Document:

Exhibit 10.7

 

CONTRACT FOR CONSTRUCTION SERVICES

 

This Contract
for Construction Services (“Contract”) is entered into between United Wisconsin
Grain Producers, LLC (“Owner”) and Iverson & Sons, LLC (“Contractor”) for
the materials, labor, and/or services described herein relating to the
improvement of certain property located at Friesland, Wisconsin “Ethanol Plant”
(the “Project”).

 

TERMS AND CONDITIONS

 

A.  THE WORK:

 

1.                                       Scope. 
Contractor will perform the following work (hereinafter “Work”) relating
to the Project:

 

ý            Phase 1 Civil and Site Work Grading Detail
Design Package bid set dated 09/02/03;

 

OR

 

o            The
scope of work described on the attached Proposal of the Contractor dated
                   ,
which is attached as Exhibit A
and incorporated into the Contract.

 

2.                                       Standard. 
The Contractor shall perform the Work in accordance with established
standards recognized in the industry practicing under like circumstances and
similar location.

 

3.                                       Permits.  Unless specifically designated otherwise herein, the Owner shall
be responsible for determining what permits, fees, and licenses are required to
perform the Work and obtaining and paying for such required permits, fees, and
licenses.

 

4.                                       Changes.  Any changes in the scope of Work or to the Contract Price shall
be in writing and signed by both parties. 
Contractor, however, shall be entitled to rely on verbal requests by
Owner, or an Owner representative, to perform additional work (a “Change
Order”).  Any expenses and/or additional
costs incurred by Contractor resulting from: 
(a) changes in the scope of Work necessitated by the enactment of
changes to codes, laws, or regulations subsequent to the execution of this
Contract; (b) weather conditions; (c) a suspension of the Work; or (d)
abnormal, unusual concealed, unknown, unforeseen, different, or changed
conditions at the Project site, will be billed to Owner as a Change Order.

 

B.  CONTRACT PRICE:

 

1.                                       The total sum to
be paid for the Work is:  $570,710.25.

 

 

2.                                       The Owner shall
pay Contractor a 0% deposit.  The
balance of the Contract Price shall be paid:

 

o            Upon substantial
completion of the Work; OR

 

ý           As
construction progresses based on monthly applications for payment submitted by
Contractor to Owner.

 

3.                                       All payments are
due within ten (10) days of Owner’s receipt of Contractor’s invoice.  Any payment not received when due shall bear
interest at the rate of eighteen percent (18%) per year.  If timely payment is not received, then
Contractor shall be entitled to, without prejudice to any other remedies it may
have, stop the work until payment in full is received or terminate this
Contract.  Contractor is entitled to
recover from Owner all costs and expenses, including, but not limited to,
actual attorneys’ fees, Contractor may incur in collecting any amounts due
under the Contract or enforcing any provision of the Contract.

 

C.  CONTRACT TIME:

 

1.                                       Work will
commence on or about October 16, 2003 and shall be completed on or about
November 26, 2003.

 

2.                                       The times
prescribed in Paragraph C.1 shall be extended if Contractor is delayed in the
commencement or progress of the Work by: 
Change Orders; an Owner default, including, without limitation to,
Owner’s failure to make payments to Contractor when due, or any other act or
omission of Owner, Owner’s agent, or Owner’s contractor; a shortage of or delay
in delivery of equipment, labor, or materials; site conditions; equipment
breakdowns; strikes or other labor disputes; governmental restrictions and/or
regulations; failure of a subcontractor; acts of God, weather conditions,
storms, lightning, hail, flood, or acts of God; riots, civil commotion,
vandalism, theft, war, or fire; or any condition or occurrence that is not
within the reasonable control of the Contractor.  In the event of such a delay, the times to commence and/or
complete the work shall be extended for a period of time equal to the delay and
the Contract Price shall be equitably adjusted for any increased cost and/or
damages Contractor incurs because of such delay.

 

D.  WARRANTY AND RIGHT TO CURE:

 

 

1.                                       For one year
after the date of completion and payment of all monies to Contractor under this
Contract, the Contractor shall remedy and make good all Work that is not in
accordance with established standards recognized in the industry, provided such
defect is not due to abuse, misuse, or modification by any person or entity
other than Contractor, improper or insufficient maintenance, improper
operation, normal wear and tear, or normal usage.  Contractor’s sole responsibility with respect to a covered defect
shall be the repair or replacement, at Contractor’s sole option, of the covered
defective Work.  The Owner shall give
notice of observed defects to the Contractor with reasonable promptness and
within the one-year warranty period. 
Except for the warranties expressly

 

 

stated herein, all other warranties (express, implied, or oral),
including, any implied warranty of merchantability, implied warranty of
workmanship, and/or implied warranty of fitness for a particular purpose are
HEREBY DISCLAIMED AND EXCLUDED. 
Contractor shall not be responsible for any incidental and/or
consequential damages caused by any defect in the Work or breach of any
warranty.  Owner’s commencement of
litigation or arbitration against Contractor for an alleged defect in the Work
before giving Contractor a notice of the defect and a reasonable opportunity to
investigate, test, examine, and cure the defect, shall be deemed a waiver of
any and all claims Owner may have had against Contractor for such defect.

 

E.  DISPUTE RESOLUTION:

 

1.                                       Any dispute
arising out of or relating to this Contract shall, at Contractor’s sole option,
be resolved by arbitration which shall, at Contractor’s sole option, be
conducted in accordance with Wisconsin Statutes Chapter 788 or the Construction
Industry Arbitration Rules of the American Arbitration Association, then
currently in effect.  The decision of
the arbitrator(s) shall be binding, final, and may be enforced in accordance
with the applicable provisions of Chapter 788 of the Wisconsin Statutes.  The filing of a lien claim shall not be
considered an election by Contractor to waive its rights under this
provision.  Any arbitration proceedings
commenced pursuant to this section shall be conducted in accordance with
the rules adopted by the arbitrator, applicable arbitration body, if any, and
the applicable provisions of Wisconsin law.

 

F.  MISCELLANEOUS:

 

1.                                       Access to
Work.  Owner shall maintain access
for Contractor at the Project site and obtain the necessary permissions for
Contractor to gain access through adjacent property, if required.  Owner shall keep the Project site free from
obstructions and any work that conflicts with Contractor’s Work.  Contractor shall be responsible for and have
control over the construction means, methods, techniques, sequences, and
procedures and for coordinating all portions of the Work.

 

2.                                       Environmental
Issues and Indemnity.  Owner shall
be responsible for the handling, removal, and disposal of any environmentally
sensitive materials, toxic or hazardous substances, and/or waste, if
encountered on the Project site. 
Design/Builder shall have no responsibility for the discovery, presence,
handling, removal, or disposal of or exposure of persons to environmentally
sensitive materials, toxic or hazardous substances, or waste form at the
Project site.  Owner shall forever
release and fully discharge and defend, indemnify, and hold Contractor harmless
from and against any and all claims, penalties, damages, liabilities, causes of
action, demands, suits, losses, and expenses, including, but not limited to,
attorney’s fee, attributable to any environmental condition, site condition,
personal injury, bodily injury, damage to real or personal property, including
loss of use thereof, arising out of or relating to any existing condition at
the Project site, any negligent act or omission of Owner or anyone for whose
acts Owner may be liable, or Owner’s breach of any term or condition of this
Contract.

 

 

3.                                       Successors
and Assigns, Assignment, and Severability. 
The Owner and Contractor respectively bind themselves, their partners,
successors, assigns, and legal representatives to the other party hereto and to
partners, successors, assigns, and legal representatives of such other party in
respect to the agreements and obligations contained in the Contract.  Owner shall have no right to transfer or
assign its interests, rights, or obligations in this Contract or any part
thereof.  Any purported assignment of
such by Owner shall be null and void and of no force and effect.  If any provision of this Contract is
invalidated in whole or in part, then the remainder of this Contract shall not
be affected thereby, but shall remain in effect to the fullest extent permitted
by law.

 

4.                                       Lien Notice.  AS
REQUIRED BY THE WISCONSIN CONSTRUCTION LIEN LAW, BUILDER HEREBY NOTIFIES BUYER
THAT PERSONS OR COMPANIES FURNISHING LABOR OR MATERIALS FOR THE CONSTRUCTINN ON
BUYER’S LAND MAY HAVE LIEN RIGHTS ON BUYER’S LAND AND BUILDINGS IF NOT
PAID.  THOSE ENTITLED TO LIEN RIGTHS, IN
ADDITION TO THE UNDERSIGNED BUILDER, ARE THOSE HOW CONTRACT DIRECTLY WITH THE
BUYER OR THOSE WHO GIVE THE BUYER NOTICE WIHTIN SIXTY (60) DAYS AFTER THEY
FIRST FURNISH LABOR OR MATERIALS FOR THE CONSTRUCTION.  ACCORDINGLY, BUYER WILL PROBABLY RECEIVE
NOTICE FROM THOSE WHO FURNISH LABOR OR MATERIALS FOR THE CONSTRUCTION AND
SHOULD GIVE A COPY OF EACH NOTICE RECEIVED TO HIS MORTGAGE LENDER, IF ANY.  BUILDER AGREES TO COOPERATE WITH THE BUYER
AND HIS LENDER, IF ANY, TO SEE THAT ALL POTENTIAL LIEN CLAIMANTS ARE DULY PAID.

 

 

	
  CONTRACTOR

  	
   

  	
  OWNER

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Richard Iverson

  	
   

  	
  By:

  	
   

  	
  /s/ Bob Lange

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Richard Iverson

  	
   

  	
  Name:

  	
   

  	
  Bob Lange

  
	
  Title:

  	
   

  	
  Owner

  	
   

  	
  Title:

  	
   

  	
  Bob Lange

  
	
  Date:

  	
   

  	
  10-6-03

  	
   

  	
  Date:

  	
   

  	
  10/23/03Exhibit
  10.8

  
	
   

  
	
  

  

 

Standard Form of Agreement Between

Owner and Design-Builder - Lump Sum

 

This document has important legal
consequences.  Consultation with

an attorney is recommended with respect to its completion or modification.

 

This AGREEMENT is made as of the
8th  day of October in the year
of  2003, by and between the
following parties, for services in connection with the Project identified
below.

 

OWNER:

(Name and address)

 

United Wisconsin Grain
Producers, LLC

P.O. Box 247

Friesland, WI  53935

 

 

DESIGN-BUILDER:

(Name and address)

 

Fagen, Inc.

501 W. Highway 212

P. O. Box 159

Granite Falls, MN 56241

 

PROJECT:

(Include Project name and location

as it will appear in the Contract 

Documents)

 

40 MGY Dry Grind Ethanol
Plant

 

 

In consideration of the
mutual covenants and obligations contained herein, Owner and Design-Builder
agree as set forth herein.

 

DBIA Document No.
525  •  Standard
Form of  Agreement

Between
Owner and Design-Builder – Lump Sum

© 1998 Design-Build
Institute of America

 

1

 

Article 1

 

Scope
of Work

 

1.1                               Design-Builder
shall perform all design and construction services, and provide all material,
equipment, tools and labor, necessary to complete the Work described in and
reasonably inferable from the Contract Documents.

 

Article 2

 

Contract
Documents

 

2.1                               The
Contract Documents are comprised of the following:

 

.1                                      All written
modifications, amendments and change orders to this Agreement issued in
accordance with DBIA Document No. 535, Standard Form of General Conditions of Contract
Between Owner and Design-Builder (1998 Edition) (“General Conditions
of Contract”);

 

.2                                      This Agreement,
including all exhibits and attachments, executed by Owner and Design-Builder,
said Exhibits being:

 

Exhibit A – [*]

Exhibit B – [*]

Exhibit C – [*]

Exhibit D – [*]

Exhibit E – [*]

 

* Portion omitted pursuant to a
request for confidential treatment and filed separately with the Securities and
Exchange Commission.

 

.3                                      Written
Supplementary Conditions, consisting of two pages, to the General Conditions of
Contract;

 

.4                                      The
General Conditions of Contract;

 

.5                                      Construction
Documents prepared and approved in accordance with Section 2.4 of the
General Conditions of Contract;

 

.6                                      Design-Builder’s
Deviation List, if any, contained in Design-Builder’s Proposal, which shall
specifically identify any and all deviations from Owner’s Project Criteria;

 

.7                                      Owner’s
Project Criteria;

 

.8                                      Design-Builder’s
Proposal, except for the Deviation List, 
submitted in response to Owner’s Project Criteria; and

 

.9                                      The following
other documents, if any:  N/A

 

DBIA Document No.
525  •  Standard
Form of Agreement

Between
Owner and Design-Builder – Lump Sum

© 1998
Design-Build Institute of America

 

2

 

Article 3

 

Interpretation
and Intent

 

3.1                               The
Contract Documents are intended to permit the parties to complete the Work and
all obligations required by the Contract Documents within the Contract Time(s)
for the Contract Price. The Contract Documents are intended to be complementary
and interpreted in harmony so as to avoid conflict, with words and phrases
interpreted in a manner consistent with construction and design industry
standards.  In the event of any inconsistency,
conflict, or ambiguity between or among the Contract Documents, the Contract
Documents shall take precedence in the order in which they are listed in
Section 2.1 hereof.

 

3.2                               Terms,
words and phrases used in the Contract Documents, including this Agreement,
shall have the meanings given them in the General Conditions of Contract. 

 

3.3                               The
Contract Documents form the entire agreement between Owner and Design-Builder
and by incorporation herein are as fully binding on the parties as if repeated
herein.  The Contract Documents
supercede any prior letters of intent between the parties, and such letters of
intent are now null and void.   No oral
representations or other agreements have been made by the parties except as
specifically stated in the Contract Documents. 

 

Article 4

 

Ownership
of Work Product

 

4.1                               Work
Product.  All drawings,
specifications and other documents and electronic data furnished by
Design-Builder to Owner under this Agreement (“Work Product”) are deemed to be
instruments of service and Design-Builder shall retain the ownership and
property interests therein, including the copyrights thereto.  

 

4.2                               Owner’s
Limited License Upon Payment in Full. 
Upon Owner’s payment in full for all Work performed under the Contract
Documents, Design-Builder shall vest in Owner a limited license to use the Work
Product in connection with Owner’s occupancy, repair, remodeling or enlargement
of the Project and Design-Builder shall provide Owner with a copy of the “as
built” plans, conditioned on Owner’s express understanding that its use of the
Work Product and its acceptance of the “as built” plans is at Owner’s sole risk
and without liability or legal exposure to Design-Builder or anyone working by
or through Design-Builder, including Design Consultants of any tier
(collectively the “Indemnified Parties”), provided, however, that any
performance guarantees and warranties (of equipment or otherwise) shall remain
in effect according to the terms of this Agreement.  The limited license to use the work product shall be limited by
and construed according to the terms contained in the License Agreement between
Owner and ICM, Inc., attached hereto and made a part hereof as Exhibit D.

 

4.3                               Owner’s
Limited License Upon Owner’s Termination for Convenience or Design-Builder’s
Election to Terminate.  If Owner
terminates the Project for its convenience as set forth in Article 8
hereof, or if Design-Builder elects to terminate this Agreement in accordance
with Section 11.4 of the General Conditions of Contract, Design-Builder
shall, then upon Owner’s payment in full of the amounts due Design-Builder
under the Contract Documents, vest in Owner a limited license to use the Work
Product to complete the Project and subsequently occupy, repair, remodel or
enlarge the Project, subject to the following: 

 

DBIA Document No.
525  •  Standard
Form of Agreement

Between
Owner and Design-Builder – Lump Sum

© 1998 Design-Build
Institute of America

 

3

 

.1                                      Use of the Work
Product is at Owner’s sole risk without liability or legal exposure to any
Indemnified Party; provided, however, that any “pass through” warranties
regarding equipment or express warranties regarding equipment provided by this
Agreement shall remain in effect according to their terms; and

 

.2                                      If the termination
for convenience is by Owner or if Design-Builder elects to terminate this
Agreement in accordance with Section 11.4 of the General Conditions of
Contract, then Owner agrees to pay Design-Builder the additional sum of One
Million Dollars                 ($1,000,000.00)
upon obtaining the Work Product in a suitable form to complete the project as
compensation for the limited right to use the Work Product in accordance with
this Article 4 if Owner proceeds to complete the Project through its
employees, agents, or third parties. 
Additionally, Owner understands that Owner may have to pay the
reasonable costs and expenses, plus overhead and profit margin in the amount of
fifteen percent (15%), attributable to completion of the Work Product if such
Work Product is not completed as of the date of termination.

 

The limited license to
use the work product shall be limited by and construed according to the terms
contained in the License Agreement between Owner and ICM, Inc., attached hereto
and made a part hereof as Exhibit D.

 

4.4                               Owner’s
Limited License Upon Design-Builder’s Default.  If this Agreement is terminated due to
Design-Builder’s default pursuant to Section 11.2 of the General
Conditions of Contract and (i) it is determined that Design-Builder was in
default and (ii) Owner has fully satisfied all of its obligations under the
Contract Documents through the time of Design-Builder’s default, then
Design-Builder shall grant Owner a limited license to use the Work Product in
connection with Owner’s completion and occupancy, repair, remodeling, or
enlargement of the Project.  This
limited license is conditioned on Owner’s express understanding that its use of
the Work Product is at Owner’s sole risk and without liability or legal
exposure to any Indemnified Party; provided, however, that any “pass through”
warranties regarding equipment or express warranties regarding equipment
provided by this Agreement shall remain in effect according to their
terms.  This limited license would grant
Owner the ability to repair, remodel or expand the Project at Owner’s
discretion. The limited license to use the work product shall be limited by and
construed according to the terms contained in the License Agreement between
Owner and ICM, Inc., attached hereto and made a part hereof as Exhibit D.

 

4.5                               Owner’s
Indemnification for Use of Work Product.  If Owner uses the Work Product under any of the circumstances
identified in this Article 4, Owner shall defend, indemnify and hold
harmless the Indemnified Parties from and against any and all claims, damages,
liabilities, losses and expenses, including attorneys’ fees, arising out of or
resulting from the use of the Work Product; provided, however, that any “pass
through” warranties regarding equipment or express warranties regarding
equipment provided by this Agreement shall remain in effect according to their
terms.

 

Article 5

 

Contract
Time

 

5.1                               Date of
Commencement.  The Work shall
commence within five (5) days of Design-Builder’s receipt of Owner’s written
Notice to Proceed (“Date of Commencement”) unless the parties mutually agree
otherwise in writing.                                               The
parties agree that a valid Owner’s Notice to Proceed cannot be given until: 1)
Owner has title to the real estate on which the project will be constructed; 2)
a Letter of Commitment for all necessary financing to construct the project is
received; 3) the Phase I and Phase II site work required of Owner, as described
in Exhibit “C” is completed along with Phase II redline drawings;  4) 
the air permit(s) and/or other applicable local, state or federal
permits necessary so that construction can begin, have been obtained; and 5) it
appears

 

DBIA Document No.
525  •  Standard
Form of Agreement

Between
Owner and Design-Builder – Lump Sum

© 1998
Design-Build Institute of America

 

4

 

reasonable that financial
close on the Letter of Commitment will occur within sixty (60) days of the
issuance of said Notice to Proceed.  

 

5.2                               Substantial
Completion and Final Completion

 

5.2.1                     If
Design-Builder receives Owner’s Notice to Proceed by November 15, 2003,
then Substantial Completion of the entire Work shall be achieved no later than
Four hundred eighty-five (485) calendar days after Design-Builder’s receipt of
a valid Owner’s Notice to Proceed.  

 

5.2.2                     Interim
milestones and/or Substantial Completion of identified portions of the Work
shall be achieved as follows:  N/A

 

5.2.3                     Final
Completion of the Work or identified portions of the Work shall be achieved as
expeditiously as reasonably practicable. 
Final Completion of the Work shall occur within sixty (60) days of
Substantial Completion.

 

5.2.4                     All
of the dates set forth in this Article 5 (“Contract Time(s)”) shall be
subject to adjustment in accordance with the General Conditions of Contract.

 

5.2.5                     If
Design-Builder does not receive Owner’s Notice to Proceed by November 15,
2004, Owner and Design-Builder mutually agree to re-negotiate in good faith the
Contract Times of Substantial Completion as described in Section 5.2.1,
the Early Completion Bonus as described in Section 5.4, and the Liquidated
Damages as described in Section 5.5 herein.

 

5.3                               Time
is of the Essence.  Owner and
Design-Builder mutually agree that time is of the essence with respect to the
dates and times set forth in the Contract Documents.

 

5.4                               *
Material omitted. 

 

5.5                               * Material omitted.

 

Article 6

 

Contract
Price

 

6.1                               Contract
Price.  Owner shall pay
Design-Builder in accordance with Article 6 of the General Conditions of
Contract the sum of Forty-five Million Five Hundred Seventy-five Thousand Dollars
($45,575,000) (“Contract Price”), subject to adjustments made in accordance
with the General Conditions of Contract. 
Unless otherwise provided in the Contract Documents, the Contract Price
is deemed to include all sales, use, consumer and other taxes mandated by
applicable Legal Requirements. 

 

6.2                               Markups
for Changes.  If the Contract Price
requires an adjustment due to changes in the Work, and the cost of such changes
is determined under Sections 9.4.1.3 or 9.4.1.4 of the General Conditions of
Contract, the following markups shall be allowed on such changes: The parties
agree that changes shall not occur pursuant to Sections 9.4.1.3 or 9.4.1.4 of
the General Conditions of Contract, but may occur pursuant to the other
provisions therein.

 

DBIA Document No.
525  •  Standard
Form of Agreement

Between
Owner and Design-Builder – Lump Sum

© 1998 Design-Build
Institute of America

 

5

 

 

Article 7

 

Procedure
for Payment

 

7.0                               Payment
at Financial Close.  As part of the
Contract Price, Owner shall pay Design-Builder Three Million Dollars
($3,000,000) as soon as allowed by its organizational documents, the Escrow
Agreement and any other relevant agreements or laws (such payment to possibly
occur prior to Financial Close) as a mobilization fee. Provided, however, that
said payment, if not made earlier, shall be paid at Financial Close. Financial
Close is defined as Owner executing final loan documents obtaining all
necessary financing to construct the project and funds are available to pay
disbursements. Said Three Million ($3,000,000) dollar payment shall be subject
to the retainage as provided by Article 7.2.1.

 

7.1                               Progress
Payments

 

7.1.1                     Design-Builder
shall submit to Owner on the twenty-fifth 
( 25th ) day of each month, beginning with the first month
after the Date of Commencement, Design-Builder’s Application for Payment in
accordance with Article 6 of the General Conditions of Contract.

 

7.1.2                     Owner
shall make payment within ten (10) days after Owner’s receipt of each properly
submitted and accurate Application for Payment in accordance with
Article 6 of the General Conditions of Contract, but in each case less the
total of payments previously made, and less amounts properly withheld under
Section 6.3 of the General Conditions of Contract. 

 

7.2                               Retainage on
Progress Payments  

 

7.2.1                     Owner
will retain ten percent ( 10%) of each payment provided, however, that when
fifty percent (50%) of the Work ($22,787,500 aggregate payment) has been
completed by Design-Builder, Owner will not retain any additional amounts from
Design-Builder’s subsequent payments, unless there is less than $2,278,750
total retainage.  Owner will also
reasonably consider reducing retainage for Subcontractors completing their work
early in the Project.  

 

7.2.2                     Upon
Substantial Completion of the entire Work or, if applicable, any portion of the
Work, pursuant to Section 6.6 of the General Conditions of Contract, Owner
shall release to Design-Builder all retained amounts relating, as applicable, to
the entire Work or completed portion of the Work, less an amount equal to the
reasonable value of all remaining or incomplete items of Work as noted in the
Certificate of Substantial Completion, provided that such payment shall only be
made if Design-Builder has met the Performance Guarantee Criteria listed in
Exhibit A.  

 

7.3                               Final
Payment.  Design-Builder shall
submit its Final Application for Payment to Owner in accordance with
Section 6.7 of the General Conditions of Contract.  Owner shall make payment on Design-Builder’s
properly submitted and accurate Final Application for Payment within thirty
(30) days after Owner’s receipt of the Final Application for Payment, provided
that Design-Builder has satisfied the requirements for final payment set forth
in Section 6.7.2 of the General Conditions of Contract and Design-Builder
has met the Performance Guarantee Criteria listed in Exhibit A.

 

7.4                               Interest.  Payments which are due and unpaid by Owner
to Design-Builder, whether progress payments or final payment, shall bear
interest commencing five (5) days after payment is due at the rate of eighteen
percent (18%) per annum.

 

7.5                               Record
Keeping and Finance Controls.  With
respect to changes in the Work performed on a cost basis by Design-Builder
pursuant to the Contract Documents, Design-Builder shall keep full and detailed
accounts and exercise such controls as may be necessary for proper financial
management, using accounting and control systems in accordance with generally
accepted accounting principles and as may be provided in the Contract
Documents.  During the performance of
the Work and for a period of three (3) years after Final Payment, Owner and
Owner’s accountants shall be afforded access from time to time, upon reasonable
notice, to Design-Builder’s records, books, correspondence, receipts,
subcontracts, purchase orders, vouchers, memoranda and other data relating to
changes in the Work performed on a cost basis in

 

DBIA Document No.
525  •  Standard
Form of Agreement

Between
Owner and Design-Builder – Lump Sum

© 1998
Design-Build Institute of America

 

6

 

accordance with the
Contract Documents, all of which Design-Builder shall preserve for a period of
three (3) years after Final Payment.

 

Article 8

 

Termination
for Convenience

 

8.1                               Upon
ten (10) days’ written notice to Design-Builder, Owner may, for its convenience
and without cause, elect to terminate this Agreement.  In such event, Owner shall pay Design-Builder for the following:

 

.1                                      All Work executed
and for proven loss, cost or expense in connection with the Work;

 

.2                                      The reasonable
costs and expenses attributable to such termination, including demobilization
costs and amounts due in settlement of terminated contracts with Subcontractors
and Design Consultants; and 

 

.3                                      Overhead and
profit margin in the amount of fifteen percent ( 15 %) on the sum of items .1
and .2 above, except that overhead and profit shall not be due regarding
amounts due in settlement of terminated contracts with subcontractors and
design consultants.

 

8.2                               In
addition to the amounts set forth in Section 8.1 above, Design-Builder
shall be entitled to receive one of the following as applicable:  NA

 

8.3                               If
Owner terminates this Agreement pursuant to Section 8.1 above and proceeds
to design and construct the Project through its employees, agents or third
parties, Owner’s rights to use the Work Product shall be as set forth in
Section 4.3 hereof.

 

Article 9

 

Representatives
of the Parties

 

9.1                               Owner’s
Representatives

 

9.1.1                     Owner
designates the individual listed below as its Senior Representative (“Owner’s
Senior Representative”), which individual has the authority and responsibility
for avoiding and resolving disputes under Section 10.2.3 of the General
Conditions of Contract:  (Identify
individual’s name, title, address and telephone numbers)

 

TBD

 

9.1.2                     Owner
designates the individual listed below as its Owner’s Representative, which
individual has the authority and responsibility set forth in Section 3.4
of the General Conditions of Contract:  (Identify
individual’s name, title, address and telephone numbers)

 

TBD 

 

9.2                               Design-Builder’s
Representatives

 

9.2.1                     Design-Builder
designates the individual listed below as its Senior Representative
(“Design-Builder’s Senior Representative”), which individual has the authority
and responsibility for avoiding and resolving disputes under
Section 10.2.3 of the General Conditions of Contract:  (Identify individual’s name, title, address and
telephone numbers)

 

DBIA Document No.
525  •  Standard
Form of Agreement

Between
Owner and Design-Builder – Lump Sum

© 1998 Design-Build
Institute of America

 

7

 

Roland
“Ron” Fagen, CEO and President

501 W. Highway 212

P.O. Box 159

Granite Falls, MN 56241

Telephone:  (320) 564-3324

 

9.2.2                     Design-Builder
designates the individual listed below as its Design-Builder’s Representative,
which individual has the authority and responsibility set forth in
Section 2.1.1 of the General Conditions of Contract:  (Identify individual’s name, title, address and
telephone numbers)

 

TBD

 

Article 10

 

Bonds
and Insurance

 

10.1                        Insurance.  Design-Builder shall procure in accordance
with Article 5 of the General Conditions of Contract the following
insurance coverage: A certificate of insurance will be provided prior to
starting construction.  Policy limits
shall be as follows:

 

	
  Commercial
  General Liability:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  General
  Aggregate

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  Products-Comp/Op
  AGG

  	
   

  	
  $

  	
  2,000,000

  	
   

  
	
  Personal
  & Adv Injury

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  Each
  Occurrence

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  Fire
  Damage (Any one fire)

  	
   

  	
  $

  	
  50,000

  	
   

  
	
  Med
  Exp (Any one person)

  	
   

  	
  $

  	
  5,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Automobile
  Liability:

  	
   

  	
   

  	
   

  
	
  Combined
  Single Limit

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Excess
  Liability – Umbrella Form

  	
   

  	
   

  	
   

  
	
  Each
  Occurrence

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
  Aggregate

  	
   

  	
  $

  	
  20,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Workers
  Compensation and

  	
   

  	
   

  	
   

  
	
  Employers’
  Liability:

  	
   

  	
   

  	
   

  
	
  Statutory
  Limits:

  	
   

  	
   

  	
   

  
	
  Each
  Accident

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  Disease-Policy
  Limit

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  Disease-Each
  Employee

  	
   

  	
  $

  	
  1,000,000

  	
   

  

 

Owner shall obtain a
builder’s risk policy naming Owner as the insured, with Design-Builder as
additional insured, in an amount not less than the Contract Price.  Owner shall also obtain Boiler and Machinery
Insurance protecting Owner, Design-Builder, Design Consultants, Subcontracts
and Subcontractors.

 

DBIA Document No.
525  •  Standard
Form of Agreement

Between
Owner and Design-Builder – Lump Sum

© 1998
Design-Build Institute of America

 

8

 

Article 11

 

Other
Provisions

 

11.1                        Other
provisions, if any, are as follows: 

 

•                  Performance Guarantee:  The Design-Builder guarantees the Criteria
listed in Exhibit A.  If there is a
performance shortfall, Design-Builder will pay all design and construction
costs associated with making the necessary corrections.  Design-Builder retains the right to use its
sole discretion in determining the method to remedy any performance related
issues.

 

•                  Price Guarantee:  The Design-Builder guarantees the Contract
Price for the Work delineated by the Contract Documents.  Any and all price increases would require,
in addition to Owner’s approval, the approval of Owner’s senior lender.

 

•                  Winter Construction:  Owner shall have no responsibility for any
winter construction related activities including, but not limited to, special material
costs, sheltering, heating, and equipment rental, except that Owner shall pay
all the reasonable costs incurred for frost removal including, but not limited
to, equipment costs, equipment rental costs, and associated labor costs, so
that winter construction can proceed. 

 

•                  Design-Builder shall obtain or
cooperate in obtaining a performance bond if such a bond is requested by
Owner.  If the bond is obtained by
Design-Builder, Owner shall pay Design-Builder for the cost of the bond, plus
pay Design-Builder a fee of 7.5%, said fee calculated by multiplying 7.5% on
the cost of the bond.  If purchased by
Owner, Owner shall pay all costs of obtaining the bond.  

 

•                  Design-Builder warrants that within
six (6) months following the date of Substantial Completion, the atmospheric
emissions of the ethanol plant shall meet the requirements as currently
prescribed, as of the date hereof, by the State of Wisconsin Department of
Natural Resources Bureau of Air Management. 
Verification shall be provided by a written report from Design-Builder.

 

 

In executing this
Agreement, Design-Builder represents that it has the necessary financial
resources to fulfill its obligations under this Agreement and has the necessary
corporate approvals to execute this Agreement and perform the services
described herein.  Owner represents that
it has the necessary organizational approvals to execute this Agreement; that
Owner is seeking financing for the project and that Owner agrees to keep Design-Builder
informed of Owner’s progress in obtaining commitments for and closing on such
financing.

 

 

	
  OWNER:

  	
   

  	
  DESIGN-BUILDER:

  
	
   

  	
   

  	
   

  
	
  United Wisconsin Grain
  Producers, LLC

  	
   

  	
  Fagen, Inc.

  
	
  (Name of Owner)

  	
   

  	
  (Name of Design-Builder)

  
	
   

  	
   

  	
   

  
	
  /s/ Kevin Roche

  	
   

  	
  /s/ Roland “Ron” Fagen

  
	
  (Signature)

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
  Kevin Roche

  	
   

  	
  Roland “Ron” Fagen

  
	
  (Printed Name)

  	
   

  	
  (Printed Name)

  

 

DBIA Document No.
525  •  Standard
Form of Agreement

Between
Owner and Design-Builder – Lump Sum

© 1998 Design-Build
Institute of America

 

9

 

	
  President

  	
   

  	
  CEO and President

  
	
  (Title)

  	
   

  	
  (Title)

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  10-8-03

  	
   

  	
  Date:

  	
  10-8-03

  
					

 

DBIA Document No.
525  •  Standard
Form of Agreement

Between
Owner and Design-Builder – Lump Sum

© 1998
Design-Build Institute of America

 

10

 

Design Build
Contract

United Wisconsin
Grain Producers, LLC

October 8,
2003

 

EXHIBIT A

 

* Material omitted.

 

Exh. A to United
Wisconsin Grain Producers, LLC 

 

1

 

Design Build Contract

United Wisconsin
Grain Producers, LLC

October 8,
2003

 

EXHIBIT B

 

* Material omitted.

 

Exh. A to United
Wisconsin Grain Producers, LLC 

 

1

 

Design Build
Contract

United Wisconsin
Grain Producers, LLC

October 8,
2003

 

EXHIBIT
C

 

* Material omitted.

 

Exh. A to United
Wisconsin Grain Producers, LLC 

 

1

 

Design Build
Contract

United Wisconsin
Grain Producers, LLC

October 8,
2003

 

EXHIBIT D

 

* Material Omitted

 

1

 

Design Build
Contract

United Wisconsin
Grain Producers, LLC

October 8,
2003

 

EXHIBIT “E”

 

* Material omitted.

 

1

 

	
  

  

 

Standard Form of General Conditions

of Contract Between Owner and Design-Builder

 

This document has important legal
consequences.  Consultation with

an attorney is recommended with respect to its completion or modification.

 

Table
of Contents

 

	
  Article 1:

  	
  General

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 2:

  	
  Design-Builder’s Services and
  Responsibilities

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 3:

  	
  Owner’s Services and Responsibilities

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 4:

  	
  Hazardous Conditions and Differing Site
  Conditions

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 5:

  	
  Insurance and Bonds

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 6:

  	
  Payment

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 7:

  	
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 8:

  	
  Time

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 9:

  	
  Changes to the Contract Price and Time

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 10:

  	
  Contract Adjustments and Disputes

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 11:

  	
  Stop Work and Termination for Cause

  	
   

  
	
   

  	
   

  	
   

  
	
  Article 12:

  	
  Miscellaneous

  	
   

  

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998 Design-Build
Institute of America

 

 

Article 1

 

General

 

1.1                               Mutual
Obligations

 

1.1.1                     Owner and
Design-Builder commit at all times to cooperate fully with each other, and
proceed on the basis of trust and good faith, to permit each party to realize
the benefits afforded under the Contract Documents.

 

1.2                               Basic
Definitions

 

1.2.1                     Agreement
refers to the executed contract between Owner and Design-Builder under either
DBIA Document No. 525, Standard Form of Agreement Between Owner and
Design-Builder – C Lump Sum (1998 Edition) or DBIA Document
No. 530, Standard Form of Agreement Between Owner and Design-Builder C – Cost
Plus Fee with an Option for a Guaranteed Maximum Price (1998
Edition).

 

1.2.2                     Day
or Days
shall mean calendar days unless otherwise specifically noted in the Contract
Documents.

 

1.2.3                     Design
Consultant is a qualified, licensed design professional who is not
an employee of Design-Builder, but is retained by Design-Builder, or employed
or retained by anyone under contract with Design-Builder or Subcontractor, to
furnish design services required under the Contract Documents.

 

1.2.4                     Hazardous
Conditions are any materials, wastes, substances and chemicals
deemed to be hazardous under applicable Legal Requirements, or the handling,
storage, remediation, or disposal of which are regulated by applicable Legal
Requirements.

 

1.2.5                     General
Conditions of Contract refer to this DBIA Document No. 535, Standard
Form of General Conditions of Contract Between Owner and Design-Builder
(1998 Edition).

 

1.2.6                     Legal
Requirements are all applicable federal, state and local laws,
codes, ordinances, rules, regulations, orders and decrees of any government or
quasi-government entity having jurisdiction over the Project or Site, the
practices involved in the Project or Site, or any Work.

 

1.2.7                     Owner’s
Project Criteria are developed by or for Owner to describe Owner’s
program requirements and objectives for the Project, including use, space,
price, time, site and expandability requirements, as well as submittal
requirements and other requirements governing Design-Builder’s performance of
the Work.  Owner’s Project Criteria may
include conceptual documents, design criteria, performance requirements and
other Project-specific technical materials and requirements.

 

1.2.8                     Site
is the land or premises on which the Project is located.

 

1.2.9                     Subcontractor
is any person or entity retained by Design-Builder as an independent contractor
to perform a portion of the Work and shall include materialmen and suppliers. 

 

1.2.10              Sub-Subcontractor
is any person or entity retained by a Subcontractor as an independent
contractor to perform any portion of a Subcontractor’s Work and shall include
materialmen and suppliers.

 

1.2.11              Substantial
Completion is the date on which the Work, or an agreed upon portion
of the Work, is sufficiently complete so that Owner can occupy and use the
Project or a portion thereof for its intended purposes.

 

1.2.12              Work
is comprised of all Design-Builder’s design, construction and other services
required by the Contract Documents, including procuring and furnishing all
materials, equipment, services and labor reasonably inferable from the Contract
Documents.

 

Article 2

 

Design-Builder’s
Services and

Responsibilities

 

2.1                               General
Services

 

2.1.1                     Design-Builder’s
Representative shall be reasonably available to Owner and shall have the
necessary expertise and experience required to supervise the Work.  Design-Builder’s Representative shall
communicate regularly with Owner and shall be vested with the authority to act
on behalf of Design-Builder. 
Design-Builder’s Representative may be replaced only with the mutual
agreement of Owner and Design-Builder.  

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998
Design-Build Institute of America

 

2

 

2.1.2                     Design-Builder
shall provide Owner with a monthly status report detailing the progress of the
Work, including whether (i) the Work is proceeding according to schedule, (ii)
discrepancies, conflicts, or ambiguities exist in the Contract Documents that
require resolution, (iii) health and safety issues exist in connection with the
Work, and (iv) other items require resolution so as not to jeopardize
Design-Builder’s ability to complete the Work for the Contract Price and within
the Contract Time(s).

 

2.1.3                     Design-Builder
shall prepare and submit, at least three (3) days prior to the meeting
contemplated by Section 2.1.4 hereof, a schedule for the execution of
the Work for Owner’s review and response. 
The schedule shall indicate the dates for the start and completion
of the various stages of Work, including the dates when Owner information and
approvals are required to enable Design-Builder to achieve the Contract
Time(s).  The schedule shall be
revised as required by conditions and progress of the Work, but such revisions
shall not relieve Design-Builder of its obligations to complete the Work within
the Contract Time(s), as such dates may be adjusted in accordance with the
Contract Documents.  Owner’s review of
and response to the schedule shall not be construed as relieving
Design-Builder of its complete and exclusive control over the means, methods,
sequences and techniques for executing the Work.  

 

2.1.4                     The
parties will meet within seven (7) days after execution of the Agreement to
discuss issues affecting the administration of the Work and to implement the
necessary procedures, including those relating to submittals and payment, to
facilitate the ability of the parties to perform their obligations under the
Contract Documents.

 

2.2                               Design
Professional Services

 

2.2.1                     Design-Builder
shall, consistent with applicable state licensing laws, provide through
qualified, licensed design professionals employed by Design-Builder, or
procured from qualified, independent licensed Design Consultants, the necessary
design services, including architectural, engineering and other design
professional services, for the preparation of the required drawings,
specifications and other design submittals to permit Design-Builder to complete
the Work consistent with the Contract Documents.  Nothing in the Contract Documents is intended or deemed to create
any legal or contractual relationship between Owner and any Design Consultant.

 

2.3                               Standard of Care for Design Professional
Services

 

2.3.1                     The
standard of care for all design professional services performed to execute the
Work shall be the care and skill ordinarily used by members of the design
profession practicing under similar conditions at the same time and locality of
the Project.  Notwithstanding the
preceding sentence, if the parties agree upon specific performance standards
for any aspect of the Work, which standards are to be set forth in an exhibit
to the Agreement entitled “Performance Standard Requirements,” the design
professional services shall be performed to achieve such standards. 

 

2.4                               Design
Development Services

 

2.4.1                     Design-Builder
and Owner shall, consistent with any applicable provision of the Contract
Documents, agree upon any interim design submissions that Owner may wish to
review, which interim design submissions may include design criteria, drawings,
diagrams and specifications setting forth the Project requirements.   On or about the time of the scheduled
submissions, Design-Builder and Owner shall meet and confer about the
submissions, with Design-Builder identifying during such meetings, among other
things, the evolution of the design and any significant changes or deviations
from the Contract Documents, or, if applicable, previously submitted design
submissions.  Minutes of the meetings
will be maintained by Design-Builder and provided to all attendees for
review.  Following the design review
meeting, Owner shall review and approve the interim design submissions in a
time that is consistent with the turnaround times set forth in Design-Builder’s
schedule.

 

2.4.2                     Design-Builder
shall submit to Owner Construction Documents setting forth in detail drawings
and specifications describing the requirements for construction of the
Work.  The Construction Documents shall
be consistent with the latest set of interim design submissions, as such
submissions may have been modified in a design review meeting.  The parties shall have a design review
meeting to discuss, and Owner shall review and approve, the Construction
Documents in accordance with the procedures set forth Section 2.4.1
above.  Design-Builder shall proceed
with

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998 Design-Build
Institute of America

 

3

 

construction in
accordance with the approved Construction Documents and shall submit one set of
approved Construction Documents to Owner prior to commencement of
construction.  

 

2.4.3                     Owner’s
review and approval of interim design submissions and the Construction
Documents is for the purpose of mutually establishing a conformed set of
Contract Documents compatible with the requirements of the Work.  Neither Owner’s review nor approval of any
interim design submissions and Construction Documents shall be deemed to
transfer any design liability from Design-Builder to Owner.

 

2.4.4                     To
the extent not prohibited by the Contract Documents or Legal Requirements,
Design-Builder may prepare interim design submissions and Construction
Documents for a portion of the Work to permit construction to proceed on that
portion of the Work prior to completion of the Construction Documents for the
entire Work. 

 

2.5                               Legal Requirements

 

2.5.1                     Design-Builder
shall perform the Work in accordance with all Legal Requirements and shall
provide all notices applicable to the Work as required by the Legal
Requirements.

 

2.5.2                     The
Contract Price and/or Contract Time(s) shall be adjusted to compensate
Design-Builder for the effects of any changes in the Legal Requirements enacted
after the date of the Agreement affecting the performance of the Work, or if a
Guaranteed Maximum Price is established after the date of the Agreement, the
date the parties agree upon the Guaranteed Maximum Price.  Such effects may include, without
limitation, revisions Design-Builder is required to make to the Construction
Documents because of changes in Legal Requirements.

 

2.6                               Government
Approvals and Permits

 

2.6.1                     Except
as identified in an Owner’s Permit List attached as an exhibit to the
Agreement, Design-Builder shall obtain and pay for all necessary permits,
approvals, licenses, government charges and inspection fees required for the
prosecution of the Work by any government or  quasi-government entity
having jurisdiction over the Project.  

 

2.6.2                     Design-Builder
shall provide reasonable assistance to Owner in obtaining those permits,
approvals and licenses that are Owner’s responsibility.

 

2.7                               Design-Builder’s Construction Phase
Services

 

2.7.1                     Unless
otherwise provided in the Contract Documents to be the responsibility of Owner
or a separate contractor, Design-Builder shall provide through itself or
Subcontractors the necessary supervision, labor, inspection, testing, start-up,
material, equipment, machinery, temporary utilities and other temporary
facilities to permit Design-Builder to complete construction of the Project
consistent with the Contract Documents.

 

2.7.2                     Design-Builder
shall perform all construction activities efficiently and with the requisite
expertise, skill and competence to satisfy the requirements of the Contract
Documents.  Design-Builder shall at all
times exercise complete and exclusive control over the means, methods, sequences
and techniques of construction.

 

2.7.3                     Design-Builder
shall employ only Subcontractors who are duly licensed and qualified to perform
the Work consistent with the Contract Documents.  Owner may reasonably object to Design-Builder’s selection of any
Subcontractor, provided that the Contract Price and/or Contract Time(s) shall
be adjusted to the extent that Owner’s decision impacts Design-Builder’s cost
and/or time of performance.

 

2.7.4                     Design-Builder
assumes responsibility to Owner for the proper performance of the Work of
Subcontractors and any acts and omissions in connection with such
performance.  Nothing in the Contract
Documents is intended or deemed to create any legal or contractual relationship
between Owner and any Subcontractor or Sub-Subcontractor, including but not
limited to any third-party beneficiary rights.

 

2.7.5                     Design-Builder
shall coordinate the activities of all Subcontractors.  If Owner performs other work on the Project
or at the Site with separate contractors under Owner’s control, Design-Builder
agrees to reasonably cooperate and coordinate its activities with those of such
separate contractors so that the Project can be completed in an orderly and

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998 Design-Build
Institute of America

 

4

 

coordinated manner
without unreasonable disruption.

 

2.7.6                     Design-Builder
shall keep the Site reasonably free from debris, trash and construction wastes
to permit Design-Builder to perform its construction services efficiently,
safely and without interfering with the use of adjacent land areas.  Upon Substantial Completion of the Work, or
a portion of the Work, Design-Builder shall remove all debris, trash,
construction wastes, materials, equipment, machinery and tools arising from the
Work or applicable portions thereof to permit Owner to occupy the Project or a
portion of the Project for its intended use.

 

2.8                               Design-Builder’s
Responsibility for Project Safety

 

2.8.1                     Design-Builder
recognizes the importance of performing the Work in a safe manner so as to
prevent damage, injury or loss to (i) all individuals at the Site, whether
working or visiting, (ii) the Work, including materials and equipment
incorporated into the Work or stored on-Site or off-Site, and (iii) all other
property at the Site or adjacent thereto. 
Design-Builder assumes responsibility for implementing and monitoring
all safety precautions and programs related to the performance of the
Work.  Design-Builder shall, prior to
commencing construction, designate a Safety Representative with the necessary
qualifications and experience to supervise the implementation and monitoring of
all safety precautions and programs related to the Work.  Unless otherwise required by the Contract
Documents, Design-Builder’s Safety Representative shall be an individual
stationed at the Site who may have responsibilities on the Project in addition
to safety.  The Safety Representative
shall make routine daily inspections of the Site and shall hold weekly safety
meetings with Design-Builder’s personnel, Subcontractors and others as
applicable.

 

2.8.2                     Design-Builder
and Subcontractors shall comply with all Legal Requirements relating to safety,
as well as any Owner-specific safety requirements set forth in the Contract
Documents, provided that such Owner-specific requirements do not violate any
applicable Legal Requirement. 
Design-Builder will immediately report in writing any safety-related
injury, loss, damage or accident arising from the Work to Owner’s
Representative and, to the extent mandated by Legal Requirements, to all
government or quasi-government authorities having jurisdiction over
safety-related matters involving the Project or the Work.

 

2.8.3                     Design-Builder’s
responsibility for safety under this Section 2.8  is not intended in any way
to relieve Subcontractors and Sub-Subcontractors of their own contractual and
legal obligations and responsibility for (i) complying with all Legal
Requirements, including those related to health and safety matters, and (ii)
taking all necessary measures to implement and monitor all safety precautions
and programs to guard against injury, losses, damages or accidents resulting
from their performance of the Work.

 

2.9                               Design-Builder’s
Warranty

 

2.9.1                     Design-Builder
warrants to Owner that the construction, including all materials and equipment
furnished as part of the construction, shall be new unless otherwise specified
in the Contract Documents, of good quality, in conformance with the Contract
Documents and free of defects in materials and workmanship.  Design-Builder’s warranty obligation
excludes defects caused by abuse, alterations, or failure to maintain the Work
by persons other than Design-Builder or anyone for whose acts Design-Builder
may be liable. Nothing in this warranty is intended to limit any manufacturer’s
warranty which provides Owner with greater warranty rights than set forth in
this Section 2.9 or the Contract Documents.  Design-Builder will provide Owner with all manufacturers’ warranties
upon Substantial Completion.

 

2.10                        Correction
of Defective Work

 

2.10.1              Design-Builder
agrees to correct any Work that is found to not be in conformance with the
Contract Documents, including that part of the Work subject to Section 2.9
hereof, within a period of one year from the date of Substantial Completion of
the Work or any portion of the Work, or within such longer period to the extent
required by the Contract Documents.

 

2.10.2              Design-Builder
shall, within seven (7) days of receipt of written notice from Owner that the
Work is not in conformance with the Contract Documents, take meaningful steps
to commence correction of such nonconforming Work, including the correction,
removal or replacement of the nonconforming Work and any damage caused to other
parts of the Work affected by the nonconforming Work.  If Design-Builder

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998 Design-Build
Institute of America

 

5

 

fails to commence the
necessary steps within such seven (7) day period, Owner, in addition to any
other remedies provided under the Contract Documents, may provide
Design-Builder with written notice that Owner will commence correction of such
nonconforming Work with its own forces. 
If Owner does perform such corrective Work, Design-Builder shall be
responsible for all reasonable costs incurred by Owner in performing such
correction.  If the nonconforming Work
creates an emergency requiring an immediate response, the seven (7) day periods
identified herein shall be deemed inapplicable.

 

2.10.3              The
one year period referenced in Section 2.10.1 above applies only to
Design-Builder’s obligation to correct nonconforming Work and is not intended
to constitute a period of limitations for any other rights or remedies Owner
may have regarding Design-Builder’s other obligations under the Contract
Documents.

 

Article 3

 

Owner’s
Services and Responsibilities

 

3.1                               Duty to
Cooperate

 

3.1.1                     Owner
shall, throughout the performance of the Work, cooperate with Design-Builder
and perform its responsibilities, obligations and services in a timely manner
to facilitate Design-Builder’s timely and efficient performance of the Work and
so as not to delay or interfere with Design-Builder’s performance of its
obligations under the Contract Documents.

 

3.1.2                     Owner
shall provide timely reviews and approvals of interim design submissions and
Construction Documents consistent with the turnaround times set forth in
Design-Builder’s schedule.   

 

3.2                               Furnishing
of Services and Information

 

3.2.1                     Unless
expressly stated to the contrary in the Contract Documents, Owner shall
provide, at its own cost and expense, for Design-Builder’s information and use
the following, all of which Design-Builder is entitled to rely upon in
performing the Work:

 

.1                  Surveys describing the property,
boundaries, topography and reference points for use during construction,
including existing service and utility lines;

 

.2                  Geotechnical studies describing
subsurface conditions, and other surveys describing other latent or concealed
physical conditions at the Site;

 

.3                  Temporary and permanent easements,
zoning and other requirements and encumbrances affecting land use, or necessary
to permit the proper design and construction of the Project and enable
Design-Builder to perform the Work; 

 

.4                  A legal description of the Site;

 

.5                  To the extent available, as-built and
record drawings of any existing structures at the Site; and

 

.6                  To the extent available,
environmental studies, reports and impact statements describing the
environmental conditions, including Hazardous Conditions, in existence at the
Site. 

 

3.2.2                     Owner
is responsible for securing and executing all necessary agreements with
adjacent land or property owners that are necessary to enable Design-Builder to
perform the Work.  Owner is further
responsible for all costs, including attorneys’ fees, incurred in securing
these necessary agreements.

 

3.3                               Financial
Information

 

3.3.1                     At
Design-Builder’s request, Owner shall promptly furnish reasonable evidence
satisfactory to Design-Builder that Owner has adequate funds available and
committed to fulfill all of Owner’s contractual obligations under the Contract
Documents.  If Owner fails to furnish such
financial information in a timely manner, Design-Builder may stop Work under
Section 11.3 hereof or exercise any other right permitted under the
Contract Documents.  

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998
Design-Build Institute of America

 

6

 

3.3.2                     Design-Builder
shall cooperate with the reasonable requirements of Owner’s lenders or other
financial sources.  Notwithstanding the preceding
sentence, after execution of the Agreement Design-Builder shall have no
obligation to execute for Owner or Owner’s lenders or other financial sources
any documents or agreements that require Design-Builder to assume obligations
or responsibilities greater than those existing obligations Design-Builder has
under the Contract Documents.

 

3.4                               Owner’s
Representative  

 

3.4.1                     Owner’s
Representative shall be responsible for providing Owner-supplied information
and approvals in a timely manner to permit Design-Builder to fulfill its
obligations under the Contract Documents. 
Owner’s Representative shall also provide Design-Builder with prompt
notice if it observes any failure on the part of Design-Builder to fulfill its
contractual obligations, including any errors, omissions or defects in the
performance of the Work.

 

3.5                               Government
Approvals and Permits

 

3.5.1                     Owner
shall obtain and pay for all necessary permits, approvals, licenses, government
charges and inspection fees set forth in the Owner’s Permit List attached as an
exhibit to the Agreement.  

 

3.5.2                     Owner
shall provide reasonable assistance to Design-Builder in obtaining those
permits, approvals and licenses that are Design-Builder’s responsibility.

 

3.6                               Owner’s
Separate Contractors

 

3.6.1                     Owner is
responsible for all work performed on the Project or at the Site by separate
contractors under Owner’s control. 
Owner shall contractually require its separate contractors to cooperate
with, and coordinate their activities so as not to interfere with, Design-Builder
in order to enable Design-Builder to timely complete the Work consistent with
the Contract Documents. 

 

Article 4

 

Hazardous
Conditions and Differing

Site Conditions

 

4.1                               Hazardous
Conditions

 

4.1.1                     Unless
otherwise expressly provided in the Contract Documents to be part of the Work,
Design-Builder is not responsible for any Hazardous Conditions encountered at
the Site.  Upon encountering any
Hazardous Conditions, Design-Builder will stop Work immediately in the affected
area and duly notify Owner and, if required by Legal Requirements, all
government or quasi-government entities with jurisdiction over the Project or
Site.  

 

4.1.2                     Upon
receiving notice of the presence of suspected Hazardous Conditions, Owner shall
take the necessary measures required to ensure that the Hazardous Conditions
are remediated or rendered harmless. 
Such necessary measures shall include Owner retaining qualified
independent experts to (i) ascertain whether Hazardous Conditions have actually
been encountered, and, if they have been encountered, (ii) prescribe the
remedial measures that Owner must take either to remove the Hazardous
Conditions or render the Hazardous Conditions harmless.

 

4.1.3                     Design-Builder
shall be obligated to resume Work at the affected area of the Project only
after Owner’s expert provides it with written certification that (i) the
Hazardous Conditions have been removed or rendered harmless and (ii) all
necessary approvals have been obtained from all government and quasi-government
entities having jurisdiction over the Project or Site.

 

4.1.4                     Design-Builder
will be entitled, in accordance with these General Conditions of Contract, to
an adjustment in its Contract Price and/or Contract Time(s) to the extent
Design-Builder’s cost and/or time of performance have been adversely impacted
by the presence of Hazardous Conditions.

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998 Design-Build
Institute of America

 

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4.1.5                     To
the fullest extent permitted by law, Owner shall indemnify, defend and hold
harmless Design-Builder, Design Consultants, Subcontractors, anyone employed
directly or indirectly for any of them, and their officers, directors, employees
and agents, from and against any and all claims, losses, damages, liabilities
and expenses, including attorneys’ fees and expenses, arising out of or
resulting from the presence, removal or remediation of Hazardous Conditions at
the Site.  

 

4.1.6                     Notwithstanding
the preceding provisions of this Section 4.1, Owner is not responsible for
Hazardous Conditions introduced to the Site by Design-Builder, Subcontractors
or anyone for whose acts they may be liable. 
Design-Builder shall indemnify, defend and hold harmless Owner and
Owner’s officers, directors, employees and agents from and against all claims,
losses, damages, liabilities and expenses, including attorneys’ fees and
expenses, arising out of or resulting from those Hazardous Conditions introduced
to the Site by Design-Builder, Subcontractors or anyone for whose acts they may
be liable.

 

4.2                               Differing
Site Conditions

 

4.2.1                     Concealed
or latent physical conditions or subsurface conditions at the Site that (i)
materially differ from the conditions indicated in the Contract Documents or
(ii) are of an unusual nature, differing materially from the conditions
ordinarily encountered and generally recognized as inherent in the Work are
collectively referred to herein as “Differing Site Conditions.”  If Design-Builder encounters a Differing
Site Condition, Design-Builder will be entitled to an adjustment in the
Contract Price and/or Contract Time(s) to the extent Design-Builder’s cost
and/or time of performance are adversely impacted by the Differing Site Condition.

 

4.2.2                     Upon
encountering a Differing Site Condition, Design-Builder shall provide prompt
written notice to Owner of such condition, which notice shall not be later than
fourteen (14) days after such condition has been encountered.  Design-Builder shall, to the extent
reasonably possible, provide such notice before the Differing Site Condition
has been substantially disturbed or altered.

 

Article 5

 

Insurance
and Bonds

 

5.1                               Design-Builder’s
Insurance Requirements

 

5.1.1                     Design-Builder
is responsible for procuring and maintaining from insurance companies
authorized to do business in the state in which the Project is located, and
with a minimum rating set forth in the Agreement, the following insurance
coverages for certain claims which may arise from or out of the performance of
the Work and obligations under the Contract Documents:

 

.1                  Coverage for claims arising under
workers’ compensation, disability and other similar employee benefit laws
applicable to the Work;

 

.2                  Coverage for claims by Design-Builder’s
employees for bodily injury, sickness, disease, or death;

 

.3                  Coverage for claims by any person
other than Design-Builder’s employees for bodily injury, sickness, disease, or
death;

 

.4                  Coverage for usual personal injury
liability claims for damages sustained by a person as a direct or indirect
result of Design-Builder’s employment of the person, or sustained by any other
person;

 

.5                  Coverage for claims for damages  (other than to the Work) because of injury
to or destruction of tangible property, including loss of use;

 

.6                  Coverage for claims of damages
because of personal injury or death, or property damage resulting from
ownership, use and maintenance of any motor vehicle; and

 

.7                  Coverage for contractual liability
claims arising out of Design-Builder’s obligations under Section 7.4.1
hereof.

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998
Design-Build Institute of America

 

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5.1.2                     Design-Builder’s
liability insurance required by Section 5.1.1 above shall be written for
the coverage amounts set forth in the Agreement and shall include completed
operations insurance for the period of time set forth in the Agreement. 

 

5.1.3                     Design-Builder’s
liability insurance set forth in Sections 5.1.1.1 through 5.1.1.7 above shall
specifically delete any design-build or similar exclusions that could
compromise coverages because of the design-build delivery of the Project.

 

5.1.4                     To
the extent Owner requires Design-Builder or any Design Consultant to provide
professional liability insurance for claims arising from the negligent
performance of design services by Design-Builder or the Design Consultant, the
coverage limits, duration and other specifics of such insurance shall be as set
forth in the Agreement.  Any
professional liability shall specifically delete any design-build or similar
exclusions that could compromise coverages because of the design-build delivery
of the Project.  Such policies shall be
provided prior to the commencement of any design services hereunder.

 

5.1.5                     Prior
to commencing any construction services hereunder, Design-Builder shall provide
Owner with certificates evidencing that (i) all insurance obligations required
by the Contract Documents are in full force and in effect and will remain in
effect for the duration required by the Contract Documents and (ii) no
insurance coverage will be canceled, renewal refused, or materially changed
unless at least thirty (30) days prior written notice is given to Owner.

 

5.2                               Owner’s
Liability Insurance

 

5.2.1                     Owner
shall procure and maintain from insurance companies authorized to do business
in the state in which the Project is located such liability insurance to
protect Owner from claims which may arise from the performance of Owner’s
obligations under the Contract Documents or Owner’s conduct during the course
of the Project.

 

5.3                               Owner’s
Property Insurance

 

5.3.1                     Unless
otherwise provided in the Contract Documents, Owner shall procure and maintain
from insurance companies authorized to do business in the state in which the
Project is located property insurance upon the entire Project to the full
insurable value of the Project, including professional fees, overtime premiums
and all other expenses incurred to replace or repair the insured property.  The property insurance obtained by Owner
shall include as additional insureds the interests of Owner, Design-Builder,
Design Consultants, Subcontractors and Sub-Subcontractors, and shall insure
against the perils of fire and extended coverage, theft, vandalism, malicious
mischief, collapse, flood, earthquake, debris removal and other perils or
causes of loss as called for in the Contract Documents.  The property insurance shall include
physical loss or damage to the Work, including materials and equipment in
transit, at the Site or at another location as may be indicated in
Design-Builder’s Application for Payment and approved by Owner.

 

5.3.2                     Unless
the Contract Documents provide otherwise, Owner shall procure and maintain
boiler and machinery insurance that will include the interests of Owner,
Design-Builder, Design Consultants, Subcontractors and Sub-Subcontractors.

 

5.3.3                     Prior
to Design-Builder commencing any Work, Owner shall provide Design-Builder with
certificates evidencing that (i) all Owner’s insurance obligations required by
the Contract Documents are in full force and in effect and will remain in
effect until Design-Builder has completed all of the Work and has received
final payment from Owner and (ii) no insurance coverage will be canceled,
renewal refused, or materially changed unless at least thirty (30) days prior
written notice is given to Design-Builder. 
Owner’s property insurance shall not lapse or be canceled if Owner
occupies a portion of the Work pursuant to Section 6.6.3 hereof.  Owner shall provide Design-Builder with the
necessary endorsements from the insurance company prior to occupying a portion
of the Work.

 

5.3.4                     Any
loss covered under Owner’s property insurance shall be adjusted with Owner and
Design-Builder and made payable to both of them as trustees for the insureds as
their interests may appear, subject to any applicable mortgage clause.  All insurance proceeds received as a result
of any loss will be placed in a separate account and distributed in accordance
with such agreement as the interested parties may reach.  Any disagreement concerning the distribution
of any proceeds will be resolved in accordance with Article 10 hereof.

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998 Design-Build
Institute of America

 

9

 

5.3.5                     Owner
and Design-Builder waive against each other and Owner’s separate contractors,
Design Consultants, Subcontractors, agents and employees of each and all of
them, all damages covered by property insurance provided herein, except such
rights as they may have to the proceeds of such insurance.  Design-Builder and Owner shall, where
appropriate, require similar waivers of subrogation from Owner’s separate
contractors, Design Consultants and Subcontractors and shall require each of
them to include similar waivers in their contracts.

 

5.4                               Bonds
and Other Performance Security

 

5.4.1                     If
Owner requires Design-Builder to obtain performance and labor and material
payment bonds, or other forms of performance security, the amount, form and
other conditions of such security shall be as set forth in the Agreement.

 

Article 6

 

Payment

 

6.1                               Schedule of
Values  

 

6.1.1                     Within
ten (10) days of execution of the Agreement, Design-Builder shall submit for
Owner’s review and approval a schedule of values for all of the Work.  The Schedule of Values will (i)
subdivide the Work into its respective parts, (ii) include values for all items
comprising the Work and (iii) serve as the basis for monthly progress payments
made to Design-Builder throughout the Work.

 

6.2                               Monthly
Progress Payments

 

6.2.1                     On
or before the date established in the Agreement, Design-Builder shall submit
for Owner’s review and approval its Application for Payment requesting payment
for all Work performed as of the date of the Application for Payment.  The Application for Payment shall be
accompanied by all supporting documentation required by the Contract Documents
and/or established at the meeting required by Section 2.1.4 hereof.

 

6.2.2                     The
Application for Payment may request payment for equipment and materials not yet
incorporated into the Project, provided that (i) Owner is satisfied that the equipment
and materials are suitably stored at either the Site or another acceptable
location, (ii) the equipment and materials are protected by suitable insurance
and (iii) upon payment, Owner will receive the equipment and materials free and
clear of all liens and encumbrances.

 

6.2.3                     The
Application for Payment shall constitute Design-Builder’s representation that
the Work has been performed consistent with the Contract Documents, has
progressed to the point indicated in the Application for Payment, and that
title to all Work will pass to Owner free and clear of all claims, liens,
encumbrances, and security interests upon the incorporation of the Work into
the Project, or upon Design-Builder’s receipt of payment, whichever occurs
earlier.

 

6.3                               Withholding
of Payments

 

6.3.1                     On
or before the date established in the Agreement, Owner shall pay Design-Builder
all amounts properly due. If Owner determines that Design-Builder is not
entitled to all or part of an Application for Payment, it will notify
Design-Builder in writing at least five (5) days prior to the date payment is
due.  The notice shall indicate the
specific amounts Owner intends to withhold, the reasons and contractual basis
for the withholding, and the specific measures Design-Builder must take to rectify
Owner’s concerns.  Design-Builder and
Owner will attempt to resolve Owner’s concerns prior to the date payment is
due.   If the parties cannot resolve
such concerns, Design-Builder may pursue its rights under the Contract
Documents, including those under Article 10 hereof.

 

6.3.2                     Notwithstanding
anything to the contrary in the Contract Documents, Owner shall pay
Design-Builder all undisputed amounts in an Application for Payment within the
times required by the Agreement.

 

6.4                               Right
to Stop Work and Interest  

 

6.4.1                     If
Owner fails to pay Design-Builder any amount that becomes due, Design-Builder,
in addition to all other remedies provided in the Contract Documents, may stop
Work pursuant to Section 11.3 hereof. 
All payments due and unpaid shall bear interest at the rate set forth in
the Agreement.

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998
Design-Build Institute of America

 

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6.5                               Design-Builder’s
Payment Obligations

 

6.5.1                     Design-Builder
will pay Design Consultants and Subcontractors, in accordance with its
contractual obligations to such parties, all the amounts Design-Builder has
received from Owner on account of their work. 
Design-Builder will impose similar requirements on Design Consultants
and Subcontractors to pay those parties with whom they have contracted.  Design-Builder will indemnify and defend
Owner against any claims for payment and mechanic’s liens as set forth in Section 7.3
hereof.

 

6.6                               Substantial
Completion  

 

6.6.1                     Design-Builder
shall notify Owner when it believes the Work, or to the extent permitted in the
Contract Documents, a portion of the Work, is substantially complete.  Within five (5) days of Owner’s receipt of
Design-Builder’s notice, Owner and Design-Builder will jointly inspect such
Work to verify that it is substantially complete in accordance with the
requirements of the Contract Documents. 
If such Work is substantially complete, Owner shall prepare and issue a
Certificate of Substantial Completion that will set forth (i) the date of
Substantial Completion of the Work or portion thereof, (ii) the remaining items
of Work that have to be completed before final payment, (iii) provisions (to
the extent not already provided in the Contract Documents) establishing Owner’s
and Design-Builder’s responsibility for the Project’s security, maintenance,
utilities and insurance pending final payment and (iv) an acknowledgment that
warranties commence to run on the date of Substantial Completion, except as may
otherwise be noted in the Certificate of Substantial Completion.  

 

6.6.2                     Upon
Substantial Completion of the entire Work or, if applicable, any portion of the
Work, Owner shall release to Design-Builder all retained amounts relating, as
applicable, to the entire Work or completed portion of the Work, less an amount
equal to the reasonable value of all remaining or incomplete items of Work as
noted in the Certificate of Substantial Completion. 

 

6.6.3                     Owner,
at its option, may use a portion of the Work which has been determined to be
substantially complete, provided, however, that (i) a Certificate of
Substantial Completion has been issued for the portion of Work addressing the
items set forth in Section 6.6.1 above, (ii) Design-Builder and Owner have
obtained the consent of their sureties and insurers, and to the extent
applicable, the appropriate government authorities having jurisdiction over the
Project, and (iii) Owner and Design-Builder agree that Owner’s use or occupancy
will not interfere with Design-Builder’s completion of the remaining Work.

 

6.7                               Final
Payment

 

6.7.1                     After
receipt of a Final Application for Payment from Design-Builder, Owner shall
make final payment by the time required in the Agreement, provided that
Design-Builder has completed all of the Work in conformance with the Contract
Documents. 

 

6.7.2                     At
the time of submission of its Final Application for Payment, Design-Builder
shall provide the following information: 

 

.1                  an affidavit that there are no
claims, obligations or liens outstanding or unsatisfied for labor, services,
material, equipment, taxes or other items performed, furnished or incurred for
or in connection with the Work which will in any way affect Owner’s interests; 

 

.2                  a general release executed by
Design-Builder waiving, upon receipt of final payment by Design-Builder, all
claims, except those claims previously made in writing to Owner and remaining
unsettled at the time of final payment; 

 

.3                  consent of Design-Builder’s surety,
if any, to final payment;

 

.4                  all operating manuals, warranties and
other deliverables required by the Contract Documents; and 

 

.5                  certificates of insurance confirming
that required coverages will remain in effect consistent with the requirements
of the Contract Documents.

 

6.7.3                     Upon
making final payment, Owner waives all claims against Design-Builder except
claims relating to (i) Design-Builder’s failure to satisfy its payment
obligations, if such failure affects Owner’s interests, (ii) Design-Builder’s
failure to complete the Work consistent with the Contract Documents, including
defects appearing after Substantial

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998 Design-Build
Institute of America

 

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Completion and (iii) the
terms of any special warranties required by the Contract Documents.

 

Article 7

 

Indemnification

 

7.1                               Patent
and Copyright Infringement

 

7.1.1                     Design-Builder
shall defend any action or proceeding brought against Owner based on any claim
that the Work, or any part thereof, or the operation or use of the Work or any
part thereof, constitutes infringement of any United States patent or
copyright, now or hereafter issued. 
Owner shall give prompt written notice to Design-Builder of any such
action or proceeding and will reasonably provide authority, information and
assistance in the defense of same. 
Design-Builder shall indemnify and hold harmless Owner from and against
all damages and costs, including but not limited to attorneys’ fees and
expenses awarded against Owner or Design-Builder in any such action or
proceeding.  Design-Builder agrees to
keep Owner informed of all developments in the defense of such actions.  

 

7.1.2                     If
Owner is enjoined from the operation or use of the Work, or any part thereof,
as the result of any patent or copyright suit, claim, or proceeding,
Design-Builder shall at its sole expense take reasonable steps to procure the
right to operate or use the Work.  If
Design-Builder cannot so procure such right within a reasonable time,
Design-Builder shall promptly, at Design-Builder’s option and at
Design-Builder’s expense, (i) modify the Work so as to avoid infringement of
any such patent or copyright or (ii) replace said Work with Work that does not
infringe or violate any such patent or copyright.

 

7.1.3                     Sections
7.1.1 and 7.1.2 above shall not be applicable to any suit, claim or proceeding
based on infringement or violation of a patent or copyright (i) relating solely
to a particular process or product of a particular manufacturer specified by
Owner and not offered or recommended by Design-Builder to Owner or (ii) arising
from modifications to the Work by Owner or its agents after acceptance of the Work.  If the suit, claim or proceeding is based
upon events set forth in the preceding sentence, Owner shall defend, indemnify
and hold harmless Design-Builder to the same extent Design-Builder is obligated
to defend, indemnify and hold harmless Owner in Section 7.1.1 above.

 

7.1.4                     The
obligations set forth in this Section 7.1 shall constitute the sole
agreement between the parties relating to liability for infringement of
violation of any patent or copyright.  

 

7.2                               Tax Claim Indemnification

 

7.2.1                     If,
in accordance with Owner’s direction, an exemption for all or part of the Work
is claimed for taxes, Owner shall indemnify, defend and hold harmless
Design-Builder from and against any liability, penalty, interest, fine, tax
assessment, attorneys’ fees or other expenses or costs incurred by
Design-Builder as a result of any action taken by Design-Builder in accordance
with Owner’s directive.

 

7.3                               Payment Claim Indemnification

 

7.3.1                     Providing
that Owner is not in breach of its contractual obligation to make payments to
Design-Builder for the Work, Design-Builder shall indemnify, defend and hold
harmless Owner from any claims or mechanic’s liens brought against Owner or
against the Project as a result of the failure of Design-Builder, or those for
whose acts it is responsible, to pay for any services, materials, labor,
equipment, taxes or other items or obligations furnished or incurred for or in
connection with the Work.  Within three
(3) days of receiving written notice from Owner that such a claim or mechanic’s
lien has been filed, Design-Builder shall commence to take the steps necessary
to discharge said claim or lien, including, if necessary, the furnishing of a
mechanic’s lien bond.  If Design-Builder
fails to do so, Owner will have the right to discharge the claim or lien and
hold Design-Builder liable for costs and expenses incurred, including
attorneys’ fees.

 

7.4                               Design-Builder’s
General Indemnification

 

7.4.1                     Design-Builder,
to the fullest extent permitted by law, shall indemnify, hold harmless and defend
Owner, its officers, directors, employees and agents from and against claims,
losses, damages, liabilities, including attorneys’ fees and expenses, for
bodily injury, sickness or death, and property damage or destruction (other
than to the Work itself) to the extent resulting from the negligent acts or

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998
Design-Build Institute of America

 

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omissions of
Design-Builder, Design Consultants, Subcontractors, anyone employed directly or
indirectly by any of them or anyone for whose acts any of them may be liable.

 

7.4.2                     If
an employee of Design-Builder, Design Consultants, Subcontractors, anyone employed
directly or indirectly by any of them or anyone for whose acts any of them may
be liable has a claim against Owner, its officers, directors, employees, or
agents, Design-Builder’s indemnity obligation set forth in Section 7.4.1
above shall not be limited by any limitation on the amount of damages,
compensation or benefits payable by or for Design-Builder, Design Consultants,
Subcontractors, or other entity under any employee benefit acts, including
workers’ compensation or disability acts.

 

7.5                               Owner’s
General Indemnification

 

7.5.1                     Owner,
to the fullest extent permitted by law, shall indemnify, hold harmless and
defend Design-Builder and any of Design-Builder’s officers, directors,
employees, or agents from and against claims, losses, damages, liabilities,
including attorneys’ fees and expenses, for bodily injury, sickness or death,
and property damage or destruction (other than to the Work itself) to the
extent resulting from the negligent acts or omissions of Owner, it’s officers,
directors, employees, agents, and Owner’s separate contractors or anyone for
whose acts any of them may be liable.

 

Article 8

 

Time

 

8.1                               Obligation
to Achieve the Contract Times

 

8.1.1                     Design-Builder
agrees that it will commence performance of the Work and achieve the Contract
Time(s) in accordance with Article 5 of the Agreement.

 

8.2                               Delays
to the Work

 

8.2.1                     If
Design-Builder is delayed in the performance of the Work due to acts,
omissions, conditions, events, or circumstances beyond its control and due to
no fault of its own or those for whom Design-Builder is responsible, the
Contract Time(s) for performance shall be reasonably extended by Change
Order.  By way of example, events that
will entitle Design-Builder to an extension of the Contract Time(s) include
acts or omissions of Owner or anyone under Owner’s control (including separate
contractors), changes in the Work, Differing Site Conditions, Hazardous
Conditions, wars, floods, labor disputes, unusual delay in transportation,
epidemics abroad, earthquakes, adverse weather conditions not reasonably
anticipated, and other acts of God.  

 

8.2.2                     In
addition to Design-Builder’s right to a time extension for those events set
forth in Section 8.2.1 above, Design-Builder shall also be entitled to an
appropriate adjustment of the Contract Price provided, however, that the
Contract Price shall not be adjusted for those events set forth in
Section 8.2.1 above that are beyond the control of both Design-Builder and
Owner, including the events of war, floods, labor disputes, earthquakes,
epidemics, adverse weather conditions not reasonably anticipated, and other
acts of God.  

 

Article 9

 

Changes
to the Contract Price and Time

 

9.1                               Change
Orders

 

9.1.1                     A
Change Order is a written instrument issued after execution of the Agreement
signed by Owner and Design-Builder, stating their agreement upon all of the
following:

 

.1                  The scope of the change in the Work;

 

.2                  The amount of the adjustment to the
Contract Price; and

 

.3                  The extent of the adjustment to the
Contract Time(s).

 

9.1.2                     All changes
in the Work authorized by applicable Change Order shall be performed under the
applicable conditions of the Contract Documents.  Owner and Design-Builder shall negotiate in good faith and as
expeditiously as possible the appropriate adjustments for such changes.

 

9.1.3                     If
Owner requests a proposal for a change in the Work from Design-Builder and
subsequently elects not to proceed with the change, a Change Order shall be
issued to reimburse Design-Builder

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998 Design-Build
Institute of America

 

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for reasonable costs
incurred for estimating services, design services and services involved in the preparation
of proposed revisions to the Contract Documents.

 

9.2                               Work
Change Directives

 

9.2.1                     A
Work Change Directive is a written order prepared and signed by Owner,
directing a change in the Work prior to agreement on an adjustment in the
Contract Price and/or the Contract Time(s).

 

9.2.2                     Owner
and Design-Builder shall negotiate in good faith and as expeditiously as
possible the appropriate adjustments for the Work Change Directive.  Upon reaching an agreement, the parties
shall prepare and execute an appropriate Change Order reflecting the terms of
the agreement.

 

9.3                               Minor
Changes in the Work

 

9.3.1                     Minor
changes in the Work do not involve an adjustment in the Contract Price and/or
Contract Time(s) and do not materially and adversely affect the Work, including
the design, quality, performance and workmanship required by the Contract
Documents.  Design-Builder may make
minor changes in the Work consistent with the intent of the Contract Documents,
provided, however that Design-Builder shall promptly inform Owner, in writing,
of any such changes and record such changes on the documents maintained by
Design-Builder.

 

9.4                               Contract
Price Adjustments

 

9.4.1                     The
increase or decrease in Contract Price resulting from a change in the Work
shall be determined by one or more of the following methods:

 

.1                  Unit prices set forth in the
Agreement or as subsequently agreed to between the parties;

 

.2                  A mutually accepted, lump sum,
properly itemized and supported by sufficient substantiating data to permit
evaluation by Owner;

 

.3                  Costs, fees and any other markups set
forth in the Agreement; and

 

.4                  If an increase or decrease cannot be
agreed to as set forth in items .1 through .3 above and Owner issues a Work
Change Directive, the cost of the change of the Work shall be determined by the
reasonable expense and savings in the performance of the Work resulting from
the change, including a reasonable overhead and profit, as may be set forth in
the Agreement.  If the net result of
both additions and deletions to the Work is an increase in the Contract Price,
overhead and profit shall be calculated on the basis of the net increase to the
Contract Price.  If the net result of
both additions and deletions to the Work is a decrease in the Contract Price,
there shall be no overhead or profit adjustment to the Contract Price.  Design-Builder shall maintain a documented,
itemized accounting evidencing the expenses and savings associated with such
changes.

 

9.4.2                     If
unit prices are set forth in the Contract Documents or are subsequently agreed
to by the parties, but application of such unit prices will cause substantial
inequity to Owner or Design-Builder because of differences in the character or
quantity of such unit items as originally contemplated, such unit prices shall
be equitably adjusted.

 

9.4.3                     If
Owner and Design-Builder disagree upon whether Design-Builder is entitled to be
paid for any services required by Owner, or if there are any other
disagreements over the scope of Work or proposed changes to the Work, Owner and
Design-Builder shall resolve the disagreement pursuant to Article 10
hereof.  As part of the negotiation
process, Design-Builder shall furnish Owner with a good faith estimate of the
costs to perform the disputed services in accordance with Owner’s
interpretations.  If the parties are
unable to agree and Owner expects Design-Builder to perform the services in
accordance with Owner’s interpretations, Design-Builder shall proceed to
perform the disputed services, conditioned upon Owner issuing a written order
to Design-Builder (i) directing Design-Builder to proceed and (ii) specifying
Owner’s interpretation of the services that are to be performed.  If this occurs, Design-Builder shall be
entitled to submit in its Applications for Payment an amount equal to fifty

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998
Design-Build Institute of America

 

14

 

percent (50%) of its
reasonable estimated direct cost to perform the services, and Owner agrees to
pay such amounts, with the express understanding that (i) such payment by
Owner does not prejudice Owner’s right to argue that it has no responsibility
to pay for such services and (ii) receipt of such payment by Design-Builder
does not prejudice Design-Builder’s right to seek full payment of the disputed
services if Owner’s order is deemed to be a change to the Work.

 

9.5                               Emergencies

 

9.5.1                     In
any emergency affecting the safety of persons and/or property, Design-Builder
shall act, at its discretion, to prevent threatened damage, injury or
loss.  Any change in the Contract Price
and/or Contract Time(s) on account of emergency work shall be determined as
provided in this Article 9.

 

Article 10

 

Contract
Adjustments and Disputes

 

10.1                        Requests for Contract Adjustments and
Relief

 

10.1.1              If
either Design-Builder or Owner believes that it is entitled to relief against
the other for any event arising out of or related to the Work or Project, such
party shall provide written notice to the other party of the basis for its
claim for relief.  Such notice shall, if
possible, be made prior to incurring any cost or expense and in accordance with
any specific notice requirements contained in applicable sections of these
General Conditions of Contract.  In the
absence of any specific notice requirement, written notice shall be given
within a reasonable time, not to exceed twenty-one (21) days, after the
occurrence giving rise to the claim for relief or after the claiming party
reasonably should have recognized the event or condition giving rise to the
request, whichever is later.  Such
notice shall include sufficient information to advise the other party of the
circumstances giving rise to the claim for relief, the specific contractual
adjustment or relief requested and the basis of such request. 

 

10.2                        Dispute Avoidance and Resolution

 

10.2.1              The parties are
fully committed to working with each other throughout the Project and agree to
communicate regularly with each other at all times so as to avoid or minimize
disputes or disagreements.  If disputes
or disagreements do arise, Design-Builder and Owner each commit to resolving
such disputes or disagreements in an amicable, professional and expeditious
manner so as to avoid unnecessary losses, delays and disruptions to the
Work.  

 

10.2.2              Design-Builder
and Owner will first attempt to resolve disputes or disagreements at the field
level through discussions between Design-Builder’s Representative and Owner’s
Representative.

 

10.2.3              If a dispute or
disagreement cannot be resolved through Design-Builder’s Representative and
Owner’s Representative, Design-Builder’s Senior Representative and Owner’s
Senior Representative, upon the request of either party, shall meet as soon as
conveniently possible, but in no case later than thirty (30) days after such a
request is made, to attempt to resolve such dispute or disagreement.  Prior to any meetings between the Senior
Representatives, the parties will exchange relevant information that will
assist the parties in resolving their dispute or disagreement.  

 

10.2.4              If
after meeting the Senior Representatives determine that the dispute or
disagreement cannot be resolved on terms satisfactory to both parties, the
parties shall submit the dispute or disagreement to non-binding mediation.  The mediation shall be conducted by a
mutually agreeable impartial mediator, or if the parties cannot so agree, a
mediator designated by the American Arbitration Association (“AAA”) pursuant to
its Construction Industry Mediation Rules. 
The mediation will be governed by and conducted pursuant to a mediation
agreement negotiated by the parties or, if the parties cannot so agree, by
procedures established by the mediator. 

 

10.3                        Arbitration 

 

10.3.1              Any claims,
disputes or controversies between the parties arising out of or relating to the
Agreement, or the breach thereof, which have not been resolved in accordance
with the procedures set forth in Section 10.2 above shall be decided by
arbitration in accordance with the Construction Industry Arbitration Rules of
the AAA then in effect, unless the parties mutually agree otherwise. 

 

10.3.2              The award of the
arbitrator(s) shall be final and binding upon the parties without the right of
appeal to the courts.  Judgment may be
entered

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998 Design-Build
Institute of America

 

15

 

upon it in accordance
with applicable law by any court having jurisdiction thereof.

 

10.3.3              Design-Builder
and Owner expressly agree that any arbitration pursuant to this
Section 10.3 may be joined or consolidated with any arbitration involving
any other person or entity (i) necessary to resolve the claim, dispute or
controversy, or (ii) substantially involved in or affected by such claim,
dispute or controversy.  Both
Design-Builder and Owner will include appropriate provisions in all contracts
they execute with other parties in connection with the Project to require such
joinder or consolidation.

 

10.3.4              The
prevailing party in any arbitration, or any other final, binding dispute
proceeding upon which the parties may agree, shall be entitled to recover from
the other party reasonable attorneys’ fees and expenses incurred by the
prevailing party.

 

10.4                        Duty
to Continue Performance

 

10.4.1              Unless provided
to the contrary in the Contract Documents, Design-Builder shall continue to
perform the Work and Owner shall continue to satisfy its payment obligations to
Design-Builder, pending the final resolution of any dispute or disagreement
between Design-Builder and Owner. 

 

10.5                        CONSEQUENTIAL
DAMAGES

 

10.5.1              NOTWITHSTANDING
ANYTHING HEREIN TO THE CONTRARY (EXCEPT AS SET FORTH IN SECTION 10.5.2
BELOW), NEITHER DESIGN-BUILDER NOR OWNER SHALL BE LIABLE TO THE OTHER FOR ANY
CONSEQUENTIAL LOSSES OR DAMAGES, WHETHER ARISING IN CONTRACT, WARRANTY, TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, INCLUDING BUT NOT
LIMITED TO LOSSES OF USE, PROFITS, BUSINESS, REPUTATION OR FINANCING.

 

10.5.2              The
consequential damages limitation set forth in Section 10.5.1 above is not
intended to affect the payment of liquidated damages, if any, set forth in
Article 5 of the Agreement, which both parties recognize has been established,
in part, to reimburse Owner for some damages that might otherwise be deemed to
be consequential.

 

Article 11

 

Stop
Work and Termination for Cause

 

11.1                        Owner’s
Right to Stop Work

 

11.1.1              Owner
may, without cause and for its convenience, order Design-Builder in writing to
stop and suspend the Work.  Such
suspension shall not exceed sixty (60) consecutive days or aggregate more than
ninety (90) days during the duration of the Project.

 

11.1.2              Design-Builder
is entitled to seek an adjustment of the Contract Price and/or Contract Time(s)
if its cost or time to perform the Work has been adversely impacted by any
suspension of stoppage of work by Owner.

 

11.2                        Owner’s
Right to Perform and Terminate for Cause

 

11.2.1              If
Design-Builder persistently fails to (i) provide a sufficient number of skilled
workers, (ii) supply the materials required by the Contract Documents, (iii)
comply with applicable Legal Requirements, (iv) timely pay, without cause,  Design Consultants or Subcontractors, (v)
prosecute the Work with promptness and diligence to ensure that the Work is
completed by the Contract Time(s), as such times may be adjusted, or (vi)
perform material obligations under the Contract Documents, then Owner, in
addition to any other rights and remedies provided in the Contract Documents or
by law, shall have the rights set forth in Sections 11.2.2 and 11.2.3
below.  

 

11.2.2              Upon
the occurrence of an event set forth in Section 11.2.1 above, Owner may
provide written notice to Design-Builder that it intends to terminate the
Agreement unless the problem cited is cured, or commenced to be cured, within
seven (7) days of Design-Builder’s receipt of such notice.  If Design-Builder fails to cure, or
reasonably commence to cure, such problem, then Owner may give a second written
notice to Design-Builder of its intent to terminate within an additional seven
(7) day period.  If Design-Builder,
within such second seven (7) day period, fails to cure, or reasonably commence
to cure, such problem, then Owner may declare the Agreement terminated for
default by providing written notice to Design-Builder of such declaration.  

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998
Design-Build Institute of America

 

16

 

11.2.3              Upon
declaring the Agreement terminated pursuant to Section 11.2.2 above, Owner
may enter upon the premises and take possession, for the purpose of completing
the Work, of all materials, equipment, scaffolds, tools, appliances and other
items thereon, which have been purchased or provided for the performance of the
Work, all of which Design-Builder hereby transfers, assigns and sets over to
Owner for such purpose, and to employ any person or persons to complete the
Work and provide all of the required labor, services, materials, equipment and
other items.  In the event of such
termination, Design-Builder shall not be entitled to receive any further
payments under the Contract Documents until the Work shall be finally completed
in accordance with the Contract Documents. 
At such time, if the unpaid balance of the Contract Price exceeds the
cost and expense incurred by Owner in completing the Work, such excess shall be
paid by Owner to Design-Builder. 
Notwithstanding the preceding sentence, if the Agreement establishes a
Guaranteed Maximum Price, Design-Builder will only be entitled to be paid for
Work performed prior to its default.  If
Owner’s cost and expense of completing the Work exceeds the unpaid balance of
the Contract Price, then Design-Builder shall be obligated to pay the
difference to Owner.  Such costs and
expense shall include not only the cost of completing the Work, but also
losses, damages, costs and expense, including attorneys’ fees and expenses,
incurred by Owner in connection with the reprocurement and defense of claims
arising from Design-Builder’s default, subject to the waiver of consequential
damages set forth in Section 10.5 hereof. 

 

11.2.4              If
Owner improperly terminates the Agreement for cause, the termination for cause
will be converted to a termination for convenience in accordance with the
provisions of Article 8 of the Agreement.

 

11.3                        Design-Builder’s
Right to Stop Work 

 

11.3.1              Design-Builder
may, in addition to any other rights afforded under the Contract Documents or
at law, stop work for the following reasons:

 

.1                  Owner’s failure to provide financial
assurances as required under Section 3.3 hereof; or

 

.2                  Owner’s failure to pay amounts
properly due under Design-Builder’s Application for Payment. 

 

11.3.2              Should
any of the events set forth in Section 11.3.1 above occur, Design-Builder
has the right to provide Owner with written notice that Design-Builder will
stop work unless said event is cured within seven (7) days from Owner’s receipt
of Design-Builder’s notice.  If Owner
does not cure the problem within such seven (7) day period, Design-Builder may
stop work.  In such case, Design-Builder
shall be entitled to make a claim for adjustment to the Contract Price and
Contract Time(s) to the extent it has been adversely impacted by such
stoppage.  

 

11.4                        Design-Builder’s
Right to Terminate for Cause

 

11.4.1              Design-Builder,
in addition to any other rights and remedies provided in the Contract Documents
or by law, may terminate the Agreement for cause for the following
reasons:  

 

.1                  The Work has been stopped for sixty
(60) consecutive days, or more than ninety (90) days during the duration of the
Project, because of court order, any government authority having jurisdiction
over the Work, or orders by Owner under Section 11.1.1 hereof, provided
that such stoppages are not due to the acts or omissions of Design-Builder or
anyone for whose acts Design-Builder may be responsible.

 

.2                  Owner’s failure to provide
Design-Builder with any information, permits or approvals that are Owner’s
responsibility under the Contract Documents which result in the Work being
stopped for sixty (60) consecutive days, or more than ninety (90) days during
the duration of the Project, even though Owner has not ordered Design-Builder
in writing to stop and suspend the Work pursuant to Section 11.1.1 hereof.

 

.3                  Owner’s failure to cure the problems
set forth in Section 11.3.1 above after Design-Builder has stopped the
Work.

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998 Design-Build
Institute of America

 

17

 

11.4.2              Upon
the occurrence of an event set forth in Section 11.4.1 above,
Design-Builder may provide written notice to Owner that it intends to terminate
the Agreement unless the problem cited is cured, or commenced to be cured,
within seven (7) days of Owner’s receipt of such notice.  If Owner fails to cure, or reasonably
commence to cure, such problem, then Design-Builder may give a second written
notice to Owner of its intent to terminate within an additional seven (7) day
period.  If Owner, within such second
seven (7) day period, fails to cure, or reasonably commence to cure, such
problem, then Design-Builder may declare the Agreement terminated for default
by providing written notice to Owner of such declaration.  In such case, Design-Builder shall be
entitled to recover in the same manner as if Owner had terminated the Agreement
for its convenience under Article 8 of the Agreement.

 

11.5                        Bankruptcy
of Owner or Design-Builder

 

11.5.1              If
either Owner or Design-Builder institutes or has instituted against it a case
under the United States Bankruptcy Code (such party being referred to as the
“Bankrupt Party”), such event may impair or frustrate the Bankrupt Party’s
ability to perform its obligations under the Contract Documents.  Accordingly, should such event occur:

 

.1                  The Bankrupt Party, its trustee or
other successor, shall furnish, upon request of the non-Bankrupt Party,
adequate assurance of the ability of the Bankrupt Party to perform all future
material obligations under the Contract Documents, which assurances shall be
provided within ten (10) days after receiving notice of the request; and

 

.2                  The Bankrupt Party shall file an
appropriate action within the bankruptcy court to seek assumption or rejection
of the Agreement within sixty (60) days of the institution of the bankruptcy
filing and shall diligently prosecute such action.

 

If the Bankrupt Party
fails to comply with its foregoing obligations, the non-Bankrupt Party shall be
entitled to request the bankruptcy court to reject the Agreement, declare the
Agreement terminated and pursue any other recourse available to the
non-Bankrupt Party under this Article 11.

 

11.5.2              The
rights and remedies under Section 11.5.1 above shall not be deemed to
limit the ability of the non-Bankrupt Party to seek any other rights and
remedies provided by the Contract Documents or by law, including its ability to
seek relief from any automatic stays under the United States Bankruptcy Code or
the right of Design-Builder to stop Work under any applicable provision of
these General Conditions of Contract.

 

Article 12

 

Miscellaneous

 

12.1                        Assignment

 

12.1.1              Neither
Design-Builder nor Owner shall, without the written consent of the other
assign, transfer or sublet any portion or part of the Work or the obligations
required by the Contract Documents.

 

12.2                        Successorship

 

12.2.1              Design-Builder
and Owner intend that the provisions of the Contract Documents are binding upon
the parties, their employees, agents, heirs, successors and assigns.

 

12.3                        Governing
Law

 

12.3.1              The
Agreement and all Contract Documents shall be governed by the laws of the place
of the Project, without giving effect to its conflict of law principles.

 

12.4                        Severability

 

12.4.1              If
any provision or any part of a provision of the Contract Documents shall be
finally determined to be superseded, invalid, illegal, or otherwise
unenforceable pursuant to any applicable Legal Requirements, such determination
shall not impair or otherwise affect the validity, legality, or enforceability
of the remaining provision or parts of the provision of the Contract Documents,
which shall remain in full force and effect as if the unenforceable provision
or part were deleted. 

 

12.5                        No Waiver

 

12.5.1              The
failure of either Design-Builder or Owner to insist, in any one or more
instances, on the performance of any of the obligations required

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998
Design-Build Institute of America

 

18

 

by the other under the
Contract Documents shall not be construed as a waiver or relinquishment of such
obligation or right with respect to future performance.

 

12.6                        Headings

 

12.6.1              The
headings used in these General Conditions of Contract, or any other Contract
Document, are for ease of reference only and shall not in any way be construed
to limit or alter the meaning of any provision.

 

12.7                        Notice

 

12.7.1              Whenever
the Contract Documents require that notice be provided to the other party,
notice will be deemed to have been validly given (i) if delivered in person to
the individual intended to receive such notice, (ii) four (4) days after being
sent by registered or certified mail, postage prepaid to the address indicated
in the Agreement or (iii) if transmitted by facsimile, by the time stated in a
machine generated confirmation that notice was received at the facsimile number
of the intended recipient.

 

12.8                        Amendments

 

12.8.1              The
Contract Documents may not be changed, altered, or amended in any way except in
writing signed by a duly authorized representative of each party.

 

DBIA Document No.
535  •  Standard
Form of General Conditions

of
Contract Between Owner and Design-Builder

© 1998 Design-Build
Institute of America

 

19

 

SUPPLEMENTARY
CONDITIONS

UNITED WISCONSIN GRAIN PRODUCERS, LLC

October 8, 2003

 

These Supplementary Conditions amend or supplement the Standard Form of
General Conditions of Contract between Owner and Design-Builder (DBIA Document
No. 535, 1998 Edition) and other provisions of the Contract Documents as
indicated below.  All provisions, which
are not so amended or supplemented, remain in full force and effect.

 

SC – 1.2 Basic Definitions

 

The terms used in these Supplementary Conditions which are defined in
the Standard Form of General Conditions of Contract between Owner and Design-Builder
(DBIA Document No. 535, 1998 Edition) have the meanings assigned to them in the
General Conditions.

 

SC –
1.2.1 Agreement

 

Delete Section 1.2.1
of the General Conditions in its entirety and insert the following in its
place:

 

Agreement refers to the executed Standard
Form of Agreement between Owner and Design-Builder – Lump Sum (DBIA Document
No. 525, 1998 Edition).

 

SC –
1.2.11 Substantial Completion

 

Amend Section 1.2.11 of the General Conditions by striking out the
following words: or an agreed upon portion of the Work.

 

Add the following
language at the end of Section 1.2.11 of the General Conditions.  Substantial Completion shall be attained at
the point in time when the Facility is ready to begin operation for its
intended use (ethanol production).

 

As so amended,
Section 1.2.11 reads as follows:

 

Substantial Completion is the date on
which the Work is sufficiently complete so that Owner can occupy and use the
Project for its intended purposes. 
Substantial Completion shall be attained at the point in time when the
Facility is ready to begin operation for its intended use (ethanol production).

 

SC –
2.2.1

 

Amend Section 2.2.1
of the General Conditions by adding to the end of 2.2.1:  - Except as provided by Exhibit D – License
of Proprietary Property of ICM, Inc. whereby ICM, Inc. has joined for purposes
only of that Exhibit.

 

SC –
2.3.1

 

Amend the second sentence of Section 2.3.1 of the General
Conditions by striking out the words: Performance Standard Requirements; and
inserting the following: Exhibit A: Performance Guarantee Criteria; and as so
amended, Section 2.3.1 reads as follows:

 

The standard of care for all design professional services performed to
execute the Work shall be the care and skill ordinarily used by members of the
design profession practicing under similar conditions at the same time and
locality of the Project. 
Notwithstanding the preceding sentence, if the parties agree upon
specific performance standards for any aspect of the Work, which standards are
to be set forth in an

 

1

 

SUPPLEMENTARY CONDITIONS

UNITED WISCONSIN GRAIN PRODUCERS, LLC

October 8, 2003

 

exhibit to the Agreement entitled “Exhibit A: Performance Guarantee
Criteria,” the design professional services shall be performed to achieve such
standards.

 

SC –
2.6.1

 

Amend Section 2.6.1
of the General Conditions by striking out the words: an Owner’s Permit List;
and inserting the following: Exhibit C: Owner’s Responsibilities; and as so
amended, Section 2.6.1 reads as follows:

 

Except as identified in
Exhibit C: Owner’s Responsibilities List attached as an exhibit to the
Agreement, Design-Builder shall obtain and pay for all necessary permits,
approvals, licenses, government charges and inspection fees required for the
prosecution of the Work by any government or quasi-government entity having
jurisdiction over the Project.

 

SC – 2.10.1

 

Amend Section 2.10.1
of the General Conditions by striking out the words from the sixth line of that
Section: “or any portion of the Work”; and as so amended, Section 2.10.1
reads as follows:

 

Design-Builder agrees to
correct any Work that is found to not be in conformance with the Contract
Documents, including that part of the Work subject to Section 2.9 hereof,
within a period of one year from the date of Substantial Completion of the
Work, or within such longer period to the extent required by the Contract
Documents.

 

SC –
3.5.1

 

Amend Section 3.5.1 of the General Conditions by striking out the
words: the Owner’s Permit List; and inserting the following: Exhibit C: Owner’s
Responsibilities; and as so amended, Section 3.5.1 reads as follows:

 

Owner shall obtain and pay for all necessary permits, approvals,
licenses, government charges and inspection fees set forth in Exhibit C:
Owner’s Responsibilities attached as an exhibit to the Agreement.

 

SC –
6.4.1

 

Amend the first sentence of Section 6.4.1 of the General
Conditions by inserting the phrase: in accordance with Section 6.3 above;
and as so amended, Section 6.4.1 reads as follows:

 

If Owner fails to pay Design-Builder any amount that becomes due, in
accordance with Section 6.3 above, Design-Builder, in addition to all
other remedies provided in the Contract Documents, may stop Work pursuant to
Section 11.3 hereof.  All payments
due and unpaid shall bear interest at the rate set forth in the Agreement.

 

SC –
6.6.1

 

Amend Section 6.6.1 of the General Conditions by striking out the
words from the second and third lines of that Section: “, or to the extent
permitted in the Contract Documents, a portion of the Work,”; and by striking
out the words from the twelfth and thirteenth lines of that Section: “or
portion thereof”; and as

 

2

 

SUPPLEMENTARY CONDITIONS

UNITED WISCONSIN GRAIN PRODUCERS, LLC

October 8, 2003

 

so amended, Section 6.6.1 reads as follows:

 

Design-Builder shall notify Owner when it believes the Work is
substantially complete.  Within five (5)
days of Owner’s receipt of Design-Builder’s notice, Owner and Design-Builder
will jointly inspect such Work to verify that it is substantially complete in
accordance with the requirements of the Contract Documents.  If such Work is substantially complete,
Owner shall prepare and issue a Certificate of Substantial Completion that will
set forth (i) the date of Substantial Completion of the Work, (ii) the
remaining items of Work that have to be completed before final payment, (iii)
provisions (to the extent not already provided in the Contract Documents)
establishing Owner’s and Design-Builder’s responsibility for the Project’s
security, maintenance, utilities and insurance pending final payment and (iv)
an acknowledgment that warranties commence to run on the date of Substantial
Completion, except as may otherwise be noted in the Certificate of Substantial
Completion.

 

SC –
6.6.2

 

Amend Section 6.6.2 of the General Conditions by striking out the
words from the second line of that Section: 
“or, if applicable, any portion of the Work”; and by striking out the
words from the fifth line of that Section: “or completed portion of the Work”;
and as so amended, Section 6.6.2 reads as follows:

 

Upon Substantial Completion of the entire Work, Owner shall release to
Design-Builder all retained amounts relating, as applicable, to the entire
Work, less an amount equal to the reasonable value of all remaining or
incomplete items of Work as noted in the Certificate of Substantial Completion.

 

SC –
11.3.2

 

Delete Section 11.3.2 of the General Conditions in its entirety
and insert the following in its place:

 

Should any of the events set forth in Section 11.3.1 above occur,
Design-Builder has the right to provide Owner with written notice that
Design-Builder will stop work unless said event is cured within seven (7) days
from Owner’s receipt of Design-Builder’s notice.  If Owner fails to cure, or reasonably commence to cure, such
problem, then Design-Builder may give a second written notice to Owner of its
intent to stop work within an additional seven (7) day period.  If Owner, within such second seven (7) day
period, fails to cure, or reasonably commence to cure, such problem, then
Design-Builder may stop work.  In such
case, Design-Builder shall be entitled to make a claim for adjustment to the
Contract Price and Contract Time(s) to the extent it has been adversely impacted
by such stoppage.

 

3

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