INSTRUCTIONS FOR COMPLETION OF AGC DOCUMENT 410 STANDARD FORM OF DESIGN-BUILD AGREEMENT AND GENERAL CONDITIONS BETWEEN OWNER AND CONTRACTOR

 

                                                                      Exhibit 10

 

 

                  THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA

 

 

 

                         INSTRUCTIONS FOR COMPLETION OF

                                AGC DOCUMENT 410

                          STANDARD FORM OF DESIGN-BUILD

                        AGREEMENT AND GENERAL CONDITIONS

                          BETWEEN OWNER AND CONTRACTOR

           (Where the Basis of Payment is the Actual Cost Plus a Fee,

                      with a Guaranteed Maximum Price Option)

 

1993 EDITION

         The Standard   Form of   Design-Build   Agreement   and General   Conditions

between   Owner and   Contractor   (Cost Plus a Fee with GMP Option),   AGC Document

410, is a very   substantial   revision of the 1982 edition.   It is designed to be

used as a follow-on   document to AGC 400,   Preliminary   Design- Build   Agreement

Between Owner and   Contractor,   or as a stand-alone   document that addresses the

entire design-build process, including the services otherwise provided under AGC

400. The revision to AGC 410 is in response to new circumstances, e.g. hazardous

materials and more options for dispute   resolution.   The revision also is in the

interest   of   creating   a   document   clearly   stating   the   parties'   rights and

responsibilities,   reducing the   potential   for disputes and guiding   those less

experienced in the design-build method of project delivery.

 

GENERAL INSTRUCTIONS

 

Standard Form

 

         These instructions are for the information and convenience of the users

of AGC 410, 1993 Edition. They are not part of the agreement nor a commentary on

or   interpretation   of the contract   form.   It is the intent of the parties to a

particular   agreement   that controls its meaning and not that of the writers and

publishers of the standard   form. As a standard   form,   this   agreement has been

designed to establish the relationship of the parties in the standard situation.

Recognizing that every project is unique, modifications may be required. See the

recommendations for modifications, below.

 

Insurance and Legal Counsel

 

         This   agreement   has   important    legal   and   insurance    consequences.

Consultation   with an   attorney   and an   insurance   adviser is   encouraged   with

respect to its completion or modification.

 

DESIGN-BUILD FAMILY OF DOCUMENTS

 

         In the design-build   project delivery method,   the owner and contractor

enter   into   a   single    contract    wherein   the    contractor    undertakes    the

responsibility to provide for both the design and construction of the project in

conformance   with   basic   requirements   which   have been set forth by the owner.

Design may be   performed   within   the   contractor's   organization,   or it may be

performed   by   design   professionals   under   a   separate   contract   between   the

architect/engineer and contractor (AGC 420).

 

         The AGC   family   of   design-build   standard   forms   has been   carefully

coordinated   (See   diagram).   Use of other   forms or AGC   forms   with   different

publication   dates with any of this series of contract   documents   would require

extensive modification and is not recommended.

 

                   USE OF AGC DESIGN-BUILD SERIES OF DOCUMENTS

 

LICENSING LAWS

 

         State   architect/engineer   licensing   laws must be   considered by firms

interested in   design-build.   In addition to the requirement for licensed design

professionals   to perform   those   services   regulated   by the   licensing   law, a

corporate professional license may be required.   This may be true whether design

is provided   by in-house   architect/engineers   or design   professionals   who are

independent   contractors.   (This   family of   documents   is written to be used in

either   situation.)   There is a growing body of state law in this area that must

be reviewed to ensure that design-build contracts are valid and enforceable.

 

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COMPLETING THE AGREEMENT

 

Completing Blanks

 

         Diamonds in the margins indicate   provisions   requiring parties to fill

in blanks with information.

 

Modifications

 

         Supplemental conditions, provisions added to the printed agreement, may

be adopted by reference. It is always best for supplements to be attached to the

agreement.

 

         Provisions   in the printed   document that are not to be included in the

agreement may be deleted by striking through the word,   sentence or paragraph to

be omitted.   It is   recommended   that unwanted   provisions not be blocked out so

that the deleted materials are illegible. The parties should be clearly aware of

the material deleted from the standard form.

 

         It   is   a   good   practice   for   both   parties   to   sign   and   date   all

modifications and supplements.

 

AGC 410

 

         If AGC 410 is   executed   after   AGC   400   has   been   entered   into   and

completed, then the work product of AGC 400 (normally schematic design documents

plus a   preliminary   estimate and   schedule) is simply   referenced in AGC 410 as

part of the Owner's   Program   and other   relevant   information   that is provided

under Subparagraph 4.1.1, and need not be duplicated.

 

Article 2

 

         In paragraph 2.2 the parties   identify the   Architect/Engineer   for the

Project.

 

         Subparagraph 2.4.1 details the Contract Documents and provides an order

of priority in case of conflicts.   If a GMP is prepared,   the documents   forming

its basis   are to be   listed   in   Amendment   No.   1,   which is   attached   to the

Agreement.

 

Article 3

 

         The GMP   provisions in Paragraph 3.2 are optional.   The   particulars of

the GMP (its   basis,   the   concept   of   including   a   contingency   sum under the

contractor's control, etc.) are clearly delineated. The GMP will be prepared (if

the Owner   requests)   when the   drawings   and   specifications   are   sufficiently

complete,    thus   not   tieing   the   Contractor   to   a   specific,    and   possibly

inappropriate,   moment in time when the GMP must be prepared.   Further,   the GMP

(and date of Substantial Completion) are added later via Amendment No. 1.

 

         Paragraph 3.4 addresses the risk of hazardous materials.

 

         The   additional   services set forth in Paragraph   3.8 have been greatly

expanded    and    match    the     Additional     Services     provisions     of    the

Contractor-Architect/Engineer agreement, AGC 420.

 

Article 4

 

         A new provision relates to the Owner's Representative in Paragraph 4.4.

The Owner is to name its   representative,   who must   meet with the   Contractor's

approval. There is a description of the Representative's duties.

 

Article 5

 

         Paragraph 5.4 provides for the contingent assignment of subcontracts to

the Owner should the Contractor default.

 

Article 6

 

         A date   of   Substantial   Completion   may   be   established   in   the   GMP

Amendment.   If no GMP is   established,   the   parties   may   establish   a date   of

Substantial   Completion   in   Amendment   No. 1 and   proceed   on a cost plus a fee

basis.

 

 

<PAGE>

 

Article 7

 

         An initial payment by the Owner is introduced in Paragraph 7.1.

 

         Payment for the   Contractor's   services is split into two parts -- that

due   in   the    preconstruction    phase   (Paragraph   7.2),   and   that   due   after

construction commences (Paragraph 7.3).

 

Article 11

 

         Contractual   indemnification   is   governed   by state law and the states

differ as to the types of   indemnification   agreements   that they will   enforce.

Consultation with insurance and legal counsel with knowledge of the jurisdiction

is recommended.

 

         Paragraph   11.3   requires   the   statement   of the   Architect/Engineer's

professional   liability insurance coverage.   The rationale is that this coverage

is at least as   important as the other   coverages to be provided,   and gives the

Owner the opportunity to participate in setting the minimum liability limits for

all major policies.

 

Article 12

 

         New   provisions   have been added for the   Contractor   to   recover   lost

opportunity   costs if the   Contractor   terminates   the contract for cause or the

Owner terminates for convenience.

 

Article 13

 

         A few state laws may   require a   prominent   notice on the first page of

the contract   stating that the agreement is subject to   arbitration   (e.g.   Tex.

Bus. & Com. Code Ann. ss.35.53 (West 1987)).

 

         Dispute   resolution    provisions   have   been   revised   to   make   direct

discussions and then mediation preconditions of the demand for arbitration.

 

         A very   important   new concept is the   multi-party   dispute   resolution

procedure   in which all parties   necessary to resolve a claim will be parties to

the same arbitration proceeding (Paragraph 13.6).

 

         In   addition,   the cost of dispute   resolution   is   recoverable   by the

prevailing party from the other party (Paragraph 13.7).

 

Amendment No. 1

 

         This amendment   establishes a Guaranteed   Maximum Price for the project

and/or the date of Substantial Completion.

 

 

 

 

 

 

 

 

<PAGE>

 

                  THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA

 

                          STANDARD FORM OF DESIGN-BUILD

                        AGREEMENT AND GENERAL CONDITIONS

                          BETWEEN OWNER AND CONTRACTOR

          (Where the Basis of Payment is the Cost of the Work Plus a Fee,

                     with a Guaranteed Maximum Price Option)

 

                                TABLE OF ARTICLES

 

          1.    AGREEMENT

          2.    GENERAL PROVISIONS

          3.     CONTRACTOR'S RESPONSIBILITIES

          4.    OWNER'S RESPONSIBILITIES

          5.    SUBCONTRACTS

          6.    CONTRACT TIME

          7.    COMPENSATION

          8.    COST OF THE WORK

          9.    CHANGES IN THE WORK

          10.   PAYMENT FOR CONSTRUCTION PHASE SERVICES

          11.   INDEMNITY, INSURANCE AND WAIVER OF SUBROGATION

          12.   TERMINATION   OF   THE   AGREEMENT   AND   OWNER'S   RIGHT   TO   PERFORM

               CONTRACTOR'S RESPONSIBILITIES

          13.   DISPUTE RESOLUTION

          14.   MISCELLANEOUS PROVISIONS

          15.   EXISTING CONTRACT DOCUMENTS

 

          AMENDMENT NO.1

 

 

 

 

 

 

 

 

 

 

 

 

 

This Agreement has important legal and insurance consequences. Consultation with

an   attorney   and   insurance   consultant   is   encouraged   with   respect   to   its

completion or modification.

 

 

 

<PAGE>

 

 

         STANDARD FORM OF DESIGN-BUILD AGREEMENT AND GENERAL CONDITIONS

                          BETWEEN OWNER AND CONTRACTOR

 

(Where   the   Basis   of   Payment   is the   Cost   of the   Work   Plus a Fee,   with a

Guaranteed Maximum Price Option)

 

                                    ARTICLE 1

 

                                    AGREEMENT

 

This   Agreement is made this 27th day of April in the year 2005,   by and between

the

 

OWNER                       Community First Bank

(Name and Address)          3685 Blue Ridge Blvd.

                           Walhalla, SC 29691

 

and the

 

CONTRACTOR                  Trehel Corporation

(Name and Address)          P.O. Box 1707

                           Clemson, SC 29633-1707

 

 

for services in connection with the following

 

PROJECT                     A New Financial Institution for Community First Bank.

 

 

          Notice to the parties shall be given at the above addresses.

 

                                    ARTICLE 2

 

                                GENERAL PROVISIONS

 

2.1 TEAM   RELATIONSHIP   The Owner and the   Contractor   agree to proceed with the

Project on the basis of trust,   good faith and fair dealing,   and shall take all

actions   reasonably   necessary to perform this   Agreement in an   economical   and

timely manner,   including   consideration of design modifications and alternative

materials or equipment   that will permit the Work to be   constructed   within the

Guaranteed   Maximum Price (GMP) and by the date of   Substantial   Completion,   if

they are   established by Amendment No. 1. The   Contractor   agrees to procure the

architectural   and   engineering    services   set   forth   below,   and   to   furnish

construction and administration of the Work.

 

2.2   ARCHITECTIENGINEER Architectural and engineering services shall be procured

from licensed,   independent design   professionals   retained by the Contractor or

furnished by licensed employees of the Contractor, or as permitted by the law of

the   state   where the   Project   is   located.   The   person   or   entity   providing

architectural    and    engineering    services    shall   be    referred   to   as   the

Architect/Engineer.    If   the    Architect/Engineer    is   an   independent   design

professional,   the   architectural   and   engineering   services   shall be procured

pursuant    to   a    separate    agreement    between    the    Contractor    and    the

Architect/Engineer.    The    Architect/Engineer   for   the   Project   is   Signature

Architects (Clemson, SC); Britt, Peters & Associates, Inc. (Greenville, SC)

 

2.3 EXTENT OF AGREEMENT This Agreement is solely for the benefit of the parties,

represents   the   entire   and   integrated   agreement   between   the   parties,   and

supersedes all prior negotiations, representations or agreements, either written

or oral.

 

2.4       DEFINITIONS

        .1The Contract Documents consist of:

          a.    Change Orders and written   amendments to this Agreement signed by

               both the   Owner   and   Contractor,   including   Amendment   No. 1 if

               executed;

          b.    this   Agreement   except for the existing   Contract   Documents set

               forth in item e below;

<PAGE>

 

          c.    the most   current   Documents   approved   by the Owner   pursuant to

               Subparagraphs 3.1.4, 3.1.5 or 3.1.6;

          d.    the information provided by the Owner pursuant to Clause 4.1.2.1;

          e.    the   Contract   Documents in existence at the time of execution of

               this Agreement which arc set forth in Article 15;

          f.    the Owner's Program provided pursuant to Subparagraph 4.1.1.

 

In   case   of   any   inconsistency,   conflict   or   ambiguity   among   the   Contract

Documents,   the   Documents   shall   govern in the order in which   they are listed

above.

 

     .2    The Work is the Design   Phase   Services   procured in   accordance   with

          Paragraph 3.1, the GMP Proposal   provided in accordance with Paragraph

          3.2, the   Construction   Phase   Services   provided in   accordance   with

          Paragraph 3.3,   Additional Services that may be provided in accordance

          with   Paragraph   3.8,   and   other   services   which are   neccessary   to

          complete the Project in accordance with and reasonably   inferable from

          the Contract Documents.

 

     .3    The term Day shall mean calendar day.

 

     .4    A   Subcontractor   is a person or entity who has an agreement   with the

          Contractor to perform any portion of the Work. The term   Subcontractor

          does not include the   Architect/Engineer   or any   separate   contractor

          employed by the Owner or any separate contractor's subcontractors.

 

     .5    A   Subsubcontractor   is a person or entity who has an agreement with a

          Subcontractor to perform any portion of the Subcontractor's work.

 

      .6    Substantial Completion of the Work, or of a designated portion, occurs

          on the date when   construction is sufficiently   complete in accordance

          with the   Contract   Documents   so that the Owner can occupy or utilize

          the   Project,   or a   designated   portion,   for the use for which it is

          intended. This date shall be confirmed by a certificate of Substantial

          Completion   signed by the Owner and Contractor.   The certificate shall

          state the respective   responsibilities of the Owner and Contractor for

          security,   maintenance,   heat,   utilities,   damage   to the   Work,   and

          insurance.   The certificate   shall also list the items to be completed

          or   corrected,   and   establish   the   time   for   their   completion   and

          correction.

 

     .7    The   Owner's   Program   is   an   initial    description   of   the   Owner's

          objectives,   including budgetary and time criteria, space requirements

          and relationships, flexibility and expendability requirements, special

          equipment and systems, and site requirements.

 

                                    ARTICLE 3

 

                          CONTRACTOR'S RESPONSIBILITIES

 

         The Contractor   shall be   responsible   for procuring the design and for

the   construction   of the Work   consistent   with the   Owner's   Program,   as such

Program   may be   modified   by the Owner   during   the   course   of the   Work.   The

Contractor   shall exercise   reasonable   skill and judgment in the performance of

its services,   but does not warrant or guarantee   schedules and estimates   other

than those that are part of the GMP proposal.

 

3.1       DESIGN PHASE SERVICES

 

3.1.1   PRELIMINARY    EVALUATION   The   Contractor   shall   provide   a   preliminary

evaluation of the Project's   feasibility   based on the Owner's Program and other

relevant information.

 

3.1.2 PRELIMINARY   SCHEDULE The Contractor shall prepare a preliminary   schedule

of the Work for the   Owner's   written   approval.   The   schedule   shall   show the

activities of the Owner, Architect/Engineer and Contractor necessary to meet the

Owner's completion requirements. The schedule shall be updated periodically with

the level of detail for each schedule   update   reflecting the   information   then

available.   If an update indicates that a previously   approved schedule will not

be met,   the   Contractor   shall   recommend   corrective   action   to the   Owner in

writing.

<PAGE>

 

3.1.3   PRELIMINARY    ESTIMATE   When   sufficient   Project   information   has   been

identified,   the   Contractor   shall prepare for the Owner's   written   approval a

preliminary   estimate   utilizing area, volume or similar   conceptual   estimating

techniques.   The estimate shall be updated periodically with the level of detail

for each estimate   update   reflecting the   information   then   available.   If the

preliminary   estimate or any update exceeds the Owner's   budget,   the Contractor

shall make written recommendations to the Owner.

 

3.1.4   SCHEMATIC   DESIGN   DOCUMENTS The Contractor   shall submit for the Owner's

written approval   Schematic Design   Documents,   based on the Owner's Program and

other relevant   information.   Schematic Design Documents shall include drawings,

outline specifications and other conceptual documents illustrating the Project's

basic   elements,   scale,   and their   relationship   to the site. One set of these

documents   shall be   furnished   to the Owner.   The   Contractor   shall update the

preliminary schedule and estimate based on the Schematic Design Documents.

 

3.1.5 DESIGN   DEVELOPMENT   DOCUMENTS The Contractor shall submit for the Owner's

written approval Design   Development   Documents based on the approved   Schematic

Design   Documents.   The Design   Development   Documents   shall further define the

Project including drawings and outline   specifications fixing and describing the

Project size and character,   and other   appropriate   elements   incorporating the

structural,   architectural,   mechanical and electrical systems. One set of these

documents   shall be   furnished   to the Owner.   The   Contractor   shall update the

schedule and estimate based on the Design Development Documents.

 

3.1.6 CONSTRUCTION DOCUMENTS The Contractor shall submit for the Owner's written

approval   Construction   Documents   based   on   the   approved   Design   Development

Documents. The Construction Documents shall set forth in detail the requirements

for   construction of the Work, and shall consist of drawings and   specifications

based upon codes, laws or regulations   enacted at the time of their preparation.

Construction shall be in accordance with these approved Construction   Documents.

One set of these documents shall be furnished to the Owner prior to commencement

of construction. If a GMP has not been established, the Contractor shall prepare

a further update of the schedule and estimate.

 

3.1.7   OWNERSHIP OF   DOCUMENTS   All   Documents   shall remain the property of the

Contractor   and are not to be used by the Owner   without the written   consent of

the Contractor.

 

3.2   GUARANTEED MAXIMUM PRICE (GMP) PROPOSAL

 

3.2.1 When the   drawings   and   specifications   are   sufficiently   complete,   the

Contractor   shall, if requested by the Owner,   propose a GMP, which shall be the

sum   of the   estimated   Cost   of the   Work   as   defined   in   Article   8 and   the

Contractor's   Fee as defined in Article 7. The GMP is subject to modification as

provided in Article 9.

 

3.2.2 If a GMP is not   established,   all references in this Agreement to the GMP

shall   not be   applicable,   and   the   parties   shall   proceed   on the   basis   of

reimbursement   as provided in Articles 7 and 8. In the absence of a GMP however,

the parties may establish a date of Substantial Completion.

 

3.2.3 The estimated Cost of the Work may include the Contractor's contingency, a

sum   established   by the Contractor   for use at the   Contractor's   discretion to

cover costs which are   properly   reimbursable   as a Cost of the Work but are not

the basis for a Change Order.

 

3.2.4 BASIS OF GUARANTEED   MAXIMUM PRICE The   Contractor   shall include with the

GMP proposal a written statement of its basis, which shall include:

     .1    a list of the   drawings   and   specifications,   including   all addenda,

          which were used in preparation of the GMP proposal;

     .2    a list of allowances and a statement of their basis;

     .3    a list of the assumptions and clarifications made by the Contractor in

          the   preparation   of the GMP proposal to   supplement   the   information

          contained in the drawings and specifications;

 

<PAGE>

 

     .4    the date of   Substantial   Completion   upon which the   proposed   GMP is

          based,   and the   Schedule   of Work upon which the date of   Substantial

          Completion is based;

     .5    schedule of applicable alternate prices;

     .6    schedule of applicable unit prices;

     .7    statement of Additional Services included, if any; and

     .8    the time limit for acceptance of the GMP proposal.

 

3.2.5 The   Contractor   shall meet with the Owner to review the GMP proposal.   In

the event that the Owner   discovers any   inconsistencies   or inaccuracies in the

information   presented,   the Owner shall   promptly   give   written   notice to the

Contractor,   who shall make   appropriate   adjustments   to the GMP,   its basis or

both.

 

3.2.6 Unless the Owner accepts the GMP proposal in writing on or before the date

specified in the proposal for such   acceptance   and so notifies the   Contractor,

the GMP   proposal   shall not be   effective   without   written   acceptance   by the

Contractor.

 

3.2.7 Prior to the Owner's   acceptance of the   Contractor's   GMP   proposal,   the

Contractor   shall not incur any cost to be reimbursed as part of the Cost of the

Work,   except as provided   in this   Agreement   or as the Owner may   specifically

authorize in writing.

 

3.2.8 Upon   acceptance by the Owner of the GMP   proposal,   the GMP and its basis

shall   be set   forth in   Amendment   No.   I. The GMP and the date of   Substantial

Completion   shall be subject to   modification by changes in the Work as provided

in Articles 6 and 9.

 

3.2.9   The GMP   shall   include   in the Cost of the Work   those   taxes   which are

applicable at the time the GMP is established. If in accordance with the Owner's

direction   an exemption   is claimed for taxes,   the Owner   agrees to   indemnify,

defend and hold the Contractor   harmless for any liability,   penalty,   interest,

fine,   tax   assessment,   attorneys fees or other expense or cost incurred by the

Contractor as a result of any action taken by the Contractor in accordance   with

the Owner's direction.

 

3.3       CONSTRUCTION PHASE SERVICES

 

3.3.1 The   Construction   Phase will commence upon the issuance by the Owner of a

written notice to proceed with construction.   If construction commences prior to

execution of Amendment No. 1, the Owner's   written   notice to proceed shall list

the   documents   that are   applicable to the part of the Work which the Owner has

authorized.

 

3.3.2 In order to complete the Work, the Contractor   shall provide all necessary

construction supervision,   inspection, construction equipment, labor, materials,

tools, and subcontracted items.

 

 

3.3.3   The   Contractor   shall   give all   notices   and   comply   with all laws and

ordinances   legally   enacted at the date of   execution   of the   Agreement   which

govern the proper performance of the Work.

 

3.3.4 The Contractor shall prepare and submit a Schedule of Work for the Owner's

written   approval.   This   schedule   shall   indicate   the dates for the start and

completion of the various   stages of the   construction   including the dates when

information   and approvals   are required from the Owner.   It shall be revised as

required by the conditions of the Work.

 

3.3.5 The   Contractor   shall assist the Owner in securing   the building   permits

necessary for the construction of the Project.

 

3.3.6 The   Contractor   shall take   necessary   precautions   for the safety of its

employees on the Project,   and shall comply with all   applicable   provisions   of

federal,   state and   municipal   safety   laws to prevent   accidents   or injury to

persons on, about or adjacent to the Project site. The   Contractor,   directly or

through its   Subcontractors,   shall erect and properly maintain at all times, as

required by the   conditions and progress of the Work,   necessary   safeguards for

 

<PAGE>

 

the protection of workers and the public. The Contractor,   however, shall not be

responsible   for the   elimination   or   abatement   of safety   hazards   created or

otherwise resulting from work at the Project site carried on by the Owner or its

employees,   agents,   separate   contractors or tenants. The Owner agrees to cause

its employees,   agents,   separate   contractors and tenants to abide by and fully

adhere to all applicable provisions of federal,   state and municipal safety laws

and regulations.   The above provision shall not relieve   Subcontractors of their

responsibility for the safety of persons or property in the performance of their

work, nor for compliance with all applicable provisions of relevant laws.

 

3.3.7   The   Contractor   shall   keep such full and   detailed   accounts   as may be

necessary for proper financial management under this Agreement.   The Owner shall

be   afforded   access to all the   Contractor's   records,   books,   correspondence,

instructions,   drawings, receipts, vouchers, memoranda and similar data relating

to this Agreement.   The Contractor   shall preserve all such records for a period

of three years after the final payment or longer where required by law.

 

3.3.8 The Contractor   shall provide periodic written reports to the Owner on the

progress of the Work as agreed to by the Owner and Contractor.

 

3.3.9 The   Contractor   shall   develop a system of cost   reporting   for the Work,

including   regular   monitoring   of actual costs for   activities   in progress and

estimates for   uncompleted   tasks and proposed   changes in the Work. The reports

shall be presented to the Owner at mutually agreeable intervals.

 

3.3.10 At all times the Contractor shall maintain the site of the Work free from

debris and waste   materials   resulting   from the Work. At the   completion of the

Work, the Contractor shall remove from the premises all construction   equipment,

tools, surplus materials, waste materials and debris.

 

3.4       HAZARDOUS MATERIAL

 

3.4.1A hazardous Material is any substance or material   identified now or in the

future as hazardous under any federal, state or local law or regulation,   or any

other   substance   or material   which may be   considered   hazardous   or otherwise

subject to statutory or regulatory   requirements   governing   handling,   disposal

and/or   clean-up.   The Contractor shall not be obligated to commence or continue

Work until any known or suspected   Hazardous Material   discovered at the Project

site has been   removed,   rendered or   determined   to be harmless by the Owner as

certified by an independent   testing   laboratory and approved by the appropriate

government agency.

 

3.4.2 If after   the   commencement   of the   Work,   known or   suspected   Hazardous

Material is discovered at the Project site, the Contractor   shall be entitled to

immediately   stop Work in the affected area, and the Contractor shall report the

condition   to   the   Owner   and,   if   required,    the    government    agency   with

jurisdiction.

 

3.4.3 The Contractor shall not be required to perform any Work relating to or in

the   area of   known or   suspected   Hazardous   Material   without   written   mutual

agreement.

 

3.4.4 The Owner   shall be   responsible   for   retaining   an   independent   testing

laboratory to determine the nature of the material encountered and whether it is

a Hazardous Material requiring   corrective measures and/or remedial action. Such

measures shall be the sole   responsibility   of the Owner, and shall be performed

in a manner   minimizing any adverse effect upon the Work of the Contractor.   The

Contractor shall resume Work in the area affected by any Hazardous Material only

upon written agreement between the parties after the Hazardous Material has been

removed or rendered harmless.

 

3.4.5 If the   Contractor   incurs   additional   costs and/or is delayed due to the

presence of known or   suspected   Hazardous   Material,   the   Contractor   shall be

entitled to an equitable   adjustment   in the GMP and/or the date of   Substantial

Completion.

<PAGE>

 

3.4.6 To the   extent   not   caused   by the   negligent   acts or   omissions   of the

Contractor,   its Subcontractors and Sub-subcontractors and the agents of each of

them, the Owner shall defend,   indemnify and hold harmless the   Contractor,   its

Subcontractors or anyone employed directly or indirectly by any of them from all

claims, damages,   losses, costs and expenses including any related to or arising

from the repair,   replacement or   re-performance or Work, and also including but

not limited to attorney's fees, costs and expenses   incurred in connections with

any testing, site remediation,   or dispute resolution process, arising out of or

relating   to the   performance   of the Work in any   area   affected   by   Hazardous

Material,   which   includes   mold,   mildew,   fungi   or   other   similar   microbial

conditions.   To the fullest extent permitted by law, such indemnification   shall

apply regardless of fault, negligence, breach of warranty or contract, or strict

liability of the Owner.

 

3.4.7 The terms of this   Paragraph 3.4 shall survive the   completion of the Work

under this Agreement and/or any termination of this Agreement.

 

3.4.8 To the fullest extent permitted by law, the Owner shall defend,   indemnify

and hold harmless the Contractor, its Subcontractors or anyone employed directly

or   indirectly   by any of them from all claims for   bodily   injury and   property

damage that may arise by virtue of the existence, development or growth of mold,

mildew,   fungi or other similar   microbial   conditions during the performance of

the Work,   to the extent   that such   conditions   are   attributable   to the acts,

omissions or breaches of performance   under this Contract by Owner,   the Owner's

other contractors or anyone for whose acts the Owner may be liable.

 

3.5 ROYALTIES, PATENTS AND COPYRIGHTS The Contractor shall pay all royalties and

license fees which may be due on the   inclusion   of any patented or   copyrighted

materials, methods or systems selected by the Contractor and incorporated in the

Work.   The Contractor   shall defend,   indemnify and hold the Owner harmless from

all suits or claims for infringement of any patent rights or copyrights   arising

out of such   selection.   The Owner   agrees   to   defend,   indemnify   and hold the

Contractor   harmless   from any   suits or claims of   infringement   of any   patent

rights or   copyrights   arising   out of any   patented or   copyrighted   materials,

methods or systems specified by the Owner.

 

3.6 TAX   EXEMPTION If in accordance   with the Owner's   direction an exemption is

claimed for taxes, the Owner agrees to defend, indemnify and hold the Contractor

harmless from any liability, penalty, interest, fine, tax assessment,   attorneys

fees or other   expense or cost   incurred   by the   Contractor   as a result of any

action taken by the Contractor in accordance with the Owner's direction.

 

3.7       WARRANTIES AND COMPLETION

 

3.7.1 The Contractor   warrants that all materials and equipment   furnished under

the Construction Phase of this Agreement will be new unless otherwise specified,

of good   quality,   in   conformance   with the Contract   Documents,   and free from

defective   workmanship and materials.   Warranties   shall commence on the date of

Substantial   Completion of the Work or of a designated   portion.   The Contractor

agrees to correct all   construction   performed under this Agreement which proves

to be defective in   workmanship   and materials   within a period of one year from

the date of Substantial   Completion or for such longer periods of time as may be

set   forth   with   respect   to   specific   warranties   required   by   the   Contract

Documents.

 

3.7.2 Those products,   equipment,   systems or materials incorporated in the Work

at the   direction of or upon the specific   request of the Owner shall be covered

exclusively by the warranty of the   manufacturer.   There are no warranties which

extend   beyond   the   description   on the   face   thereof.   All   other   warranties

expressed or implied including the warranty of merchantability   and the warranty

of fitness for a particular purpose are expressly disclaimed.

 

3.7.3 The Contractor shall secure required   certificates of inspection,   testing

or approval and deliver them to the Owner.

 

3.7.4 The Contractor shall collect all written   warranties and equipment manuals

and deliver them to the Owner.

<PAGE>

 

3.7.5 With the assistance of the Owner's maintenance   personnel,   the Contractor

shall direct the checkout of utilities   and   operations of systems and equipment

for readiness, and assist in their initial start-up and testing.

 

3.7.6 Upon   Substantial   Completion   or   occupancy   of the Work the Owner   shall

assume the sole   responsibility   to operate and maintain the Work properly,   and

waives all claims by the Owner against the Contractor,   its   Subcontractors   and

Sub-subcontractors and the agents, officers,   directors and employees of each of

them,   for any   damages   resulting   from   improper   operation   and   maintenance,

including,   but not   limited to damages   arising   from mold and other   microbial

conditions.

 

3.8 ADDITIONAL   SERVICES The   Contractor   shall provide or procure the following

Additional   Services upon the request of the Owner. A written   agreement between

the Owner and Contractor shall define the extent of such Additional Services. If

a GMP has   been   established   for the   Work or any   portion   of the   Work,   such

Additional   Services   shall be considered a Change in the Work,   unless they are

specifically   included in the   statement of the basis of the GMP as set forth in

Amendment No. 1.

 

     .1    Documentation of the Owner's Program, establishing the Project budget,

          investigating   sources of   financing,   general   business   planning and

          other   information and   documentation   as may be required to establish

          the feasibility of the Project.

     .2    Consultations,    negotiations,    and    documentation    supporting   the

          procurement of Project financing.

     .3    Surveys, site evaluations, legal descriptions and aerial photographs.

     .4    Appraisals of existing equipment,   existing properties,   new equipment

          and developed properties.

     .5    Soils,     subsurface    and    environmental    studies,     reports    and

          investigations required for submission to governmental   authorities or

          others having jurisdiction over the Project.

     .6    Consultations   and   representations   other than normal   assistance   in

          securing building permits,   before governmental   authorities or others

          having jurisdiction over the Project.

     .7    Investigation   or making measured   drawings of existing   conditions or

          the verification of drawings or other Owner-provided information.

     .8    Artistic renderings,   models and mockups of the Project or any part of

          the Project or the Work.

     .9    Inventories of existing furniture, fixtures, furnishings and equipment

          which might be under consideration for incorporation into the Work.

     .10   Interior   design   and   related   services   including    procurement   and

          placement of furniture, furnishings, artwork and decorations.

     .11   Making   revisions   to   the   Schematic   Design,    Design    Development,

          Construction Documents or documents forming the basis of the GMP after

          they   have been   approved   by the   owner,   and which are due to causes

          beyond the control of the Contractor.

     .12   Design,   coordination,    management,   expediting   and   other   services

          supporting the procurement of materials to be obtained,   or work to be

          performed,   by the   Owner,   including   but not   limited   to   telephone

          systems,   computer wiring networks,   sound systems,   alarms,   security

          systems   and   other   specialty   systems   which   are not a part of this

          Agreement.

     .13   Estimates,   proposals,   appraisals,   consultations,   negotiations   and

          services in connection   with the repair or   replacement   of an insured

          loss.

     .14   The premium   portion of overtime   work ordered by the Owner   including

          productivity impact costs.

     .15   Document   reproduction   exceeding   the   limits   provided   for in   this

           Agreement.

     .16   Out-of-town   travel by the   Architect/Engineer   in connection with the

          Work,   except between the   Architect/Engineer's   office,   Contractor's

          office, Owner's office and the Project site.

     .17   Obtaining   service   contractors   and training   maintenance   personnel,

          assisting and consulting in the use of systems and equipment after the

          initial    start   up,   and   adjusting   and   balancing   of   systems   and

          equipment.

 

<PAGE>

 

      .18   Services for tenant or rental spaces not a part of this Agreement.

     .19   Services   requested by the Owner or required by the Work which are not

          specified in the Contract Documents and which are not normally part of

          generally accepted design and construction practice.

     .20   Serving or preparing to serve as an expert witness in connection   with

          any proceeding, legal or otherwise, regarding the Project.

     .21   Preparing reproducible record drawings from marked-up prints, drawings

          or other documents that   incorporate   significant   changes in the Work

          made during the Construction Phase.

 

 

                                    ARTICLE 4

 

                            OWNER'S RESPONSIBILITIES

 

4.1    INFORMATION AND SERVICES PROVIDED BY OWNER

 

4.1.1 The Owner shall   provide full   information   in a timely   manner   regarding

requirements   for the Project,   including the Owner's Program and other relevant

information.

 

4.1.2     The Owner shall provide:

 

      .1    all necessary information   describing the physical   characteristics of

          the site,   including surveys,   site evaluations,   legal   descriptions,

          existing conditions, subsurface and environmental studies, reports and

          investigations;

     .2    inspection and testing services during construction as required by law

          or as mutually agreed; and

     .3    unless   otherwise   provided   in   the   Contract   Documents,    necessary

          approvals,   site plan review,   rezoning,   easements   and   assessments,

          necessary   permits,   fees and charges   required for the   construction,

          use, occupancy or renovation of permanent structures,   including legal

          and other required services.

 

4.1.3   The   Owner   shall   provide   reasonable    evidence    satisfactory   to   the

Contractor,   prior to   commencing   the Work and during the progress of the Work,

that   sufficient   funds are   available   and committed for the entire cost of the

Project,   including an   allowance   for changes in the Work as may be approved in

the   course of the Work.   Unless   such   reasonable   evidence   is   provided,   the

Contractor   shall   not be   required   to   commence   or   continue   the   Work.   The

Contractor   may stop Work after seven (7) days'   written   notice to the Owner if

such   evidence is not   presented   within a reasonable   time.   The failure of the

Contractor   to insist upon the   providing of this evidence at any one time shall

not be a waiver of the   Owner's   obligation   to make   payments   pursuant to this

Agreement,   nor shall it be a waiver of the   Contractor's   right to   request   or

insist that such evidence be provided at a later date.

 

4.1.4 The Contractor   shall be entitled to rely on the completeness and accuracy

of the information and services required by this Paragraph 4.1.

 

4.1.5   The   Owner   acknowledges   that   moisture   and   mold   prevention   requires

appropriate   design   plans   and   specifications,   construction   techniques,   and

building operation and maintenance. The Owner shall be responsible for retaining

an   independent   mold testing   consultant to conduct tests and inspect the Work,

particularly   interior   walls,   ceilings,   and   other   substrate   surfaces,   for

certification   and approval of moisture   content and microbial   conditions.   The

Owner shall schedule all such tests,   approvals or inspection so as not to delay

the progress of the Work or other work   related to the project.   The Owner shall

bear all   expenses   associated   with   tests,   apnrovals,   or   inspections.   Such

certification   and approval shall occur once prior to Substantial   Completion of

the   Work   and   again   prior   to the   expiration   of one   year   from the date of

Substantial Completion of the Work. The certificates of testing,   inspection, or

approval shall