Exhibit 10.1

 

AIA DOCUMENT A107-1997

 

Abbreviated Standard Form of Agreement Between Owner and Contractor for
Construction Projects of Limited Scope where the basis of payment is a
STIPULATED SUM

 

AGREEMENT made as of the twenty fourth day of January in the year Two Thousand
and Six
(In words, indicate day, month and year)

 

This document includes abbreviated General Conditions and should not be used
with other general conditions.

 

 

 

B E T W E E N the Owner:
(Name, address and other information)

 

This document has important legal consequences. Consultation with an attorney is
encouraged with respect to its completion or modification.

OMTOOL, LTD.

 

8 Industrial Way Salem,

 

NH 03079

 

 

 

 

 

and the Contractor:
(Name, address and other information)

 

This document has been approved and endorsed by The Associated General
Contractors of America.

PRISM BUILDERS, INC.

 

107 Audubon Road

 

Building 1 - Suite 19

 

Wakefield, MA 01880

 

 

 

 

 

the Project is:

 

 

(Name and location)

 

 

INTERIOR RENOVATION

 

 

6 Riverside Drive

 

 

Andover, MA 01810

 

 

 

 

 

the Architect is:

 

(Name, address and other information)

 

DESIGN SCIENCE

 

200 Baker Avenue

 

Concord, MA 01742

 

 

 

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The Owner and Contractor agree as follows.

 

ARTICLE 1 THE WORK OF THIS CONTRACT

 

The Contractor shall fully execute the Work described in the Contract Documents,
except to the extent specifically indicated in the Contract Documents to be the
responsibility of others.

 

ARTICLE 2 DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION

 

2.1 The date of commencement of the Work shall be the date of this Agreement
unless a different date is stated below or provision is made for the date to be
fixed in a notice to proceed issued by the Owner.

 

(Insert the date of commencement, if it differs from the date of this Agreement
or, if applicable, state that the date will be fixed in a notice to proceed.)

 

Within three (3) days of a fully-executed contract and building permit.

 

2.2     The Contract Time shall be measured from the date of commencement.

 

2.3     The Contractor shall achieve Substantial Completion of the entire Work
not later than seventy seven (77) days from the date of commencement, or as
follows: (Insert number of calendar days. Alternatively, a calendar date may be
used when coordinated with the date of commencement. Unless stated elsewhere in
the Contract Documents, insert any requirements for earlier Substantial
Completion of certain portions of the Work.)

 

 

, subject to adjustments of this Contract Time as provided in the Contract
Documents.

 

(Insert provisions, if any, for liquidated damages relating to failure to
complete on time or for bonus payments for early completion of the Work.)

 

ARTICLE 3 CONTRACT SUM

 

 

 

 

 

3.1   The Owner shall pay the Contractor the Contract Sum in current funds for
the

 

 

Contractor’s Performance of the Contract. The Contract Sum shall be FOUR HUNDRED

 

 

THIRTY FIVE THOUSAND FOUR HUNDRED THIRTY SEVEN AND 00/100               Dollars
($435,437.00), Subject to additions and deletions as provided in the Contract
Documents.

 

 

 

 

 

 

 

 

 

Exhibit ”A” – Schedule of Values dated 1/19/06

 

 

Exhibit ”B: – General Conditions dated 1/24/06

 

 

 

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3.2     The Contract Sum is based upon the following alternates, if any, which
are described in the Contract Documents and are hereby accepted by the Owner:

(State the numbers or other identification of accepted alternates. If decisions
on other alternates are to be made by the Owner subsequent to the execution of
this Agreement, attach a schedule of such other alternates showing the amount
for each and the date when that amount expires.)

 

 

3.3     Unit prices, if any, are as follows:

 

 

ARTICLE 4 PAYMENTS

 

4.1    PROGRESS PAYMENTS

 

4.1.1 Based upon Applications for Payment submitted to the Architect by the
Contractor and Certificates for Payment issued by the Architect, the Owner shall
make progress payments on account of the Contract Sum to the Contractor as
provided below and elsewhere in the Contract Documents. The period covered by
each Application for Payment shall be one calendar month ending on the last day
of the month, or as follows:

 

4.1.2 Provided that an Application for Payment is received by the Architect not
later than the 30th day of a month, the Owner shall make payment to the
Contractor not later than the 30th day of the following month. 

 

If an Application for Payment is received by the Architect after the date fixed
above, payment shall be made by the Owner not later than 30 days after the
Architect receives the Application for Payment.

 

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4.1.3 Payments due and unpaid under the Contract shall bear interest from the
date payment is due at the rate stated below, or in the absence thereof, at the
legal rate prevailing from time to time at the place where the Project is
located.

(Insert rate of interest agreed upon, if any.)

 

 

(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations at the Owner’s and
Contractor’s principal places of business, the location of the Project and
elsewhere may affect the validity of this provision. Legal advice should be
obtained with respect to deletions or modifications, and also regarding
requirements such as written disclosures or waivers.)

 

4.2    FINAL PAYMENT

 

4.2.1 Final payment, constituting the entire unpaid balance of the Contract Sum,
shall be made by the Owner to the Contractor when:

 

.1 the Contractor has fully performed the Contract except for the Contractor’s
responsibility to correct Work as provided in Paragraph 17.2, and to satisfy
other requirements, if any, which extend beyond final payment; and

 

.2 a final Certificate for Payment has been issued by the Architect.

 

4.2.2 The Owner’s final payment to the Contractor shall be made no later than 30
days after the issuance of the Architect’s final Certificate for Payment, or as
follows:

 

 

ARTICLE 5 ENUMERATION OF CONTRACT DOCUMENTS

 

5.1     The Contract Documents are listed in Article 6 and, except for
Modifications issued after execution of this Agreement, are enumerated as
follows:

 

5.1.1 The Agreement is this executed 1997 edition of the Abbreviated Standard
Form of Agreement Between Owner and Contractor, AIA Document A107-1997.

 

5.1.2 The Supplementary and other Conditions of the Contract are those contained
in the Project Manual dated                        
                                         , and are as follows:

 

Document

 

Title

 

Pages

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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5.1.3 The Specifications are those contained in the Project Manual dated as in
Subparagraph 5.1.2, and are as follows:

(Either list the Specifications here or refer to an exhibit attached to this
Agreement.)

 

Section

 

Title

 

Pages

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5.1.4 The Drawings are as follows, and are dated ____ unless a different date is
shown below:

(Either list the Drawings here or refer to an exhibit attached to this
Agreement.)

 

Number

 

Title

 

Pages

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Refer to Exhibit ”C” - List of Drawings

 

5.1.5 The Addenda, if any, are as follows:

 

Number

 

Date

 

Pages

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portions of Addenda relating to bidding requirements are not part of the
Contract Documents unless the bidding requirements are also enumerated in this
Article 5.

 

5.1.6 Other documents, if any, forming part of the Contract Documents are as
follows:
(List any additional documents which are intended to form part of the Contract
Documents.)

 

In accordance with Exhibit ”D” (see attachment), Prism Builders, Inc.
acknowledges that the premises being built out are leased, and Prism
Builders, Inc. acknowledges that the build-out must comply with all building
rules and regulations of the landlord and all requirements of the lease.

 

Contractor will indemnify Omtool, Ltd. for any lease default caused by the
Contractor.

 

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GENERAL CONDITIONS

 

ARTICLE 6 GENERAL PROVISIONS

 

6.1          THE CONTRACT DOCUMENTS

 

The Contract Documents consist of this Agreement with Conditions of the Contract
(General,    Supplementary and other Conditions), Drawings, Specifications,
Addenda issued prior to the execution of this Agreement, other documents listed
in this Agreement and Modifications issued after execution of this Agreement. A
Modification is (1) a written amendment to the Contract signed by both parties,
(2) a Change Order, (3) a Construction Change Directive or (4) a written order
for a minor change in the Work issued by the Architect. The intent of the
Contract Documents is to include all items necessary for the proper execution
and completion of the Work by the Contractor. The Contract Documents are
complementary, and what is required by one shall
be as binding as if required by all; performance by the Contractor shall be
required to the extent consistent with the Contract Documents and reasonably
inferable from them as being necessary to produce the indicated results.

 

6.2          THE CONTRACT

 

The Contract Documents form the Contract for Construction. The Contract
represents the entire and integrated agreement between the parties hereto and
supersedes prior negotiations, representations or agreements, either written or
oral. The Contract may be amended or modified only by a Modification. The
Contract Documents shall not be construed to create a contractual relationship
of any kind (1) between the Architect and Contractor, (2) between the Owner and
a Subcontractor or sub-subcontractor, (3) between the Owner and Architect or
(4) between any persons or entities other than the Owner and Contractor.

 

6.3          THE WORK

 

The term “Work” means the construction and services required by the Contract
Documents, whether completed or partially completed, and includes all other
labor, materials, equipment and services provided or to be provided by the
Contractor to fulfill the Contractor’s obligations. The Work may constitute the
whole or a part of the Project.

 

6.4          EXECUTION OF THE CONTRACT

 

Execution of the Contract by the Contractor is a representation that the
Contractor has visited the site, become generally familiar with local conditions
under which the Work is to be performed and correlated personal observations
with requirements of the Contract Documents.

 

6.5      OWNERSHIP AND USE OF ARCHITECT’S DRAWINGS, SPECIFICATIONS AND OTHER
INSTRUMENTS OF SERVICE

 

The Drawings, Specifications and other documents, including those in electronic
form, prepared by the Architect and the Architect’s consultants are Instruments
of Service through which the Work to be executed by the Contractor is described.
The Contractor may retain one record set. Neither the Contractor nor any
Subcontractor, sub-subcontractor or material or equipment supplier shall own or
claim a copyright in the Drawings, Specifications and other documents prepared
by the Architect or the Architect’s consultants, and unless otherwise indicated
the Architect and the Architect’s consultants shall be deemed the authors of
them and will retain all common law, statutory and other reserved rights, in
addition to the copyrights. All copies of them,    except the Contractor’s
record set, shall be returned or suitably accounted for to the Architect, on
request, upon completion of the Work. The Drawings, Specifications and other
documents prepared by the Architect and the Architect’s consultants, and copies
thereof furnished to the Contractor, are for use solely with respect to this
Project. They are not to be used by the Contractor or any Subcontractor,
sub-subcontractor or material or equipment supplier on other projects or for
additions to this Project outside the scope of the Work without the specific
written consent of the Owner, Architect and the Architect’s consultants. The
Contractor, Subcontractors,

 

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sub-subcontractors and material or equipment suppliers are authorized to use and
reproduce applicable portions of the Drawings, Specifications and other
documents prepared by the Architect and the Architect’s consultants appropriate
to and for use in the execution of their Work under the Contract Documents. All
copies made under this authorization shall bear the statutory copyright notice,
if any, shown on the Drawings, Specifications and other documents prepared by
the Architect and the Architect’s consultants. Submittal or distribution to meet
official regulatory requirements or for other purposes in connection with this
Project is not to be construed as publication in derogation of the Architect’s
or Architect’s consultants’ copyrights or other reserved rights.

 

ARTICLE 7 OWNER

 

7.1    INFORMATION AND SERVICES REQUIRED OF THE OWNER

 

7.1.1  The Owner shall furnish and pay for surveys and a legal description of
the site.

 

7.1.2 The Contractor shall be entitled to rely on the accuracy of information
furnished by the Owner but shall exercise proper precautions relating to the
safe performance of the Work.

 

7.1.3 Except for permits and fees which are the responsibility of the Contractor
under the Contract Documents, the Owner shall secure and pay for other necessary
approvals, easements, assessments and charges required for the construction, use
or occupancy of permanent structures or permanent changes in existing
facilities.

 

7.2    OWNER’S RIGHT TO STOP THE WORK

 

If the Contractor fails to correct Work which is not in accordance with the
requirements of the Contract Documents, or persistently fails to carry out the
Work in accordance with the Contract Documents, the Owner may issue a written
order to the Contractor to stop the Work, or any portion thereof, until the
cause for such order is eliminated; however, the right of the Owner to stop the
Work shall not give rise to a duty on the part of the Owner to exercise this
right for the benefit of the Contractor or any other person or entity.

 

7.3    OWNER’S RIGHT TO CARRY OUT THE WORK

 

If the Contractor defaults or persistently fails or neglects to carry out the
Work in accordance with the Contract Documents, or fails to perform a provision
of the Contract, the Owner, after io days’ written notice to the Contractor and
without prejudice to any other remedy the Owner may have, may make good such
deficiencies and may deduct the reasonable cost thereof, including Owner’s
expenses and compensation for the Architect’s services made necessary thereby,
from the payment then or thereafter due the Contractor.

 

ARTICLE 8 CONTRACTOR

 

8.1    REVIEW OF CONTRACT DOCUMENTS AND FIELD CONDITIONS BY CONTRACTOR

 

8.1.1 Since the Contract Documents are complementary, before starting each
portion of the Work, the Contractor shall carefully study and compare the
various Drawings and other Contract Documents relative to that portion of the
Work, as well as the information furnished by the Owner pursuant to Subparagraph
7.1.1, shall take field measurements of any existing conditions related to that
portion of the Work and shall observe any conditions at the site affecting it.
These obligations are for the purpose of facilitating construction by the
Contractor and are not for the purpose of discovering errors, omissions or
inconsistencies in the Contract Documents; however, any errors, omissions or
inconsistencies discovered by the Contractor shall be reported promptly to the
Architect as a request for information in such form as the Architect may
require.

 

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8.1.2 Any design errors or omissions noted by the Contractor during this review
shall be reported promptly to the Architect, but it is recognized that the
Contractor’s review is made in the Contractor’s capacity as a contractor and not
as a licensed design professional unless otherwise specifically provided in the
Contract Documents.

 

8.2    SUPERVISION AND CONSTRUCTION PROCEDURES

 

8.2.1 The Contractor shall supervise and direct the Work, using the Contractor’s
best skill and attention. The Contractor shall be solely responsible for and
have control over construction means, methods, techniques, sequences and
procedures, and for coordinating all portions of the Work under the Contract,
unless the Contract Documents give other specific instructions concerning these
matters. If the Contract Documents give specific instructions concerning
construction means, methods, techniques, sequences or procedures, the Contractor
shall be fully and solely responsible for the jobsite safety thereof unless the
Contractor gives timely written notice to the Owner and Architect that such
means, methods, techniques, sequences or procedures may not be safe.

 

8.2.2 The Contractor shall be responsible to the Owner for acts and omissions of
the Contractor’s employees, Subcontractors and their agents and employees, and
other persons or entities performing portions of the Work for or on behalf of
the Contractor or any of its Subcontractors.

 

8.3    LABOR AND MATERIALS

 

8.3.1 Unless otherwise provided in the Contract Documents, the Contractor shall
provide and pay for labor, materials, equipment, tools, construction equipment
and machinery, water, heat, utilities, transportation, and other facilities and
services necessary for proper execution and completion of the Work whether
temporary or permanent and whether or not incorporated or to be incorporated in
the Work.

 

8.3.2 The Contractor shall enforce strict discipline and good order among the
Contractor’s employees and other persons carrying out the Contract. The
Contractor shall not permit employment of unfit persons or persons not skilled
in tasks assigned to them.

 

8.3.3 The Contractor shall deliver, handle, store and install materials in
accordance with manufacturers’ instructions.

 

8.3.4 The Contractor may make substitutions only with the consent of the Owner,
after evaluation by the Architect and in accordance with a Change Order.

 

8.4    WARRANTY

 

The Contractor warrants to the Owner and Architect that materials and equipment
furnished under the Contract will be of good quality and new unless otherwise
required or permitted by the Contract Documents, that the Work will be free from
defects not inherent in the quality required or permitted, and that the Work
will conform with the requirements of the Contract Documents. Work not
conforming to these requirements, including substitutions not properly approved
and authorized, may be considered defective. The Contractor’s warranty excludes
remedy for damage or defect caused by abuse, modifications not executed by the
Contractor, improper or insufficient maintenance, improper operation or normal
wear and tear and normal usage.

 

8.5    TAXES

 

The Contractor shall pay sales, consumer, use and other similar taxes which are
legally enacted when bids are received or negotiations concluded.

 

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8.6    PERMITS, FEES AND NOTICES

 

8.6.1 Unless otherwise provided in the Contract Documents, the Contractor shall
secure and pay for the building permit and other permits and governmental fees,
licenses and inspections necessary for proper execution and completion of the
Work.

 

8.6.2 The Contractor shall comply with and give notices required by laws,
ordinances, rules, regulations and lawful orders of public authorities
applicable to performance of the Work. The Contractor shall promptly notify the
Architect and Owner if the Drawings and Specifications are observed by the
Contractor to be at variance therewith. If the Contractor performs Work knowing
it to be contrary to laws, statutes, ordinances, building codes, and rules and
regulations without such notice to the Architect and Owner, the Contractor shall
assume appropriate responsibility for such Work and shall bear the costs
attributable to correction.

 

8.7    SUBMITTALS

 

8.7.1 The Contractor shall review for compliance with the Contract Documents,
approve in writing and submit to the Architect Shop Drawings, Product Data,
Samples and similar submittals required by the Contract Documents with
reasonable promptness. The Work shall be in accordance with approved submittals.

 

8.7.2 Shop Drawings, Product Data, Samples and similar submittals are not
Contract Documents.

 

8.8    USE OF SITE

 

The Contractor shall confine operations at the site to areas permitted by law,
ordinances, permits and the Contract Documents and shall not unreasonably
encumber the site with materials or equipment.

 

8.9    CUTTING AND PATCHING

 

The Contractor shall be responsible for cutting, fitting or patching required to
complete the Work or to make its parts fit together properly.

 

8.10  CLEANING UP

 

The Contractor shall keep the premises and surrounding area free from
accumulation of waste materials or rubbish caused by operations under the
Contract. At completion of the Work, the Contractor shall remove from and about
the Project waste materials, rubbish, the Contractor’s tools, construction
equipment, machinery and surplus material.

 

8.11  ROYALTIES, PATENTS AND COPYRIGHTS

 

The Contractor shall pay all royalties and license fees; shall defend suits or
claims for infringement of copyrights and patent rights and shall hold the Owner
and Architect harmless from loss on account thereof, but shall not be
responsible for such defense or loss when a particular design, process or
product of a particular manufacturer or manufacturers is required by the
Contract Documents, or where the copyright violations are contained in Drawings,
Specifications or other documents prepared by the Owner or Architect, unless the
Contractor has reason to believe that there is an infringement of patent or
copyright and fails to promptly furnish such information to the Architect.

 

8.12  ACCESS TO WORK

 

The Contractor shall provide the Owner and Architect access to the Work in
preparation and progress wherever located.

 

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8.13  INDEMNIFICATION

 

8.13.1 To the fullest extent permitted by law and to the extent claims, damages,
losses or expenses are not covered by Project Management Protective Liability
insurance purchased by the Contractor in accordance with Paragraph 16.3, the
Contractor shall indemnify and hold harmless the Owner, Architect, Architect’s
consultants and agents and employees of any of them from and against claims,
damages, losses and expenses, including but not limited to attorneys’ fees,
arising out of or resulting from performance of the Work, provided that such
claim, damage, loss or expense is attributable to bodily injury, sickness,
disease or death, or to injury to or destruction of tangible property (other
than the Work itself), but only to the extent caused by the negligent acts or
omissions of the Contractor, a Subcontractor, anyone directly or indirectly
employed by them or anyone for whose acts they may be liable, regardless of
whether or not such claim, damage, loss or expense is caused in part by a party
indemnified hereunder. Such obligation shall not be construed to negate,
abridge, or reduce other rights or obligations of indemnity which would
otherwise exist as to a party or person described in this Paragraph 8.13.

 

8.13.2 In claims against any person or entity indemnified under this Paragraph
8.13 by an employee of the Contractor, a Subcontractor, anyone directly or
indirectly employed by them or anyone for whose acts they may be liable, the
indemnification obligation under Subparagraph 8.13.1 shall not be limited by a
limitation on amount or type of damages, compensation or   benefits payable by
or for the Contractor or Subcontractor under workers’ compensation acts,
disability benefit acts or other employee benefit acts.

 

ARTICLE 9 ARCHITECT’S ADMINISTRATION OF THE CONTRACT

 

9.1 The Architect will provide administration of the Contract and will be an
Owner’s representative (1) during construction, (2) until final payment is due
and (3) with the Owner’s concurrence, from time to time during the one-year
period for correction of Work described in Paragraph 17.2.

 

9.2 The Architect, as a representative of the Owner, will visit the site at
intervals appropriate to the stage of the Contractor’s operations (i) to become
generally familiar with and to keep the Owner informed about the progress and
quality of the portion of the Work completed, (2) to endeavor to guard the Owner
against defects and deficiencies in the work, and (3) to determine in general if
the Work is being performed in a manner indicating that the Work, when fully
completed, will be in accordance with the Contract Documents. However, the
Architect will not be required to make exhaustive or continuous on-site
inspections to check the quality or quantity of the Work. The Architect will
neither have control over or charge of, nor be responsible for, the construction
means, methods, techniques, sequences or procedures, or for safety precautions
and programs in connection with the Work, since these are solely the
Contractor’s rights and responsibilities under the Contract Documents, except as
provided in Subparagraph 8.2.1.

 

9.3     The Architect will not be responsible for the Contractor’s failure to
perform the Work in accordance with the requirements of the Contract Documents.
The Architect will not have control over or charge of and will not be
responsible for acts or omissions of the Contractor, Subcontractors, or their
agents or employees, or any other persons or entities performing portions of the
Work.

 

9.4 Based on the Architect’s evaluations of the Work and of the Contractor’s
Applications for Payment, the Architect will review and certify the amounts due
the Contractor and will issue Certificates for Payment in such amounts.

 

9.5     The Architect will have authority to reject Work that does not conform
to the Contract Documents.

 

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9.6 The Architect will review and approve or take other appropriate action upon
the Contractor’s submittals such as Shop Drawings, Product Data and Samples, but
only for the limited purpose of checking for conformance with information given
and the design concept expressed in the Contract Documents.

 

9.7 The Architect will interpret and decide matters concerning performance
under, and requirements of, the Contract Documents on written request of either
the Owner or Contractor. The Architect will make initial decisions on all
claims, disputes and other matters in question between the Owner and Contractor
but will not be liable for results of any interpretations or decisions so
rendered in good faith.

 

9.8 The Architect’s decisions on matters relating to aesthetic effect will be
final if consistent with the intent expressed in the Contract Documents.

 

9.9 Duties, responsibilities and limitations of authority of the Architect as
set forth in the Contract Documents shall not be restricted, modified or
extended without written consent of the Owner, Contractor and Architect. Consent
shall not be unreasonably withheld.

 

9.10 CLAIMS AND DISPUTES

 

9.10.1 Claims, disputes and other matters in question arising out of or relating
to this Contract,   including those alleging an error or omission by the
Architect but excluding those arising under Paragraph 15.2, shall be referred
initially to the Architect for decision. Such matters, except those relating to
aesthetic effect and except those waived as provided for in Paragraph 9.11 and
Subparagraphs 14.5.3 and 14.5.4, shall, after initial decision by the Architect
or 30 days after submission of the matter to the Architect, be subject to
mediation as a condition precedent to arbitration or the institution of legal or
equitable proceedings by either party.

 

9.10.2 If a claim, dispute or other matter in question relates to or is the
subject of a mechanic’s lien, the party asserting such matter may proceed in
accordance with applicable law to comply with the lien notice or filing
deadlines prior to resolution of the matter by the Architect, by mediation or by
arbitration.

 

9.10.3 The parties shall endeavor to resolve their disputes by mediation which,
unless the parties mutually agree otherwise, shall be in accordance with the
Construction Industry Mediation Rules of the American Arbitration Association
currently in effect. Request for mediation shall be filed in writing with the
other party to this Agreement and with the American Arbitration Association. The
request may be made concurrently with the filing of a demand for arbitration
but, in such event, mediation shall proceed in advance of arbitration or legal
or equitable proceedings, which shall be stayed pending mediation for a period
of 60 days from the date of filing, unless stayed for a longer period by
agreement of the parties or court order.

 

9.10.4 Claims, disputes and other matters in question arising out of or relating
to the Contract that are not resolved by mediation, except matters relating to
aesthetic effect and except those waived as provided for in Paragraph 9.11 and
Subparagraphs 14.53 and 14.5.4, shall be decided by arbitration which, unless
the parties mutually agree otherwise, shall be in accordance with the
Construction Industry Arbitration Rules of the American Arbitration Association
currently in effect. The demand for arbitration shall be filed in writing with
the other party to this Agreement and with the American Arbitration Association
and shall be made within a reasonable time after the dispute has arisen. The
award rendered by the arbitrator or arbitrators shall be final, and judgment may
be entered upon it in accordance with applicable law in any court having
jurisdiction thereof. Except by written consent of the person or entity sought
to be joined, no arbitration arising out of or relating to the Contract
Documents shall include, by consolidation, joinder or in any other manner, any
person or entity not a party to the Agreement under which

 

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such arbitration arises, unless it is shown at the time the demand for
arbitration is filed that (i) such person or entity is substantially involved in
a common question of fact or law, (2) the presence of such person or entity is
required if complete relief is to be accorded in the arbitration, (3) the
interest or responsibility of such person or entity in the matter is not
insubstantial, and (4) such person or entity is not the Architect or any of the
Architect’s employees or consultants. The agreement herein among the parties to
the Agreement and any other written agreement to arbitrate referred to herein
shall be specifically enforceable under applicable law in any court having
jurisdiction thereof.

 

9.11 CLAIMS FOR CONSEQUENTIAL DAMAGES

 

The Contractor and Owner waive claims against each other for consequential
damages arising out of or relating to this Contract. This mutual waiver
includes:

 

.1   damages incurred by the Owner for rental expenses, for losses of use,
income, profit, financing, business and reputation, and for loss of management
or employee productivity or of the services of such persons; and

 

.2   damages incurred by the Contractor for principal office expenses including
the compensation of personnel stationed there, for losses of financing, business
and reputation, and for loss of profit except anticipated profit arising
directly from the Work.

 

This mutual waiver is applicable, without limitation, to all consequential
damages due to either party’s termination in accordance with Article 19. Nothing
contained in this Paragraph 9.11 shall be deemed to preclude an award of
liquidated direct damages, when applicable, in accordance with the requirements
of the Contract Documents.

 

ARTICLE 10 SUBCONTRACTORS

 

10.1 A Subcontractor is a person or entity who has a direct contract with the
Contractor to perform a portion of the Work at the site.

 

10.2 Unless otherwise stated in the Contract Documents or the bidding
requirements, the Contractor, as soon as practicable after award of the
Contract, shall furnish in writing to the Owner through the Architect the names
of the Subcontractors for each of the principal portions of the Work. The
Contractor shall not contract with any Subcontractor to whom the Owner or
Architect has made reasonable and timely objection. If the proposed but rejected
Subcontractor was reasonably capable of performing the Work, the Contract Sum
and Contract Time shall be increased or decreased by the difference, if any,
occasioned by such change, and an appropriate Change Order shall be issued
before commencement of the substitute Subcontractor’s Work. The Contractor shall
not be required to contract with anyone to whom the Contractor has made
reasonable objection.

 

10.3 Contracts between the Contractor and Subcontractors shall (1) require each
Subcontractor, to the extent of the Work to be performed by the Subcontractor,
to be bound to the Contractor by the terms of the Contract Documents, and to
assume toward the Contractor all the obligations and responsibilities, including
the responsibility for safety of the Subcontractor’s Work, which the Contractor,
by the Contract Documents, assumes toward the Owner and Architect, and (2) allow
the Subcontractor the benefit of all rights, remedies and redress afforded to
the Contractor by these Contract Documents.

 

ARTICLE 11 OWNER’S RIGHT TO PERFORM CONSTRUCTION AND TO AWARD SEPARATE CONTRACTS

 

11.1 The Owner reserves the right to perform construction or operations related
to the Project with the Owner’s own forces, and to award separate contracts in
connection with other portions

 

--------------------------------------------------------------------------------

 

of the Project or other construction or operations on the site under conditions
of the contract identical or substantially similar to these, including those
portions related to insurance and waiver of subrogation. If the Contractor
claims that delay or additional cost is involved because of such action by the
Owner, the Contractor shall make such claim as provided in Paragraph 9.10.

 

11.2 The Contractor shall afford the Owner and separate contractors reasonable
opportunity for introduction and storage of their materials and equipment and
performance of their activities, and shall connect and coordinate the
Contractor’s activities with theirs as required by the Contract Documents.

 

11.3 The Owner shall be reimbursed by the Contractor for costs incurred by the
Owner which are payable to a separate contractor because of delays, improperly
timed activities or defective construction of the Contractor. The Owner shall be
responsible to the Contractor for costs incurred by the Contractor because of
delays, improperly timed activities, damage to the Work or defective
construction of a separate contractor.

 

ARTICLE 12 CHANGES IN THE WORK

 

12.1 The Owner, without invalidating the Contract, may order changes in the Work
within the general scope of the Contract consisting of additions, deletions or
other revisions, the Contract Sum and Contract Time being adjusted accordingly.
Such changes in the Work shall be authorized by written Change Order signed by
the Owner, Contractor and Architect, or by written Construction Change Directive
signed by the Owner and Architect.

 

12.2 The cost or credit to the Owner from a change in the Work shall be
determined by mutual agreement of the parties or, in the case of a Construction
Change Directive, by the Contractor’s cost of labor, material, equipment, and
reasonable overhead and profit.

 

12.3 The Architect will have authority to order minor changes in the Work not
involving adjustment in the Contract Sum or extension of the Contract Time and
not inconsistent with the intent of the Contract Documents. Such changes shall
be effected by written order and shall be binding on the Owner and Contractor.
The Contractor shall carry out such written orders promptly.

 

12.4 If concealed or unknown physical conditions are encountered at the site
that differ materially from those indicated in the Contract Documents or from
those conditions ordinarily found to exist, the Contract Sum and Contract Time
shall be equitably adjusted.

 

ARTICLE 13 TIME

 

13.1 Time limits stated in the Contract Documents are of the essence of the
Contract. By executing the Agreement the Contractor confirms that the Contract
Time is a reasonable period for performing the Work.

 

13.2 The date of Substantial Completion is the date certified by the Architect
in accordance with Subparagraph 14.4.2.

 

13.3 If the Contractor is delayed at any time in the commencement or progress of
the Work by changes ordered in the Work, by labor disputes, fire, unusual delay
in deliveries, abnormal adverse weather conditions not reasonably anticipatable,
unavoidable casualties or any causes beyond the Contractor’s control, or by
other causes which the Architect determines may justify delay, then the Contract
Time shall be extended by Change Order for such reasonable time as the Architect
may determine, subject to the provisions of Paragraph 9.10.

 

--------------------------------------------------------------------------------

 

ARTICLE 14

PAYMENTS AND COMPLETION

 

14.1 APPLICATIONS FOR PAYMENT

 

14.1.1 Payments shall be made as provided in Article 4 of this Agreement.
Applications for Payment shall be in a form satisfactory to the Architect.

 

14.1.2 The Contractor warrants that title to all Work covered by an Application
for Payment will pass to the Owner no later than the time of payment. The
Contractor further warrants that upon submittal of an Application for Payment
all Work for which Certificates for Payment have been previously issued and
payments received from the Owner shall, to the best of the Contractor’s
knowledge, information and belief, be free and clear of liens, claims, security
interests or other encumbrances adverse to the Owner’s interests.

 

14.2 CERTIFICATES FOR PAYMENT

 

14.2.1 The Architect will, within seven days after receipt of the Contractor’s
Application for Payment, either issue to the Owner a Certificate for Payment,
with a copy to the Contractor, for such amount as the Architect determines is
properly due, or notify the Contractor and Owner in writing of the Architect’s
reasons for withholding certification in whole or in part as provided in
Subparagraph 14.2.3.

 

14.2.2 The issuance of a Certificate for Payment will constitute a
representation by the Architect to the Owner, based on the Architect’s
evaluations of the Work and the data comprising the Application for Payment,
that the Work has progressed to the point indicated and that, to the best of the
Architect’s knowledge, information and belief, the quality of the Work is in
accordance with the Contract Documents. The foregoing representations are
subject to an evaluation of the Work for conformance with the Contract Documents
upon Substantial Completion, to results of subsequent tests and inspections, to
correction of minor deviations from the Contract Documents prior to completion
and to specific qualifications expressed by the Architect. The issuance of a
Certificate for Payment will further constitute a representation that the
Contractor is entitled to payment in the amount certified. However, the issuance
of a Certificate for Payment will not be a representation that the Architect has
(1) made exhaustive or continuous on-site inspections to check the quality or
quantity of the Work, (2) reviewed construction means, methods, techniques,
sequences or procedures, (3) reviewed copies of requisitions received from
Subcontractors and material suppliers and other data requested by the Owner to
substantiate the Contractor’s right to payment, or (4) made examination to
ascertain how or for what purpose the Contractor has used money previously paid
on account of the Contract Sum.

 

14.2.3 The Architect may withhold a Certificate for Payment in whole or in part,
to the extent reasonably necessary to protect the Owner, if in the Architect’s
opinion the representations to the Owner required by Subparagraph 14.2.2 cannot
be made. If the Architect is unable to certify payment in the amount of the
Application, the Architect will notify the Contractor and Owner as provided in
Subparagraph 14.2.1. The Architect may also withhold a Certificate for Payment
or, because of subsequently discovered evidence, may nullify the whole or a part
of a Certificate for Payment previously issued, to such extent as may be
necessary in the Architect’s opinion to protect the Owner from loss for which
the Contractor is responsible, including loss resulting from acts and omissions
described in Subparagraph 8.2.2, because of:

 

.1           defective Work not remedied;

. 2        third party claims filed or reasonable evidence indicating probable
filing of such claims unless security acceptable to the Owner is provided by the
Contractor;

.3           failure of the Contractor to make payments properly to
Subcontractors or for labor,  
materials or equipment;

.4           reasonable evidence that the Work cannot be completed for the
unpaid balance of the Contract Sum;

.5           damage to the Owner or another contractor;

 

14

--------------------------------------------------------------------------------

 

.6    reasonable evidence that the Work will not be completed within the
Contract Time and that the unpaid balance would not be adequate to cover actual
or liquidated damages for the anticipated delay; or

.7    persistent failure to carry out the Work in accordance with the Contract
Documents.

 

14.2.4 When the above reasons for withholding certification are removed,
certification will be made for amounts previously withheld.

 

14.3 PAYMENTS TO THE CONTRACTOR

 

14.3.1 The Contractor shall promptly pay each Subcontractor, upon receipt of
payment from the Owner, out of the amount paid to the Contractor on account of
such Subcontractor’s portion of the Work, the amount to which said Subcontractor
is entitled, reflecting percentages actually retained from payments to the
Contractor on account of such Subcontractor’s portion of the Work. The
Contractor shall, by appropriate agreement with each Subcontractor, require each
Subcontractor to make payments to sub-subcontractors in similar manner.

 

14.3.2 Neither the Owner nor Architect shall have an obligation to pay or see to
the payment of money to a Subcontractor except as may otherwise be required by
law.

 

14.3.3 A Certificate for Payment, a progress payment, or partial or entire use
or occupancy of the Project by the Owner shall not constitute acceptance of Work
not in accordance with the Contract Documents.

 

14.4 SUBSTANTIAL COMPLETION

 

14.4.1 Substantial Completion is the stage in the progress of the Work when the
Work or designated portion thereof is sufficiently complete in accordance with
the Contract Documents so that the Owner can occupy or utilize the Work for its
intended use.

 

14.4.2 When the Architect determines that the Work or designated portion thereof
is substantially complete, the Architect will issue a Certificate of Substantial
Completion which shall establish the date of Substantial Completion, establish
responsibilities of the Owner and Contractor for security, maintenance, heat,
utilities, damage to the Work and insurance, and fix the time within which the
Contractor shall finish all items on the list accompanying the Certificate.
Warranties required by the Contract Documents shall commence on the date of
Substantial Completion of the Work or designated portion thereof unless
otherwise provided in the Certificate of Substantial Completion. Upon the
issuance of the Certificate of Substantial Completion, the Architect will submit
it to the Owner and Contractor for their written acceptance of responsibilities
assigned to them in such Certificate

 

14.5 FINAL COMPLETION AND FINAL PAYMENT

 

14.5.1 Upon receipt of written notice that the Work is ready for final
inspection and acceptance and upon receipt of a final Application for Payment,
the Architect will promptly make such inspection and, when the Architect finds
the Work acceptable under the Contract Documents and the Contract fully
performed, the Architect will promptly issue a final Certificate for Payment
stating that to the best of the Architect’s knowledge, information and belief,
and on the basis of the Architect’s on-site visits and inspections, the Work has
been completed in accordance with terms and conditions of the Contract Documents
and that the entire balance found to be due the Contractor and noted in the
final Certificate is due and payable. The Architect’s final Certificate for
Payment will constitute a further representation that conditions stated in
Subparagraph 14.5.2 as precedent to the Contractor’s being entitled to final
payment have been fulfilled.

 

14.5.2 Final payment shall not become due until the Contractor has delivered to
the Owner a complete release of all liens arising out of this Contract or
receipts in full covering all labor,

 

15

--------------------------------------------------------------------------------

 

materials and equipment for which a lien could be filed, or a bond satisfactory
to the Owner to indemnify the Owner against such lien. If such lien remains
unsatisfied after payments are made, the Contractor shall refund to the Owner
all money that the Owner may be compelled to pay in discharging such lien,
including costs and reasonable attorneys’ fees.

 

14.5.3 The making of final payment shall constitute a waiver of claims by the
Owner except those arising from:

 

.1    liens, claims, security interests or encumbrances arising out of the
Contract and unsettled;

.2    failure of the Work to comply with the requirements of the Contract
Documents; or

.3    terms of special warranties required by the Contract Documents.

 

14.5.4 Acceptance of final payment by the Contractor, a Subcontractor or
material supplier shall constitute a waiver of claims by that payee except those
previously made in writing and identified by that payee as unsettled at the time
of final Application for Payment.

 

ARTICLE 15 PROTECTION OF PERSONS AND PROPERTY

 

15.1 SAFETY PRECAUTIONS AND PROGRAMS

 

The Contractor shall be responsible for initiating, maintaining and supervising
all safety precautions and programs in connection with the performance of the
Contract The Contractor shall take reasonable precautions for safety of, and
shall provide reasonable protection to prevent damage, injury or loss to:

 

.1    employees on the Work and other persons who may be affected thereby;

.2    the Work and materials and equipment to be incorporated therein; and

.3    other property at the site or adjacent thereto.

 

The Contractor shall give notices and comply with applicable laws, ordinances,
rules, regulations and lawful orders of public authorities bearing on safety of
persons and property and their protection from damage, injury or loss. The
Contractor shall promptly remedy damage and loss to property caused in whole or
in part by the Contractor, a Subcontractor, a sub-subcontractor, or anyone
directly or indirectly employed by any of them, or by anyone for whose acts they
may be liable and for which the Contractor is responsible under Subparagraphs
15.1.2 and 15.1.3, except for damage or loss attributable to acts or omissions
of the Owner or Architect or by anyone for whose acts either of them may be
liable, and not attributable to the fault or negligence of the Contractor. The
foregoing obligations of the Contractor are in addition to the Contractor’s
obligations under Paragraph 8.13.

 

15.2 HAZARDOUS MATERIALS

 

15.2.1 If reasonable precautions will be inadequate to prevent foreseeable
bodily injury or death to persons resulting from a material or substance,
including but not limited to asbestos or polychlorinated biphenyl (PCB),
encountered on the site by the Contractor, the Contractor shall, upon
recognizing the condition, immediately stop Work in the affected area and report
the condition to the Owner and Architect in writing. When the material or
substance has been rendered harmless, Work in the affected area shall resume
upon written agreement of the Owner and Contractor. The Contract Time shall be
extended appropriately and the Contract Sum shall be increased in the amount of
the Contractor’s reasonable additional costs of shutdown, delay and start-up,
which adjustments shall be accomplished as provided in Article 12 of this
Agreement.

 

15.2.2 To the fullest extent permitted by law, the Owner shall indemnify and
hold harmless the Contractor, Subcontractors, Architect, Architect’s consultants
and agents and employees of any of them from and against claims, damages, losses
and expenses, including but not limited to attorneys’ fees, arising out of or
resulting from performance of the Work in the affected area if in fact the
material or substance presents the risk of bodily injury or death as described
in

 

--------------------------------------------------------------------------------

 

Subparagraph 15.2.1 and has not been rendered harmless, provided that such
claim, damage, loss or expense is attributable to bodily injury, sickness,
disease or death, or to injury to or destruction of tangible property (other
than the Work itself), and provided that such damage, loss or expense is not due
to the sole negligence of a party seeking indemnity.

 

15.2.3 If, without negligence on the part of the Contractor, the Contractor is
held liable for the cost of remediation of a hazardous material or substance
solely by reason of performing Work as required by the Contract. Documents, the
Owner shall indemnify the Contractor for all cost and expense thereby incurred.

 

ARTICLE 16 INSURANCE

 

16.1 The Contractor shall purchase from and maintain in a company or companies
lawfully authorized to do business in the jurisdiction in which the Project is
located insurance for protection from claims under workers’ compensation acts
and other employee benefit acts which are applicable, claims for damages because
of bodily injury, including death, and claims for damages, other than to the
Work itself, to property which may arise out of or result from the Contractor’s
operations under the Contract, whether such operations be by the Contractor or
by a Subcontractor or anyone directly or indirectly employed by any of them.
This insurance shall be written for not less than limits of liability specified
in the Contract Documents or required by law, whichever coverage is greater, and
shall include contractual liability insurance applicable to the Contractor’s
obligations. Certificates of Insurance acceptable to the Owner shall be filed
with the Owner prior to commencement of the Work. Each policy shall contain a
provision that the policy will not be canceled or allowed to expire until at
least 3o days’ prior written notice has been given to the Owner.

 

16.2 OWNER’S LIABILITY INSURANCE

 

The Owner shall be responsible for purchasing and maintaining the Owner’s usual
liability insurance.

 

16.3 PROJECT MANAGEMENT PROTECTIVE LIABILITY INSURANCE

 

16.3.1 Optionally, the Owner may require the Contractor to purchase and maintain
Project Management Protective Liability insurance from the Contractor’s usual
sources as primary coverage for the Owner’s, Contractor’s and Architect’s
vicarious liability for construction operations under the Contract. Unless
otherwise required by the Contract Documents, the Owner shall reimburse the
Contractor by increasing the Contract Sum to pay the cost of purchasing and
maintaining such optional insurance coverage, and the Contractor shall not be
responsible for purchasing any other liability insurance on behalf of the Owner.
The minimum limits of liability purchased with such coverage shall be equal to
the aggregate of the limits required for Contractor’s Liability insurance under
Paragraph 16.1.

 

16.3.2 To the extent damages are covered by Project Management Protective
Liability insurance, the Owner, Contractor and Architect waive all rights
against each other for damages, except such rights as they may have to the
proceeds of such insurance. The policy shall provide for such waivers of
subrogation by endorsement or otherwise.

 

16.3.3 The Owner shall not require the Contractor to include the Owner,
Architect or other persons or entities as additional insureds on the
Contractor’s Liability insurance under Paragraph 16.1.

 

16.4 PROPERTY INSURANCE

 

16.4.1 Unless otherwise provided, the Owner shall purchase and maintain, in a
company or companies lawfully authorized to do business in the jurisdiction in
which the Project is located,

 

--------------------------------------------------------------------------------

 

property insurance on an “all-risk” policy form, including builder’s risk, in
the amount of the initial Contract Sum, plus the value of subsequent
modifications and cost of materials supplied and installed by others, comprising
total value for the entire Project at the site on a replacement cost basis
without optional deductibles. Such property insurance shall be maintained,
unless otherwise provided in the Contract Documents or otherwise agreed in
writing by all persons and entities who are beneficiaries of such insurance,
until final payment has been made as provided in Paragraph 14.5 or until no
person or entity other than the Owner has an insurable interest in the property
required by this Paragraph 16.4 to be covered, whichever is later. This
insurance shall  include interests of the Owner, the Contractor, Subcontractors
and sub-subcontractors in the Project.

 

16.4.2 The Owner shall file a copy of each policy with the Contractor before an
exposure to loss may occur. Each policy shall contain a provision that the
policy will not be canceled or allowed to expire, and that its limits will not
be reduced, until at least 3o days’ prior written notice has been given to the
Contractor.

 

16.5 WAIVERS OF SUBROGATION

 

16.5.1 The Owner and Contractor waive all rights against (i) each other and any
of their subcontractors, sub-subcontractors, agents and employees, each of the
other, and (2) the Architect; Architect’s consultants, separate contractors
described in Article 11, if any, and any of their subcontractors,
sub-subcontractors, agents and employees for damages caused by fire or other
causes of loss to the extent covered by property insurance obtained pursuant to
Paragraph 16.4 or other property insurance applicable to the Work, except such
rights as they have to proceeds of such insurance held by the Owner as
fiduciary. The Owner or Contractor, as appropriate, shall require of the
Architect, Architect’s consultants, separate contractors described in
Article 11, if any, and the subcontractors, sub-subcontractors, agents and
employees of any of them, by appropriate agreements, written where legally
required for validity, similar waivers each in favor of other parties enumerated
herein. The policies shall provide such waivers of subrogation by endorsement or
otherwise. A waiver of subrogation shall be effective as to a person or entity
even though that person or entity would otherwise have a duty of
indemnification, contractual or otherwise, did not pay the insurance premium
directly or indirectly, and whether or not the person or entity had an insurable
interest in the property damaged.

 

16.5.2 A loss insured under the Owner’s property insurance shall be adjusted by
the Owner as fiduciary and made payable to the Owner as fiduciary for the
insureds, as their interests may appear, subject to requirements of any
applicable mortgagee clause. The Contractor shall pay Subcontractors their just
shares of insurance proceeds received by the Contractor, and by appropriate
agreements, written where legally required for validity, shall require
Subcontractors to make payments to their sub-subcontractors in similar manner.

 

ARTICLE 17 CORRECTION OF WORK

 

17.1  The Contractor shall promptly correct Work rejected by the Architect or
failing to conform to the requirements of the Contract Documents, whether
discovered before or after Substantial Completion and whether or not fabricated,
installed or completed. Costs of correcting such rejected Work, including
additional testing and inspections and compensation for the Architect’s services
and expenses made necessary thereby, shall be at the Contractor’s expense.

 

17.2 In addition to the Contractor’s obligations under Paragraph 8.4, if, within
one year after the date of Substantial Completion of the ‘Work or designated
portion thereof or after the date for commencement of warranties established
under Subparagraph 14.4.2, or by terms of an applicable special warranty
required by the Contract Documents, any of the Work is found to be not in
accordance with the requirements of the Contract Documents, the Contractor shall
correct it

 

--------------------------------------------------------------------------------

 

promptly after receipt of written notice from the Owner to do so unless the
Owner has previously given the Contractor a written acceptance of such
condition. The Owner shall give such notice promptly after discovery of the
condition. During the one-year period for correction of Work, if the Owner fails
to notify the Contractor and give the Contractor an opportunity to make the
correction, the Owner waives the rights to require correction by the Contractor
and to make a claim for breach of warranty.

 

17.3  If the Contractor fails to correct nonconforming Work within a reasonable
time, the Owner may correct it in accordance with Paragraph 7.3.

 

17.4  The one-year period for correction of Work shall be extended with respect
to portions of

 

Work first performed after Substantial Completion by the period of time between
Substantial Completion and the actual performance of the Work.

 

17.5  The one-year period for correction of Work shall not be extended by
corrective Work performed by the Contractor pursuant to this Article 17.

 

ARTICLE 18 MISCELLANEOUS PROVISIONS

 

18.1  ASSIGNMENT OF CONTRACT

 

Neither party to the Contract shall assign the Contract without written consent
of the other.

 

18.2 GOVERNING LAW

 

The Contract shall be governed by the law of the place where the Project is
located.

 

18.3  TESTS AND INSPECTIONS

 

Tests, inspections and approvals of portions of the Work required by the
Contract Documents or by laws, ordinances, rules, regulations or orders of
public authorities having jurisdiction shall be made at an appropriate time.
Unless otherwise provided, the Contractor shall make arrangements for such
tests, inspections and approvals with an independent testing laboratory or
entity acceptable to the Owner, or with the appropriate public authority, and
shall bear all related costs of tests, inspections and approvals. The Contractor
shall give the Architect timely notice of when and where tests and inspections
are to be made so that the Architect may be present for such procedures. The
Owner shall bear costs of tests, inspections or approvals which do not become
requirements until after bids are received or negotiations concluded.

 

18.4 COMMENCEMENT OF STATUTORY LIMITATION PERIOD

 

As between Owner and Contractor, any applicable statute of limitations shall
commence to run and any alleged cause of action shall be deemed to have accrued:

 

.1   not later than the date of Substantial Completion for acts or failures to
act occurring prior to the relevant date of Substantial Completion;

 

.2   not later than the date of issuance of the final Certificate for Payment
for acts or failures to act occurring subsequent to the relevant date of
Substantial Completion and prior to the issuance of the final Certificate for
Payment; and

 

.3   not later than the date of the relevant act or failure to act by the
Contractor for acts or failures to act occurring after the date of the final
Certificate for Payment.

 

ARTICLE 19 TERMINATION OF THE CONTRACT

 

19.1  TERMINATION BY THE CONTRACTOR

 

If the Architect fails to recommend payment for a period of 3o days through no
fault of the Contractor, or if the Owner fails to make payment thereon for a
period of 3o days, the Contractor may, upon seven additional days’ written
notice to the Owner and the Architect, terminate the

 

--------------------------------------------------------------------------------

 

Contract and recover from the Owner payment for Work executed and for proven
loss with respect to materials, equipment, tools, and construction equipment and
machinery, including reasonable overhead, profit and damages applicable to the
Project.

 

19.2 TERMINATION BY THE OWNER

 

19.2.1 The Owner may terminate the Contract if the Contractor:

 

.1   persistently or repeatedly refuses or fails to supply enough properly
skilled workers or proper materials;

.2   fails to make payment to Subcontractors for materials or labor in
accordance with the respective agreements between the Contractor and the
Subcontractors;

.3   persistently disregards laws, ordinances, or rules, regulations or orders
of a public authority having jurisdiction; or

.4   otherwise is guilty of substantial breach of a provision of the Contract
Documents.

 

19.2.2 When any of the above reasons exists, the Owner, upon certification by
the Architect that sufficient cause exists to justify such action, may, without
prejudice to any other remedy the Owner may have and after giving the Contractor
seven days’ written notice, terminate the Contract and take possession of the
site and of all materials, equipment, tools, and construction equipment and
machinery thereon owned by the Contractor and may finish the Work by whatever
reasonable method the Owner may deem expedient. Upon request of the Contractor,
the Owner shall furnish to the Contractor a detailed accounting of the costs
incurred by the Owner in finishing the Work.

 

19.2.3 When the Owner terminates the Contract for one of the reasons stated in
Subparagraph 19.2.1, the Contractor shall not be entitled to receive further
payment until the Work is finished.

 

19.2.4 If the unpaid balance of the Contract Sum exceeds costs of finishing the
Work, including compensation for the Architect’s services and expenses made
necessary thereby, and other damages incurred by the Owner and not expressly
waived, such excess shall be paid to the Contractor. If such costs and damages
exceed the unpaid balance, the Contractor shall pay the difference to the Owner.
The amount to be paid to the Contractor or Owner, as the case may be, shall be
certified by the Architect, upon application, and this obligation for payment
shall survive termination of the Contract.

 

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ARTICLE 20 OTHER CONDITIONS OR PROVISIONS

 

 

This Agreement entered into as of the day and year first written above.

 

 

/s/ Dan Coccoluto

 

/s/ Robert Waxman

 

OWNER (Signature)

CONTRACTOR (Signature)

 

 

Dan Coccoluto , CFO

 

Robert Waxman, President

 

(Printed name and title)

(Printed name and title)

 

21

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Prism Builders Inc.

 

Omtool-6 Riverside Dr.

 

1//24/06

 

 

Andover, MA

 

 

 

 

Exhibit A - Schedule of Values

 

Item #

 

Description

 

1st Floor

 

2nd Floor

 

Remark

 

 

 

 

 

 

 

 

 

1

 

Demolition

 

N/A

 

3,100

 

includes misc. selective demolition

2

 

Concrete

 

N/A

 

2,000

(a)

modify exterior pad for generator

3

 

Steel

 

N/A

 

N/A

 

none indicated on drwgs. for new HVAC equip.

4

 

Roofing

 

N/A

 

1,600

 

cut & patch for new HVAC equipment

5

 

Carpentry

 

3,300

 

5,850

 

incl. in-wall blocking, cabinets & door installation

6

 

Doors, Frames & Hardware

 

4,101

 

15,018

 

 

7

 

Glazing

 

N/A

 

700

 

incl. sidelites at (3) doors

8

 

Drywall & Metal Framing

 

9,310

 

48,600

 

includes temp. floor protection

9

 

Misc. Drywall patching

 

500

(a)

1,500

(x)

scope to be determined

10

 

Acoustical

 

3,100

 

8,400

 

incl. remove & replace for M/E/P trades

11

 

Finish Flooring

 

1,700

 

43,236

 

includes carpet, vct & vinyl base

12

 

Painting

 

7,000

 

38,800

 

 

13

 

Specialties

 

300

 

600

 

fire extinguishers as required

14

 

Sprinkler

 

1,480

 

7,000

 

 

15

 

Plumbing

 

3,000

(a)

N/A

 

need information for 1 st floor sink.

16

 

HVAC

 

2,500

(a)

54,700

 

 

17

 

HVAC Balancing

 

500

(x)

1,000

(a)

scope to be determined

18

 

Electrical

 

6,000

(a)

91,000

 

 

19

 

Generator

 

N/A

 

N/A

 

supplied by owner with transfer switch

20

 

Final Cleaning

 

100

 

1,100

 

 

21

 

Building Permit

 

300

 

4,000

 

 

22

 

General Requirements

 

N/A

 

31,787

 

11 week schedule-see attached itemization

23

 

GC Fee (8%)

 

3,456

 

28,799

 

 

24

 

Total

 

46,647

 

388,790

 

 

 

 

 

Clarifications:

1.

 

(a)=allowance as more information is needed to accuaretely price.

2.

 

Existing vct to remain at areas to receive new carpet.

3.

 

Providing window treatments is not included.

4.

 

Providing projection screens & whiteboards are not included.

 

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Prism Builders, Inc.

 

1124/06

 

Exhibit B - General Conditions Itemization

 

Omtool-6 Riverside Drive, Andover, MA

 

Item

 

Value

 

 

 

 

 

On-Site Superintendent: 11 weeks @ $1,750. (including fringe):

 

$

19,250.

 

Project Manager: 11 weeks @ $450. (including fringe):

 

$

4,950.

 

Temporary Laborer for General Cleaning: 11 weeks @ $280. (including fringe):

 

$

3,080.

 

Temporary Telephone: 11 weeks @ $25:

 

$

275.

 

Dumpsters for Trash Removal: 6 loads @ $577:

 

$

3,462.

 

Temporary Toilets: 11 weeks @ $70:

 

$

770.

 

Total:

 

$

31,787

 

 

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Prism Builders, Inc.

 

Omtool - 6 Riverside Drive

 

1/23/06

 

 

Andover, MA

 

 

 

Exhibit C - List of Drawings

 

DESIGN SCIENCE

 

Sheet Number

 

Dated

 

Titled

A2

 

10-Jan

 

DEMO PLAN

A3

 

10-Jan

 

CONSTRUCTION PLAN

A3.1

 

1/11/2006

 

FLOOR PLAN

A4

 

10-Jan

 

REFLECTED CEILING PLAN

 

 

 

 

LIFE SAFETY PLAN

A6

 

23-Dec

 

ARCHITECTURAL DETAILS

 

 

 

 

 

 

 

COLLABORATIVE ENGINEERS

 

 

FP1

 

6-Jan

 

FIRE PROTECTION NOTES

FP2

 

6-Jan

 

FIRE PROTECTION PLAN

M1

 

6-Jan

 

HVAC LEGEND, NOTES & SCHEDULE

M2

 

6-Jan

 

HVAC NEW WORK PLAN

M3

 

6-Jan

 

HVAC DEMO PLAN

M4

 

6-Jan

 

HVAC DETAILS

ED1

 

6-Jan

 

ELECTRICAL DEMO PLAN

E1

 

6-Jan

 

ELECTRICAL LEGEND & NOTES

E2

 

6-Jan

 

ELECTRICAL LIGHTING PLAN

E3

 

6-Jan

 

ELECTRICAL POWER PLAN

E4

 

6-Jan

 

ELECTRICAL POWER RISER PLAN

FP1

 

6-Jan

 

FIRE PROTECTION LEGEND, DETAIL, NOTES

FP2

 

6-Jan

 

FIRE PROTECTION PLAN

 

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EXHIBIT D

 

TENANT FINISH-WORK: ALLOWANCE
(Tenant Performs the Work)

 

1.             Acceptance of Premises. Except as set forth in this Exhibit,
Tenant accepts the Premises in their “AS-IS” condition on the date that this
Lease is entered into.

 

2.             Space Plans.

 

(a)           Preparation and Delivery On or before the earlier of (1)
__________________, 2005, or (2) the tenth day following the date of this Lease
(such earlier date is referred to herein as the “Space Plans Delivery
Deadline”), Tenant shall deliver to Landlord a space plan prepared by
_____________________ or another design consultant reasonably acceptable to
Landlord (the “Architect”) depicting improvements to be installed in the
Premises (the “Space Plans”).

 

(b)           Approval Process. Landlord shall notify Tenant whether it approves
of the submitted Space Plans within five business days after Tenant’s submission
thereof. If Landlord disapproves of such Space Plans, then Landlord shall notify
Tenant thereof specifying in reasonable detail the reasons for such disapproval,
in which case Tenant shall, within three business days after such notice, revise
such Space Plans in accordance with Landlord’s objections and submit to Landlord
for its review and approval. Landlord shall notify Tenant in writing whether it
approves of the resubmitted Space Plans within three business days after its
receipt thereof. This process shall be repeated until the Space Plans have been
finally approved by Landlord and Tenant. If Landlord fails to notify Tenant that
it disapproves of the initial Space Plans within five business days (or, in the
case of resubmitted Space Plans, within three business days) after the
submission thereof, then Landlord shall be deemed to have approved the Space
Plans in question.

 

3.             Working Drawings.

 

(a)          Preparation and Delivery. On or before the earlier of (1),
__________________ 2005, or (2) the tenth day following the date on which the
Space Plans are approved (or deemed approved) by Landlord and Tenant (such
earlier date is referred to herein as the “Working. Drawings Delivery
Deadline”), Tenant shall provide to Landlord for its approval final working
drawings, prepared by the Architect, of all improvements that Tenant proposes to
install in the Premises; such working drawings shall include the partition
layout, ceiling plan, electrical outlets and switches, telephone outlets,
drawings for any modifications to the mechanical and plumbing systems of the
Building, and detailed plans and specifications for the construction of the
improvements called for under this Exhibit in accordance with all applicable
Laws.

 

(b)         Approval Process. Landlord shall notify Tenant whether it approves
of the submitted working drawings within ten business days after Tenant’s
submission thereof. If Landlord disapproves of such working drawings, then
Landlord shall notify Tenant thereof specifying in reasonable detail the reasons
for such disapproval, in which case Tenant shall, within three business days
after such notice, revise such working drawings in accordance with Landlord’s
objections and submit the revised working drawings to Landlord for its review
and approval. Landlord shall notify Tenant in writing whether it approves of the
resubmitted working drawings within five business days after its receipt
thereof. This process shall be repeated until the working drawings have been
finally approved by Tenant and Landlord. If Landlord fails to notify Tenant that
it disapproves of the initial working drawings within ten business days (or, in
the case of resubmitted working drawings, within five business days) after the
submission thereof, then Landlord shall be deemed to have approved the working
drawings in question.

 

(c)          Landlord’s Approval; Performance of Work. If any of Tenant’s
proposed construction work will affect the Building’s Structure or the
Building’s Systems, then the working drawings pertaining thereto must be
approved by the Building’s engineer of record. Landlord’s approval of such

 

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working drawings shall not be unreasonably withheld, provided that (1) they
comply with all Laws, (2) the improvements depicted thereon do not adversely
affect (in the reasonable discretion of Landlord) the Building’s Structure or
the Building’s Systems (including the Building’s restrooms or mechanical rooms),
the exterior appearance of the Building, or the appearance of the Building’s
common areas or elevator lobby areas, (3) such working drawings are sufficiently
detailed to allow construction of the improvements in a good and workmanlike
manner, and (4) the improvements depicted thereon conform to the rules and
regulations promulgated from time to time by Landlord for the construction of
tenant improvements (a copy of which has been delivered to Tenant). As used
herein, “Working Drawings” means the final working drawings approved by
Landlord, as amended from time to time by any approved changes thereto, and
“Work” means all improvements to be constructed in accordance with and as
indicated on the Working Drawings, together with any work required by
governmental authorities to be made to other areas of the Building as a result
of the improvements indicated by the Working Drawings. Landlord’s approval of
the Working Drawings shall not be a representation or warranty of Landlord that
such drawings are adequate for any use or comply with any Law, but shall merely
be the consent of Landlord thereto. Tenant shall, at Landlord’s request, sign
the Working Drawings to evidence its review and approval thereof. After the
Working Drawings have been approved, Tenant shall cause the Work to be performed
in accordance with the Working Drawings.

 

4.             Contractors, Performance of Work. The Work shall be performed
only by licensed contractors and subcontractors approved in writing by Landlord,
which approval shall not be unreasonably withheld. All contractors and
subcontractors shall be required to procure and maintain insurance against such
risks, in such amounts, and with such companies as Landlord may reasonably
require. Certificates of such insurance, with paid receipts therefor, must be
received by Landlord before the Work is commenced. The Work shall be performed
in a good and workmanlike manner free of defects, shall conform strictly with
the Working Drawings, and shall be performed in such a manner and at such times
as and not to interfere with or delay Landlord’s other contractors, the
operation of the Building, and the occupancy thereof by other tenants. All
contractors and subcontractors shall contact Landlord and schedule  time periods
during which they may use Building facilities in connection with the Work (e.g.,
elevators, excess electricity, etc.).

 

5.             Construction Contracts.

 

(a)           Tenant’s General Contractor. Tenant shall enter into a
construction contract with a general contractor selected by Tenant and approved
by Landlord in a form acceptable to Tenant’s representative for the Work, which
shall comply with the provisions of this Section 5 and provide for, among other
things, (1) a one-year warranty for all defective Work; (2) a requirement that
Tenant’s Contractor maintain general commercial liability insurance of not less
than a combined single limit of $5,000,000, naming Landlord, Landlord’s property
management company, Landlord’s asset management company, Landlord’s Mortgagee,
Tenant, and each of their respective Affiliates as additional insureds; (3) a
requirement that the contractor perform the Work in substantial accordance with
the Space Plans and the Working Drawings and in a good and workmanlike manner;
(4) a requirement that the contractor is responsible for daily cleanup work and
final clean up (including removal of debris); and (5) those items described in
Section 5(b) (collectively, the “Approval Criteria”). Landlord shall have three
business days to notify Tenant whether it approves the proposed construction
agreements. If Landlord disapproves of the proposed construction agreements,
then it shall specify in reasonable detail the reasons for such disapproval, in
which case Tenant shall revise the proposed construction agreements to correct
the objections and resubmit them to Landlord within two business days after
Landlord notifies Tenant of its objections thereto, following which Landlord
shall have two business days to notify Tenant whether it approves the revised
construction agreements. If Landlord fails to notify Tenant that it disapproves
of the construction agreements within three business days after the initial
construction agreements or two business days after the revised construction
agreements (as the case may be) are delivered to Landlord, then Landlord shall
be deemed to have approved the construction agreements.

 

(b)           All Construction Contracts. Unless otherwise agreed in writing by
Landlord and Tenant, each of Tenant’s construction contracts shall: (1) provide
a schedule and sequence of construction activities and completion reasonably
acceptable to Landlord, (2) be in a contract form that

 

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satisfies the Approval Criteria, (3) require the contractor and each
subcontractor to name Landlord, Landlord’s property management company,
Landlord’s asset management company, and Tenant as additional insured on such
contractor’s insurance maintained in connection with the construction of the
Work, (4) be assignable following an Event of Default by Tenant under this Lease
to Landlord and Landlord’s Mortgagees, and (5) contain at least a one-year
warranty for all workmanship and materials.

 

6.             Change Orders. Tenant may initiate changes in the Work. Each such
change must receive the prior written approval of Landlord, such approval not to
be unreasonably withheld or delayed; however, (a) if such requested change would
adversely affect (in the reasonable discretion of Landlord) (1) the Building’s
Structure or the Building’s Systems (including the Building’s restrooms or
mechanical rooms), (2) the exterior appearance of the Building, or (3) the
appearance of the Building’s common areas or elevator lobby areas, or (b) if any
such requested change might delay the Commencement Date, Landlord may withhold
its consent in its sole and absolute discretion. Tenant shall, upon completion
of the Work, furnish Landlord with an accurate architectural “as-built” plan of
the Work as constructed, which plan shall be incorporated into this EXHIBIT D by
this reference for all purposes. If Tenant requests any changes to the Work
described in the Space Plans or the Working Drawings, then such increased costs
and any additional design costs incurred in connection therewith as the result
of any such change shall be added to the Total Construction Costs.

 

7.             Definitions. As used herein “Substantial Completion,”
“Substantially Completed,” and any derivations thereof mean the Work in the
Premises is substantially completed in accordance with the Working Drawings so
as to allow Tenant to lawfully occupy the Premises, as evidenced by a temporary
certificate of occupancy issued by the applicable governmental authority.
Substantial Completion shall have occurred even though minor details of
construction, decoration, landscaping and mechanicaladjustments remain to be
completed.

 

8.             Walk-Through; Punchlist. When Tenant considers the Work in the
Premises to be Substantially Completed, Tenant will notify Landlord and within
three business days thereafter, Landlord’s representative and Tenant’s
representative shall conduct a walk-through of the Premises and identify any
necessary touch-up work, repairs and minor completion items that are necessary
for final completion of the Work. Neither Landlord’s representative nor Tenants
representative shall unreasonably withhold his or her agreement on punchlist
items. Tenant shall use reasonable efforts to cause the contractor performing
the Work to complete all punchlist items within 30 days after agreement thereon.

 

9.             Excess Costs. The entire cost of performing the Work (including
design of and space planning for the Work and preparation of the Working
Drawings, costs of construction labor and materials, electrical usage during
construction, additional janitorial services, general tenant signage, related
taxes and insurance costs, licenses, permits, certifications, surveys and other
approvals required by Law, and the construction supervision fee referenced in
Section 11 of this Exhibit, all of which costs are herein collectively called
the “Total Construction Costs”) in excess of the Construction Allowance
(hereinafter defined) shall be paid by Tenant. Upon approval of the Working
Drawings and selection of a contractor, Tenant shall promptly execute a work
order agreement which identifies such drawings and itemizes the Total
Construction Costs and sets forth the Construction Allowance.

 

10.           Construction Allowance. Landlord shall provide to Tenant a
construction allowance not to exceed $7.00 per rentable square foot in the
Premises (the “Construction Allowance”) to be applied toward the Total
Construction Costs, as adjusted for any changes to the Work. No advance of the
Construction Allowance shall be made by Landlord until Tenant has first paid to
the contractor from its own funds (and provided reasonable evidence thereof to
Landlord) the anticipated amount by which the projected Total Construction Costs
exceed the amount of the Construction Allowance. Thereafter, Landlord shall pay
to Tenant the Construction Allowance in multiple disbursements (but not more
than once in any calendar month) following the receipt by Landlord of the
following items: (a) a request for payment, (b) final or partial lien waivers,
as the case may be, from all persons performing work or supplying or fabricating
materials for the Work, fully executed, acknowledged and in recordable form, and
(c) the Architect’s certification that the Work for which reimbursement has been
requested has been finally completed, including (with respect to the last
application for payment only) any punch-list items, on the

 

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appropriate AIA form. or another form approved by Landlord, and, with respect to
the disbursement of the last 20% of the Construction Allowance, (1) the
permanent certificate of occupancy issued for the Premises, (2) Tenant’s
occupancy of the Premises, (3) delivery of the architectural “as-built” plan for
the Work as constructed (as set forth above) to Landlord’s construction
representative (set forth below), and (4) an estoppel certificate confirming
such factual matters as Landlord or Landlord’s Mortgagee may reasonably request
(collectively, a “Completed Application for Payment”). Landlord shall pay the
amount requested in the applicable Completed Application for Payment to Tenant
within 30 days following Tenant’s submission of the Completed Application for
Payment. If, however, the Completed Application for Payment is incomplete or
incorrect, Landlord’s payment of such request shall be deferred until 30 days
following Landlord’s receipt of the Completed Application for Payment.
Notwithstanding anything to the contrary contained in this Exhibit, Landlord
shall not be obligated to make any disbursement of the Construction Allowance
during the pendency of any of the following: (A) Landlord has received written
notice of any unpaid claims relating to any portion of the Work or materials in
connection therewith, other than claims which will be paid in full from such
disbursement, (B) there is an unbonded lien outstanding against the Building or
the Premises or Tenant’s interest therein by reason of work done, or claimed to
have been done, or materials supplied or specifically fabricated, claimed to
have been supplied or specifically fabricated, to or for Tenant or the Premises,
(C) the conditions to the advance of the Construction Allowance are not
satisfied, or (D) an Event of Default by Tenant exists. The Construction
Allowance must be used (that is, the Work must be fully complete and the
Construction Allowance disbursed) within twelve (12) months following the
Commencement Date or shall be deemed forfeited with no further obligation by
Landlord with respect thereto.

 

11.           Construction Management. Landlord or its Affiliate or agent shall
have the right to supervise the Work and coordinate the relationship between the
Work, the Building and the Building’s Systems. In consideration for Landlord’s
construction supervision services, Tenant shall pay to Landlord a construction
supervision fee equal to $.20 per rentable square foot of the Premises.

 

12.           Construction Representatives. Landlord’s and Tenant’s
representatives for coordination of construction and approval of change orders
will be as follows, provided that either party may change its representative
upon written notice to the other:

 

 

Landlord’s Representative:

 

 

 

 

c/o

 

 

 

 

 

 

Telephone:

 

 

 

Telecopy:

 

 

 

 

 

 

 

Tenant’s Representative:

 

 

 

 

c/o

 

 

 

 

 

 

Telephone:

 

 

 

Telecopy:

 

 

13.           Miscellaneous. To the extent not inconsistent with this Exhibit,
Sections 8(a) and 22 of this Lease shall govern the performance of the Work and
Landlord’s and Tenant’s respective rights and obligations regarding the
improvements installed pursuant thereto.

 

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