exv10w1



 




Exhibit 10.1




AIA®  Document A111 TM  – 1997



Standard
Form of Agreement Between Owner and Contractor 

where the basis for payment is the COST OF THE WORK PLUS A FEE with a negotiated Guaranteed Maximum
Price



AGREEMENT made as of the 13th day of September in the year 2006

(In words, indicate day, month and year)



BETWEEN the Owner:

(Name, address and other information)





MannKind Corporation

One Casper Street

Danbury, CT 06810

Phone: (203) 796-3423

Fax: (203) 798-7740



and the Contractor:

(Name, address and other information)



Torcon, Inc.

328 Newman Springs Road

Red Bank, NJ 07701

Phone: (732) 704-9800

Fax: (732) 704-9811



The Project is:

(Name and location)



Inhaleable Insulin Manufacturing Facility

Danbury, CT



The Engineer is:

(Name, address and other information)



CRB Consulting Engineers, Inc.

20 West Germantown Pike, Suite 170

Plymouth Meeting, PA 19426



The Architect (consultant to Engineer) is:

Kling

2301 Chestnut Street

Philadelphia, PA 19103



The Owner and Contractor agree as follows.






ADDITIONS AND DELETIONS: The author of this document has added information needed for its
completion. The author may also have revised the text of the original AIA standard form. An
Additions and Deletions Report that notes added information as well as revisions to the standard
form text is available from the author and should be reviewed.



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



This document is not intended for use in competitive bidding.



AIA Document A201-1997, General Conditions of the Contract for Construction, is adopted in this
document by reference. Do not use with other general conditions unless this document is modified.



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



ELECTRONIC COPYING of any portion of this AIA® Document to another electronic file is
prohibited and constitutes a violation of copyright laws as set forth in the footer of this
document.











 




			
	AIA Document A111TM – 1997. Copyright
© 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of
Architects. All
rights reserved. WARNING: This AIA®
Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
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ARTICLE 1 THE CONTRACT DOCUMENTS



The Contract Documents consist of this Agreement, Conditions of the Contract (General,
Supplementary and other Conditions), Drawings, Specifications, Addenda issued prior to execution of
this Agreement, other documents listed in Article 15 of this Agreement and Modifications issued
after execution of this Agreement; these form the Contract, and are as fully a part of the Contract
as if attached to this Agreement or repeated herein. The Contract represents the entire and
integrated agreement between the parties hereto and supersedes prior negotiations, representations
or agreements, either written or oral. An enumeration of the Contract Documents, other than
Modifications, appears in Article 15. If anything in the other Contract Documents is inconsistent
with this Agreement, this Agreement shall govern. In the event of a conflict between any of the
Contract Documents other than this Agreement, the Contract Document bearing the later date shall
control.




ARTICLE 2 THE WORK OF THIS CONTRACT



§2.1 The Contractor shall fully execute the Work described in this Agreement and in the Contract
Documents or reasonably inferable by Contractor to produce the results intended by the Contract
Documents, except to the extent specifically indicated in the Contract Documents to be the
responsibility of others. The Work shall be executed in a good and workmanlike manner and in
accordance with the intent and meaning of the Contract Documents as well as any additional Contract
Documents (including, without limitation, plans and specifications) that Owner may furnish or
approve for use in the Work, all of which when so furnished or approved by Owner shall be deemed to
be a part of the Contract.




ARTICLE 3 RELATIONSHIP OF THE PARTIES



The Contractor accepts the relationship of trust and confidence established by this Agreement and
covenants with the Owner to cooperate with the Engineer and Architect and exercise the Contractor’s
skill and judgment in furthering the interests of the Owner; to furnish efficient business
administration and supervision; to furnish at all times an adequate supply of workers and
materials; and to perform the Work in an expeditious and economical manner consistent with the
Owner’s interests and with the Work Progress Schedule described herein and all applicable budgets
and work progress schedules (whether bar, CPM, PERT or any modifications or combinations thereof,
as chosen by Owner), which Contractor agrees to prepare for the Owner’s and Engineer’s review. The
Owner agrees to furnish and approve, in a timely manner, information required by the Contractor and
to make payments to the Contractor in accordance with the requirements of the Contract Documents.




ARTICLE 4 DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION



§ 4.1 The date of commencement of the Work shall be December 11, 2006.

(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.)



If, prior to commencement of the Work, the Owner requires time to file mortgages, mechanic’s liens
and other security interests, the Owner’s time requirement shall be as follows:



Not applicable



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



§ 4.3 The Contractor shall achieve Substantial Completion of all mechanical systems (including all
testing and validation) in accordance with the following schedule:


Central Utility Building: Not later than January 30, 2008

Building 2A: Not later than March 17, 2008

Building 2B: Not later than July 9, 2008



Contractor shall achieve Substantial Completion of the entire Work not later than November 28,
2008.

(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.)






 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA® Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
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2









 






	 	 	 
	Portion of Work

	 	Substantial Completion date





, 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.)



§4.4 Prior to start of construction the Contractor shall prepare and submit for the Owner’s review
a detailed construction progress schedule for the Work (“Project Schedule”), which shall be related
to the entire Project and shall indicate the estimated dates for the starting and completion of
each of the various stages of construction of the Work. The initial Project Schedule prepared by
Contractor and reviewed by Owner is attached to this Agreement as Exhibit “B.” With the advance
review of the Owner, it shall be revised as required by the conditions of the Work, but not less
frequently than monthly.



The Project Schedule shall show:



§4.4.1 A sequence of operations mutually agreeable to the Owner and the Contractor;



§4.4.2 Shop drawing submittal schedule for the various items of the Work.



§4.4.3 The dates of proposed commencement and completion of each of the various items of the Work; and



§4.4.4 Expected delivery dates for all materials and equipment.



The Project Schedule shall include a complete itemized breakdown of the Work.



It shall be the Contractor’s responsibility to use its best efforts to maintain the progress of the
Work in accordance with the Project Schedule. If Contractor requests an extension of the Contract
Time, the request shall be accompanied by a revised Project Schedule showing all necessary
adjustments consistent with the requested extension.



If the Contractor shall fail in any respect to prosecute the Work with promptness and diligence, or
if the progress of the Work is such that in Owner’s opinion its completion within the Contract Time
(as adjusted under the terms of the Contract Documents) is improbable, the Contractor shall, if
Owner so requests, use such overtime labor as shall be necessary to insure the completion of the
Work within the time specified above, but the Contractor shall have no claim for any adjustment of
the Contractor’s Fee or the Guaranteed Maximum Price (as defined below), nor for reimbursement
because of the extra expenses thereby occasioned.



In executing this Agreement, Contractor represents the Contract Time (as may be adjusted under the
Contract Documents) appears to be reasonable, taking into consideration the current status of the
Contract Documents, the type of construction planned and the site conditions, climatic conditions
and industrial conditions (including, without limitation, labor conditions) prevailing in the area
of the Project.



§ 4.5 Time is of the essence in the performance of this Agreement. The Contractor acknowledges and
recognizes that the Owner is entitled to full and beneficial occupancy and use of the completed
Work following expiration of the Contract Time. The Contractor further acknowledges and agrees
that if the Contractor fails to achieve Substantial Completion of the Work within the Contract
Time, the Owner will sustain extensive damages and serious loss as a result of such failure.




ARTICLE 5 BASIS FOR PAYMENT



§
5.1 CONTRACT SUM

§ 5.1.1 The Owner shall pay the Contractor the Contract Sum in current funds for the Contractor’s
performance of the Contract. The Contract Sum is the Cost of the Work as defined in Article 7 plus
the Contractor’s Fee.



§ 5.1.2 The Contractor’s Fee is: One point two five percent (1.25%) of the Cost of the Work







 




			
	AIA Document A111TM – 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA®  Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
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(State a lump sum, percentage of Cost of the Work or other provision for determining the
Contractor’s Fee, and describe the method of adjustment of the Contractor’s Fee for changes in the
Work.)



The Contractor’s Fee on changes in the Work as defined in Article 7 of AIA Document A201-1997 shall
be one point two five percent (1.25%) of the cost of performing the change in the Work as
determined by such Article 7, and ten percent (10%) of such cost as compensation in full for the
Contractor’s General Conditions costs as defined in Section 5.2.1, below.




§ 5.2 GUARANTEED MAXIMUM PRICE



§ 5.2.1 The sum of the Cost of the Work and the Contractor’s Fee is guaranteed by the Contractor
not to exceed One Hundred and Fourteen Million, Twenty Two Thousand, Five Hundred and
Seventy-Eight Dollars ($114,022,578.00), based on the terms and conditions of the Torcon Control
Estimate (Revised) dated February 28, 2007 (attached as Exhibit “C” and sometimes referred to
herein as the “GMP Estimate”), subject to additions and deductions by Change Order as provided in
the Contract Documents. Such maximum sum is referred to in the Contract Documents as the Guaranteed
Maximum Price. Costs which would cause the Guaranteed Maximum Price to be exceeded shall be paid by
the Contractor without reimbursement by the Owner. Contractor has provided Owner with a detailed
Guaranteed Maximum Price (GMP) Estimate which includes a breakdown of all anticipated Costs of the
Work, including Contractor’s General Conditions costs. As used herein, “General Conditions” costs
shall mean the costs of those facilities and services necessary for the proper execution and
completion of the Work but which are not incorporated in the Work, such as the salaries, bonuses
and expenses of field office personnel, the costs of temporary facilities, the costs of
implementing and executing safety programs, premiums for insurance required by this Agreement, and
the costs of the Contractor’s demobilization, clean-up and removal of field office. In the event
of any conflict between the terms of the GMP Estimate and the terms of this Agreement or of the
accompanying General Conditions of the Contract for Construction, AIA Document A201-1997, as
modified (“AIA Document A201-1997”), the terms of this Agreement and AIA Document A201-1997 shall
govern.



§ 5.2.2 The Guaranteed Maximum Price is based on 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 the amount expires.)



§ 5.2.3 Unit prices, if any, are as follows:




Description            Units            Price ($ 0.00)



§ 5.2.4 Allowances, if any, are as follows



(Identify and state the amounts of any allowances, and state whether they include labor, materials,
or both.)




Allowance            Amount
($ 0.00)           Included items



§ 5.2.5 Assumptions, if any, on which the Guaranteed Maximum Price is based are as follows:



§ 5.2.6 To the extent that the Drawings and Specifications are anticipated to require further
development by the Engineer or Architect, the Contractor has provided in the Guaranteed Maximum
Price for such further development consistent with the Contract Documents and reasonably inferable
therefrom. Such further development does not include such things as changes in scope, systems,
kinds and quality of materials, finishes or equipment, all of which, if required, shall be
incorporated by Change Order.



§.5.2.7 The Guaranteed Maximum Price shall include a fixed contingency line item which includes a
design contingency as well as a construction contingency (the “Contingency”) in the amount of Seven
Million, Five









 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects.All
rights reserved. WARNING: This AIA®  Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
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Hundred and Forty-Six Thousand, One Hundred Dollars ($7,546,100.00) as detailed in
the Torcon Control Estimate (Revised) dated February 28, 2007. The parties intend that the
Contingency is to be used for Costs of the Work not anticipated by the Contractor at the time the
GMP was established, whether resulting from errors or omissions of the Contractor, the failure of
Subcontractors to fully perform, increases in the prices of materials, or from development or evolution of the design of the Project but shall not be used for Changes in the Work. A
separate contingency will be established by the Owner to fund the cost of Changes in the Work.
Subject to Owner review and approval (which approval shall not be unreasonably withheld),
Contractor may access and bill against this Contingency line item whenever Contractor’s actual
costs for any other line items exceeds the costs reflected in the GMP Budget for those line items,
and Owner shall pay or reimburse Contractor pursuant to Article 12 for such contingency billings
provided that such payment or reimbursement is for a Cost of the Work item, and does not cause the
Guaranteed Maximum Price to be exceeded. Notwithstanding anything to the contrary, Contingency
funds cannot be used to pay for the cost of Work performed by a “Related Party” as that term is
defined in Section 10.4 below (“Self-Performed Work”). Any increases in the price of materials
required to perform the Work that are not anticipated by Contractor at the time the GMP was
established shall be paid from the Contingency. If the Contingency has been fully depleted, the
GMP shall be increased by Change Order for the amount of any such increases in the price of
materials that are not paid out of the Contingency.



Whenever Contractor’s estimate for any given line item in its GMP Budget (with the exception of any
line items associated with Costs of Self-Performed Work) exceeds the cost to complete the Work
under that line item, Contractor may transfer the excess to the Contingency line item, subject to
Owner review and approval, and thereafter seek Owner’s approval to access and bill against the
Contingency line item as provided in the immediately preceding paragraph. Concurrently with its pay
applications, Contractor will provide Owner with all documentation Owner reasonably requires to
identify each transfer included in the application and the effect of the transfer, if any, on the
cost to complete the Work. Any line item transfers approved by Owner under this Section 5.2.7 must
be documented in a “no cost” Change Order signed by Owner.




ARTICLE 6 CHANGES IN THE WORK



§6.1 Adjustments to the Guaranteed Maximum Price on account of changes in the Work (also referred
to herein as a “Change”) may be determined by any of the methods listed in Section 7.3.3 of AIA
Document A201-1997 Change Orders.



§6.1.1 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 of the Work, with the
Guaranteed Maximum Price and/or the Contract Time being adjusted accordingly. Contractor
acknowledges and agrees that it shall not be entitled to adjust the Guaranteed Maximum Price or the
Contract Time except as provided in this Contract. All such Changes in the Work shall be
authorized by Change Order or Construction Change Directive, and shall be performed under the
applicable conditions of the Contract Documents.



§6.1.2 Upon issuance of a Change Order by Owner, Contractor and its Subcontractors will perform
the Change(s) in the Work incorporated by the Change Order. In the event the Change Order results
in an increased Cost of the Work, Owner shall pay Contractor for such Change(s) in the Work in the
time and manner set forth in Article 12.



§6.1.3 Any difference between the Drawings and Specifications and any revised drawings and
specifications shall not constitute a Change in the Work unless such differences are not reasonably
inferable from the Drawings and Specifications.



§6.1.4 Notwithstanding and pending resolution of any adjustment in the Guaranteed Maximum Price or
Contract Time with respect to a Change, Contractor shall promptly proceed with Work required by any
Change Order or Construction Change Directive issued by Owner.



§6.2 Minor Changes in the Work



§6.2.1 Engineer, with Owner’s concurrence, will have authority to order minor Changes in the Work
not involving an adjustment to the Guaranteed Maximum Price or an extension of the Contract Time
and not inconsistent with the intent of the Contract Documents. Such minor changes shall be
effected by written order, and shall be binding on Contractor, who shall carry out such written
orders promptly.





 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA®  Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA® Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
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§6.3 Limitation of Entitlement


§6.3.1 Nothing in this Article 6 shall excuse Contractor from proceeding with the Contract as
modified. Nothing contained in this Article 6 shall operate to limit or extinguish any right or
defense of Owner or Contractor contained elsewhere in the Contract Documents.






ARTICLE 7 COSTS TO BE REIMBURSED




§ 7.1 COST OF THE WORK



The term Cost of the Work shall mean costs necessarily incurred by the Contractor in the proper
performance of the Work. Such costs shall be at rates not higher than the standard paid at the
place of the Project except with prior consent of the Owner. The Cost of the Work shall include
only the items set forth in this Article 7.




§ 7.2 LABOR COSTS



§ 7.2.1 Wages of construction workers directly employed by the Contractor to perform the
construction of the Work at the site or, with the Owner’s approval, at off-site workshops.



§ 7.2.2 Wages or salaries and bonuses of the Contractor’s supervisory, project executive and
administrative personnel when stationed at the field office, in whatever capacity employed. Any
field office personnel in addition to a superintendent, assistant superintendent and watchman must
be approved by Owner, and will be charged for only such time as is actually spent on the job as
well as when Contractor’s staff is performing Project specific tasks off site.

(If it is intended that the wages or salaries of certain personnel stationed at the Contractor’s
principal or other offices shall be included in the Cost of the Work, identify in Article 14 the
personnel to be included and whether for all or only part of their time, and the rates at which
their time will be charged to the Work.)



§ 7.2.3 Wages and salaries of the Contractor’s supervisory or administrative personnel engaged at
factories, workshops or on the road, in expediting the production or transportation of materials or
equipment required for the Work, but only for that portion of their time required for the Work.



§ 7.2.4 Wages and salaries included in the Cost of the Work under Sections 7.2.1 through 7.2.3
paid or incurred by the Contractor shall be multiplied by a factor of two point two five (2.25) for
taxes, insurance, contributions, assessments and benefits required by law or collective bargaining
agreements and, for personnel not covered by such agreements, customary benefits such as sick
leave, medical and health benefits, holidays, vacations and pensions..




§ 7.3 SUBCONTRACT COSTS



§ 7.3.1 Payments made by the Contractor to Subcontractors in accordance with the requirements of
the subcontracts.




§ 7.4 COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED CONSTRUCTION



§ 7.4.1 Costs, including transportation and storage, of materials and equipment incorporated or to
be incorporated in the completed construction. Such materials not incorporated or consumed on the
Project will remain the property of the Owner. Contractor must submit an ongoing accounting
(including cost) of these materials and a final material reconciliation prior to final Application
for Payment.



§ 7.4.2 Costs of materials described in the preceding Section 7.4.1 in excess of those actually
installed to allow for reasonable waste and spoilage. Unused excess materials, if any, shall become
the Owner’s property at the completion of the Work or, at the Owner’s option, shall be sold by the
Contractor. Any amounts realized from such sales shall be credited to the Owner as a deduction from
the Cost of the Work.




§ 7.5 COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES AND RELATED ITEMS



§ 7.5.1 Costs, including transportation and storage, installation, maintenance, dismantling and
removal of materials, supplies, temporary facilities, machinery, equipment, and hand tools not
customarily owned by construction workers, that are provided by the Contractor at the site and
fully consumed in the performance of the Work; and cost (less salvage value) of such items which
are used but not fully consumed, which remain the property of the Contractor.



§ 7.5.2 Rental charges for temporary facilities, machinery, equipment, and hand tools not
customarily owned by construction workers that are provided by the Contractor at the site, whether
rented from the Contractor or others, including installation, minor repairs and replacements,
dismantling, removal, transportation and delivery costs





 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA®  Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
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thereof, at rental charges not to exceed
AGC or CRG Rates for Contractor’s owned equipment and AED or bluebook rates when rented from
others.





§ 7.5.3 Costs of removal of construction-generated debris from the site.





§ 7.5.4 Costs of document reproductions, facsimile transmissions and long-distance telephone calls,
postage and parcel delivery charges, telephone service at the site and reasonable petty cash
expenses of the site office.



§ 7.5.5 That portion of the reasonable (economy class) transportation, traveling, living and hotel
expenses of the Contractor or of his officers or employees in discharge of duties connected
directly and solely with the Work, when traveling more than thirty-five (35) miles one way from the
Project. Costs for mileage shall not exceed $0.485/mile.



§ 7.5.6 Costs of materials and equipment suitably stored off the site at a mutually acceptable
location, if approved in advance by the Owner.




§ 7.6 MISCELLANEOUS COSTS



§ 7.6.1 Except as excluded by Sections 8.1.9 and 8.1.10, that portion of insurance and bond
premiums that can be directly attributed to this Contract:



§ 7.6.2 Sales, use, lease, gross receipt or similar taxes imposed by a governmental authority that
are related to the Work.



§ 7.6.3 Fees and assessments for the building permit and for other permits, licenses and
inspections for which the Contractor is required by the Contract Documents to pay.



§ 7.6.4 Fees of laboratories for tests required by the Contract Documents, except those related to
defective or nonconforming Work for which reimbursement is excluded by Section 13.5.3 of AIA
Document A201-1997 or other provisions of the Contract Documents, and which do not fall within the
scope of Section 7.7.3.



§ 7.6.5 Royalties and license fees paid for the use of a particular design, process or product
required by the Contract Documents; the cost of defending suits or claims for infringement of
patent rights arising from such requirement of the Contract Documents; and payments made in
accordance with legal judgments against the Contractor resulting from such suits or claims and
payments of settlements made with the Owner’s consent. However, such costs of legal defenses,
judgments and settlements shall not be included in the calculation of the Contractor’s Fee or
subject to the Guaranteed Maximum Price. If such royalties, fees and costs are excluded by other
provisions of the Contract Documents, then they shall not be included in the Cost of the Work.



§ 7.6.6 Data processing costs related to the Work.



§ 7.6.7 Permit fees, royalties and deposits lost for causes other than the Contractor’s negligence
or failure to fulfill a specific responsibility to the Owner as set forth in the Contract
Documents.



§ 7.6.8 Legal, mediation and arbitration costs, including attorneys’ fees, other than those arising
from disputes between the Owner and Contractor, reasonably incurred by the Contractor in the
performance of the Work and with the Owner’s prior written approval; which approval shall not be
unreasonably withheld.



§ 7.6.9 Expenses incurred in accordance with the Contractor’s standard personnel policy for
relocation and temporary living allowances of personnel required for the Work, if approved by the
Owner in writing.




§ 7.7 OTHER COSTS AND EMERGENCIES



§ 7.7.1 Other costs incurred in the performance of the Work if and to the extent approved in
advance in writing by the Owner.



§ 7.7.2 Costs due to emergencies incurred in taking action to prevent threatened damage, injury or
loss in case of an emergency affecting the safety of persons and property, as provided in Section
10.6 of AIA Document A201-1997.






 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA®  Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
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7









 





§ 7.7.3 Costs of repairing or correcting damaged or nonconforming Work executed by the Contractor,
Subcontractors or suppliers, provided that such damaged or nonconforming Work was not caused by
negligence or failure to fulfill a specific responsibility of the Contractor and only to the extent
that the cost of repair or correction is not recoverable by the Contractor from insurance,
sureties, Subcontractors or suppliers.



§7.7.4 Losses and expenses, not compensated by insurance or otherwise, sustained by the Contractor
in connection with the Work, provided they have resulted from causes other than the fault or
neglect of the Contractor, any subcontractor, or anyone directly or indirectly employed by any of them or for whose acts any of
them may be liable. Such losses shall include settlements made with the written consent and
approval of the Client.





§7.7.5 Costs of water, power, fuel, first aid, temporary facilities, winter protection, OSHA
protection, blueprints, photographs, and field office supplies.



§7.7.6 General Conditions costs as set forth in the GMP Estimate as described in Section 5.2.1 and
attached as Exhibit “C”.



§7.7.7 The cost of all glass protection shall be a Cost of the Work. The Contractor shall also
replace all broken or otherwise damaged glass before Substantial Completion of the Work. The cost
of breakage or other such damage to the glass shall be a Cost of the Work, if such breakage or
damage cannot be determined to be the fault of the Contractor or a specifically identifiable
Subcontractor, provided that such costs shall not increase the Guaranteed Maximum Cost.



§7.7.8 Any cost referred to in Section 8.1.6 of this Agreement that cannot be determined to be the
fault of the Contractor or any specifically identifiable Subcontractor or other person or persons
referred to in that provision shall be a Cost of the Work, provided that the GMP shall not be
increased because of such costs.



§7.7.9 If requested by Owner, the cost of a final certified audit of the Contractor’s Cost of the
Work for any project unless such audit reveals an overcharge in excess of the GMP.




ARTICLE 8 COSTS NOT TO BE REIMBURSED



§ 8.1 The Cost of the Work shall not include:



§ 8.1.1 Salaries and other compensation of the Contractor’s personnel stationed at the Contractor’s
principal office or offices other than the site office, except as specifically provided in Sections
7.2.2 and 7.2.3.



§ 8.1.2 Expenses of the Contractor’s principal office and offices other than the field office.



§ 8.1.3 Overhead and general expenses of any kind, except as may be expressly included in Article
7.



§ 8.1.4 The Contractor’s capital expenses, including interest on the Contractor’s capital employed
for the Work.



§ 8.1.5 Rental costs of machinery and equipment, except as specifically provided in Section 7.5.2.



§ 8.1.6 Costs due to the negligence or failure to fulfill a specific responsibility of the
Contractor, Subcontractors and suppliers or anyone directly or indirectly employed by any of them
or for whose acts any of them may be liable, including but not limited to the cost to correct
defective or nonconforming Work, dispose of materials and equipment wrongly supplied, or making
good any damage to property.



§ 8.1.7 Any cost not specifically and expressly described in Article 7.



§ 8.1.8 Costs, other than costs included in Change Orders approved by the Owner, that would cause
the Guaranteed Maximum Price to be exceeded.



§8.1.9 Cost of Contractor’s general fidelity insurance, and any losses sustained by Contractor in
connection with theft, robbery, or embezzlement caused by defalcation of Contractor’s employees.



§8.1.10 The cost of insurance on equipment owned by Contractor.






 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA®  Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
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§8.1.11 Contractor’s entertainment expense.



§8.1.12 Any of Contractor’s income, excess profits, franchise taxes, and the cost of any licenses
obtained or other taxes or levies imposed in connection with the general conduct of Contractor’s
business.



§8.1.13 Any of the Contractor’s travel expenses within seventy (70) miles or less of the Project
except as Owner hereafter may specifically authorize in writing.





§8.1.14 Office supplies and office equipment and furniture, except as used at the field office.



§8.1.15 Dues and/or assessments of construction organizations, unions or associations.



§8.1.16 Any costs resulting from unacceptable work by the Contractor or anyone directly employed by
him, making good on damaged property, corrective work, or excess costs for material or labor or
otherwise, as may be determined by the Engineer or Owner shall be borne by the Contractor without
reimbursement or liability by the Owner. Such work shall be performed and completed when so
directed by Owner in accordance with Article 12 of the General Conditions.



§8.1.17 Costs incurred or paid to perform pursuant to warranties and guarantees.



§8.1.18 Legal costs (including attorney’s fees), except as provided in Section 7.6.8.



§8.1.19 General Conditions costs incurred after the Final Completion of the Work, as defined in
Article 9 of the General Conditions.




ARTICLE 9 DISCOUNTS, REBATES, REFUNDS AND PURCHASE/LEASE DECISIONS



§ 9.1 All trade discounts, cash discounts earned through advance or prompt payment, proceeds from
insurance or the sale of surplus materials and equipment, and the fair market value of any tools,
supplies or equipment purchased for the Work but not incorporated therein or sold, refunds of
insurance or bond premiums, and to the extent permitted by law, fees, commissions, and gratuities
received by Contractor, or any subsidiary or affiliate, in connection with the Work shall be for
the benefit of Owner and shall reduce the Cost of the Work. Contractor shall require all of its
subcontractors and suppliers, and shall itself use best efforts to obtain the most favorable
quantity and cash discounts and rebates in making purchases of materials, supplies, equipment and
tools, and except in the case of fixed price subcontracts, all such discounts and rebates shall be
credited to the Owner and shall reduce the Cost of the Work.



§9.2 The Contractor is to determine the economic feasibility of purchasing or leasing the equipment
over the life of the applicable Project. If the decision, with the Owner’s approval, is to lease,
the rental rates should be in accordance with the current rates in the Associated Equipment Dealers
book. If the decision, with the Owner’s approval, is to purchase the equipment, the equipment will
be returned to the Owner at the end of the Project in clean and good working order. The Contractor
may be given an option to purchase the equipment for the Owner at a mutually acceptable discounted
rate at the end of the Project. All equipment, machinery and tools expressly purchased by the
Contractor for each Project, under the General Conditions, shall be accounted for and remain on
site and become the property of the Owner, unless agreed to in advance in writing between the Owner
and Contractor.



§ 9.3 Amounts that accrue to the Owner in accordance with the provisions of Section 9.1 shall be
credited to the Owner as a deduction from the Cost of the Work.




ARTICLE 10 SUBCONTRACTS AND OTHER AGREEMENTS



§ 10.1 Those portions of the Work that the Contractor does not customarily perform with the
Contractor’s own personnel shall be performed under subcontracts or by other appropriate agreements
with the Contractor. The Owner may designate specific persons or entities from whom the Contractor
shall obtain bids. The Contractor shall make every effort to obtain at least three (3) responsive
bids from Subcontractors and from suppliers of materials or equipment fabricated especially for the
Work and shall deliver such bids to the Owner. The Owner shall then determine, with the advice of
the Contractor and the Engineer, which bids will be accepted. The Contractor shall not be required
to contract with anyone to whom the Contractor has reasonable objection.






 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA® Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
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§ 10.2 If a specific bidder among those whose bids are delivered by the Contractor to the Owner or
Engineer (1) is recommended to the Owner by the Contractor; (2) is qualified to perform that
portion of the Work; and (3) has submitted a bid that conforms to the requirements of the Contract
Documents without reservations or exceptions, but the Owner requires that another bid be accepted,
then the Contractor may require that a Change Order be issued to adjust the Guaranteed Maximum
Price by the difference between the bid of the person or entity recommended to the Owner by the
Contractor and the amount of the subcontract or other agreement actually signed with the person or
entity designated by the Owner.





§ 10.3 Subcontracts or other agreements shall conform to the applicable payment provisions of this
Agreement, and shall not be awarded on the basis of cost plus a fee without the prior consent of
the Owner.



§ 10.4 Contractor shall not enter into any contract, subcontract, purchase order or other such
agreement in connection with the Work with any Related Party, as defined below, unless (i)
Contractor has satisfied the requirements of this Article 10 with respect to such arrangement and
(ii) such arrangement has been approved in writing by Owner, after full disclosure in writing by
Contractor to Owner of such affiliation or relationship and all details relating to the proposed
agreement. The terms of any such agreement must conform to the requirements of the Contract
Documents. “Related Party” means (a) with respect to any officer, employee, or owner of the
Contractor, an individual who is a relative or an entity owned or managed by a relative, and (b)
any party or entity related to or affiliated with the Contractor or in which the Contractor has
direct or indirect ownership or control, including, without limitation, (i) any entity owned in
whole or in part by the Contractor, (ii) any party or entity with more than five percent (5%)
interest in the Contractor, and (iii) any entity in which any officer, director, employee, partner
or shareholder (or member of the family of any of the foregoing persons) of the Contractor or any
entity owned by the Contractor has a direct or indirect interest. “Relative” means father, mother,
son, daughter, brother, sister, uncle, aunt, first cousin, nephew, niece, husband, wife,
father-in-law, mother-in-law, sister-in-law, brother-in-law, stepfather, stepmother, stepson,
stepdaughter, stepbrother, stepsister, half brother, or half sister.




ARTICLE 11 ACCOUNTING RECORDS



The Contractor shall keep full and detailed accounts and exercise such controls as may be necessary
for proper financial management under this Contract, and the accounting and control systems shall
be satisfactory to the Owner. The Owner and the Owner’s accountants shall be afforded access to,
and shall be permitted to audit and copy, the Contractor’s records, books, correspondence,
instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data
relating to this Contract, and the Contractor shall preserve these for a period of three years
after final payment, or for such longer period as may be required by law.




ARTICLE 12 PAYMENTS




§ 12.1 PROGRESS PAYMENTS



§ 12.1.1 Based upon Applications for Payment submitted to the Owner by the Contractor, the Owner
shall make progress payments on account of the Contract Sum to the Contractor as provided below and
elsewhere in the Contract Documents.



§ 12.1.2 The period covered by each Application for Payment shall be one calendar month ending on
the last day of the month, or as follows:



§ 12.1.3 Provided that an Application for Payment and all supporting documentation required
hereunder is received by the Owner not later than the first day of a month, the Owner shall make
payment to the Contractor of undisputed amounts not later than the thirtieth day of the same month.
If an Application for Payment is received by the Owner after the application date fixed above,
payment of undisputed amounts shall be made by the Owner not later than thirty ( 30 ) days after
the Owner receives the Application for Payment and all supporting documentation.



§ 12.1.4 With each Application for Payment, the Contractor shall submit payrolls, petty cash
accounts, receipted invoices or invoices with check vouchers attached, partial lien waivers in form
acceptable to Owner from the Contractor, its subcontractors and sub-subcontractors and all material
suppliers, and any other evidence required by the Owner, Owner’s lender or Engineer to demonstrate
that cash disbursements already made by the Contractor on account of the Cost of the Work equal or
exceed (1) progress payments already received by the Contractor; less (2)






 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA®  Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
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that portion of those payments attributable to the Contractor’s Fee; plus (3) payrolls for the period covered by the
present Application for Payment.



§ 12.1.5 Each Application for Payment shall be based on the most recent schedule of values
submitted by the Contractor in accordance with the Contract Documents. The schedule of values shall
allocate the entire Guaranteed Maximum Price among the various portions of the Work, except that
the Contractor’s Fee shall be shown as a single separate item. The schedule of values shall be
prepared in such form and supported by such data to substantiate its accuracy as the Owner may
require. This schedule, unless objected to by the Owner, shall be used as a basis for reviewing
the Contractor’s Applications for Payment.



§ 12.1.6 Applications for Payment shall show the percentage of completion of each portion of the
Work as of the end of the period covered by the Application for Payment. The percentage of
completion shall be the lesser of (1) the percentage of that portion of the Work which has actually
been completed; or (2) the percentage obtained by dividing (a) the expense that has actually been
incurred by the Contractor on account of that portion of the Work for which the Contractor has made
or intends to make actual payment prior to the next Application for Payment by (b) the share of the
Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values.



§ 12.1.7 Subject to other provisions of the Contract Documents, the amount of each progress payment
shall be computed as follows:





	 	.1	 	take that portion of the Guaranteed Maximum Price properly allocable to
completed Work as determined by multiplying the percentage of completion of each
portion of the Work by the share of the Guaranteed Maximum Price allocated to that
portion of the Work in the schedule of values. Pending final determination of cost to
the Owner of changes in the Work, amounts not in dispute shall be included as provided
in Section 7.3.8 of AIA Document A201-1997;
	 
	 	.2	 	add that portion of the Guaranteed Maximum Price properly allocable to
materials and equipment delivered and suitably stored at the site for subsequent
incorporation in the Work, or if approved in advance by the Owner, suitably stored off
the site at a location agreed upon in writing;
	 
	 	.3	 	add the Contractor’s Fee, computed as described in Section 5.1.2, and subtract
ten percent (10%) retention; provided, however, that retention shall not be withheld
from the Contractor’s Fee. The Contractor’s Fee shall be computed upon the Cost of the
Work described in the two preceding Clauses at the rate stated in Section 5.1.2;
	 
	 	.4	 	subtract the aggregate of previous payments made by the Owner;
	 
	 	.5	 	subtract the shortfall, if any, indicated by the Contractor in the
documentation required by Section 12.1.4 to substantiate prior Applications for
Payment, or resulting from errors subsequently discovered by the Owner’s accountants in
such documentation; and
	 
	 	.6	 	subtract amounts, if any, for which the Owner has withheld or nullified
approval of payment as provided in Section 9.5 of AIA Document A201-1997.




§ 12.1.8 Except with the Owner’s prior approval, payments to Subcontractors shall be subject to
retainage of ten percent (10%). The Owner and the Contractor shall agree upon a mutually acceptable
procedure for review and approval of payments and retention for Subcontractors.



§ 12.1.9 After approval by the Owner, the monthly payment shall be paid directly to Contractor for
distribution to subcontractors and suppliers who have furnished labor, materials, services or
equipment forming the basis of the Application for Payment.




§ 12.2 FINAL PAYMENT



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






 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA®  Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
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.1 the Contractor has fully performed the Contract, including the requirements of Section
9.10 of AIA Document A201-1997, except for the Contractor’s responsibility to correct Work
as provided in Section 12.2.2 of AIA Document A201-1997, and to satisfy other requirements,
if any, which extend beyond final payment;




.2 all governmental, insurance and testing agencies have issued all certificates, licenses
and approvals that are preconditions to the Owner’s use of the Project. In this regard,
Contractor shall obtain and submit to Owner two (2) copies of the Certificate of Occupancy
(if applicable);




.3 the Owner shall have received two (2) copies of final conditional lien releases from all
persons furnishing labor, materials, services or equipment under Contractor entitled to a
lien on the Work Site, Building Project or any part thereof, or, alternatively, has received
from Contractor a bond or bonds to release the Project and the Owner from the effects of any liens. In this regard, no later
than two (2) weeks after final payment, Contractor shall furnish Owner with two (2) copies
of final unconditional lien releases from all such persons,




.4 the Owner shall have received from the Contractor an assignment of warranties and
guarantees from all of the Subcontractors and suppliers, as well as two (2) copies of all
such warranties, guarantees and operation and maintenance manuals;




.5 the Owner shall have received one (1) reproducible and one (1) copy of Construction
Record Drawings (or approved copies thereof), including CAD as-built drawings stored in
electronic format.


§ 12.2.2 The Owner’s final payment to the Contractor shall be made within the time provided by
Section 12.2.3. In the event Owner elects to forego the final accounting described in that
section, Owner shall make final payment no later than forty-five (45) days after the satisfaction
of the conditions in Section 12.2.1. Subject to receiving the consent of Owner’s lender, if any,
Owner may release final payment, including retention, prior to this date for portions of the Work
fully completed by certain subcontractors or suppliers, when Owner and Contractor so agree.



§ 12.2.3 The Owner’s accountants will review and report in writing on the Contractor’s final
accounting within 30 days after delivery of the final accounting to the Owner by the Contractor.
Based upon such Cost of the Work as the Owner’s accountants report to be substantiated by the
Contractor’s final accounting, and provided the other conditions of Section 12.2.1 have been met,
the Owner will, within seven days after receipt of the written report of the Owner’s accountants,
either issue to the Contractor final payment or notify the Contractor in writing of the Owner’s
reasons for withholding all or any portion of the final payment as provided in Section 9.5.1 of the
AIA Document A201-1997. The time periods stated in this Section 12.2.3 supersede those stated in
Section 9.4.1 of the AIA Document A201-1997.



§ 12.2.4 If the Owner’s accountants report the Cost of the Work as substantiated by the
Contractor’s final accounting to be less than claimed by the Contractor, the Contractor shall be
entitled to have the dispute resolved in a court of competent jurisdiction. Pending a final
resolution the Owner shall pay the Contractor the undisputed portion of such Final Application for
Payment.



§ 12.2.5 If, subsequent to final payment and at the Owner’s request, the Contractor incurs costs
described in Article 7 and not excluded by Article 8 to correct defective or nonconforming Work,
the Owner shall reimburse the Contractor such costs and the Contractor’s Fee applicable thereto on
the same basis as if such costs had been incurred prior to final payment, but not in excess of the
Guaranteed Maximum Price. If the Contractor has participated in savings as provided in Section 5.2,
the amount of such savings shall be recalculated and appropriate credit given to the Owner in
determining the net amount to be paid by the Owner to the Contractor.




ARTICLE 13 TERMINATION OR SUSPENSION



§ 13.2 The Contract may be terminated by the Owner for cause as provided in Article 14 of AIA
Document A201-1997. The amount, if any, to be paid to the Contractor under Section 14.2.4 of AIA
Document A201-1997 shall not cause the Guaranteed Maximum Price to be exceeded, nor shall it exceed
an amount calculated as follows:



§ 13.2.1 Take the Cost of the Work incurred by the Contractor to the date of termination;






 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA®  Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
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§ 13.2.2 Add the Contractor’s Fee computed upon the Cost of the Work to the date of termination at
the rate stated in Section 5.1.2 or, if the Contractor’s Fee is stated as a fixed sum in that
section, an amount that bears the same ratio to that fixed-sum Fee as the Cost of the Work at the
time of termination bears to a reasonable estimate of the probable Cost of the Work upon its
completion; and



§ 13.2.3 Subtract the aggregate of previous payments made by the Owner.



§ 13.3 The Owner shall also pay the Contractor fair compensation, either by purchase or rental at
the election of the Owner, for any equipment owned by the Contractor that the Owner elects to
retain and that is not otherwise included in the Cost of the Work under Section 13.2.1. To the
extent that the Owner elects to take legal assignment of subcontracts and purchase orders
(including rental agreements), the Contractor shall, as a condition of receiving the payments
referred to in this Article 13, execute and deliver all such papers and take all such steps,
including the legal assignment of such subcontracts and other contractual rights of the Contractor, as the Owner
may require for the purpose of fully vesting in the Owner the rights and benefits of the Contractor
under such subcontracts or purchase orders.



§ 13.4 The Work may be suspended by the Owner as provided in Article 14 of AIA Document A201-1997;
in such case, the Guaranteed Maximum Price and Contract Time shall be increased as provided in
Section 14.3.2 of AIA Document A201-1997 except that the term “profit” shall be understood to mean
the Contractor’s Fee as described in Section 5.1.2 and Section 6.4 of this Agreement.




ARTICLE 14 MISCELLANEOUS PROVISIONS



§ 14.1 Where reference is made in this Agreement to a provision AIA Document A201-1997 or another
Contract Document, the reference refers to that provision as amended or supplemented by other
provisions of the Contract Documents.



§ 14.2 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.)




Five percent (5%) per annum



(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.)




§ 14.3 The Owner’s representative is:

(Name, address and other information.)




Carl Monti

MannKind Corporation

One Casper Street

Danbury, CT 06810

Phone: (203) 796-3423

Fax: (203) 798-7740

cmonti@mannkindcorp.com




§ 14.4 The Contractor’s representative is:






 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA®  Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
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(Name, address and other information.)




Jerry Agresti, Senior Project Manager

Torcon, Inc.

328 Newman Springs Road

Red Bank, NJ 07701

Phone: (732) 704-9800

Fax: (732) 704-9811

gagresti@torcon.com



§ 14.5 Neither the Owner’s nor the Contractor’s representative shall be changed without ten days’
written notice to the other party.



§ 14.6 ASSIGNMENT. No assignment of or subcontract under this Agreement or any portion thereof or
any money due or which may become due hereunder will be made by Contractor without the prior
written consent of Owner. In addition to constituting a default under this Agreement, any
assignment or attempted assignment made in violation of this section will be null and void and the
assignee will acquire no rights thereunder. If Owner does consent in writing to an assignment of
or subcontract under this Agreement, the assignee or subcontractor will be bound to the terms of
this Agreement, including specifically and without limitation the insurance provisions contained
herein. If any assignment or subcontract is made in breach of this Agreement, Contractor will be
liable to Owner for all
damages resulting therefrom. Notwithstanding anything to the contrary contained herein, Owner may
assign this Agreement without the consent of Contractor. In connection with the sale or financing
of the Project, Contractor shall execute and deliver, and (if appropriate) acknowledge, any and all
documents and instruments reasonably required by Owner or any purchaser or lender, including but
not limited to, reasonable modifications to this Agreement, consents, estoppel certificates, and
subordination of any rights, interests and claims under this Agreement, at law or otherwise, to the
liens, benefits, rights and privileges of (i) any deed of trust of record at the time of execution
of this Agreement, and (ii) the primary construction lender for the Project. Contractor
subordinates all of its lien rights that it may have or acquire under this Agreement or otherwise
as to the Work or the Project to the lien and security interest securing payment of sums now or
hereafter borrowed by Owner from any lender. Contractor shall execute such additional documents as
may be requested from time to time by the Owner or any lender to evidence the provisions hereof,
and shall in its subcontracts obtain an agreement from Subcontractors and any other parties
furnishing labor or materials for the Work to subordinate their liens to such aforesaid sums.
Subject to Contractor’s reasonable approval, the provisions of the Contract Documents shall be
superseded in whole or in part by any conflicting provision of the loan agreement entered into in
good faith by Owner relative to the construction financing of the Project



§ 14.7 ENTIRE AGREEMENT. This Agreement, together with the Contract Documents which are
incorporated herein by reference, constitute the entire Agreement between the parties. Neither
this Agreement nor the Contract Documents may be amended or supplemented except by written
instrument duly executed by both parties hereto. No estimates or bids of Contractor preceding this
Agreement and no verbal agreement or conversation with any representative of Owner, either before
or after execution of this Agreement, will affect or modify any of the terms or provisions
contained in this Agreement or the Contract Documents..



§ 14.8 WAIVER. No consent or waiver, express or implied, by either party to this Agreement
relating to any breach or default by the other in the performance of any obligation hereunder will
be deemed or construed to be a consent to or waiver of any other breach or default by such party.
Failure on the part of either party to complain of any act or failure to act of the other party or
to declare the other party in default irrespective of how long such failure continues will not
constitute a waiver of the rights of such party.



§ 14.9 TIME. Time is of the essence of this Agreement and each provision herein contained.



§ 14.10 WORDS AND HEADINGS. Words used herein will include the plural as well as the singular.
Words used in the masculine gender include the feminine and neuter. The section headings used
herein are for convenience only and will have no affect upon the construction or interpretation of
any part of this document.



§ 14.11 INDEPENDENT CONTRACTOR. Contractor will be an independent contractor with respect to the
Work, and neither Contractor nor anyone employed by Contractor will be deemed for any purpose to be
the agent, employee,






 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA® Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
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servant or representative of Owner in the performance of the Work. Contractor
acknowledges and agrees that Owner will have no direction or control over the means, methods,
procedures or manner of the Work performed by Contractor or any of it subcontractors, or any of
their employees, vendors or suppliers.



§ 14.12 SEVERABILITY. If any section, sentence, clause or phrase contained in this Agreement
shall become illegal, null or void, against public policy or otherwise unenforceable for any
reason, or shall be held by any court of competent jurisdiction to be illegal, null or void,
against public policy, or otherwise unenforceable, the remaining sections, sentences, clauses or
phrases contained in this Agreement shall not be affected thereby.



§ 14.13 REPRESENTATIONS AND WARRANTIES. The Contractor represents and warrants the following to
Owner (in addition to any other representations and warranties contained in the Contract Documents)
as a material inducement to the Owner to execute this Agreement, which representations and
warranties shall survive the execution and delivery of this Agreement, any termination of this
Agreement and the final completion of the Work:




     .1 the Contractor is financially solvent, able to pay all debts as they mature and possessed
of sufficient working capital to complete the Work, perform all obligations hereunder and comply
with all Applicable Laws;



     .2 the Contract contains a Contract Sum and a Guaranteed Maximum Price sufficient to allow the
Contractor to comply with all Applicable Laws;



     .3 the Contractor is able to furnish the plant, tools, materials, supplies, equipment and
labor required to complete the Work and perform its obligations hereunder and has sufficient
experience and competence to do so;



     .4 the Contractor is authorized to do business in the State of Connecticut and is properly
licensed by all necessary governmental and public and quasi-public authorities having jurisdiction
over the Contractor and over the Work and the Project;



     .5 the Contractor’s execution of this Agreement and performance thereof is within the
Contractor’s duly authorized powers;



     .6 the Contractor’s duly authorized representative has visited the site of the Project and is
familiar with the local conditions under which the Work is to be performed and has correlated
observations with the requirements of the Contract Documents;



     .7 the Contractor is a sophisticated contractor who possesses a high level of experience and
expertise in the business administration, construction, construction management and superintendence
of projects of the size, complexity and nature of this particular Project and will perform the Work
with the care, skill and diligence of such a contractor;



     .8 the Project as designed in the Contract Documents; (a) is capable of being constructed as
contemplated thereby and (b) shall be constructed in conformity with all governmental regulations,
the Contract Documents and generally accepted industry standards, practices and principles in
effect at the time of performance; and



     .9 As of the date of issuance of a Certificate of Substantial Completion for the Work, that
the Project as constructed:



          (a) meets and complies in all material respects with all applicable state and local building
codes and all other governmental regulations as required by the Contract Documents;




          (b) does not violate in any material respect any governmental regulations;




          (c) contains no Hazardous Substances which are not permitted by governmental regulations;




          (d) fully meets all requirements of the Contract Documents; and






 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA®  Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA® Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
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15









 





          (e) including, without limitation, materials, articles and equipment furnished by the General
Contractor under this Contract, will be free of deficiencies and defects for the period set forth
in Section 3.5 of the General Conditions or as otherwise specified in the Contract Documents.



§ 14.14 COUNTERPARTS. For the convenience of the parties to the Contract Documents, this Agreement
may be executed in several original counterparts, each of which shall together constitute but one
and the same Agreement.



§ 14.15 NEUTRAL INTERPRETATION. This Agreement is deemed to be jointly prepared by all the parties
hereto and shall not be construed against any particular party. Rather, this Agreement shall be
construed as if it were jointly prepared by all the parties.



§ 14.16 EXHIBITS AND ADDENDA. All exhibits, riders or addenda attached hereto are incorporated
herein by reference.



§ 14.17 CONFIDENTIALITY. Contractor agrees that it will not, without the prior written approval of
the Owner, publicize the fact that the Owner has entered into this Contract, or disclose, confirm
or deny any details of the Contract Documents. Contractor agrees that it will not use Owner’s name
in connection with Contractor’s publicity with respect to the Project without the prior review and
written approval in each instance by the Owner. Contractor shall also insert the terms of this
provision in all contracts and/or agreements executed in connection with the services to be
performed under the Contract Documents and require that its Subcontractors do the same.






§ 14.18 EXCULPATION. Contractor agrees to look solely to the assets of Owner in the Project for
the enforcement of any claims against Owner, and Contractor further agrees that none of the
officers, directors, employees, partners, members, managers or shareholders of Owner assume any
personal liability for any of the obligations under the Contract Documents entered into on behalf
of Owner, and the obligations hereunder are not binding upon, nor shall resort be had to the
private property of any of the foregoing.




ARTICLE 15 ENUMERATION OF CONTRACT DOCUMENTS



§ 15.1 The Contract Documents, except for Modifications issued after execution of this Agreement,
are enumerated as follows:



§ 15.1.1 The Agreement is this executed 1997 edition of the Standard Form of Agreement Between
Owner and Contractor, AIA Document A111-1997.



§ 15.1.2 The General Conditions are the 1997 edition of the General Conditions of the Contract for
Construction, AIA Document A201-1997.



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




	 	 	 	 	 
	Document

	 	Title
	 	Pages





§ 15.1.4 The Specifications are those contained in the Project Manual dated as in Section 15.1.3,
and are as follows:


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




Title of Specifications exhibit:



§ 15.1.5 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.)




Title of Drawings exhibit:



§ 15.1.6 The Addenda, if any, are as follows:




	 	 	 	 	 
	Number

	 	Date
	 	Pages








 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA®  Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
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Portions of Addenda relating to bidding requirements are not part of the Contract Documents unless
the bidding requirements are also enumerated in this Article 15.



§ 15.1.7 Other Documents, if any, forming part of the Contract Documents are as follows:(List here
any additional documents, such as a list of alternates that are intended to form part of the
Contract Documents. AIA Document A201-1997 provides that bidding requirements such as advertisement
or invitation to bid, Instructions to Bidders, sample forms and the Contractor’s bid are not part
of the Contract Documents unless enumerated in this Agreement. They should be listed here only if
intended to be part of the Contract Documents.)




Exhibit
“A” – General Conditions of the Contract for Construction (AIA Document A201-1997, as modified)

Exhibit “B” – Project Schedule

Exhibit “C” – GMP Estimate/Schedule of Values

Exhibit “D” – List of Allowances

Exhibit “E” – List of Plan Sheets




ARTICLE 16 INSURANCE AND BONDS



(List required limits of liability for insurance and bonds. AIA Document A201-1997 gives other
specific requirements for insurance and bonds.)




	 	 	 
	Type of insurance

	 	Limit of liability ($ 0.00)





§ 16.1 Without limiting Contractor’s liability to Owner or third parties hereunder, Contractor
agrees to maintain the following insurance coverages with insurance carriers with A.M. Best rating
of at least A-VII or otherwise acceptable to Owner, in Owner’s sole discretion:



§16.1.1 All insurance coverages required by federal, state or local laws and statutes, including
Worker’s Compensation Insurance and Employers’ Liability Insurance. The Employers’ Liability
Insurance shall have a minimum coverage of at least $500,000 for each person;



§16.1.2 Comprehensive or Commercial General Liability Insurance, including coverage for Products
and Completed Operations, Errors and Omissions, and Blanket Contractual Liability for obligations
undertaken by Contractor to Owner under this Agreement. Such Comprehensive General Liability
Insurance shall provide for minimum Combined Bodily Injury and Property Damage Coverage Limits of
at least $3,000,000, per occurrence, and name Owner as Additional Insured;



§16.1.3 Comprehensive Automobile Liability Insurance including coverage for Hired & Non-Owned
Automobile Liability, with Combined Bodily Injury and Property Damage Coverage Limits, per
occurrence, of at least $1,000,000, naming Owner as Additional Insured; and



§16.1.4 Comprehensive Crime Policy, including Employees Dishonest/Fidelity coverage for all
Contractor’s employees, officers and agents, and On-Premises (Loss Inside the Premises) and
In-Transit (Loss Outside the Premises) Coverage shall have a minimum of at least $2,000,000, per
occurrence.



§16.1.5 Contractor agrees to require all Subcontractors who are providing design services as part
of their scope of the Work to maintain professional liability (errors and omissions) coverage for a
minimum coverage of at least $2,000,000 per occurrence. If such insurance is furnished as part of
a “claims made” policy, Contractor agrees to require the Subcontractor furnishing such insurance to
renew the coverage annually for a period of three (3) years following Substantial Completion of the
Work.



§16.2 All insurance must include a Primary & Non-Contributing Endorsement.



§16.3 Prior to performance of any services or commencement of any Work under this Agreement,
Contractor shall furnish to Owner Certificates of Insurance evidencing such required insurance
coverages and naming Owner as Additional Insured (for coverages required by items 16.1.2 and 16.1.3
above). Said Certificates will include a






 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA®  Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
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	 	(2480353336)






17









 





provision whereby the Insurance Carrier is required to provide, directly to Owner, thirty (30) days advance written notice before termination, change or
cancellation or coverage take effect for such policies evidenced on such Certificates, regardless
of whether cancelled by the Contractor, Insured, or Insurance Carrier.



Language to the effect that “Insurance Carrier will endeavor to provide advance notice of
cancellation or termination and failure to mail such notice shall impose no obligation or liability
of any kind upon the Insurance Carrier, its agents or representatives,” is not acceptable.



The insurer of each policy shall waive (by written endorsement where necessary), and Contractor
hereby waives, all rights of recovery or subrogation against Owner which might arise with regard to
damage or loss which is insured against under any insurance policies in force and effect at the
time of the damage or loss.




[Signatures on next page]



This Agreement is entered into as of the day and year first written above and is executed in at
least two original copies, of which one is to be delivered to the Contractor and the other to the
Owner.




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	OWNER	 	 	 	CONTRACTOR	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	MannKind Corporation	 	 	 	Torcon, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Hakan S. Edstrom 	 	 	 	By:	 	/s/ Ben Torcivia, Jr. 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name: Hakan S. Edstrom
	 	 	 	 	 	Name: Ben Torcivia, Jr.	 	 
	 

	 	Title: President and Chief
Operating Officer
	 	 	 	 	 	Title: Co-President
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	/s/ Alfred E. Mann 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Name: Alfred E. Mann	 	 	 	 	 	 	 	 
	 

	 	Title: Chairman of the
Board and Chief Executive
Officer	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 







 




			
	AIA Document A111TM — 1997. Copyright © 1920, 1925, 1951, 1958, 1961, 1963,
1967, 1974, 1978, 1987 and 1997 by The American Institute of Architects. All
rights reserved. WARNING: This AIA®  Document is protected by U.S.
Copyright Law and International Treaties. Unauthorized reproduction or
distribution of this AIA®  Document, or any portion of it, may
result in severe civil and criminal penalties, and will be prosecuted to the
maximum extent possible under the law. This draft was produced by AIA software
at 16:53:46 on 03/08/2005 under Order No.1000148073_1 which expires on
11/22/2005, and is not for resale.





			
	User Notes: 520366.02
	 	(2480353336)







18