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Exhibit 10.3

STANDARD FORM OF AGREEMENT BETWEEN

OWNER AND CONSULTANT

FOR THE

QAD ORTEGA HILL PROJECT

AGREEMENT

made as of the 12th day of June, in the year 2002

BETWEEN the Consultant's client identified as the Owner

QAD Inc.
6450 Via Real
Carpinteria, CA 93013

and the Consultant:

Ove Arup & Partners California
2440 S. Sepulveda Boulevard
Suite 180
Los Angeles, CA 90064 USA

Consultant's Discipline or Services:

See Exhibit A

For the following Project:

QAD Ortega Hill

The Owner and Consultant agree as follows.

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ARTICLE 1 DESCRIPTION OF SCOPE
The Consultant shall provide QAD with professional services as described in
Exhibit A.
ARTICLE 2 GENERAL PROVISIONS
2.1
GENERAL
2.1.1
The part of the Project for which the Consultant is to provide services is
hereinafter called This Part of the Project. Except as set forth herein, the
Consultant shall not have any duties or responsibilities for any other part of
the Project.
2.1.2
The Construction Manager, Paul Franz Construction, Inc. shall be the general
administrator of the professional services for the Project, and shall facilitate
the exchange of information among the consultants retained by QAD as necessary
for the coordination of This Part of the Project.
ARTICLE 3 CONSULTANT'S RESPONSIBILITIES
3.1
GENERAL RESPONSIBILITIES
3.1.1
The services performed by the Consultant, Consultant's employees and
Consultant's subconsultants shall be as enumerated in Articles 4 and 5.
3.1.2
The Consultant shall designate a representative authorized to act on behalf of
the Consultant with respect to This Part of the Project. The Consultant's
representative authorized to act on behalf of the Consultant with respect to
This Part of Project shall be Catherine Wells unless otherwise designated by
written notice from Consultant to the Construction Manager giving at least
fourteen (14) days prior to the change.
3.1.3
The Consultant shall recommend to the Construction Manager that appropriate
investigations, surveys, tests, analyses and reports be obtained as necessary
for the proper execution of the Consultant's services.
3.1.4
The Consultant's services shall be coordinated with those of the Architect and
other consultants for the Project in order to avoid unreasonable delay in the
orderly and sequential progress of the Architect's or other consultants'
services.
3.1.5
The Consultant shall provide copies of drawings, reports, specifications and
other necessary information to the Construction Manager, the Architect and other
consultants for coordination and review during the course of the Project.
3.1.6
The Consultant shall not be responsible for the acts or omissions of the
Construction Manager, Owner, Architect, Architect's other consultants,
Contractor, Subcontractors, their agents or employees, or other persons
performing any of the Work.
3.1.7
The Consultant shall maintain the confidentiality of information specifically
designated as confidential by the Owner or the Construction Manager, unless
withholding such information would violate the law, create the risk of
significant harm to the public or prevent the Consultant from establishing a
claim or defense in an adjudicatory proceeding.
3.1.8
The Consultant's services shall be performed as expeditiously as is consistent
with professional skill and care and the orderly progress of the Project. The
project schedule shall include allowances for periods of time required for the
Construction Manager's, Owner's and Architect's review and for approval of
submissions by authorities having jurisdiction over the Project. Time limits
established by this schedule shall not, except for reasonable cause, be exceeded
by the Consultant or Architect. The Consultant shall not be responsible for
delays beyond the Consultant's control.
 
 
 

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3.2
EVALUATION OF BUDGET AND COST OF WORK
3.2.1
Evaluations of the Owner's budget for the Project, the preliminary estimate of
the Cost of the Work and updated estimates of the Cost of the Work prepared by
the Construction Manager engaged by the Owner for This Part of the Project
represent Construction Manager's judgment as a design professional familiar with
the construction industry. It is recognized, however, that neither the
Consultant nor Architect has control over the cost of labor, materials or
equipment, over the Contractor's methods of determining bid prices, or over
competitive bidding, market or negotiating conditions. Accordingly, the
Consultant cannot and does not warrant or represent that bids or negotiated
prices for This Part of the Project will not vary from the Owner's budget for
the Project or from any estimate of the Cost of the Work or evaluation prepared
or agreed to by the Consultant.
3.2.2
If the budget for the Cost of the Work for This Part of the Project is exceeded
by the lowest bona fide bid or negotiated proposal, QAD shall
 
.1
give written approval of an increase in the budget;
 
.2
authorize rebidding or renegotiating of the Project within a reasonable time;
 
.3
terminate in accordance with Paragraph 10.1.6 or
 
.4
cooperate in revising the Project scope and quality as required to reduce the
Cost of the Work.
 
If QAD chooses to proceed under Clause 3.2.5.4, the Consultant, as an additional
service, shall modify the documents for which the Consultant is responsible,
reducing the Cost of the Work for This Part of the Project as necessary to
comply with the budget for the Cost of the Work. The Consultant shall be
entitled to compensation in accordance with this Agreement for all services
performed whether or not construction is commenced.
ARTICLE 4 SCOPE OF CONSULTANT'S SERVICES
4.1
DESIGN DEVELOPMENT
4.1.1
When authorized by Construction Manager or QAD, the Consultant shall prepare
Design Development Documents from the Schematic Design studies approved by the
Owner and confirmed by the Architect. The Design Development Documents shall
consist of drawings and other documents to fix and describe This Part of the
Project, including materials, equipment, component systems and types of
construction or installation as may be appropriate, all of which are to be
approved by the Owner and Architect.
4.2
CONSTRUCTION DOCUMENTS
4.2.1
When authorized by Construction Manager or QAD, the Consultant shall prepare,
from the Design Development Documents approved by the Owner and confirmed by the
Architect, Drawings and Specifications setting forth in detail the requirements
for the construction of This Part of the Project, all of which are to be
approved by the Owner and Architect. The Consultant shall prepare the Drawings
and Specifications in such format as the Architect may reasonably require.
4.2.2
The Consultant shall assist the Construction Manager and the Architect as
necessary in connection with the Owner's responsibility for filing the documents
concerning This Part of the Project required for the approval of governmental
authorities having jurisdiction over the Project.
4.3
BIDDING OR NEGOTIATION
4.3.1
The Consultant shall assist the Owner and Construction Manager in evaluating
bids or negotiated proposals, and assist in awarding and preparing contracts for
construction or installation.
 
 
 

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4.4
CONTRACT ADMINISTRATION SERVICES
4.4.1
The Consultant's responsibility to provide the Contract Administration services
under this Agreement commences with the award of the initial Contract for
Construction and terminates at the issuance to the Owner of the final
Certificate for Payment. However, the Consultant shall be entitled to a Change
in Services in accordance with Paragraph 5.1 when Contract Administration
Services extend 6o days after the date of Substantial Completion of the Work.
4.4.2
The Consultant shall assist the Owner and Construction Manager in the
administration of the Contract between Owner and Contractor with respect to This
Part of the Project as set forth below.
4.4.3
The Consultant shall visit the site at intervals appropriate to the stage of the
Contractor's operations for This Part of the Project as defined in Exhibit A, or
as otherwise agreed with the Construction Manager or the Owner in writing,
(1) to become generally familiar with and to keep the Construction Manager
informed about the progress and quality of the portion of the Work completed for
This Part of the Project, (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 Consultant shall not be
required to make exhaustive or continuous on-site inspections to check the
quality or quantity of the Work for This Part of the Project. The Consultant
shall 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 for This Part of the
Project, since these are solely the Contractor's rights and responsibilities
under the Contract Documents.
4.4.4
The Consultant shall report to the Construction Manager known deviations from
the Contract Documents. However, the Consultant shall not be responsible for the
Contractor's failure to perform the Work in accordance with the requirements of
the Contract Documents. The Consultant shall be responsible for the Consultant's
negligent acts or omissions, but shall not have control over or charge of and
shall not be responsible for acts or omissions of the Contractor,
Subcontractors, or their agents or employees, or of any other persons or
entities performing portions of the Work.
4.4.5
The Consultant shall at all times have access to the Work for This Part of the
Project, wherever it is in preparation or progress.
4.4.6
Upon written request of the Construction Manager, the Consultant shall furnish
to the Construction Manager and the Owner with reasonable promptness, in writing
or in the form of drawings, interpretations of the Contract Documents prepared
by the Consultant, if, in the opinion of the Construction Manager, such
interpretations are necessary for the proper execution or progress of the Work.
4.4.7
The Consultant shall within a reasonable time render written recommendations on
claims, disputes and other matters in question between the Owner and Contractor
relating to the execution or progress of This Part of the Project as provided by
the Contract Documents.
4.4.8
The Consultant shall assist the Owner and the Construction Manager in
determining whether the Owner shall reject Work for This Part of the Project
which does not conform to the Contract Documents or whether additional
inspection or testing is required.
 
 
 

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4.4.9
The Consultant shall review and approve or take other appropriate action upon
the Contractor's submittals pertaining to This Part of the Project, 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. Following such appropriate action, the Consultant shall
forward the Contractor's submittals to the Construction Manager for final
disposition. Review of such submittals is not conducted for the purpose of
determining the accuracy and completeness of other details such as dimensions
and quantities, or for substantiating instructions for installation or
performance of equipment or systems designed by the Contractor, all of which
remain the responsibility of the Contractor, as required for this Part of the
Project by the Contract Documents. The Consultant's review shall not constitute
approval of safety precautions or, unless otherwise specifically stated by the
Consultant, of any construction means, methods, techniques, sequences or
procedures. The Consultant's approval of a specific item shall not indicate
approval of an assembly of which the item is a component.
4.4.10
If professional design services or certifications by a design professional
related to systems, materials or equipment are specifically required of the
Contractor by the Contract Documents, the Consultant shall specify appropriate
performance and design criteria that such services must satisfy. Shop Drawings
and other submittals related to the Work designed or certified by the design
professional retained by the Contractor shall bear such professional's written
approval when submitted to the Construction Manager. The Consultant shall be
entitled to rely upon the adequacy, accuracy and completeness of the services,
certifications or approvals performed by such design professionals.
4.4.11
The Consultant shall assist the Owner in preparing Change Orders and
Construction Change Directives for This Part of the Project for the Owner's
approval and execution in accordance with the Contract Documents, and may
recommend to the Construction Manager minor changes in the Work not involving an
adjustment in the Contract Sum or an extension of the Contract Time which are
consistent with the intent of the Contract Documents.
ARTICLE 5 OTHER SERVICES
5.1
CHANGE IN SERVICES
5.1.1
Change in Services of the Consultant other than a change required to bring This
Part of the Project within the Project budget for the Cost of the Work,
including services required of subconsultants, may be accomplished after
execution of this Agreement, without invalidating the Agreement, if mutually
agreed in writing, if required by circumstances beyond the Consultant's control,
or if the Consultant's services are affected as described in Subparagraph 5.1.2.
In the absence of mutual agreement in writing, the Consultant shall notify the
Construction Manager and the Owner prior to providing such services. If the
Owner or the Construction Manager deems that all or a part of such Change in
Services is not required, and gives prompt written notice to the Consultant,
then the Consultant shall have no obligation to provide those services. Except
for a change due to the fault of the Consultant, Change in Services of the
Consultant shall entitle the Consultant to an adjustment in compensation
pursuant to Subparagraph 13.2.2, and to any Reimbursable Expenses described in
Paragraph 12.6.
5.1.2
If any of the following circumstances affect the Consultant's services for the
Project, the Consultant shall be entitled to an appropriate adjustment in the
Consultant's schedule and compensation:
 
.1
change in the instructions or approvals given by the Owner that necessitate
revisions in Instruments of Service;
 
.2
enactment or revision of codes, laws or regulations or official interpretations
which necessitate changes to previously prepared Instruments of Service;
 
 
 

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.3
decisions of the Owner not rendered in a timely manner;
 
.4
significant changes in the Project including, but not limited to, size, quality,
complexity, the Owner's schedule or budget, or procurement method;
 
.5
evaluation of the Owner's or Contractor's proposals, including the preparation
or revision of Instruments of Service, and provision of other services in
connection with Change Orders and Construction Change Directives;
 
.6
providing consultation concerning replacement of Work resulting from fire or
other causes during construction;
 
.7
failure of performance on the part of the Owner, the Owner's consultants or
contractors;
 
.8
evaluation of an extensive number of claims submitted by the Owner's
consultants, the Contractor or others in connection with the Work;
 
.9
preparation for and attendance at a public hearing, a dispute resolution
proceeding or a legal proceeding except where the Consultant is party thereto;
 
.10
evaluation of substitutions proposed by the Owner or the Contractor after the
award of the Contract for Construction;
 
.11
preparation of design and documentation for alternate bids or proposal requests
proposed by the Owner;
 
.12
change in the Preliminary Project information contained in the Agreement between
Owner and Architect; or
 
.13
Contract Administration Services provided 6o days after the date of Substantial
Completion of the Work.
5.2
PROJECT REPRESENTATION SERVICES
5.2.1
If more extensive representation at the site than is described under
Subparagraph 4.5.3 is required for This Part of the Project, the Consultant
shall, if requested by the Owner, provide one or more Project Representatives to
assist the Consultant in carrying out such additional on-site responsibilities.
5.2.2
Project Representatives shall be selected, employed and directed by the
Consultant, and the Consultant shall be compensated therefor as agreed by the
Owner and Consultant. The duties, responsibilities and limitations of authority
of Project Representatives shall be as described in an exhibit to this
Agreement.
5.2.3
Through the presence at the site of such Project Representatives, the Consultant
shall endeavor to provide further protection for the Owner against defects and
deficiencies in the Work for This Part of the Project, but the furnishing of
such project representation shall not modify the rights, responsibilities or
obligations of the Consultant as described elsewhere in this Agreement.
ARTICLE 6 ARCHITECT'S RESPONSIBILITIES
6.1
GENERAL
6.1.1
The Owner, through the Construction Manager, shall provide available information
in a timely manner regarding requirements for and limitations on This Part of
the Project. The Owner, through the Construction Manager, shall furnish to the
Consultant, within 21 days after Construction Manager's receipt of a written
request, information necessary and relevant for the Consultant to evaluate, give
notice of or enforce lien rights.
 
 
 

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6.1.2
The Owner's Representative is the Construction Manager. The Owner or
Construction Manager shall render decisions in a timely manner pertaining to
documents submitted by the Consultant in order to avoid unreasonable delay in
the orderly and sequential progress of the Consultant's services.
6.1.3
If the Consultant considers it necessary for This Part of the Project, the Owner
shall furnish the services of other consultants when such services are
reasonably required by the scope of the Project, including surveys to describe
physical characteristics, legal limitations and utility locations for the site
of the Project and a written legal description of the site. The surveys and
legal information shall include, as applicable, grades and lines of streets,
alleys, pavements and adjoining property and structures; adjacent drainage;
rights-of-way, restrictions, easements, encroachments, zoning, deed
restrictions, boundaries and contours of the site; locations, dimensions and
necessary data with respect to existing buildings, other improvements and trees;
and information concerning available utility services and lines, both public and
private, above and below grade, including inverts and depths. All information on
the survey shall be referenced to a Project benchmark.
6.1.4
On the Consultant's request for This Part of the Project, the Owner shall
furnish to the Consultant, in a timely manner, (1) detailed layouts showing the
location of connections, and (2) tabulations giving sizes and loads of equipment
designed, specified or furnished by others for incorporation into other parts of
the Project.
6.1.5
On the Consultant's request for This Part of the Project, the Owner shall
furnish, in a timely manner, the services of geotechnical engineers. Such
services may include, but are not limited to, test borings, test pits,
determinations of soil bearing values, percolation tests, evaluations of
hazardous materials, ground corrosion tests and resistivity tests, including
necessary operations for anticipating subsoil conditions, with reports and
appropriate recommendations.
6.1.6
The services, information, surveys and reports required by Paragraphs 6.3
through 6.6 shall be furnished at no expense to the Consultant, who shall be
entitled to rely upon the accuracy and completeness thereof. The Consultant
shall provide prompt written notice to the Construction Manager if the
Consultant becomes aware of any errors, omissions or inconsistencies in such
services or information.
6.1.7
The Owner, through the Construction Manager, shall provide prompt written notice
to the Consultant if the Owner becomes aware of any fault or defect with respect
to This Part of the Project including any errors, omissions or inconsistencies
in the Consultant's Instruments of Service.
6.1.8
The Architect employed by the Owner shall confer with the Consultant before
issuing interpretations or clarifications of documents prepared by the
Consultant and shall request the recommendation of the Consultant before
providing interpretations or clarifications of Shop Drawings, Product Data,
Samples or other submissions of the Contractor, or upon Change Orders and
Construction Change Directives affecting This Part of the Project.
6.1.9
The Owner shall furnish to the Consultant a copy of the preliminary estimate or
updated estimates of Cost of the Work as submitted to the Owner or Construction
Manager, bidding documents, bid tabulations, negotiated proposals and Contract
Documents, including Change Orders and Construction Change Directives as issued,
to the extent that they pertain to This Part of the Project.
6.1.10
The Owner, through the Construction Manager, shall advise the Consultant of the
identity of other consultants participating in the Project and the scope of
their services.
 
 
 

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6.1.11
The Architect and the Construction Manager employed by the Owner shall review
the Consultant's work for compliance with the Owner's program and for overall
coordination with the architectural and engineering requirements.
ARTICLE 7 COST OF THE WORK
7.1
DEFINITION
7.1.1
The Cost of the Work shall be the total cost or, to the extent the Project is
not completed, the estimated cost to the Owner of all elements of the Project
designed or specified by the Architect and the Owner's consultants. The Cost of
the Work for This Part of the Project shall be the total cost or estimated cost
to the Owner of all elements of the Project designed or specified by the
Consultant.
7.1.2
The Cost of the Work or the Cost of the Work for This Part of the Project shall
include the cost at current market rates of labor and materials furnished by the
Owner and equipment designed, specified, selected or specially provided for by
the Architect or Consultant, including the costs of management or supervision of
construction or installation provided by a separate construction manager or
contractor, plus a reasonable allowance for their overhead and profit. In
addition, a reasonable allowance for contingencies shall be included for market
conditions at the time of bidding and for changes in the Work.
7.1.3
The Cost of the Work does not include the compensation of the Architect and the
Owner's consultants, the costs of the land, rights-of-way and financing or other
costs that are the responsibility of the Owner as provided in Article 6 of this
Agreement.
ARTICLE 8 INSTRUMENTS OF SERVICE
8.1
GENERAL
8.1.1
Drawings, specifications, and other documents, including those in electronic
form, prepared by the Consultant are Instruments of Service for use solely with
respect to this Project. Unless otherwise provided, the Consultant shall be
deemed the author and owner of the Consultant's Instruments of Service and shall
retain all common law, statutory and other reserved rights, including
copyrights.
8.1.2
Upon execution of this Agreement, the Consultant grants to the Owner a
nonexclusive license to reproduce the Consultant's Instruments of Service for
purposes of designing, administering, using and maintaining the Project,
provided that the Owner shall comply with all obligations, including prompt
payment of all sums when due, under this Agreement. Such license shall authorize
the Owner and the Owner's contractors and consultants to reproduce applicable
portions of the Consultant's Instruments of Service solely for purposes of
constructing, using and maintaining the Project. Any termination of this
Agreement prior to completion of the Project as a result of any default by Owner
shall terminate this license. Upon such termination, the Owner shall refrain
from making further reproductions of the Consultant's Instruments of Service and
shall return to the Consultant within seven days of termination all originals
and reproductions in the Owner's possession or control.
 
 
 

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8.1.3
Except for the licenses granted in Paragraph 8.2, no other license or right
shall be deemed granted or implied under this Agreement. The Owner shall not
assign, delegate, sublicense, pledge or otherwise transfer any license granted
herein to another party (except for successors in interest) without the prior
written agreement of the Consultant. Submission or distribution of Instruments
of Services to meet official regulatory requirements or for similar purposes in
connection with the Project is not to be construed as publication in derogation
of the reserved rights of the Consultant. The Owner shall not use the
Consultant's Instruments of Service for future additions or alterations to this
Project or for other projects, unless the Owner obtains the prior written
agreement of the Consultant which will not be unreasonably withheld or delayed.
Any unauthorized use of the Instruments of Service shall be at the Owner's sole
risk and without liability to the Consultant.
8.1.4
Prior to the Consultant providing to the Owner or the Construction Manager any
Instruments of Service in electronic form or the Owner providing to the
Consultant any electronic data for incorporation into the Instruments of
Service, the Owner and Consultant shall by separate written agreement set forth
the specific conditions governing the format of such Instruments of Service or
electronic data, including any special limitations or licenses not otherwise
provided in this Agreement.
8.1.5
The Owner and Consultant shall not make changes to the Instruments of Service
without written permission of the other party.
8.1.6
The Consultant shall maintain on file and make available to the Owner design
calculations for This Part of the Project, and shall furnish copies thereof to
the Construction Manager and the Owner on request.
ARTICLE 9 DISPUTE RESOLUTION
9.1
MEDIATION
9.1.1
Any claim, dispute or other matter in question arising out of or related to this
Agreement shall be subject to mediation as a condition precedent to arbitration
or the institution of legal or equitable proceedings by either party. If such
matter relates to or is the subject of alien arising out of the Consultant's
services, the Consultant may proceed in accordance with applicable law to comply
with the lien notice or filing deadlines prior to resolution of the matter by
mediation or by arbitration.
9.1.2
The Owner and Consultant shall endeavor to resolve claims, disputes and other
matters in question between them 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.
9.1.3
The parties agree to split the mediator's fee and any filing fees equally. The
mediation shall be held in the place where the Project is located, unless
another location is mutually agreed upon. Agreements reached in mediation shall
be enforceable as settlement agreements in any court having jurisdiction
thereof.
 
 
 

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9.2
ARBITRATION
9.2.1
Any claim, dispute or other matter in question arising out of or related to this
Agreement shall be subject to arbitration. Prior to arbitration, the parties
shall endeavor to resolve disputes by mediation in accordance with
Paragraph 9.1.
9.2.2
Claims, disputes and other matters in question between the parties that are not
resolved by mediation 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.
Demand for arbitration shall be filed in writing with the other party to this
Agreement and with the American Arbitration Association.
9.2.3
A demand for arbitration shall be made within a reasonable time after the claim,
dispute or other matter in question has arisen. In no event shall the demand for
arbitration be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in question would be
barred by the applicable statute of limitations.
9.2.4
An arbitration arising out of or related to this Agreement may be consolidated
with an arbitration between the Owner and any other person or entity if such
arbitration involves common issues of fact relating to the performance by the
Consultant of the Consultant's obligations under this Agreement.
9.2.5
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.
9.3
CLAIMS FOR CONSEQUENTIAL DAMAGES
9.3.1
The Owner and Consultant waive consequential damages for claims, disputes or
other matters in question arising out of or relating to this Agreement. This
mutual waiver is applicable, without limitation, to all consequential damages
due to either party's termination in accordance with Article 10.
ARTICLE 10 TERMINATION OR SUSPENSION
10.1
GENERAL
10.1.1
If the Owner fails to make payments to the Consultant in accordance with this
Agreement within ten (10) business days after written notice from Consultant,
such failure shall be considered substantial nonperformance and cause for
termination or, at the Consultant's option, cause for suspension of performance
of services under this Agreement. If the Consultant elects to suspend services,
prior to suspension of services, the Consultant shall give seven days' written
notice to the Owner. In the event of such a suspension of services, the
Consultant shall have no liability to the Owner for delay or damage caused the
Owner because of such suspension of services. Before resuming services, the
Consultant shall be paid all sums due prior to suspension and any expenses
incurred in the interruption and resumption of the Consultant's services. The
Consultant's fees for the remaining services and the time schedules shall be
equitably adjusted. Owner shall have the right to terminate this Agreement in
the event a default is not cured by Consultant within ten (10) business days
after written notice from Owner.
10.1.2
If the Project is suspended by the Owner for more than 30 consecutive days, the
Consultant shall be compensated for services performed prior to notice of such
suspension. When the Project is resumed, the Consultant shall be compensated for
reasonable expenses incurred in the interruption and resumption of the
Consultant's services. The Consultant's fees for the remaining services and the
time schedules shall be equitably adjusted.
10.1.3
If the Project is suspended for more than ninety (90) consecutive days by either
party, the Consultant may terminate this Agreement by giving not less than seven
days' written notice.
 
 
 

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10.1.4
Owner may terminate this Agreement upon not less than seven (7) days' written
notice.
10.1.5
In the event of termination not the fault of the Consultant, the Consultant
shall be compensated for services performed prior to termination, together with
Reimbursable Expenses then due and all Termination Expenses as defined in
Article 10.1.6.
10.1.6
Termination Expenses are in addition to compensation for the services of the
Agreement and include reasonable expenses directly attributable to termination
for which the Consultant is not otherwise compensated.
ARTICLE 11 MISCELLANEOUS PROVISIONS
11.1
GENERAL
11.1.1
This Agreement shall be governed by the law of the principal place of business
of the Owner, unless otherwise provided in Article 14.
11.1.2
Terms in this Agreement shall have the same meaning as those in the edition of
AIA Construction Manager Version Document A201, General Conditions of the
Contract for Construction, current as of the date identified in the Prime
Agreement.
11.1.3
Causes of action between the parties to this Agreement pertaining to acts or
failures to act shall be deemed to have accrued and the applicable statutes of
limitations shall commence to run not later than either the date of Substantial
Completion for acts or failures to act occurring prior to Substantial Completion
or the date of issuance of the final Certificate for Payment for acts or
failures to act occurring after Substantial Completion. In no event shall such
statutes of limitation commence to run any later than the date when the services
are substantially completed.
11.1.4
To the extent damages are covered by property insurance during construction, the
Owner and Consultant waive all rights against each other, contractors,
consultants, agents and employees of the other for damages, except such rights
as they may have to the proceeds of such insurance as set forth in the edition
of AIA Document A201, Construction Manager Version, General Conditions of the
Contract for Construction, current as of the date identified in the Prime
Agreement. The Consultant or the Architect, as appropriate, shall require of the
Owner, contractors, consultants, agents and employees of any of them similar
waivers in favor of the other parties enumerated herein.
11.1.5
The Owner and Consultant, respectively, bind themselves, their partners,
successors, assigns and legal representatives to the other party to this
Agreement and to the partners, successors, assigns and legal representatives of
such other party with respect to all covenants of this Agreement. Neither Owner
nor Consultant shall assign this Agreement without the written consent of the
other, except that Owner may assign this Agreement to Owner's lender(s) and
Consultant shall execute any reasonable consent in connection therewith that is
requested by such a lender.
11.1.6
This Agreement represents the entire and integrated agreement for This Part of
the Project between the Owner and the Consultant and supersedes all prior
negotiations, representations or agreements, either written or oral. This
Agreement may be amended only by written instrument signed by both Owner and
Consultant.
11.1.7
Nothing contained in this Agreement shall create a contractual relationship with
or a cause of action in favor of a third party against either the Owner or
Consultant.
11.1.8
Unless otherwise provided in this Agreement, the Owner and Consultant shall have
no responsibility for the discovery, presence, handling, removal or disposal of
or exposure of persons to hazardous materials or toxic substances in any form at
the Project site.
 
 
 

11

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ARTICLE 12 PAYMENTS TO THE CONSULTANT
12.1.1
Payments on account of services rendered and for Reimbursable Expenses incurred
shall be made monthly within thirty (30) days presentation of the Consultant's
statement of services to the Construction Manager. No deductions shall be made
from the Consultant's compensation on account of penalty, liquidated damages or
other sums withheld from payments to contractors, or on account of the cost of
changes in the Work other than those for which the Consultant has been adjudged
to be liable.
12.1.2
If and to the extent that the time initially established in Subparagraph 13.4.1
of this Agreement is exceeded or extended through no fault of the Consultant,
reasonable compensation for services rendered during the additional period of
time shall be computed on an hourly basis as additional services.
12.2
REIMBURSABLE EXPENSES
12.2.1
Reimbursable Expenses are in addition to compensation for the Consultant's
services and shall mean reasonable expenses incurred by the Consultant and
Consultant's employees and subconsultants directly related to the Project, of
the types generally described in the following Clauses:
 
.1
transportation in connection with the Project, authorized out-of-town travel and
subsistence, and electronic communications;
 
.2
fees paid for securing approval of authorities having jurisdiction over the
Project;
 
.3
reproductions, plots, standard form documents, postage, handling and delivery of
Instruments of Service;
 
.4
expense of overtime work requiring higher than regular rates if authorized in
advance by the Owner;
 
.5
renderings, models and mock-ups requested by the Owner; and
 
.6
expense of professional liability insurance dedicated exclusively to this
Project or the expense of additional insurance coverage or limits requested by
the Owner or Architect in excess of that normally carried by the Consultant.
12.2.2
Records of Reimbursable Expenses and expenses pertaining to a Change in Services
and services performed on the basis of hourly rates shall be available to the
Owner and Construction Manager at mutually convenient times.
12.3
INSURANCE
12.3.1
The Consultant shall obtain insurance in the amount of $1,000,000 covering
claims arising out of the performance of professional services under this
Agreement and caused by errors, omissions or negligent acts for which the
Consultant is liable. The Consultant shall maintain this insurance in force, if
available, after the completion of professional services under this Agreement
until the expiration of the applicable statutes of limitations. In the event
there is no such statute specifically applicable to design and construction of
improvements to real property, this insurance, if available, shall be maintained
in force by the Consultant for three (3) years.
12.3.2
Unless otherwise agreed, the Owner and Consultant shall each provide insurance
to protect themselves from claims under workers' compensation acts; from claims
for damages because of bodily injury, including personal injury, sickness,
disease, or death of any employees or of any other person; from claims for
damages because of injury to or destruction of property including loss of use
resulting therefrom; and from damage to or destruction of property including
valuable papers and records coverage and including loss of use resulting
therefrom.
 
 
 

12

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12.3.3
The insurance required pursuant to Subparagraphs 12.3.1 and 12.3.2 shall be in
not less than the minimum limits required by law.
12.3.4
The Consultant shall promptly furnish to the Owner certificates of insurance
evidencing the insurance required by Subparagraphs 12.3.1 and 12.3.2, including
appropriate evidence that each type of insurance includes appropriate coverages
for this specific Project. Certificates shall contain provisions that at least
30 days' prior written notice will be given to the Construction Manager in the
event of cancellation, reduction in or nonrenewal of the insurance.
ARTICLE 13 BASIS OF COMPENSATION
See Exhibit A.
13.1
ADDITIONAL PROVISIONS
The Owner and Consultant agree that:
13.1.1
If services covered by this Agreement have not been completed within thirty
months of the date hereof, through no fault of the Consultant for This Part of
the Project, extension of the Consultant's services beyond that time shall be
compensated on the basis of hourly rates as provided in Exhibit A.
13.1.2
The rates set forth for services shall be annually adjusted in accordance with
normal reasonable salary review practices of the Consultant. Consultant agrees
to inspect upon (a) substantial and (b) final completion and issue certificates
to Architect and Owner at those points.
13.1.3
PAYMENT PROVISIONS
 
 
 

(Insert provisions as to conditions, contingencies, times, manner and other
particulars concerning payments, including any provisions for the payment of
interest.)

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

/s/  K. M. FISHER      

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

OWNER (Signature)
 
/s/  S. CARTER      

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

CONSULTANT (Signature)
 
 
 
K. M. Fisher, CFO

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

(Printed Name and Title)
 
S. Carter, Principal

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

(Printed Name and Title)
 
 
 
 
 
 

13

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Exhibit A

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Our ref 76019.06/dc
Date March 29, 2002
  
BY FAX AND MAIL   2440 South Sepulveda Boulevard
Suite 180
Los Angeles California 90064
Tel +1 310 312 5040
Fax +1 310 312 5788
atila.zekioglu@arup.com
 
 
www.arup.com

Mr. Paul Franz
Paul Franz Construction Inc.
3749 Santa Claus Lane
Carpenteria, CA 93013

ARUP

Dear Mr. Franz:

QAD Ortega Hill Campus Phase I
Revised Proposal to Provide Building Engineering Services (2nd Revision)

        We are excited to hear that this project is going forward again and that
QAD has invited us to be part of a team once more. We enclose our revised fee
proposal and scope of services for the structural, mechanical, electrical and
plumbing engineering design for the shell and core phase on this project.

PROJECT DESCRIPTION

        The project is a new 88,5000 gross square foot headquarters building for
the QAD software company located in Carpenteria, in Santa Barbara County. The
building is single story with a partial basement. Phase I includes only the
design of the shell and core of the building. The tenant improvements will be a
separate, future phase. The current building construction cost is estimated at
$15,635,138.00 and the design schedule is fast-track.

SCHEDULE

        Arup Los Angeles currently employs over 120 technical staff in its Los
Angeles office. If appropriate this can be augmented with additional staff from
our other US offices. We understand that the project schedule is currently under
review, but we are aware of the urgency to occupy the building and will work
with QAD, the architect and the construction team to provide engineering
services to meet QAD's goals.

SCOPE OF WORK

        Ove Arup & Partners California Ltd. (OAPCAL) will provide standard
consulting structural, mechanical, electrical and plumbing engineering design
services from the schematic design phase of the project through construction
administration. Cost estimates will be provided at each phase by a construction
manager employed by the Owner. OAPCAL will provide assistance in analyzing these
estimates.

        Our services relate to the design of building systems typically located
at defined positions not more than 5'-0" from the building envelope. These
services will be provided under an AIA C141 (1997) Standard Form of Agreement
between Owner and Consultant augmented by the Scope of Building Engineering
Services document attached to this proposal. At this point, we have not received
a copy of the Owner/Consultant contract. We reserve the right to review our
conditions upon review of it. We have listed separately services that are
excluded from our proposed scope of work.

2

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BUILDING ENGINEERING FEES

        The attached fees are based on our current understanding of the project
as represented by the project cost estimate prepared by Melchiori Construction
Co., dated February 7th, 2002 with an estimated building construction cost of
$15,635,138.00 (shell and core—$10,323,875.00 and tenant
improvements—$5,311,263.00). However, we would welcome the opportunity to
negotiate fees based on any additional information that you may provide. We
propose building engineering fees as outlined below.

SHELL AND CORE FEES

        The fees are based on a building shell and core construction cost of
2.7% of $10,323,875, for basic services related to structural, mechanical,
electrical and plumbing engineering for the shell and core design for the Design
Development through Construction Administration phases. The fees have been
separated by phase, however our proposal is based on the assumption that we will
be providing services for all phases. Our scope includes fitout of the core
spaces, the lobbies, MEP supply to a single point of connection in the kitchen
and HVAC for the data center. The following items are additional to this basic
fee.

1. Update to current building code requirements

The existing building design was based on the 1994 code requirements and so a
complete re-design of the mechanical work done to date and the building lateral
system is needed to meet current codes and this also has impacts on the
architectural design. This will result in an updated set of drawings for costing
and Owner approvals. The design development fee indicated in the schedule below
covers this re-work.

2. Integration of structure, systems and ceiling heights

The site constraints on the overall building height, combined with QAD's desire
to maximize internal ceiling height, require the MEP and structural systems to
be carefully coordinated together, unlike typical shell and core construction
where structure and services are separate. We propose an additional lump sum fee
of $40,000 to do sizing and preliminary distribution plans for the MEP systems
in all the TI spaces and to modify structure and ductwork to best achieve the
required ceiling heights. This information will be documented for use by the TI
designer.

3. Mechanical Title 24 analysis

In order to retain the existing architectural concept as much as possible, while
meeting the new Title 24 energy conservation requirements, we are carrying out a
specialized performance analysis of the building, rather than the standard
prescriptive code approach. This requires additional analysis in both the design
development and construction administration phases and for this we propose and
additional lump sum fee of $25,000.

4. Site Lighting

We have also been asked to include the design of site and parking lot lighting
in our scope, including selection of fixtures in conjunction with the architect
and preparation of plans. We will also provide a lighting level plan based on
the selected fixtures. We propose a fee of $4,000 including one trip to Santa
Barbara County. QAD will be responsible for obtaining any necessary approvals
from the local neighborhood jurisdictions.

TENANT IMPROVEMENT FEES

        These fees are based on 84,000sf of space, including offices, conference
rooms, fitness center, visitor center and data center. There is also a kitchen,
which will be designed by a specialist kitchen consultant.

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        For this scope of work, we propose a fee of $120,000. If we are awarded
the TI scope in addition to the shell and core, we will charge only $20,000 fee
under shell and core design services for integration of structure, systems and
ceiling heights.

        Should the program change in scope or area or the budget change once it
is established in later phases, we would amend our fees as appropriate. In
addition, our fee proposal is based on seamless continuity between phases, and
any delays in the project not the fault of the design team, will be subject to
negotiated demobilization and mobilization costs. We do understand that there
will be the obligatory review periods by the user groups and facilities
personnel, as well as plan check by the governing agencies.

        This proposal is based on our invoicing monthly through each phase of
the project, and receiving payment within 45 days of invoice.

SHELL AND CORE FEES

Phase

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

  Phase Split

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

  Structural, Mechanical, Electrical and Plumbing Shell and Core Engineering
Fees

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

Design Development   22 % $ 61,324.00 Construction Documents   44 % $ 122,648.00
Bidding / Negotiations   6 % $ 16,725.00 Construction Administration   28 % $
78,048.00 Sub-Total   100.00 % $ 278,745.00 Integration of Systems   —   $
40,000.00 Mechanical Title 24 Analysis   —   $ 25,000.00 Site Lighting   —   $
4,000.00 Total   —   $ 347,745.00

TENANT IMPROVEMENT FEES

Phase

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

  Phase Split

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

  Structural, Mechanical, Electrical and Plumbing Tenant Improvement
Engineering Fees

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

Schematic Design   15 % $ 18,000.00 Design Development   15 % $ 18,000.00
Construction Documents   40 % $ 48,000.00 Bidding / Negotiations   5 % $
6,000.00 Construction Administration   25 % $ 30,000.00 Sub-Total   100.00 % $
120,000.00

QUOTED FEES ASSUMPTIONS

1.Our fee is based on a design development plus construction document phase
schedule of a total of ten (10) months. Should that time period be extended
beyond eleven (11) months, we will asses an additional service charge of
$5,000.00 per month.

2.If the project is placed on hold, we will be assessing an additional start up
and mobilization fee of $10,000.00 when the project resumes.

3.We reserve the right to stop work if fees are not received 60 days after
issuing an invoice.

4.Invoices older than 60 days will attract a backdated finance charge of 1.5%
per month.

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ADDITIONAL SERVICES AVAILABLE

        We have attached for your reference our standard scope of engineering
services. In addition to our Basic Building Engineering services, we have the
ability to provide Additional or Specialist Services in various areas, if
necessary, in the course of the project. Some of the services, which may prove
to be relevant to this project, are:

•Architectural Lighting Design: As part of Basic Services, OAPCAL will provide
general lighting design as defined in the attached scope of work, and site
lighting as an additional service described previously.

•Acoustics, including architectural and environmental noise issues and noise
control. Please see our proposal submitted under separate cover.

•Telecommunications systems, including voice, data, paging, intercom, public
address, central clocks, elapsed timers, etc. Our basic fee includes only
providing electrical power to the equipment. Conduit layouts, sizing, and all
associated infrastructure for these systems will be the responsibility of the
Owner. When the extent of any telecommunications infrastructure to be provided
in our work is clarified, we will provide an additional services proposal.

•Audio Visual systems, including audiovisual for meeting rooms, exhibits, retail
floor, etc. Our basic fee includes only providing electrical power to the
equipment. Conduit layouts, sizing, and all associated infrastructure for these
systems will be the responsibility of the Owner.

•Security Systems, including CCTV, door alarms, and card key access system. Our
basic fee includes only providing electrical power to the equipment. Conduit
layouts, sizing, and all associated infrastructure for these systems will be the
responsibility of the Owner.

•Life Cycle Costing Analysis, Early in the design process life cycle cost for
tradeoffs of alternative building systems can be analyzed and explored to arrive
at the most appropriate and cost effective solution. Life cycle costing of
systems is an integral and important element of the process of energy efficient
design. Upon request, we would be happy to provide a proposal.

•Computerized Daylighting Studies

•Computational Fluid Dynamics Study, the use of CFD analysis can be used as a
means to understand air flows within a space by modeling the space in 2- or 3-D.
This has been proven to save clients on capital cost and energy consumption.
Upon request we would be happy to provide a proposal.

•Non-linear and / or Performance Based Seismic Design of Structural Systems

•Dynamic Analysis of Structural Systems, where not required by Code.

•Sustainable Design Consulting Services—Our basic services does not include the
detailed Energy Analyses required for LEED certification, advice on Integrated
Envelope Design and LEED rating specifications not specifically related to the
mechanical, electrical or plumbing systems. These elements can be provided as an
additional service.

•Façade Engineering

•Special Materials—Incorporation of special materials as part of the structural
system, which are not recognized by the Building Code.

        Additional services will be carried out on either a negotiated lump sum
or time and materials basis. Our current time and materials rates are as
follows. Hourly rates are reviewed annually in April.

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SCHEDULE OF HOURLY TIME BASIS RATES

Principal   $ 225.00 Senior Associate/ Project Manager   $ 155.00 Associate   $
135.00 Senior Engineer   $ 110.00 Engineer   $ 95.00 Sr. Draftsperson   $ 90.00
Designer / Draftsperson   $ 80.00 Clerical I   $ 50.00 Clerical II   $ 65.00

OUTLINE OF EXCLUDED SCOPE

        The basic scope of our services, and therefore the engineering fees as
outlined in the proposal, DOES NOT include the following items:

•Cost estimating. However, as part of Basic Services, OAPCAL will provide review
and comment to cost analysis completed by others as part of this scope of work.

•Smoke exhaust calculations. However, as part of Basic Services, OAPCAL will
design smoke control systems based upon airflow calculations, smoke exhaust and
pressurization requirements and concepts provided by a specialty Fire and Life
Safety Code Consultant.

•Preparation of Record Drawings from the Contractor's As-Built drawings.
However, as part of Basic Services, OAPCAL will review the as-built drawings by
the Contractor for completeness.

•Building commissioning. However, as part of Basic Services, OAPCAL will review
testing and balancing reports, as-built drawings, owner's manuals and final
field observation report during the construction administration phase.
Witnessing and directing the actual testing and balancing of the mechanical and
electrical systems and / or full commissioning of the building services is
excluded from our scope of work.

•Preparation of demolition drawings / site surveys / building services surveys,
utilizing non-invasive activities, including building a set of CAD drawings is
excluded from our scope of work.

•Wind tunnel testing and evaluation.

REIMBURSABLE EXPENSES

        Reimbursable expenses include the following items, all of these expenses
will be reimbursed at 1.1 times cost. We suggest that you allow for $20,000.00
(twenty thousand dollars) for reimbursable expenses related to this project.

•Travel and accommodations outside of Los Angeles County.

•All costs associated with printing and plotting of formal submissions to the
Owner, other consultants, and the Contractor.

•Courier and long distance telephone charges.

•Additional CADD drawings requested by the Owner other than that required in the
final submittal for each phase of the project as detailed in the attached Scope
of Engineering Services.

•If authorized in advance by the Owner, expense of overtime work requiring
higher than regular rates.

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•Expense of renderings, models and mock-ups requested by the Owner.

        We have a team of experienced engineers looking forward to the chance to
work on this project. We would be pleased to have the opportunity to meet with
you to discuss this proposal in detail. If you need any further information,
please do not hesitate to call our proposed Project Manager, Catherine Wells or
me.

Yours sincerely,
    for Ove Arup & Partners California Ltd.

   
    

Atila Zekioglu
Principal

Enc        Scope of Engineering Services

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QAD Ortega Hill, Phase I
Scope of Engineering Consulting Services
March 29, 2002   ARUP

STRUCTURAL ENGINEERING SERVICES AND DELIVERABLES

Introduction

        The basic structural design services of Ove Arup & Partners
California Ltd. (OAPCAL) include designing building structural systems and all
other major components of the buildings requiring support limited to within five
feet (5'-0") of any building envelope. All free standing structures including
but not limited to retaining walls, property line walls / fences, trash
enclosure walls, stairs, flagpoles, planter and landscaping walls, equipment
enclosures, pavement sections, shall be done by a registered Civil Engineer
retained by others, and are not included as part of this scope. We will design
bases for light poles at the building exterior.

1.0  Design Development

        Based on the previously approved schematic design scheme, OAPCAL will
prepare design drawings and other documents as required to describe the
structural systems, materials, and design intent as delineated by the Architect
and other such elements, as may be appropriate.

1.1OAPCAL will review the existing geotechnical report for structural concerns
and conformance with new codes, and respond in writing.

1.2OAPCAL will re-analyze the building lateral systems and prepare CADD plans of
the revised structural system in conformance with the 1997 Uniform Building Code
and current architectural layouts, showing foundations, framing and preliminary
design of special conditions and systems including materials, gross sizes,
critical details, coordination clearances and basic dimensions.

1.3OAPCAL will participate in cost analysis and cooperate with the construction
manager in the preparation of detailed estimates, including alternate materials
and systems.

1.4OAPCAL will coordinate its work with that of other consultants.

1.5OAPCAL will coordinate the Design Development drawings with the revised
drawings prepared by other consultants and prepare a list of any and all design
concerns and considerations related to structural engineering.

1.6OAPCAL will attend two(2) design coordination meeting with the Design Team in
Santa Barbara County.

2.0  Construction Documents

        Based on the approved design development scheme, OAPCAL will prepare
construction documents.

2.1Construction documentation shall include preparation of documents necessary
to fully and completely convey the design, which shall be used for bidding and
construction. Documents shall include detailing of structural connections.

2.2OAPCAL will indicate non-structural items that affect the basic structure or
provide appropriate cross-references to drawings by others for such items.
Special attention will be required relative to the exterior façade. We will
account for design loads (wind, gravity, etc.) imposed onto the building
structural system, as a result of the exterior façades. However, the façade
component design and detailed façade attachments are not included in OAPCAL's
building engineering scope of work.

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2.3OAPCAL will provide necessary criteria and other information needed for the
design and installation of pre-engineered elements.

2.4OAPCAL will indicate on the drawings design criteria such as live and
superimposed dead loads, material strengths, code requirements and any
provisions for future additions.

2.5OAPCAL will coordinate as required with the Architect and other consultants
relative to structural impacts to their work.

2.6OAPCAL will produce, as required by jurisdictional authorities, structural
calculations in order to facilitate review of the documents for permit. Drawings
and calculations shall be "signed and sealed" as required by the building
official in order to obtain a building permit.

2.7The design and documentation of non-primary and non-load bearing structural
components as required by the Architect and other consultants in order to
facilitate other components of the project, including ceiling and interior
partitions, are not part of OAPCAL's scope.

2.8OAPCAL will assist the Architect in specifying the scope, standards and
frequency of required testing and inspection services by independent agencies.

2.9OAPCAL will revise drawings as required by reviewing code authorities and
assist the Architect to obtain all City, County, State or other governmental
approvals prior to bid.

2.10OAPCAL will attend three (3) coordination meetings with the Design Team in
Santa Barbara County.

2.11OAPCAL will prepare final specifications utilizing our master specification
system based on the CSI format to include the Architect's typeface and page
layout.

3.0  Bidding and Negotiations

3.1OAPCAL will be responsible for coordination and incorporating all addenda
into the Construction Documents package for issue to the Contractor "for
construction."

3.2OAPCAL will assist the Owner and the Architect during the Bid Phase by
interpretation of the Bid Documents and coordination and preparation of Addenda.

3.3OAPCAL will attend Pre-Bid and Pre-Construction meetings, answer Contractor
questions and issue addenda.

4.0  Construction and Post Construction Administration

4.1OAPCAL will visit the site at intervals, to become generally familiar with
the progress and quality of the work and to see whether construction is
proceeding in accordance with the Construction Documents. This will be one visit
per month over the construction period of the superstructure. A written report
of OAPCAL's findings shall be prepared at the conclusion of each site visit and
be forwarded to the Owner and the Architect.

4.2OAPCAL will resolve all "Requests for Information" pertaining to the
structural design.

4.3OAPCAL will advise and consult with the Owner, the Architect and other
consultants during the Construction Administration phase.

4.4OAPCAL will report to the Owner and the Architect in writing any work
observed during site visits that does not conform to the Construction Documents.

4.5OAPCAL will prepare revisions, modifications and construction bulletins as
required.

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4.6OAPCAL will review or reject the Contractor's submittals (such as shop
drawings, product data and samples), but only for conformance with the
Construction Documents. Such action shall be taken with reasonable coordination
and promptness and in no case longer than ten (10) working days from receipt, so
as to cause no delay. If any Contractor submittal requires more than two
reviews, the third review and any subsequent review will be an additional
service.

5.0  Exclusions

5.1Performance of cost analysis. However, OAPCAL will provide review and comment
to cost analyses completed by others as part of this scope of work.

5.2As part of Basic Services, OAPCAL will review the as-built drawings prepared
by the Contractor for completeness. These as-built drawings will be the record
drawings.

5.3Non-public exit stairs and external stairs outside the building envelope.

5.4Design of curtain wall / façade framing for heavier finishes such as full
course brick veneer, GFRC, precast concrete or stone finishes.

5.5Design and detailing for aluminum and steel glass storefront window wall
systems.

5.6Underpinning and / or shoring of existing and adjacent buildings and streets
as may be required during construction. Shoring and / or excavation procedures
and design packages of any sub-grade components.

5.7Large billboards, signage and graphic elements, which are not an integral
part of the building's structural system.

5.8We have assumed that the project will be bid as one complete package for
construction in one continuous phase, and as such, the documentation and effort
to create separate foundation, steel, etc., bid packages is excluded.

5.9Design, engineering and plan check approval of remedial solutions required to
correct as-built conditions (Contractor errors) that significantly do not
conform to the Construction Documents.

6.0  Scope Clarifications

6.1Stair Design: As part of Basic Services, we have included the design of all
concrete stairs within and directly adjacent to the building.

6.2Ceilings: We will provide attachment points for heavy decorative plaster,
metal or wood ceilings from the roof or floor structure above. Lightweight
ceiling suspension systems will be a bidder-designed element, indicated on the
architectural drawings.

6.3Handrails: The design of handrails / guardrails is included for stairs that
we design (see above), catwalks that we design, seating balconies, and lobbies.
Handrails / guardrails for bidder-designed stairs will be a bidder-designed
element.

6.4We will assist the Architect to provide a design-build specification and
conceptual details indicating the nature of exterior skin connections, including
metal studs, and supports for exterior building maintenance equipment. We are
assuming that for the purposes of this proposal that the façade is non-load
bearing. Our experience has been that the curtain wall contractor's final
methods of attachment to the building superstructure (including embedded items
and architectural pre-cast concrete) differ, and the design-build contractor
will provide the Owner with the most cost effective solution.

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MECHANICAL / PLUMBING ENGINEERING SERVICES AND DELIVERABLES

Introduction

        The basic mechanical and plumbing engineering services of OAPCAL include
design of all mechanical, plumbing and energy management systems for the
project, including water, sewer and natural gas systems to a point of connection
five feet (5'-0") outside of the main building. Design of the fire hydrant
system to a point of connection, as required, shall be done by a registered
Civil Engineer. As part of its Basic Services, OAPCAL will develop a performance
specification for the fire sprinkler system, fire riser location and main pipe
distribution. Site drainage shall be performed by a registered Civil Engineer.

        Primary ductwork routes will be designed for vertical risers and main
horizontal distribution to service a nominal number of VAV devices. This effort
is necessary due to required coordination with architectural, structural and
other trades for restricted floor to ceiling heights. Coordination of sprinkler
main and roof drain piping with structure and ceiling will be carried out.

1.0  Design Development

1.1OAPCAL will attend two (2) systems design / coordination meetings with the
Design Team in Santa Barbara County.

1.2OAPCAL will re-size mechanical units, provide weights, electrical loads and
unit locations in building(s).

1.3OAPCAL will determine main duct sizes and VAV device zoning.

1.4OAPCAL will contact local authorities to determine requirements and develop
code review for any special requirements.

1.5OAPCAL will re-evaluate the building for compliance with the new Title 24
Energy Code requirements and revised building codes. OAPCAL will advise on
architectural implications due to new code requirements.

1.6OAPCAL will prepare Design Development drawings on electronic backgrounds of
architectural plans.

1.7OAPCAL will coordinate with other consultants.

2.0  Construction Documents

2.1OAPCAL will attend three (3) coordination meetings with the Design Team in
Santa Barbara County.

2.2OAPCAL will coordinate work with other consultants.

2.3OAPCAL will prepare final construction documents.

2.4OAPCAL will revise drawings as required by reviewing code authorities. Assist
the Architect to obtain all City, County, State or other governmental approvals
prior to bid.

2.5OAPCAL will attend final meeting with the Owner prior to review of final
construction drawings.

2.6OAPCAL will attend all backcheck meetings, as required, with government
agencies to obtain approval of mechanical systems.

2.7OAPCAL will prepare final specifications utilizing our master specification
system based on the CSI format to include the Architect's typeface and page
layout.

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3.0  Bidding and Negotiations

3.1OAPCAL will respond to the Architect with all clarifications of drawings.

3.2OAPCAL will provide addenda as required to clarify drawings.

3.3OAPCAL will assist with post-bid analysis of mechanical / plumbing
engineering components.

4.0  Construction and Post Construction Administration

4.1OAPCAL will provide one visit per month during the major installation of
mechanical and plumbing systems and a final jobsite observation to prepare a
mechanical/plumbing punch list.

4.2OAPCAL will provide clarifications and revisions to drawings and / or
specifications when required.

4.3OAPCAL will review shop drawings and submittals. If any Contractor submittal
requires more than two reviews, the third review and any subsequent review will
be an additional service.

5.0  Exclusions

5.1Specialist studies (i.e., life cycle costing, daylighting and natural
ventilation)

5.2Performance of cost analysis. However, OAPCAL will provide review and comment
to cost analyses completed by others as part of this scope of work.

5.3As part of Basic Services, OAPCAL will review the as-built drawings prepared
by the Contractor for completeness. These as-built drawings will be the record
drawings.

5.4Kitchens, cafeteria, concessions and pantries will be provided with single
utility connection points at agreed positions and floor drainage connection
points at agreed positions. The kitchen or concession shall be designed by a
specialist consultant who will provide all necessary information for furniture,
mechanical and plumbing services and obtain all necessary permits; OAPCAL will
coordinate utility connection points only, as noted above.

5.5Special mechanical systems and / or process systems.

5.6Design, engineering and plan check approval of remedial solutions required to
correct as-built conditions (Contractor errors) that significantly do not
conform to the Construction Documents.

5.7Acoustical consulting services related to the analysis and evaluation of
on-site and off-site noise, including noise generated by mechanical equipment.

5.8Design of infrastructure for a dedicated Data Center is included as part of
this Scope of Work.

6.0  Scope Clarifications

6.1OAPCAL will design smoke control systems based upon airflow calculations and
concepts provided by a specialty Code Consultant retained by others.

6.2OAPCAL will undertake a prescriptive Title 24 code check on the building at
the Design Development Phase, and will make recommendations on any modifications
that may be necessary in order to comply with Title 24 requirements. Once the
modifications are made, OAPCAL will undertake a further prescriptive compliance
check.

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ELECTRICAL ENGINEERING SERVICES AND DELIVERABLES

Introduction

        The basic electrical engineering services of OAPCAL include the basic
design of building and site electrical systems as required for a core and shell
design. This will include electrical service from the building to a point of
connection supplied by the utility company, design of general power service to
all HVAC and plumbing equipment. Additionally, this will include all required
minimum emergency power, fire and smoke detection, emergency lighting and normal
power systems for core and utility areas.

1.0  Design Development

1.1OAPCAL will attend two (2) systems design / coordination meetings with the
Design Team in Santa Barbara County.

1.2OAPCAL will re-evaluate and re-define all major electrical systems.

1.3OAPCAL will re-evaluate and incorporate any design/code changes and prepare
Design Development drawings on electronic backgrounds of architectural plans.

2.0  Construction Documents

2.1OAPCAL will attend three (3) coordination meetings with the Design Team in
Santa Barbara County.

2.2OAPCAL will coordinate work with other consultants.

2.3OAPCAL will prepare final construction documents.

2.4OAPCAL will revise drawings, as required by reviewing code authorities.
Assist the Architect to obtain all City, County, State or other governmental
approvals prior to bid.

2.5OAPCAL will attend final meeting with the Owner prior to review of final
construction drawings.

2.6OAPCAL will attend all backcheck meetings, as required, with government
agencies to obtain approval of electrical systems.

2.7OAPCAL will prepare final specifications utilizing our master specification
system based on the CSI format to include the Architect's typeface and page
layout.

3.0  Bidding and Negotiations

3.1OAPCAL will respond to Architect with all clarifications of drawings.

3.2OAPCAL will provide addenda as required to clarify drawings.

3.3OAPCAL will assist with post-bid analysis of electrical engineering
components, if required.

4.0  Construction and Post Construction Administration

4.1OAPCAL will provide one visit per month during major installation of
electrical systems and a final jobsite observation to prepare an electrical
punch list.

4.2OAPCAL will provide clarifications and revisions to drawings and / or
specifications when required.

4.3OAPCAL will review shop drawings and submittals. If any Contractor submittal
requires more than two reviews, the third review and any subsequent review will
be an additional service.

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5.0  Exclusions

        The following work is excluded from the OAPCAL scope of work:

5.1Tenant improvements and fit-outs of the occupied spaces. OAPCAL scope of work
will be limited to minimal core and shell type of services.

5.2Record drawings. However, as part of Basic Services, OAPCAL will review the
as-built drawings by the Contractor for completeness. These as-built drawings
will be the record drawings.

5.3Kitchens, cafeteria, concessions and pantries will be provided with a single
utility connection point at an agreed position. The kitchen or concession shall
be designed by a specialist consultant who will provide all necessary
information for equipment requiring electrical services and obtain all necessary
permits; OAPCAL will coordinate the utility connection point only, as noted
above.

5.4Performance of cost analysis. However, OAPCAL will provide review and comment
to cost analysis completed by others as part of this scope of work.

5.5The design of the telephone, data, sound, audio-visual, security and other
signal systems including device layouts, cable trays, conduit routings, system
specifications, equipment layouts, and wiring will be provided by specialist
consultants appointed by the Owner / Architect. Our basic fee includes only
providing power supplies to the equipment, based on information provided by
others.

5.6Design, engineering and plan check approval of remedial solutions required to
correct as-built conditions (Contractor errors) that significantly do not
conform to the Construction Documents.

5.7The shell and core scope of work includes space for a future computer room.
We will provide power to this room, based on requirements from QAD. The
telecommunications designer will provide requirements for underground
telecommunication conduits to the room.

6.0  Scope Clarifications

6.1As part of Basic Services, OAPCAL will provide basic building lighting
design. This includes the development of appropriate lighting schemes for
typical toilet rooms, utility rooms, main lobby, exit lighting at exterior doors
and core spaces only. Our work will include the selection of light fixtures,
providing catalog sheets, and assisting the Architect in generating reflected
ceiling plans. Excluded from our scope of work are exhibit lighting, accent
lighting and custom light fixtures. OAPCAL will provide Title 24 calculations as
part of the mechanical calculations, with an allowance for interior lighting to
be used in the tenant improvement fit-out design by others. If local
jurisdiction requires independent calculations to be completed for individual
spaces, this shall be an additional service and a separate proposal can be
forwarded at that time.

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QuickLinks

STANDARD FORM OF AGREEMENT BETWEEN OWNER AND CONSULTANT FOR THE QAD ORTEGA HILL
PROJECT