CONSTRUCTION AGREEMENT

Exhibit 10.38

 

CONSTRUCTION AGREEMENT

 

Between

 

DENDREON CORPORATION

 

Owner,

 

- and -

 

THE HENDERSON CORPORATION

 

Contractor.

 

As of November 4, 2005

TABLE OF CONTENTS

 

THIS AGREEMENT, made as of the 4 ^th day of November, 2005, by and between DENDREON CORPORATION, having an office at 3005 First Avenue, Seattle, Washington, 98121 (“Owner”), and THE HENDERSON, having an office at 575 State Hwy. 28, Raritan, New Jersey, 08869 (“Contractor”).

 

W I T N E S S E T H :

 

WHEREAS, Owner intends to develop a therapeutic biotechnology processing facility at 220 Hanover Avenue, Hanover, New Jersey (the “Project”).

 

WHEREAS , Contractor has been advised that, under separate agreement, Owner has retained the services of Perkins & Will, to provide certain architectural services for the Project (the “Architect”); Affiliated Engineers NW, Inc. to provide certain engineering services for the Project (the “Engineer”); and AES Clean Technology, Inc., to provide certain design and build services for the clean room to be located within the Project (the “Design Builder” and collectively the Architect, Engineer and Design Builder shall be referred to as “Architect”) and such other required consulting engineers, design build professionals and Architects (the “Consultants”) as deemed necessary by Owner to prepare preliminary and final plans, specifications, working drawings and other construction documents for the Project (the final versions of which are hereinafter collectively referred to as the “Construction Documents”); and

 

WHEREAS , Contractor has been advised that, pursuant to this Agreement, Owner intends to retain the services of Contractor (a) to consult with Owner and Architect in the preparation of the Construction Documents and (b) to perform construction related services and to arrange for, monitor, supervise, administer and contract for the construction (collectively the “Work”) of all or any portion of the Project, all as more particularly set forth in Article II hereof; and

 

WHEREAS , Contractor desires to be retained by Owner to perform, or cause to be performed, the Work;

 

NOW, THEREFORE , in consideration of the mutual covenants and agreements contained herein, Contractor and Owner hereby agree as follows.

 

ARTICLE I

Contract Documents

 

1.01 The contract documents (collectively, the “Contract Documents”) shall consist of the following:

 

(a) This Agreement, including all the Exhibits annexed hereto and made a part hereof;

 

(b) The Construction Documents identified on Exhibit “A” hereto, and such other Construction Documents as may hereafter be prepared by Architect or Consultants and approved in writing by Owner;

(c) Any form of trade contractor approval letter as Owner may use to evidence its approval of the award of “Trade Contracts” to “Trade Contractors” (as such terms are defined in Section 8.01 hereof) (the “Trade Contractor Approval Letter”);

 

(d) Change Orders, Emergency Change Orders and Field Orders (as such terms are defined in Article XXIII hereof);

 

(e) The payment and performance bonds required to be provided by Trade Contractors in accordance with the provisions of Article XV hereof; and

 

(f) The Progress Schedule (as defined in section 7.01(k) hereof) to be initially prepared for the Work by Contractor and submitted to Owner for its approval in accordance with the provisions of Section 7.01(k) for the construction and Final Completion (as such term is defined in Section 6.01 hereof) of the Work, as the same may be updated, modified or extended, subject to Owner’s prior approval, in accordance with the applicable provisions of this Agreement. A copy of the preliminary schedule, as of the date of this Agreement, is attached hereto as Exhibit C .

 

1.02 The Contract Documents form the contract between Owner and Contractor. References in the Contract Documents to “the contract” or “this contract” shall be deemed to include all of the Contract Documents. References to “this Agreement” or “the Agreement” shall refer to this instrument, which is one of the Contract Documents.

 

1.03 The intent of the Contract Documents is to include in the Work all labor, materials and supplies, insurance, tools, equipment, permits (excluding building and site work permits which shall be paid for by Owner), licenses, taxes, approvals, transportation, testing and field surveying (customarily furnished by general contractors) and other services and items required in connection with the satisfactory performance, execution and Final Completion of the Work in accordance with the Contract Documents. Matters not expressly included in the Contract Documents but which are reasonably inferable therefrom shall be deemed included as a part of the Work. Controlled inspections, as required by any governmental authority, shall be provided by the Owner.

 

1.04 The Contract Documents are complementary and cumulative and what is called for by one shall be as binding as if called for by all.

 

1.05 Words and abbreviations which have well known technical or trade meanings are used in the Contract Documents in accordance with such recognized meanings.

 

1.06 If any conflicts or ambiguities exist in or between the Construction Documents, the Construction Documents and any of the Contract Documents, or the Construction Documents and existing conditions at the Project Site, Contractor shall, immediately upon discovery of such conflict or ambiguity, bring the same to the attention of Owner for resolution. It is expressly understood and agreed that Owner, in consultation with Architect, shall be the interpreter of the Construction Documents and shall resolve any such conflicts and ambiguities. Any Work relating to any such conflict or ambiguity which is performed by Contractor’s own forces or any Trade Contractor after

 

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discovery by Contractor but before Owner has had a reasonable time to respond to or address such condition, as provided herein, shall be at Contractor’s or such Trade Contractor’s sole risk, cost and expense.

 

1.07 Modifications to parts of the Contract Documents are for the purpose of varying, modifying, rescinding or adding to the Contract Documents. All modifications should be read together with the portions of the Contract Documents to which they relate.

 

1.08 The drawings and specifications comprising the Construction Documents are complementary. Anything shown in any of the drawings and not mentioned in the specifications, or mentioned in any of the specifications and not shown in the drawings, shall have the same effect as if shown or mentioned in both.

 

1.09 A typical or representative detail indicated on the Construction Documents shall constitute the standard for workmanship and materials throughout corresponding parts of the Work, unless otherwise shown.

 

1.10 The layout of mechanical and electrical systems, equipment, fixtures, piping, ductwork, conduits, specialty items and accessories indicated on the Construction Documents is diagrammatic. The actual scope of the Work shall be carried out so as not to affect the architectural and structural integrity and limitations of the Project and shall be performed in such sequence and manner so as to avoid conflicts and provide clear access to all control points, including valves, strainers, control devices and specialty items of every nature related to such systems and equipment in conformance with all applicable codes; it being agreed Contractor shall not be liable or responsible for errors, omissions, or coordination deficiencies in, between or among the Construction Documents. Subject to the provisions of Section 29.01 hereof, if Contractor discovers or has knowledge of (i) conflicts in or the shop drawings, the coordination drawings or the Construction Documents, or (ii) any conflicts between existing conditions at the Site (which Contractor is aware of or by testing as agreed to by Owner) and the Construction Documents which, in Contractor’s opinion, are of a nature that may affect the architectural or structural integrity or limitations of the Project, Contractor immediately shall bring the same to the attention of Owner and Architect for resolution in the manner provided in Section 1.06 hereof. Any Work relating to any such conflict which is performed by Contractor or by any Trade Contractor after discovery but prior to the resolution of the same shall be borne by the responsible party in accordance with Section 1.06

 

ARTICLE II

Scope of the Work

 

2.01 Contractor shall perform all Construction services described in this Agreement in connection with the construction of the Work. The general scope of the Work, as initially reflected in the Construction Documents and as set forth in Exhibit A, will be developed into a detailed design and construction program and further refined as the preparation of the Construction Documents progresses so as to include, and further define, (i) the scope, parameters and anticipated timing for the Work, and (ii) Owner’s and Contractor’s understanding of the quality of the materials and workmanship required and expected. Contractor represents that (i) it has fully acquainted itself with

 

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the general design concept and scope of the Work, as reflected in the Construction Documents, (ii) it has visited the Project site and existing buildings, if any, including the location of adjacent structures and utilities, and is generally familiar with access to the Project site and with the observable condition of any existing buildings. Owner shall be responsible for obtaining all consents, licenses and easements required from adjoining property owners.

 

2.02 In addition to the services referred to in Section 2.01 hereof, Contractor, shall perform and furnish, or cause to be performed and furnished all labor, materials, plant, power, light, heat, water (to the extent that power, light, heat and water – and the equipment associated therewith – are not already otherwise available in the building and are necessary to perform the Work, in which case such utility costs shall be a Reimbursable Costs in accordance with Article IV herein ) , telephone, tools, supplies, equipment, services, transportation, scaffolding, permits, (excluding building and site permits which shall be paid for by Owner) licenses, supervision and shall provide all services, business administration, management, coordination and supervision, necessary for, or incidental to, the successful prosecution and Final Completion of the Work, including, but not limited to, all services, business administration, management, coordination and supervision of the services provided by AES and all other Trade Contractors in connection with the Project (the “General Conditions Work Items”) in the most expeditious and economical manner, consistent with best industry accepted standards, strict and complete compliance with codes and ordinances having jurisdiction over the Work, lawful construction practices and the interests of Owner relating to quality, timely economical completion of the Work, to the extent made known to the Contractor. The Work shall be performed and executed in a customary and workmanlike manner by qualified and efficient workers, in conformance with the Contract Documents and best industry trade practices.

 

2.03 Contractor agrees to furnish efficient business administration with emphasis on budget control, construction scheduling, coordination of the Work, supervision and Construction in an expeditious and economical manner consistent with the interests of Owner and shall assist Owner in developing and maintaining a climate of understanding and good will with all governmental and quasi-governmental agencies affected by the Project, the local communities adjacent to the Project site, proposed tenants and the public at large. Contractor shall require all Trade Contractors (as such term is defined in Section 8.01 hereof) to comply with Contractor’s instructions related to storage of materials and scheduling. Contractor shall generally advise and assist the Owner on all matters concerning the construction of the Project upon which the Owner requests advice and assistance and also about all matters concerning which Contractor, being familiar with the construction industry, might normally be consulted. All recommendations to be rendered by Contractor shall be in writing when requested, stating advantages and disadvantages and evaluating alternatives and shall be in sufficient detail to enable Owner to analyze such recommendations and make informed decisions with respect thereto. Without limiting the foregoing, Contractors’ obligations are more fully described herein.

 

2.04 Contractor accepts the relationship of trust and confidence established between it and Owner by this Agreement and covenants to Owner to furnish its best professional skill and judgment and to cooperate with Owner, Architect and Consultants in furthering the interests of Owner as made known to Contractor. Contractor understands that it is the Owner’s intent to construct the Project at a reasonable cost and in the most expeditious fashion given budgetary considerations. Accordingly, Contractor will devote its best efforts (consistent with the Project Budget and Schedule) toward (i)

 

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maintaining the cost level of the Project at the lowest possible point consistent with good construction practices, (ii) carrying out Owner’s intent and direction of the Architect’s and Consultants’ Construction Documents and (iii) achieving the most rapid and efficient construction and completion of the Project. Contractor will use its best efforts to bring to the Owner’s attention any possibilities for savings that may present themselves during the course of Contractor’s performance under this Agreement and will confer with Owner periodically in order to determine whether there are any areas where, by design change or otherwise, costs may be reduced. Contractor shall not knowingly accept for its own account any trade discounts, except to the extent permitted by Article IX, or contributions, or deal with (or recommend that the Owner deal with) any firm in which Contractor has any financial or other interest, or undertake any activity or employment which would or could create a conflict of interest or compromise the Contractor’s judgment or prevent the Contractor from serving the best interests of the Owner. If Contractor shall become aware of any facts which are or may be in violation of the preceding sentence or shall have any financial or other interest in any firm with which the Owner is dealing or proposes to deal with in connection with the Project, Contractor shall immediately advise Owner thereof in writing. It shall be deemed a conflict of interest and a material breach of the terms of this Contract, for Contractor to knowingly employ at the Project, or knowingly recommend acceptance of bids from Trade Contractors employing, with respect to the Project, any relatives (including in-laws) of any of the officers or directors, or executives of the Contractor. Any breach hereunder shall entitle the Owner to terminate this Agreement upon seven (7) days’ prior notice.

 

ARTICLE III

Contract Sum and

Guaranteed Maximum Price

 

3.01 As consideration for the full and complete performance of the Work and all of Contractor’s obligations hereunder, Owner shall pay to Contractor a sum of money (“Contract Sum”) equal to the total of:

 

(i)

a fee (“Contractor’s Fee”) Contractor’s Fee includes all overhead (including home office personnel and expenses not otherwise reimbursable under Section 3.10 hereof) and profit;

 

(ii)

General Conditions, as provided in Section 3.03 and;

 

(iii)

Contractor’s Reimbursable Costs as defined in Article IV hereof.

 

provided, however, that except as expressly provided herein, the Contract Sum shall not exceed fifteen million dollars ($15,000,000) (the “Guaranteed Maximum Price” or “GMP”)

 

3.02 The Contractor’s Fee which includes all costs not otherwise identified in this Agreement and profit shall be a fixed fee of five hundred forty thousand dollars ($540,000) (“Contractor’s Fixed Fee”), plus, subject to terms of the Agreement, an additional one hundred twenty three thousand five hundred fifty five dollars ($123,555) for obtaining Substantial Completion by July 31, 2006 (“Contractor’s Substantial Completion Fee”) plus another one hundred twenty three thousand five hundred fifty five dollars ($123, 555) for achieving Substantial Completion for a Contract Sum not to exceed the GMP.

 

3.03 The Contractor’s General Conditions Costs, as approved in advance by Owner, which are more fully defined in Section 3.09 below are estimated at one hundred ninety five thousand dollars ($195,000).

 

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3.04 Contractor acknowledges that the Documents identified on Exhibit “A” annexed hereto are incomplete and are being developed by Architect. However, Contractor represents that the documents in Exhibit “A” contain sufficient information so as to provide Contractor with an understanding of the scope of the Work and the level of finishes so as to enable Contractor to prepare the Preliminary Budget which will be provided to Owner upon completion.

 

3.05 Unless adjusted by Change Order pursuant to Article XXII below, in no event shall the Contract Sum exceed the Guaranteed Maximum Price.

 

3.06 In the event that the GMP is adjusted by Change Order as defined in Article XXII below, Contractor shall be entitled to a Contractors fee of the total of the actual Reimbursable Costs and actual General Conditions which are included in such Change Order with no mark-up for fee.

 

3.07 Payments on account of the Contractor’s Fee and General Conditions, shall be paid monthly, simultaneously with each progress payment made to Contractor under Article XI hereof. The proportion of the Contractor’s Fee earned at the date of any Application for Payment (as such term is defined in Section 11.01(a) hereof) shall be calculated as defined in Section 11.01 for the Work completed in such Application for Payment. All payments to Contractor shall be subject to the hold-back requirements set forth in Article 3.08 below.

 

3.08 Unless otherwise agreed to by Owner and Contractor, Owner shall make progress payments to Contractor pursuant to the provisions of Article XI hereof, subject to a hold-back on the Trade Contract Costs (hereinafter defined) (including payments to Trade Contractors for the performance of General Conditions Work Items pursuant to Trade Contracts) in an amount equal to ten percent (10%) of each such Trade Contractor Costs.

 

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3.09 The General Conditions Costs shall include, but not be limited to, the following:

 

(a) Rates for the following classifications of personnel and who provide services in connection with the Work and for such time as is actually devoted to the Work, Project Executive, Project Manager, Project Engineer(s), Assistant Project Manager(s), Estimator(s), Project Superintendent(s), Assistant Superintendent(s), On-site Safety Coordinator, Mechanical/Electrical Project Manager(s) and Superintendent(s), Project Accountant(s), Timekeepers, Teamsters, Master Mechanics, Elevator Operators, Operating Engineers, laborers, personnel engaged (e.g. at shops or on the road) in expediting the production or transportation of materials or equipment, clerical and data processing personnel, estimators, schedulers and accountants;

 

(b) actual costs and expenses incurred in connection with telegrams, telephones (and charges), fax, messenger service, blueprinting, xeroxing, photographs, field office, trailers, correspondence and other similar petty cash items directly related to the Work; and

 

(c) Actual costs of all temporary structures and their maintenance, less the reasonable salvage value obtainable on such items which are used but not totally consumed in the performance of the Work; provided, however, that at Owner’s option and at its direction, Contractor either shall (i) deliver all such temporary structures to Owner, (ii) use reasonable efforts to sell the same for the account of Owner, or (iii) discard the same in the manner set forth in Section 6.06 hereof;

 

(d) Rental charges and maintenance expenses for any temporary structure necessary in connection with the performance of the Work, including the installation, erection, removal, transportation and delivery costs thereof;

 

(e) Rental charges of all machinery and equipment (exclusive of hand tools) used at the Project site and necessary in connection with the performance of the Work, together with costs incurred in the installation thereof, and the dismantling, removal, transportation and delivery of the same;

 

(f) Actual costs incurred by Contractor in performing General Conditions Work Items by Contractor’s own labor force or by Trade Contractors retained by Contractor to perform the same, provided such costs are not back-chargeable or deductible from any other Trade Contractor for any reason;

 

(g) license fees necessary for the performance of the Work, fines, violations or penalties and

 

(h) legal and accounting fees reasonably incurred in performance of the Work, excluding any legal and accounting fees incurred by Contractor (i) as a result of failure of Contractor (as opposed to Trade Contractors) to perform in accordance with this Agreement, or arising out of the negligence of Contractor or (ii) provided Owner has paid Contractor, wrongful failure of Contractor to pay any Trade Contractor, supplier or others in connection with the Project and (iii) arising out of or related to the negotiation of this Agreement.

 

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ARTICLE IV

Reimbursable Costs

 

4.01 In addition to the Contractor’s Fee, and General Conditions payable hereunder, and Owner shall reimburse Contractor for the actual costs necessarily incurred by Contractor in the proper performance of the Work (hereinafter the “Reimbursable Costs”), which Reimbursable Costs shall be at rates not higher than those which are competitive and prevailing in the locality for work and services similar to the Work and shall be comprised of the costs listed in Subsections (a) through (f) hereunder:

 

(a) costs of freight, trucking and, subject to Owner’s prior written approval, the warehousing of materials required for the Work;

 

(b) payments made by Contractor for work performed and materials, supplies and equipment furnished pursuant to Trade Contracts and/or Purchase Orders (and Change Orders) approved by Owner in accordance with the provisions of this Agreement (“Trade Contract Costs”);

 

(c) Federal, State and local sales, use, excise, personal property and other similar taxes, if any, which may be required to be paid by Contractor in connection with the Work, except taxes applicable, directly or indirectly, to the Contractor’s Fee;

 

(d) actual costs reasonably and necessarily incurred due to an emergency, not compensated by insurance, affecting the safety of persons or property, except to the extent caused by Contractor’s negligence or Contractor’s intentional failure to comply with the terms of this Agreement. As a condition precedent to payment for such costs Contractor must give written notice to Owner within 48-hours after incurring such costs;

 

(e) premiums for insurance as required in Exhibit B.

 

(f) additional utility costs as per paragraph 2.02

 

4.02 Contractor shall use its best efforts to minimize the Reimbursable Costs incurred in the performance of the Work, consistent with the intent and purposes of this Agreement, sound business practice and the reasonable instructions of Owner.

 

ARTICLE V

Non-Reimbursable Costs

 

5.01 Except to the extent included in Section 3.09 or Article IV, Owner shall not reimburse Contractor for any of the following costs, all of which shall be borne by Contractor at its sole cost and expense:

 

(a) salaries or other compensation of any principals and branch office heads of Contractor.

 

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(b) expenses of operating Contractor’s home and branch offices, including overhead and administrative expenses except to the extent that such expenses are reimbursable pursuant to the provisions of Section 3.09 or Article IV hereof;

 

(c) any part of Contractor’s capital expenses, including interest on capital employed in connection with the Work;

 

(d) (i) costs not reimbursed by insurance, due (x) to the negligent acts or omissions or willful misconduct of Contractor, or Contractor’s failure to perform its obligations under this Agreement or (y) from the violation by Contractor of any Federal, State or local laws, ordinances or statutes; (ii) casualty losses and related expenses sustained by Contractor in connection with tools, equipment, supplies and other personal effects owned or rented by Contractor; and (iii) any other costs which would have been insured but for the failure of Contractor to carry the insurance required to be carried hereunder or the failure of Contractor to comply with the requirements of any insurance carriers providing insurance coverage for the Project, as set forth in Exhibit B hereof;

 

(e) costs of uncovering, correcting or replacing defective Work which has arisen by reason of Contractor’s gross negligence or intentional breach of this Agreement or failure to properly supervise or coordinate the Work;

 

(f) losses, costs, and expenses (including attorneys’ fees and disbursements) incurred by Contractor in connection with, or as a result of, the occurrence of any event expressly provided for under the terms of this Agreement wherein Contractor agrees to indemnify and hold harmless Owner against such losses, costs and expenses (except Owner shall reimburse Contractor for legal fees incurred in discharging or bonding Trade Contractor mechanic’s liens as provided for in Section 3.10(i);

 

(g) General Conditions Costs which are back-charged to or are deducted from any Trade Contractor for any reason;

 

(h) costs incurred by reason of Contractor’s failure to comply with its obligations under this Agreement, including costs in the form of penalties, fines or other similar charges, as well as any and all costs incurred in contravention of laws, rules and regulations attributable to Contractor’s gross negligence;

 

(i) except as otherwise provided in Subsection 4.01 hereof, premiums for other insurance carried by Contractor;

 

(j) costs of any item expressly excluded from, or not expressly included within, the items referred to in Section 3.09 or 4.01 hereof; and

 

(k) costs of any item or expense which this Agreement provides are to be paid or borne by Contractor at its sole cost and expense.

 

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ARTICLE VI

Schedule of the Work and Early Occupancy

 

6.01 Contractor shall commence the Work hereunder within ten (10) days of receipt and by Contractor of a Notice to Proceed and shall promptly and diligently perform its responsibilities hereunder such, so that the Work shall be (a) Substantially Completed (as defined herein) on or before July 31, 2006 (“Substantial Completion Date”), and (b) completed on or before the date which is ninety (90) days from the latest Substantial Completion Date (“Final Completion Date”), in each case as set forth in the Progress Schedule, subject to adjustments as hereinafter provided, including Contemplated Delays (as defined in Section 6.02 hereof).

 

The Work shall be deemed substantially completed (“Substantial Completion”) on the date when the Work shall be sufficiently completed and all of the following shall have occurred: (a) Owner may use and occupy the Project without interference for all of its intended uses, (b) only minor Punch List items (as such term is defined in Section 7.02(cc) hereof), if any, remain incomplete provided they do not interfere with such use and occupancy and (c) a temporary certificate of occupancy shall have been issued by the appropriate local governmental authority for such portion of the Work. The Work shall be deemed finally completed (“Final Completion”) on the date when the Work shall have been finally completed and Owner shall have received satisfactory evidence, that:

 

(a) all Work, including all items set forth on the Punch Lists (as defined in Section 7.02(cc)), has been fully and satisfactorily completed in a good and workmanlike manner, in conformance with the Contract Documents and in full compliance with all applicable laws, rules, requirements and regulations of all governmental authorities having jurisdiction over the Work;

 

(b) all final certificates of approval relating to the Work, including a Final Certificate of Occupancy of the entire Work and the contemplated uses of the Project, including, without limitation, all necessary certifications of any entity having jurisdiction thereof or any successor thereto, shall have been issued and delivered to the Owner unless the failure to secure said approvals is related to the design of the Project, and unless the inability to secure such certificates is beyond Contractor’s reasonable control; and

 

(c) all required receipts, releases of liens, affidavits, waivers, guarantees, warranties, bonds, as-built drawings and any other documents required under this Agreement or the Trade Contractors shall have been issued and delivered to Owner.

 

6.02 Anything contained in the foregoing provisions of this Article VI to the contrary notwithstanding, if and to the extent that there are hindrances to, or delays in, the performance of the Work by reason of Contemplated Delays (as such term is defined in this Section 6.02) and if Contractor demonstrates that the Work is actually hindered or delayed thereby, any Substantial Completion Date or the Final Completion Date, as the case may be, shall be postponed by the actual number of days attributable to each such demonstrated cause. For purposes of this Agreement, “Contemplated Delays” (a) shall be deemed to include delays or hindrances caused by (i) the acts or

 

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omissions of Owner and Architect (including Change Orders providing for an extension of time and suspensions of work pursuant to Article XXII below), as well as (ii) strikes, (iii) fire, (iv) acts of God, (v) acts of the public enemy, (vi) unavailability of, or inability to obtain, labor or materials by reason of shortages which affect the supply or availability of labor or materials, (vii) floods, (viii) rebellions, riots, insurrections or sabotage, (ix) labor disputes provided such disputes are beyond Contractor’s control and provided Contractor takes all responsible steps possible to remediate them, (x) Manufacturer’s inability to deliver completed product to the Project site unless such failure to deliver is caused by the negligence of Contractor, (xi) severe weather conditions, (xii) concealed conditions and Hazardous Materials, and (b) shall be recognized only if Contractor has used its best efforts to minimize the period of delay or hindrance by means which include, without limitation, seeking alternate sources of labor or materials or acceleration of the Work, but such efforts shall not require Contractor to incur any additional costs. If Contractor wishes to make a claim for an extension of the Substantial Completion Date or the Final Completion Date by reason of a Contemplated Delay, Contractor shall give notice (in accordance with the provisions of Section 29.08 hereof) to Owner of such claim within ten (10) days after knowledge of any Contemplated Delay, which notice shall set forth in detail the nature of each Contemplated Delay, the date or dates upon which each cause of delay began (and ended), the number of days of delay attributable to each such cause, and the action taken, or to be taken, by Contractor to minimize the period of delay if possible. Any such extension shall be deemed accepted by Owner only if reflected in a validly issued Change Order which acceptance shall not be unreasonably withheld or delayed.

 

6.03 In furtherance of the provisions of Sections 6.01 and 6.02 hereof, Contractor shall include in all Trade Contracts, whether for labor or materials or both, a provision entitling Contractor to terminate or cancel such Trade Contract in the event of a breach thereby by the Trade Contractor or any other occurrence or omission thereunder which would result in a delay in, or hindrance to, the timely progress of the Work.

 

6.04 Contractor shall notify Owner promptly if the Work will not be completed within the time provided for in the Project Schedule. If Contractor so notifies Owner, or if, in the opinion of Owner reasonably exercised, Contractor falls behind in the Project Schedule for any reason other than a Contemplated Delay, Contractor shall take appropriate action to improve the progress of the Work and shall, if requested by Owner, submit operational plans to demonstrate the manner in which the lost time may be regained if possible.

 

6.05 On or before the Substantial Completion Date, Contractor shall clear, or cause to be cleared, the Project Site and the Project of any debris, construction materials, rubbish, rubble, discarded equipment or spillage caused by Contractor or its Trade Contractors of solid or liquid waste in full compliance with all applicable environmental laws, shall remove all tools, construction equipment, machinery and surplus materials, and shall maintain the Project free of such items (attributable to Contractor’s work) until Final Completion. In addition, on or before the Substantial Completion Date, Contractor shall clean, or cause to be cleaned in broom clean condition the Project, as provided in the Construction Documents. If the Project or the Project site are injured or damaged by Contractor, in the course of Contractor’s cleaning or removal, Contractor, without increase to the Guaranteed Maximum Price, promptly shall repair and restore the portion thereof so damaged or injured to its condition immediately prior to such damage or injury in a manner satisfactory to Owner

 

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and Architect. If Contractor fails to undertake or cause the undertaking of the aforesaid cleaning, removal and repairs, in such event, the Owner may, at Owner’s sole option, avail itself of any of the remedies provided in this Agreement and, subject to giving 48 hours’ prior written notice to Contractor, Owner may also perform, or cause to be performed, the aforesaid cleaning, removal and repairs and, in such event, all additional expenses incurred by Owner in connection therewith, at Owner’s option, shall be reimbursed to Owner either (a) by Owner not paying Contractor monies then due or next becoming due from Owner to Contractor hereunder, or (b) by Contractor paying such amounts to Owner on demand, after rendition of a bill or statement therefor.

 

6.06 Prior to Substantial Completion of the Work, Owner or Owner’s designees shall have the right to use or occupy all or any portion of the Project or to install or cause the installation of furniture, furnishings and equipment therein, or to allow other contractors to perform tenant work, provided that such occupancy shall not materially interfere with Contractor’s performance of its obligations hereunder (including harmonious labor relations) and, provided further, that Owner or Owner’s designees, as the case may be, shall be liable for any delay, or personal injuries to, or death of, any person and for property damage, to the extent the same is caused by the acts or omissions of Owner or Owner’s designees, as the case may be, in connection with their aforesaid use or occupancy of the Project. Such use or occupancy by Owner or Owner’s designees shall not (a) constitute acceptance by Owner of any element of the Work or the space, systems, materials or equipment incorporated in the Project, (b) be construed as a waiver of any right or claim by Owner in connection with any Work, or (c) affect the obligations of Contractor or any Trade Contractor for any Work which is not in accordance with this Agreement, the respective Trade Contracts or the Contract Documents. Contractor shall continue performance of the Work in a manner which shall not unreasonably interfere with the aforesaid use, occupancy and operation by Owner or Owner’s designees. Contractor agrees that it shall not unreasonably interfere with, or object to, such use or occupancy by Owner or Owner’s designees and that it shall cooperate with Owner and any designated occupants to facilitate such early occupancy.

 

6.07 Owner and Owner’s designees shall have the right of access to the entrances, loading facilities and such other services as Contractor shall be using or providing to the Project. Such right of access shall be subject to the reasonable rules of Contractor, which rules (a) shall be for the sole purpose of coordinating such access and for observing all safety and precautionary measures, and (b) shall not hinder, prohibit or interfere with such access. In addition, Owner may require the use and operation of any completed heating, ventilating or air conditioning equipment at the time that Owner or Owner’s designees occupy or use any portion of the Project.

 

ARTICLE VII

Contractor’s Work

 

7.01 Pre-Construction Phase . Contractor agrees that during the pre-construction phase of the Work (the “Pre-Construction Phase”), it shall perform the following services:

 

(a) consult with Owner and Architect to ascertain Owner’s needs and goals and the requirements of the Work;

 

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(b) thoroughly review all preliminary plans and specifications, and all revisions and additions thereto, for the purpose of preparing and submitting to Owner preliminary budgets (“Construction Budget”), to be in such form and contain such detail as required by Owner and which Construction Budget shall be revised as requested by Owner or more frequently if Owner so requires;

 

(c) provide assistance to, and cooperate with Owner and Architect in obtaining all necessary approvals of governmental authorities having jurisdiction over the Project;

 

(d) thoroughly investigate existing conditions at the Project Site and consult with and advise Owner and Architect concerning all materials and major design, building systems and construction elements to be incorporated in the Work, taking into consideration costs, availability, lead time for ordering materials, speed of construction and maintenance;

 

(e) review estimates, if any, of Architect and Consultants with respect to the costs of the Work;

 

(f) review the Construction Documents (but without assuming Architect’s responsibility for errors and omissions) as they are being prepared for the purpose of making recommendations, and make recommendations to Owner and Architect with respect to the following:

 

(i) the availability of labor, materials and supplies;

 

(ii) elimination of possible conflicts and/or overlapping jurisdictions among the various trades or overlapping responsibilities among Trade Contractors;

 

(iii) variations from customary construction practices and methods which, in the opinion of Contractor, may cause difficulties or occasion delay in the performance of the Work, it being expressly understood that by review of the Construction Documents under this entire paragraph, Contractor shall not thereby assume responsibility for design errors and omissions;

 

(iv) discrepancies and deficiencies in the Construction Documents, or between the Construction Documents and existing conditions at the Project;

 

(v) costs of labor, supplies, materials and equipment to be used in the performance of the Work;

 

(vi) unit prices and alternates;

 

(vii) required temporary and Project support facilities; and

 

(viii) construction economies through alternative methods, materials, or concepts, consistent with Owner’s requirements and sound construction practice;

 

(g) establish, implement and observe all safety, health and environmental protection

 

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measures during performance of the Work, consistent with the requirements of all applicable Federal, State and local laws, rules and regulations; submit to Owner, and periodically update, as necessary, appropriate or may be required, safety plans for the Project showing the manner in which the aforesaid measures are implemented; and designate a responsible person or persons of Contractor’s office organization, as site safety coordinator. The performance of such services by Contractor shall not relieve it or any of the Trade Contractors of their respective responsibilities for the safety of persons and property in compliance with this Agreement and all statutes, rules, regulations and orders applicable to the Work;

 

(h) in consultation with Owner and Architect, develop the most favorable way of bidding the Work, including, without limitation, the size and scope of each bid package, and dates of bidding and use of “fast-track” methods;

 

(i) make a labor survey, including an analysis of the costs, types and quality of labor required for the Work and a forecast of the availability thereof as and when needed, including a survey and schedule of the dates of all union labor contracts coming up for renewal during the projected period of construction;

 

(j) make recommendations regarding, and render assistance necessary for, the development and administration of an effective labor relations program for the Work and the avoidance of labor disputes during the performance of the Work and assist in negotiating any agreements with labor unions;

 

(k) in consultation with Owner and Architect and as expeditiously as is required for the orderly and timely completion of the Project, prepare and submit to Owner for its approval, a progress schedule for the performance of the Work, make such modifications thereto as Owner may reasonably request and, upon Owner’s approval of the same (which, subsequent to such approval is hereinafter referred to as the “Progress Schedule”), make no further modifications thereto without first in each instance obtaining Owner’s prior approval thereof. The Progress Schedule shall also (i) set forth a construction time schedule which identifies all major and critical components of the Project and the Work, including Architect’s preparation of design documents, all major and critical design details and all matters relating to Trade Contractors and Trade Contract awards, and which identifies Owner’s responsibilities, if any, with respect to the design documents, and (ii) from and after the date that the same is available, incorporate the information described in this Section 7.01. Contractor agrees that the Progress Schedule shall not be amended, modified or extended without Owner’s prior written approval;

 

(1) advise and make recommendations to Owner and Architect regarding the best order and sequence for the development of the Construction Documents;

 

(m) maintain written records of all communications with, and recommendations made to, Architect, and Architect’s responses thereto; make the same available for inspection by Owner at all times and promptly furnish to Owner copies of all correspondence between Contractor and Architect relative to the Work and the Project;

 

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(n) advise and consult with Owner and obtain Owner’s approval of, Trade Contractors qualified to bid the various packages of the Work as well as methods of, and the form of, Trade Contract awards, and award Trade Contracts all in the manner set forth in Article VIII hereof;

 

(o) review with Trade Contractors all methods and materials that may be used in connection with the Work and make recommendations to Owner and Architect regarding changes, if any, to the Construction Documents;

 

(p) make a materials survey, including an analysis of all materials and equipment required for the Work and a forecast of the availability thereof as and when needed, including advice of any factors or potential occurrences then known by Contractor which might affect the future availability of such materials and equipment and coordinate all purchases of materials and equipment; and

 

(q) assist Owner in connection with the pre-purchasing of any long-lead materials and/or equipment to be incorporated in the Work.

 

Contractor agrees to perform such other and additional services similar in type and obligation to those listed above, prepare such other reasonably requested schedules, reports, budgets and other technical data, and attend such meetings during the Pre-Construction Phase as Owner may reasonably request in order to assist in the preparation of the Construction Documents, cost estimates, updated Progress Schedules and any other documents and instruments relative to the Work and the Project, to the end that Final Completion of the Work may be brought and maintained within the Guaranteed Maximum Price and Substantial Completion Date.

 

7.02 Construction Phase . Contractor agrees that during the construction phase (the “Construction Phase”) of the Work, which Construction Phase shall commence immediately upon Owner’s notification to Contractor that current tenant has vacated the Hanover, NJ facility and shall terminate on the date of Final Completion of the Work, it shall perform the following services:

 

(a) establish procedures for the orderly and expeditious performance and Final Completion of the Work in accordance with the terms of this Agreement; perform, or require to be performed, all Work necessary in connection therewith; establish procedures for administration of Trade Contracts; and maintain coordination among Trade Contractors;

 

(b) prepare Project site organization and lines of authority in order to carry out the Work on a coordinated basis;

 

(c) organize staff and assign personnel, as approved by Owner, to various areas to provide a positive and efficient means by which the Work may be controlled, coordinated and expedited;

 

(d) in consultation with Owner and Architect, update the latest Construction Budget prepared in the course of the Pre-Construction Phase, setting forth in such manner and detail as Owner may require, all anticipated costs of the Work for (i) all Trade Contractors performing labor or furnishing materials under Trade Contracts, other than Trade Contracts awarded solely for the

 

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performance of General Conditions Work Items, on a trade-by-trade and square foot basis, (ii) all of the Contractor’s personnel and labor referred to in Section 3.06(a) hereof, and (iii) all General Conditions Work Items, broken down on an itemized, line item basis, and segregated to reflect those portions of said General Conditions Work Items which are to be performed by Contractor and those portions which are to be performed by Trade Contractors; update monthly, in consultation with Owner and Architect, and submit to Owner for its approval, such Construction Budget, and make such adjustments thereto, including adjustments by reason of approved Change Orders and Emergency Change Orders, to keep Owner currently informed as to the anticipated aggregate Costs of the Work. Contractor agrees that if there exists any factor, event or occurrence of any kind which in Contractor’s opinion, inhibits or prevents the furnishing of accurate cost forecasts, then and in such event, Contractor promptly shall so advise Owner in writing;

 

(e) coordinate the scheduling of the Work;

 

(f) require submission of, and review, progress schedules of Trade Contractors and make adjustments to such schedules as appropriate in an effort to continue the expeditious Final Completion of the Work within the time periods set forth in the Progress Schedule;

 

(g) except as otherwise provided in Article XXIII hereof, obtain Owner’s written approval of any changes in the Work and any approvals or other documents necessary in connection therewith;

 

(h) conduct necessary job and coordination meetings, which job meetings shall be held not less often than weekly unless not required and which coordination meetings shall be held as required, and attend all such meetings;

 

(i) prepare agendas and detailed written minutes of each job and coordination meeting and furnish copies thereof to Owner and Architect;

 

(j) prepare and maintain Project record keeping system, including records of all changes in the Work necessitated by reason of Change Orders, Emergency Change Orders and Field Orders, Work progress schedules, daily manpower breakdown, shop drawing logs, material lists, records of all pertinent communications with, and recommendations made to, Architect and its responses thereto, and daily reports recording manpower breakdowns on a trade-by-trade basis with a description of the Work being performed each day by each trade, equipment and material deliveries, visitors, special occurrences, weather conditions, and other Work related information and make such on-Project Site records available for inspection to Owner (and, if required by Owner, to Architect and/or Consultants). In addition, copies of all correspondence pertaining to the Work shall be maintained by Contractor and shall be made available at all times to Owner;

 

(k) submit to Owner each month a “Job Progress Report” which shall describe the following: (i) the financial condition of the Work, including Trade Contract awards, Project modifications, anticipated cost summary and Change Order summary; (ii) construction status, including updated Progress Schedules with projected critical dates, status of job progress to date, current Work activity, projected Work activity for the following month and job photos; (iii) drawing status and (iv) any issues that may impact the above schedule and cost.

 

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(1) require that Trade Contractors submit and assemble and review, brochures, guarantees, certificates of compliance and other agreements and instruments;

 

(m) obtain and review for constructability (but not as a substitute for Architect’s technical review) all shop drawings, samples and catalog cuts submitted by Trade Contractors and comment to Owner and Architect on their form and any significant inconsistencies between the shop drawings and the Construction Documents; and after Contractor shall so review said documents it shall promptly submit the shop drawings to Architect for review and approval. Architect shall review and return to Contractor all shop drawings and other submittals within ten (10) business days. After return of the shop drawings from Architect, review Architect’s comments to the shop drawings; and distribute them to the submitting Trade Contractor and all other affected parties so that the Work may be properly coordinated and implemented into the Project. Contractor shall not be responsible for design errors and omissions. Contractor shall use its best efforts to discover and resolve any conflicts between shop drawings submitted by Trade Contractors; Contractor acknowledges and agrees that as part of its obligations under this Agreement, Contractor and its Trade Contractors are to prepare and submit shop drawings and other submissions, conduct coordination meetings and prepare coordination drawings for the purpose of coordinating the work required of Contractor and its Trade Contractors. Owner shall require the attendance of Architect at coordination meetings, when requested by Contractor. This process, in part, is intended to recognize and resolve design conflicts in advance of fabrication and installation of the various components of the Work. Contractor agrees that it shall expeditiously and thoroughly prepare and submit shop drawings and conduct and conclude the coordination effort at the earliest possible time so as to facilitate the recognition and resolution of conflicts, including errors in the Construction Documents, such that any adverse effects on the progress of the Work are avoided to the fullest extent reasonably possible. Similarly, the proposal of substitutions in accordance with Article XXIII of this Agreement shall be conducted at the earliest possible time. Nothing herein shall relieve Contractor from its own failure to comply with its obligations with respect to shop drawings, samples and catalog cuts;

 

(n) at the Project Site, on a current basis:

 

(i) maintain, and make available to Owner, Architect and/or Consultants, copies of any records with respect to Trade Contracts, shop drawings, samples, operating manuals, the Construction Documents, equipment and any and all other related documents and any revisions to any of the foregoing which may arise out of, or be related to, this Agreement;

 

(ii) maintain and provide, and make available to Owner, Architect and/or Consultants, progress photos taken on a monthly basis according to a plan, as previously approved by Owner; and

 

(iii) upon final completion of the Work, deliver to Owner copies of a complete set of marked “as-built drawings”, with respect to mechanical, electrical and plumbing showing the Work, as actually completed, together with copies of all operating instructions and maintenance manuals (bound and indexed); and

 

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(o) establish and coordinate with Owner a system for processing, expediting and administering all Trade Contracts for the purchase of materials, supplies and equipment. Manage the procurement and delivery of critical materials to the Project Site and coordinate the deliveries with the progress of the Work;

 

(p) notify Owner and Architect of the progress of the Work, and advise Owner, in accordance with the provisions of Article VI hereof, of any delays or serious potential delays which may affect Substantial Completion of the Work and of Contractor’s recommendations regarding such delays;

 

(q) inspect and coordinate the work of all Trade Contractors, enforce the terms of their respective Trade Contracts and enforce strict discipline and good order among all Trade Contractors in an effort to see that the Work is performed in accordance with the terms of such Trade Contracts, the Contract Documents, recognized trade standards and the applicable laws, rules and regulations of governmental authorities having jurisdiction over the Work and endeavor to guard Owner against any delays, increased costs and defects and deficiencies in the Work. In connection with the foregoing, Contractor shall (i) require any Trade Contractor to stop the performance of any Work which Contractor observes is not in compliance with the requirements of its respective Trade Contract, the Contract Documents, recognized trade standards or the applicable laws, rules and regulations of any governmental authorities having jurisdiction over the Work; (ii) reject and require to be corrected, those portions of the Work which Contractor discovers does not conform to the requirements of the applicable Trade Contract, the Contract Documents, recognized trade standards or the applicable laws, rules and regulations of any governmental authorities having jurisdiction over the Work; (iii) inspect all materials, supplies and equipment delivered or installed in connection with, or pursuant to, any Trade Contract in an effort to determine that the same are in compliance with the requirements of the applicable Trade Contract, the Contract Documents, recognized trade standards and the laws, rules and regulations of all governmental authorities having jurisdiction over the Work and reject and require replacement of all non-conforming materials, supplies and equipment; and (iv) not employ on the Work any person or Trade Contractor unfit for or unskilled in the assigned task and, remove such unfit or unskilled employee or such Trade Contractor from the Project site;

 

(r) arrange for all cutting, fitting or patching that may be required to complete the Work or to make its several parts fit together properly;

 

(s) use best efforts to resolve disputes between Trade Contractors relative to the performance of their work or the furnishing of materials, supplies or equipment in connection with the Work;

 

(t) arrange for the storage of all materials, supplies, systems and equipment provided in connection with the performance of the Work;

 

(u) maintain the Project site in a safe and orderly fashion and provide Project site clean-up of the Work on a regular basis during the course of construction, and also upon Substantial Completion and Final Completion, as provided in this Agreement;

 

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(v) enforce the implementation of necessary safety, health and environmental protection measures (as required under Subsection (g) of Section 7.01 hereof) during the performance of the Work, which shall include, without limitation, the erection and maintenance of all reasonable safeguards and the posting of danger signs and other warnings against hazards, conduct inspections and require that all Trade Contractors comply with all Federal, State and local safety, health, equal opportunity and environmental protection and other requirements, laws, rules and regulations as well as all necessary safety, health and environmental protection measures as provided herein applicable to the Work;

 

(x) prepare a schedule of values and Applications for Payment in a form reasonably approved by Owner; determine, prior to the submission of each Application for Payment, whether and to what extent the sums requested herein are due and payable; and certify to the best of Contractor’s knowledge, information and belief the same to Owner;

 

(y) make recommendations with respect to any changes Contractor may consider necessary or desirable in connection with the Work (including, but not limited to, events of force majeure or Contemplated Delay), it being understood and agreed that, except as otherwise provided in Section 23.05 and 23.06 hereof, no changes to the Contract Documents may be made in connection with the Work without the prior written approval of Owner;

 

(z) issue to Trade Contractors (i) all Change Orders approved by Owner, and (ii) all Emergency Change Orders and Field Orders in the manner and in accordance with the provisions set forth in Article XXIII hereof;

 

(aa) with respect to portions of the Work to be performed pursuant to a Change Order, an Emergency Change Order, or a Field Order, on a time and material, unit-cost or other similar basis, keep and require the keeping of records and computations thereof and maintain accurate cost accounting records, and provide copies thereof to Owner;

 

(bb) review all Trade Contractors’ insurance documents for compliance with the provisions of their respective Trade Contracts. Inform Owner of any deficiencies in said coverage;

 

(cc) assist Owner in determining when Substantial Completion of the Work has taken place; subsequent to Substantial Completion of the Work, prepare (in consultation with Architect) lists of incomplete or unsatisfactory Work (“Punch Lists”) and perform or cause to be performed, and supervise all work necessary to complete the items set forth on the Punch Lists; provided, however, that the failure to include any element of the Work on such Punch Lists shall not alter the responsibility of Contractor and/or Trade Contractors to complete the Work in accordance with the Contract Documents; and subsequent to the completion of all items set forth on th