builder a sworn certificate by one or both of Owner's
representatives attesting to the availability and amount of funds
to be used for the Project. The certificate shall provide to
Design/Builder the location(s), amount(s) and source(s) of such
funds, and shall authorize Design/Builder to contact such
source(s) and verify the availability of funds as certified by
Owner. If, after verification of such funds by Design/Builder, it
is determined that (1) the amounts verified are materially less
than attested; or (2) the amounts verified are insufficient to
meet outstanding applications for payment, plus the of the
portion of the Work completed since last the last application for
payment, then Design/Builder may require Owner to immediately set
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aside such funds as may be required in an account under the joint
control of the parties or in such other separate control account
arrangement as may be mutually acceptable to the parties.
3.7 The Owner shall communicate with the contractors only through
the Design/Builder, unless otherwise deemed reasonably necessary
by the Owner.
3.8 Owner shall obtain and carry during the term of this Part 2,
a Course of Construction, All Risk" insurance policy for the
replacement value of the improvements constructed with respect to
the Project in the event of damage or casualty loss thereto from
fire, flood, vandalism, water and earthquake, with such
deductibles and replacement amounts as may be determined by
Owner. Owner shall name Design/Builder as an additional insured,
but all proceeds of such policy shall be paid to Owner, who, in
the event of loss or damage to of Fifty Percent (50%) or more of
the Project improvements, may elect not to replace such
improvements and may thereby terminate this Agreement. In such
event, the notice of termination shall be given within sixty (60)
days of the date the loss occurs, the Design/Builder shall be
paid for all Work to the date of termination. Otherwise, Owner
shall use proceeds to replace the damaged or destroyed
improvements as soon as reasonably practicable after receipt of
such proceeds.
ARTICLE 4
TIME
4.1 The Design/Builder shall provide services as expeditiously as
is consistent with reasonable skill and care and the orderly
progress of design and construction.
4.2 Time limits stated in the Contract Documents are of the
essence of Part 2. The Work to be performed under Part 2 shall
commence upon acceptance of a Proposal, unless otherwise agreed,
and subject to authorized modifications or delays recognized in
paragraphs 4.5 and 4.6, Completion shall be achieved on or
before: June 16, 1996
4.3 The Date of Completion of the Work is the date when
construction shall be fully completed and Owner obtains
Certificate of Occupancy from Pocatello City and a certificate of
Substantial Completion attested to by Design/Builder and its
architect.
4.4 The schedule provided in the Design/Builder's Proposal shall
include a construction schedule consistent with Paragraph 4.2
above.
4.5 If the Design/Builder is delayed in the progress of the
Project by acts or neglect of the Owner, Owner's employees, or
separate contractors employed by the Owner, or by acts or neglect
of Pocatello City or its contractors, or another cause which the
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Owner and Design/Builder agree is justifiable, the contract time
shall be reasonably extended by Change Order.
4.6 The deadline for completion of the Work may be extended if
reasonably required in the event of stoppage of Work or delay
from causes which could not be reasonably anticipated by
Design/Builder and which are out of the control of Design/Builder
and resulting from damage by fire, flood, hurricane, earthquake
or other Acts of God, or for strikes, war or shortages of
materials, and for unreasonable delay in approvals or stoppage of
Work caused by or resulting from municipal regulatory agencies.
ARTICLE 5
PAYMENTS
5.1 PROGRESS PAYMENTS
5.1.1 The Design/Builder shall deliver to the Owner itemized
Applications for Payment in such detail as indicated in this
Article and Article 12..
5.1.2 Within 15 days of the Owner's receipt of a properly
submitted and correct Application for Payment, the Owner shall
make payment to the Design/Builder, unless any item or items are
disputed by the Owner, based upon recommendations of a qualified
architect or engineer. If disputed, Owner shall notify
Design/Builder of the dispute, in writing, within the fifteen
(15) day period, and shall only withhold the disputed portion of
the payment. Unless disputed, the amount paid shall be the amount
of the request, less retainage pursuant to paragraph 5.1.8.
5.1.3 The Application for Payment shall constitute and shall
contain a representation by the Design/Builder and its architect
to the Owner that, to the best of their knowledge, information
and belief, the construction has processed to the point indicated
by percentage of completion on the Application, by Phase and by
total Project; the workmanship and materials of the Work covered
by the Application is in accordance with the Contract Documents;
the Design/Builder is entitled to payment in the amount
requested; and, the Design/Builder has made payment , or upon
full receipt of funds, will make payment to its contractors,
subcontractors and suppliers as required herein. Applications for
Payment shall be submitted on the first day of each month and may
only be submitted once per month. Any Application received after
the first day of the month shall be considered in the next month.
5.1.4 The Design/Builder shall pay each contractor and supplier,
upon receipt of payment from the Owner, less retainage, out of
the amount paid to the Design/Builder on account of such
contractor's work, the amount which said contractor or supplier
is entitled in accordance with the terms of the Design/Builder's
contract with such contractor or supplier. The Design/Builder
shall, by appropriate agreement with each contractor, require
each contractor to make payments to their subcontractors or
suppliers in a similar manner.
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5.1.5 The Owner shall have no obligation to pay or to be
responsible in any way for payment to a contractor or supplier of
the Design/Builder.
5.1.6 No progress payment or partial or entire use or occupancy
of the Project by the Owner shall constitute an acceptance of
Work not in accordance with the Contract Documents.
5.1.7 The Design/Builder warrants that: (1) title to Work,
materials and equipment covered by an Application for Payment
will pass to the Owner either by incorporation in construction or
upon receipt of payment by the Design/Builder, whichever occurs
last; (2) Work, materials and equipment covered by previous
Applications for Payment are free and clear of liens, claims
security interests or encumbrances, hereinafter referred to as
"liens", provided that liens may be allowed if Design/Builder
provides Owner with a bond or other security acceptable to Owner
for one and one-half (11/2) times the amount of the lien, in the
event that the Design/Builder desires to contest any such lien;
and (3) no Work, materials or equipment covered by an Application
for Payment will have been acquired by the Design/Builder, or any
other person performing work at the site or furnishing materials
or equipment for the Project, subject to an agreement under which
an interest therein or an encumbrance thereon is retained by the
seller or otherwise imposed by the Design/Builder or such other
person.
5.1.8 Owner shall have the right to withhold payment of up to Ten
Percent (10%) of any amounts requested for labor or services in
the Application for Payment by Design/Builder, to be held by
Owner to assure completion of all the Work. Within 30 days
following the date of Completion of the Work, the Design/Builder
may apply for the release of retained amounts. If the
Design/Builder has satisfied the requirements of Paragraph 5.2.1
and any other requirements of this Part 2, Owner, upon receipt of
such Application, shall pay the Design/Builder the amount
retained, if any, for the Work less the reasonable value of
incorrect or incomplete Work, which withheld sum shall be paid
upon correction or completion of such Work. The retainage may, in
the Owner's discretion, be used as an offset by Owner against any
amounts otherwise owed by Design/Builder. Owner shall reduce the
retention amount to five percent (5%) upon receipt of a
certificate from Design/Builder and its architect that the
Project is at least fifty percent (50%) completed, is within
budget and on schedule, and that no default exists at the time of
payment.
5.1.9 Owner may, if Owner deems it necessary, make payment to
Design/Builder by joint checks payable to Design/Builder and/or
its contractors or suppliers.
5.1.10 Design/Builder shall have the right to stop the
construction of the Work if Owner is in default or its payment
obligations under this Part 2, or, in the event Owner is unable
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to reasonably satisfy Design/Builder of its financial ability to
fund the Project in accordance with paragraph 3.6.
5.1.11 With each Application for Payment, the Design/Builder
shall provide unconditional lien waivers from itself & each
subcontractor/material supplier covering the previous Application
and a conditional lien waiver from the Design/Builder which
covers the current Application.
5.2 FINAL PAYMENT
5.2.1 Neither final payment nor amounts retained, if any, shall
become due until the Design/Builder submits to the Owner (1) an
affidavit that payrolls, bills for materials and equipment, and
other indebtedness connected with the Project for which the Owner
or Owner's property might be liable have been paid or otherwise
satisfied, (2) consent of surety, if any, to final payment, (3) a
certificate that insurance required by the Contract Documents is
in force following completion of the Work, and (4) if required by
the Owner, other data establishing payment or satisfaction of
obligations, such as receipts, releases and waivers of lien
arising out of Part 2, to the extent and in such form as may be
designated by the Owner. If a contractor refuses to furnish a
release or waiver, required by the Owner, the Design/Builder may
furnish a bond satisfactory to the Owner to indemnify the Owner
against such lien. If such lien remains unsatisfied after
payments are made, the Design/Builder shall reimburse the Owner
for moneys the latter may be compelled to pay in discharging such
lien, including all costs and reasonable attorneys' fees.
5.2.2 Final Payment constituting the entire unpaid balance due
except retainage as described above, shall be paid by the Owner
to the Design/Builder upon Owner's receipt of the
Design/Builder's final Application for Payment when the Work has
been completed and the Contract fully performed except for those
responsibilities of the Design/Builder which survive final
payment.
5.2.3 The making of final payment shall constitute acceptance of
the Work by Owner and waiver of all claims by Owner except those
arising from:
.1 unsettled liens or liens which appear thereafter but release
the activities of Design/Builder.
.2 faulty or defective Work appearing after completion.
.3 failure of the Work to comply with requirements of the
Contract Documents which is discovered and claimed by the Owner
within one year of the date of issuance of a Certificate of
Occupancy for the Project; provided that this one year limitation
shall apply unless Owner receives a Certificate from the
Design/Builder's architect to the effect that all Work, including
workmanship, materials and equipment is in full conformance with
Contract Documents.
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.4 terms of special warranties required by the Contract Documents
or described herein; or
.5 incorrect or incomplete Work as provided in paragraph 5.1.8
above.
5.2.4 Acceptance of Final Payment shall constitute a waiver of
all claims by the Design/Builder except those previously made in
writing and identified by the Design/Builder as unsettled at the
time of final Application for Payment.
5.2.5 At the time of the Application for Payment for the final
sums due to Design/Builder and upon presentation of a Certificate
of Completion signed by the Design/Builder and its architect, if
Owner determines that Design/Builder has left certain Work
uncompleted, or if corrections to the Work need to be made as
determined by Owner, Owner shall provide to Design/Builder a
punch list comprised of such uncompleted Work and Work to be
corrected, and shall retain such amounts as Owner deems
reasonably necessary to cover the cost of such Work until
completed. Design/Builder shall perform any such Work within
thirty (30) days after receipt of such list.
5.3 INTEREST PAYMENTS
5.3.1 Payments due the Design/Builder under Part 2 which are not
paid when due, except retainage, shall bear interest from the
date due at the rate specified in Article 12, or in the absence
of a specified rate, at the legal rate prevailing where principal
improvements are to be located.
ARTICLE 6
PROTECTION OF PERSONS AND PROPERTY
6.1 The Design/Builder shall be responsible for initiating,
maintaining and providing supervision of safety precautions and
programs in connection with the Work.
6.2 The Design/Builder shall take reasonable precautions for
safety or; 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; and (3) other property
at or adjacent to the site.
6.3 The Design/Builder shall give notices and comply with
applicable laws, ordinances, rules, regulations and orders of
public authorities bearing on the safety of persons and property
and their protection from damage, injury or loss.
6.4 Subject to the limitations contained in paragraph 10.7.1, the
Design/Builder shall be liable for all damage or loss to property
at the site, except damage or loss attributable to the acts or
omissions of the Owner, the Owner's separate contractors or
anyone directly or indirectly employed by them or by anyone for
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whose acts they may be liable, and except for those damages or
losses otherwise covered by insurance obtained by either Owner or
Design/Builder as provided herein.
ARTICLE 7
INSURANCE AND BONDS
7.1 DESIGN/BUILDER'S LIABILITY INSURANCE
7.1.1 The Design/Builder shall purchase and maintain in a company
or companies authorized to do business in the State of Idaho the
following types of insurance which shall provide coverage for
Design/Builder and Owner for liabilities related to the Work and
the operations of the Design/Builder on the Project as follows:
.1 claims under workers' or workmen's compensation, disability
benefit and other similar employee benefit laws 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 Design/Builder's employees under
any applicable employer's liability law;
.3 claims for damages because of bodily injury, sickness or
disease or death of persons other than the Design/Builder's employees;
.4 claims for damages covered by usual personal injury liability
coverage which are sustained (1) by a person as a result of an
offense directly or indirectly related to employment of such
person by the Design/Builder or (2) by another person;
.5 claims for damages, other than to the Work at the site,
because of injury to or destruction of tangible property,
including loss of use; and
.6 claims for damages for bodily injury or death of a person or
property damage arising
out of ownership, maintenance or use of a motor vehicle.
7.1.2 The insurance required by the above Sub-paragraph 7.1.1
shall be written for not less than limits of liability of
$1,000,000.00 aggregate, per injury or death, or $500,000.00
property damage per occurrence, or as required by law, whichever
is greater.
7.1.3 The Design/Builder's liability insurance shall include
contractual liability insurance applicable to the
Design/Builder's obligations under Paragraph 10.7.
7.1.4 Certificates of insurance, and copies of policies
requested, acceptable to the Owner shall be delivered to the
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Owner prior to commencement of design and construction. These
Certificates as well as insurance policies required by this
Paragraph shall contain provisions that coverage will not be
canceled or allowed to expire until at least thirty (30) days'
written notice has been given to the Owner. If any of the
foregoing insurance coverage are not required to remain in force
after final payment, an additional certificate evidencing
continuation of such coverage shall be submitted along with the
application for final payment.
7.2 OWNER'S LIABILITY INSURANCE
7.2.1 The Owner shall be named as an additional insured on all
policies of insurance required under paragraph 7.1. Owner shall
obtain the insurance required under paragraph 3.8.
7.3 PROPERTY INSURANCE
7.3.1 Unless otherwise provided under this Part 2, the Owner
shall purchase and maintain, in a company or companies authorized
to do business in the State of Idaho, property insurance upon the
Work at the site to the replacement value thereof acceptable to
the Owner. Property insurance shall include interests of the
Owner and the Design/Builder in the work. It shall insure against
perils of fire and extended coverage and shall include all risk
insurance for physical loss or damage including, without
duplication of coverage, theft, vandalism and malicious mischief.
If not covered under the all risk insurance or not otherwise
provided in the Contract Documents, the Design/Builder shall
effect and maintain similar property insurance on portions of the
Work stored off-site or in transit when such portions of the Work
are to be included in an Application for Payment.
7.3.2 A loss insured under the foregoing property insurance is to
be adjusted with the Owner and made payable to the Owner who may
repair or replace the damaged property or retain the proceeds, in
Owner's discretion. If Owner elects not to repair or replace the
damaged property, Design/Builder shall be released from its duty
to complete the Project. To the extent proceeds of such insurance
are paid for damage to property not belonging to the Owner, such
proceeds shall be delivered to Design/Builder who shall receive
them in trust for all contractors, subcontractors and suppliers.
7.3.3 Before an exposure to any loss hereunder may occur, the
Design/Builder and Owner shall each file with the other a copy of
each policy required under this Part 2. Each policy shall contain
only those endorsements specifically related to this Project.
Each policy shall contain a provision that the policy will not be
canceled or allowed to expire until at least thirty days' prior
written notice has been given the applicable party.
7.3.4 If the Owner requests in writing that insurance for risks
other than those described herein or for special hazards be
included in any property insurance policy, the Design/Builder
shall, if possible obtain such insurance, and the actual cost
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thereof shall be charged to the Owner by appropriate Change
Order.
7.3.5 If the Owner finds it necessary to occupy or use a portion
or portions of the Work before completion, such occupancy or use
shall not commence prior to a time agreed to by the Owner and
Design/Builder and to which the insurance company or companies
providing property insurance have consented by endorsement to the
policy or policies. The property insurance shall not lapse or be
canceled on account of such partial occupancy or use. Consent of
the Design/Builder to such occupancy or use shall not be
unreasonably withheld.
7.4 LOSS OF USE INSURANCE
7.4.1 The Owner, at the Owner's option, may purchase and maintain
such insurance as will insure the Owner against loss of use of
the Owner's property due to fire or other hazards, however
caused.
7.5 PERFORMANCE BOND AND PAYMENT BOND
7.5.1 Upon Owner's request the Design/Builder shall furnish bonds
covering the faithful performance of the contract and the payment
of all Design/Builder's obligations hereunder, at Owner's expense
for the actual cost thereof.
ARTICLE 8
CHANGES IN THE WORK
8.1 CHANGE ORDERS
8.1.1 A Change Order is a written order signed by the Owner and
Design/Builder, and issued after execution of Part 2, authorizing
a change in the Work or adjustment in the contract sum or
contract time. The contract sum and contract time may be changed
only by Change Order.
8.1.2 The Owner, without invalidating Part 2, may order changes
in the Work within the general scope of Part 2 consisting of
additions, deletions or other revisions, and the contract sum and
contract time shall be adjusted accordingly. Such changes in the
Work shall be authorized by Change Order, and shall be performed
under applicable conditions of the Contract Documents.
8.1.3 Cost or credit to the Owner resulting from a change in the
Work shall be determined by mutual acceptance of a cost bid
properly itemized and supported by sufficient substantiating data
to permit evaluation.
8.1.4 In the event Owner and Design/Builder cannot agree on a
price for any Change Order for any Work outside the scope of the
Basic Services, Design/Builder shall perform the work as directed
by Owner at a price equal to the actual cost to Design/Builder
for performance of the additional work as those costs are defined
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in this Agreement, plus an amount equal to ten percent (10%) of
such costs to cover profit and overhead for the Design/Builder.
8.2 CONCEALED CONDITIONS
8.2.1 The Design/Builder assumes all risk of changes in law or
regulation after beginning of construction, provided, however,
that if any change to the Project or Work is required Pocatello
City or other municipal governmental officials after their
initial approval of the plans and specifications for the Work,
Owner shall agree to the change and the additional costs thereof
by appropriate Change Order. Design/Builder assumes all risk of
conditions existing on site, which are known or which, with the
exercise of reasonable diligence, should be known by
Design/Builder, based upon Design/Builder's examination of
existing engineering and soil reports and the Project site.
ARTICLE 9
CORRECTION OF WORK
9.1 The Design/Builder shall promptly correct Work rejected by
the Owner or known by the Design/Builder to be defective or
failing to conform to the Construction Documents, whether
observed before or after Completion and whether or not
fabricated, installed or completed, and shall correct Work under
this Part 2 found to be defective or non conforming within a
period of one year from the date of Completion of the Work or
designated portion thereof, or within such longer period provided
by any applicable special warranty in the Contract Documents.
Upon issuance of the Certificate of Completion and final payment,
Design/Builder shall assign to Owner all warranties and
guarantees that it has received relative to the Project.
9.2 Nothing contained in this Article 9 shall be construed to
establish a period of limitation with respect to other
obligations of the Design/Builder under this Part 2. Paragraph
9.1 relates only to the specific obligation of the Design/Builder
to correct the Work, and has no relationship to the time within
which 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 Design/Builder's liability with
respect to the Design/Builder's obligations by contract, statute
or common law, other than correction of the Work.
9.3 If the Design/Builder fails to correct the defective Work as
required or is otherwise in default under Part 1 or Part 2, the
Owner may, but need not, provide written notice to Design/Builder
of default. In the event such a notice of default is given,
Design/Builder shall have a period of seven (7) days after the
date of receipt of such notice, to effect a cure of said default
in accordance with the Contract Documents. If Design/Builder
fails to effect a cure of the default within the seven (7) day
time period, Owner may, at Owner's option (i) order
Design/Builder to immediately cease all Work except that required
to cure the
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default and Owner may then proceed to cure the default and may
charge the cost thereof to the Design/Builder, or (ii) provide
notice of termination of this Part 2, in whole or in part. In the
event notice of termination is given, Design/Builder shall have
an additional seven (7) days from the date such termination
notice is received to cure any default. In the event of the
failure of Design/Builder to then cure default, this
Part 2 shall terminate in whole or in part without further action
on the part of Owner. In the event that any default is of such a
nature that it cannot be cured within the initial seven (7) days,
the Design/Builder shall be allowed up to an additional twenty-
two (22) days to cure the default, so long as Design/Builder
immediately takes action to cure the default upon receipt of the
first notice and diligently pursues the correction of such
deficiency.
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1 This Part 2 shall be governed by the laws of the State of
Utah.
10.2 The table of contents and the headings of articles and
paragraphs are for convenience only and shall not modify rights
and obligations created by Part 2.
10.3 In case a provision of Part 2 is held to be invalid, illegal
or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not be affected.
10.4 SUBCONTRACTS
10.4.1 The Design/Builder shall, prior to beginning construction
of any phase of the Work, and at the time of submitting the
Proposal, furnish to the Owner in writing the names of the
persons or entities the Design/Builder will engage as contractors
or suppliers for that Phase of the Project. The Owner may direct
the Design/Builder to engage a particular contractor,
subcontractor or supplier for any part of the Work at a price or
cost which agreed upon by Owner. The Design/Builder shall not be
liable to Owner for defective work or materials of such
contractor or subcontractor if Design/Builder objects in writing
to Owner to the use of such contractor or subcontractor, unless
such defect results in part or in whole from the negligent act or
omission of Design/Builder from its obligations to properly
supervise any and all contractors and suppliers on the Project.
10.4.2 Nothing contained in the Design/Builder Contract Documents
shall create a contractual relationship between Owner and any
third party.
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10.5 WORK BY OWNER OR OWNER'S CONTRACTORS
10.5.1 The Owner reserves the right to perform work related to or
included within the Project and to award separate contracts in
connection with the Work, so long as Owner provides notice to
Design/Builder prior to Owner's acceptance of any Proposals from
Design/Builder pursuant to paragraph 2.2.2. Owner may further
contract with other contractors or subcontractors to provide
fixturization or customization of the Project outside the scope
of Work.
10.5.2 The Design/Builder shall afford the Owner's separate
contractors reasonable opportunity for introduction and storage
of their materials and equipment for execution of their Work. The
Design/Builder shall incorporate and coordinate he
Design/Builder's Work with work of the Owner's separate
contractors.
10.5.3 Costs caused by defective or ill-timed work shall be borne
by the party responsible.
10.5.4 Any Work performed by Owner or its contractors or
employees shall be performed in such a manner as not to interfere
with the completion of the Work by Design/Builder as required
under the Contract Documents. Design/Builder shall have the right
to make claims against Owner for additional compensation for any
delays caused by Owner or its contractors or subcontractors to
the extent of the actual cost thereof. Owner and Design/Builder
shall fully cooperate, one with the other, in the scheduling and
coordination of their respective responsibilities under this
Agreement.
10.5 (INTENTIONALLY LEFT OPEN)
10.7 INDEMNIFICATION
10.7.1 To the fullest extent permitted by law, the Design/Builder
shall indemnify and hold harmless the Owner and the Owner's
consultants and its agents and employees from and against claims,
damages, losses and expenses, including but not limited to
attorneys' fees, arising out of or resulting from performance of
the Work, except to the extent caused by Owner or its agents or
employees, or caused by Pocatello City or its agents or
employees. These indemnification obligations shall included, but
not be limited to claims, damages, loses or expenses (1) that are
attributable to bodily injury, sickness, disease or death, or to
injury to or destruction of tangible property, including loss of
use resulting therefrom, and (2) to the extent such claims,
damages, losses or expenses are caused in whole or in part by
negligent acts or omissions of the Design/Builder, the
Design/Builder's contractors, subcontractors or suppliers, anyone
directly or indirectly employed by them or anyone for whose acts
such persons may be liable, provided that such contractors or
subcontractors are performing Work within the scope of their
respective contracts and the Project. Such obligation shall not
be construed to negate, abridge or otherwise reduce other rights
41
or obligations of indemnity which would otherwise exist as to a
party or person described in this Paragraph 10.7.
10.7.2 In claims against the Owner or its consultants, agents or
employees by an employee of the Design/Builder, its contractors,
anyone directly or indirectly employed by them or anyone for
whose acts they may be liable, the indemnification obligation
under this paragraph 10.7 shall not be limited by a limitation on
amount or type of damages, compensation or benefits payable by or
for the Design/Builder, or a Design/Builder's contractor, under
worker's or workmen's compensation acts, disability benefit acts
or other employee benefit acts.
10.7.3 This paragraph 10.7 shall survive the Completion of the
Work.
10.8 SUCCESSORS
10.8.1 This Part 2 shall be binding on successors, assigns and
legal representatives of and persons in privity of contract with
the Owner or Design/Builder. Neither party shall assign, sublet
or transfer an interest in Part 2 without written consent of the
other.
10.8.2 This Paragraph 10.8 shall survive completion of the Work.
10.8.3 In case of termination of the Architect, the
Design/Builder shall provide the services of another lawfully
licensed person or entity against whom Owner makes no reasonable
objection.
10.10 EXTENT OF AGREEMENT
10.10.1 Part 2, when considered with Part 1, represents the
entire agreement between the Owner and Design/Builder and
supersedes prior negotiations, representations or agreements.
Part 2 may be amended only by written instrument signed by both
Owner and Design/Builder.
10.11 USE OF SITE
10.11.1 Owner hereby grants to Design/Builder, its employees,
subcontractors and sub-subcontractors, a license of ingress and
egress to the Project site as necessary to complete the Work as
contemplated hereby, including, but not limited to, ingress and
egress of all construction vehicles and personnel, including the
delivery and removal of materials, equipment, supplies and
refuse.
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ARTICLE 11
TERMINATION OF THE AGREEMENT
11.1 TERMINATION BY OWNER
11.1.1 The Owner shall have the right to terminate this Part 2 as
provided at paragraph 9.3. Upon such termination, the Owner may
take possession of the site and of all materials, equipment,
tools and construction equipment and machinery thereon owner by
the Design/Builder and finish the Work by whatever method the
Owner may deem expedient. Upon such termination, Owner shall be
entitled to damages in the amount of all costs and expenses Owner
may incur to complete all or part of the Work in accordance with
such termination. Owner shall pay Design/Builder for any Work
completed by Design/Builder after allowing a set-off for Owner's
damages. No other claim for damages shall accrue, including
claims for consequential damages.
11.2 TERMINATION BY THE DESIGN /BUILDER
11.2.1 If the Owner fails to make payment when due, the
Design/Builder may give written notice of the Design/Builder's
intention to terminate Part 2. If the Design/Builder fails to
receive payment within seven (7) days after providing such notice
to the Owner, the Design/Builder may give a second written
notice, and seven (7) days after receipt of such second written
notice by the Owner, if Owner has not made such payments as are
then due, Design/Builder may terminate this Part 2 and recover
from the Owner payment for Work executed and for proven loses
sustained upon materials, equipment, tools and construction
equipment and machinery, and for compensation described at
Paragraph 12.1. No other claim for damages shall accrue,
including claims for consequential damages.
ARTICLE 12
BASIS OF COMPENSATION
The Owner shall compensate the Design/Builder in accordance with
Article 5, Payments, and the other provisions of Part 2 as
described below.
12.1 COMPENSATION
12.1.1 FOR BASIC SERVICES, as described in Paragraphs 2.2.2
through 2.2.21, and for any other services included in Article 13
as part of Basic Services, Basic Compensation shall be as
follows: A contract price shall be determined by the
Design/Builder's Proposal for each phase of construction. The
contract price for each phase of the Work shall be determined to
be the cost of the Work related to such phase (as "cost" is
defined herein), as determined by the Proposal from the
Design/Builder, plus an amount equal to 10% of such costs. No
compensation shall be due to Design/Builder for any Work unless
approved and accepted by the Owner. The Basic Compensation for
each phase of construction shall not exceed the contract price as
determined herein, unless a signed Change Order has been
executed. The total cost for the entire Project shall not exceed
$6,800,000.00 unless a signed Change Order has been issued. In
the event the Design/Builder desires to perform part of the Work
or supply part or all of the materials to be incorporated into
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the Work, and in determining "costs" as used herein above to
establish the contract price for each Phase in the Proposals,
"cost shall mean the actual direct costs to Design/Builder for
materials incorporated into the Project, wages, for labor
directly used on the Project, including unemployment, social
security, and other benefit payments for such labor, the pro-
rated rental value or industry standard price for
Design/Builder's tools or equipment used to perform the Work, for
the time such equipment or tools will be used, cost for tools or
equipment rentals, cost of insurance, bonds, permits, sales or
use taxes, temporary facilities and clerical personnel and office
facilities used at the Project site, the amounts paid to any
subcontractors used in any portion of that phase of the Work, but
only such costs as are incurred with respect to accomplishing the
Work. These shall be set forth in their entirety in the Proposal
from the Design/Builder. "Costs which are specifically not
included (except to the extent inconsistent with the foregoing)
are salaries or other compensation of the Design/Builder's
personnel at the Design Builder's main office; general office
expenses of the Design Builder's; any part of the
Design/Builder's capital expenses, including interest on
Design/Builder's capital; costs due to negligence of the
Design/Builder, any subcontractor, 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 correction of defective
or non conforming Work, disposal of materials and equipment
wrongfully supplied, or making good any damage to property;
overhead, general expense, secretarial or clerical help,
supervisory personnel, except for time actually spent on the
Project, and the cost of any item not specifically or reasonably
inferable as included in the terms described above. Once the
contract price for each Phase has been established by Proposal,
there shall be no adjustment based upon actual costs incurred.
The Design/Builder shall be responsible to complete the Project
within the total cost budget described in this Article 12.
12.2 REIMBURSABLE EXPENSES
12.2.1 There shall be no reimbursable expenses except as set
forth in the specific Proposal accepted for each phase of Work,
or, as agreed upon by Change Order.
12.3 INTEREST PAYMENTS
12.3.1 The rate of interest for past due payments shall be as
follows: 12% per annum, simple interest.
Applications for Payment for Work prior to the date of this
Agreement shall not be deemed to be past due for a period of
fifteen (15) days after the date hereof; and only upon receipt of
all information required in such Application.
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ARTICLE 13
OTHER PROVISIONS
13.1 The Basic Services to be performed have commenced and shall
be completed no later than: June 15, 1996.
13.2 The Design/Builder shall submit Applications for Payment on
or before the first (1st) day of each month, or any pay
application received after that date shall not be deemed to be
received until the first (1st) day of the month following
receipt.
13.3 When accepted, a Proposal shall be attached hereto and shall
become a part of this Part 2 Agreement.
This Part 2 entered into as of the day and year first written
above.
OWNER DESIGN/BUILDER
▇▇▇▇▇▇▇ REAL ESTATE
HOLDINGS, INC. ▇▇▇▇▇▇ & MIDGLEY INC.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President ▇▇▇▇ ▇▇▇▇▇▇, President
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