Document:

EXHIBIT 10.1

 

 

LEASE

 

THIS
LEASE ("Lease'')
is made this 31 day of
December,
2022 (the "Effective Date"),
by and between TPB MERCHANTS
ICE LLC, a Texas limited liability company (hereinafter referred to as "Landlord'')
and SCORPION BIOLOGICAL SERVICES, INC., a Delaware corporation (hereinafter referred to as "Tenant'').

 

WHEREAS,
Landlord is the owner of a certain
parcel of real property located at 1305 E. Houston
Street, San Antonio, Texas 78205 as more particularly described in Exhibit "A",
which real property is improved by two office
buildings commonly known as “Merchants
Ice Main Building” and “Eddie’s
Workshop” (collectively, the “Property”).
The Property is adjacent to three other office buildings that together comprise the Merchant’s Ice
development (collectively referred to herein as the
"Complex", including the buildings,
improvements and underlying and adjacent land);
and

 

WHEREAS,
Tenant desires to lease space in the Property and
Landlord is willing to lease Tenant space in
the Property, upon the terms, conditions, covenants and agreements set forth herein.

 

NOW,
THEREFORE, the parties hereto, intending legally to be bound, hereby covenant and
agree as set forth below.

 

		1.	THE PREMISES

 

Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord for the Term (as defined below) and upon the terms, conditions, covenants,
and agreements hereinafter provided, the space (the "Premises") that is currently
estimated to be 8,042 square feet of rentable area (the "Premises Rentable Square Feet"), which in any event constitutes
the entire rentable area of the structure known as the "Eddie’s Workshop" that is located on the Property. The Premises
are labeled as "Scorpion 8,042 SF" on Exhibit "B"
attached hereto and made a part hereof. The Lease of the Premises includes the non- exclusive
right of Tenant to use, in
common with others
and in accordance with
the Rules and Regulations
attached as Exhibit "D",
those certain areas (the
"Common Areas")
and facilities of
the Property which are from time
to time provided and
specifically designated by Landlord
for the use of tenants of
the Property. The Property
is part of
the Complex and subject
to Operating Expenses for
Common Area maintenance and operations
assessed by Texas Research and
Technology Foundation (TRTF) as owner and manager
of the Complex. The
Common Areas include the grounds, landscaped areas, outside sitting
areas, sidewalks, courtyards, walkways, and designated
parking spaces located within the Complex (collectively, the “Complex
Common Areas”). TRTF has agreed with
Landlord to maintain such Common Areas
in good order
and condition consistent with other Class-A
office building projects in San Antonio,
Texas, normal wear and tear excepted,
and subject to
Landlord's
right to charge the tenants of
the Property for Operating Expenses as set forth
in Section 4E
of this Lease.

 

		2.	USE OF PREMISES

 

Tenant
will use and occupy the Premises solely for general office, laboratory, research, analytical,
and/or biomanufacturing purposes, subject to Applicable Laws (as hereinafter defined); without the prior written consent of Landlord,
the Premises will not be used for any other purpose. Without limiting the foregoing: (a) Tenant
may utilize the Premises to perform the daily requirements of a large molecule contract development and manufacturing organization focusing
on the underserved market of Immuno-assay, biomarker, and GMP
manufacturing; (b) Tenant may focus its efforts on Biological Manufacturing (Small scale process
development and production of GMP material to support IND, Phase
I/II clinical trials). Tenant will not use or occupy the Premises for any unlawful purpose, or for any purpose that will
constitute a nuisance under applicable law, and will comply with all present and future laws,

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ordinances,
regulations, and orders of the United States of America, State of Texas, Bexar County, and
any other governmental authority having jurisdiction over the Premises (''Applicable
Laws"). Tenant acknowledges that the Complex
has been listed on the National Register of Historic Places and that the Landlord has legal obligations to maintain the Premises in accordance
with the requirements of the Standards of Rehabilitation set forth in 36 C.F.R. 67.7. Tenant
agrees not to make any changes to the Premises, whether interior or exterior, without the prior consent of Landlord and only in accordance
with an approved Part 2 historic tax credit application from the National Park Service “NPS”
and an approved Part B from the Texas Historical Commission
“THC”.

 

		3.	TERM

 

The
Term (as used herein, so
called) of this Lease shall be for a period of one hundred eighty (180) full calendar
months commencing on the Lease Commencement Date (as hereinafter defined), plus any
partial month from the Lease Commencement Date to the end of
the month in which the Lease Commencement
Date falls, ending at 11:59 p.m. local time
on the last day of the 180th
full calendar month following the Lease Commencement Date (the "Lease Expiration Date"),
subject to adjustment and earlier termination
as provided in this Lease. The initial
period of time referenced
in the preceding that comprises the Term is the "Initial Term".

 

		3A.	LEASE
COMMENCEMENT DATE

 

The
"Lease Commencement Date" is the date on which
Landlord delivers the Premises to Tenant with the Lease Improvements
and Tenant Improvements (as defined in Exhibit "C" hereto)
having achieved Substantial Completion (as defined in Exhibit "C",
attached hereto) (such date
being referred to herein as the “Delivery
Date"), but not later than March
31, 2023
(the “Outside Deadline").
If the Lease Commencement Date does not occur
prior to the Outside Deadline due to a
Landlord Delay having occurred(as defined in Exhibit “C”),
Tenant shall be entitled to the
sum equivalent to the Basic
Rent payment, for each full or partial calendar month after the Outside Deadline that the
Lease Improvements and Tenant Improvements have
not achieved Substantial Completion, to be paid
in the form of a rent abatement in the amount of the
then-applicable monthly Basic
Rent (prior to application of any abatement)
per partial or whole calendar month
following the Outside Deadline in which the actual Lease Commencement
Date occurs. If permission is given to Tenant to enter into the possession of the Premises (other
than to perform the Tenant Improvements (as defined in Exhibit "C")
therein prior to the specified Lease Commencement Date and Tenant actually takes possession of the Premises, Tenant covenants and agrees
that such occupancy shall be deemed to be under all the terms, covenants, conditions and provisions of this Lease and that the Lease Commencement
Date shall occur as of the date that Tenant takes possession of the Premises for manufacturing or otherwise regardless of whether Substantial
Completion has been achieved and/or a Certificate of Occupancy has been obtained.

 

		4.	RENT

 

Tenant
shall pay as rent for the Premises the following amounts as more fully described in Sections 4.A. and 4.D. (each of which
shall be considered Rent and all of which are
collectively referred to herein as "Rent"):

 

A.
Prepaid Rent. The total amount of Prepaid
Rent (the “Prepaid Rent”) under this Lease is
$6,529,482.00 (which includes amounts due in connection with proposed Change Order 001, which Landlord agrees will be implemented
as part of the Tenant Improvements Construction Contract).
Prepaid Rent will constitute “fixed rent,” as such term is defined in Treasury
Reg. Sec. 1.467-1(h)(3) and will be allocated
on a level basis to each full or partial
calendar year during the Term (pro-rated for
partial calendar years). For federal income tax purposes, Landlord
must include as rental income and must
deduct as interest expenses, and Tenant must deduct
as rental expense and must include as interest
income, the amounts required to be so included
or deducted in accordance with Code Section 467.
As of the date hereof, Tenant has made payments to
the General

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Contractor
in the amount of $1,598,764.25 and received credits from the Landlord
in the amount of

$1,232,419.00.
Such payments are deemed to have been made to the General
Contractor on behalf of the Landlord
and in satisfaction of such amount of Prepaid
Rent. Therefore, the amount of outstanding Prepaid Rent that is due and payable
by Tenant to Landlord on the later of January
3, 2023 or one business day following Tenant’s
receipt of a recorded Memorandum of Lease (which
Tenant agrees to cooperate reasonably in finalizing and executing)
is $3,698,298.75.

 

B.
Basic Rent. Subject to the provisions of
Section 4.C. and
4.D., below: (I)
The Basic Rent (hereinafter
called the "Basic Rent") shall be Two Hundred
Fifty Seven Thousand
Three Hundred Forty Four and No/100
Dollars ($257,344.00) annually
for the first twelve calendar months
of the Lease (each, a "Lease
Month"), payable in equal monthly installments,
in advance, of Twenty One Thousand
Four Hundred Forty
Five and 33/100 Dollars
($21,445.33), subject
to the terms of the following sentence,
the first payment to be made
on or before the Lease Commencement Date, and each subsequent monthly payment to be made
on the first day of each and every
calendar month during the Term hereof;
and (2) The Rent shall be considered
late and subject to penalty if not paid ten days after the applicable due date. If the
Term of this Lease begins on a date other
than on the first day of a month,
or ends on a date other than the
last day of a month, Rent for the month of such
termination or commencement shall be prorated
at the rate of one-thirtieth (1/30th)
of the fixed monthly rental for each day, payable
in advance.

 

C.
Basic Rent Escalation. On
the first business day of the first full month after the anniversary of the Lease Commencement Date
during the Term of the Lease, the Basic Rent for
such month and the following eleven calendar months shall be increased by three percent (3%) per annum from the Basic
Rent previously in effect. For the avoidance of doubt, the Basic Rent for the Initial
Term as follows:

 

	
    Lease Months

    (Following
    the Lease Commencement Date and any partial month
    after the Lease Commencement Date prior to the first full
    calendar month of the Term)
	Annual Basic Rent	Monthly Basic Rent
	1-12	$257,344.00	$21,445.33
	13-24	$265,064.32	$22,088.69
	25-36	$273,025.90	$22,752.16
	37-48	$281,228.74	$23,435.73
	49-60	$289,672.84	$24,139.40
	61-72	$298,358.20	$24,863.18
	73-84	$307,284.82	$25,607.07
	85-96	$316,533.12	$26,377.76
	97-108	$326,022.68	$27,168.56
	109-120	$335,753.50	$27,979.46
	121-132	$345,886.42	$28,823.87
	133-144	$356,260.60	$29,688.38
	145-156	$367,036.88	$30,586.41
	157-168	$377,893.58	$31,491.13
	169-180	$389,232.80	$32,436.07

 

D.
Additional Rent. During the Term, Tenant
shall pay Additional Rent (as used herein, so called), which
consists of the Tenant's
Share (as hereinafter defined) of Operating Expenses and Taxes.
Tenant shall make such payments as set
forth in Sections 4.G and 4.H,
below.

 

		E.	Tenant's Share. The term "Tenant's
Share" means: (1) 100% of the Taxes

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(as
hereinafter defined) attributable to the Premises; plus (2) 100% of the Operating Expenses
incurred by Landlord solely with respect to the Premises; plus (3) 5% of the
Taxes (as hereinafter defined) of the Common Areas
of the Property; plus (4) Except as included in Section
4.E.(2), 5% of the Complex Common Area Operating Expenses (as hereinafter defined) as provided
annually by TRTF, which percentage in Section 4.E(4) is obtained by dividing
(a) the Premises Rentable Square Feet
as stated above by (b) the
Complex Rentable Square Feet as of the Effective Date. If the Complex Rentable Square
Feet in the Complex increases after the Effective
Date, the percentage in Section 4.E(4) shall be recalculated
(but in no event, will the percentage in Section 4.E(4) increase after the Effective Date).
Tenant shall not be obligated to pay amounts due under Section
4.E(4) to the extent such Complex Common Areas
are unavailable to Tenant due to casualty, condemnation, or other cause that is not
the fault of Tenant.

 

F.
Stipulations. Landlord and Tenant stipulate
that the Premises Rentable Square Feet and the Complex Rentable Square Feet set
forth above are conclusive
and shall be binding upon them during the Term. If,
during the Term, any
change occurs in
either the Premises Rentable Square Feet or the
Complex Rentable Square Feet, Tenant's Share
shall be adjusted, effective as
of the date of such
change occurred. provided, however in no event
will the Complex Rentable Square Feet for the
purpose of calculating Additional Rent in Section
4.D.l be greater than the amount set
forth in Section 4.D.1 above, or will
Tenant's Share in Section 4.E.l
above be greater than 5% (although Tenant's Share in
Section 4.E.l may decrease if the Complex
Rentable Square Feet increases).

 

G.
Taxes. For
each year during the Term of this Lease, Landlord
shall submit to Tenant a statement of the Taxes that are actually
assessed by the Bexar County Tax Assessor and within
thirty (30) days after receipt of such statement, Tenant shall pay to Landlord, subject to the terms of Section 4.D and 4.E, above,
that portion of Additional Rent that consists of Tenant's
Share of Taxes (and, for any partial calendar year after the Lease Commencement
Date, Tenant shall be responsible only for remitting to Landlord a pro-rated portion
thereof, based on the number of actual days in the calendar year: (1) after the Lease Commencement
Date until the end of such year; and (2) prior to the Lease Expiration Date). The
termination of this Lease shall not affect the obligations of the Landlord and Tenant
pursuant to this Section 4.G to be performed after such termination, but shall be effective only with respect to the period of
time that constitutes the Term.

 

As
used in this Lease, the term "Taxes" means taxes, assessments, and governmental
charges or fees whether federal, state, county or municipal,
and whether they be by taxing
districts or authorities presently
taxing or by others, subsequently created or otherwise,
and any other taxes and assessments (including non•governmental
assessments and charges under any restrictive
covenant, declaration of covenants, restrictions
and easements or other private
agreement that are not treated as part
of Operating Costs) now or hereafter attributable to
the Property (or its operation), excluding, however,
penalties and interest thereon and federal
and state taxes on income. Notwithstanding the foregoing
to the contrary, in no event
shall "Taxes" be deemed to include
any franchise, margin, estate,
inheritance, or income tax. Taxes shall include
reasonable costs of consultants retained in an effort
to lower taxes and all costs incurred in disputing any taxes or in seeking to lower the tax
valuation of the Property, but only to the extent
actual savings results from such efforts.

 

H.
Payment of Operating
Expenses. Prior to January 1 of each year,
or as soon thereafter as practicable, during the Term
of this Lease, Landlord shall provide Tenant a good faith projection of Operating
Expenses for the coming year (including with
respect to the Complex Common Areas), and commencing on January 1 of each year, Tenant shall
pay monthly, one-twelfth (l/12)
of the Tenant's
Share with respect to the Operating Expenses
of operating the Property that are set forth in Section 4.E. 
Landlord shall, within the period of ninety (90) days (or as soon thereafter as possible)
after the close of each calendar year, provide Tenant a statement of such year's actual Operating Expenses with respect thereto. Tenant
shall pay Landlord within thirty (30) days of statement receipt Tenant's
Share of the difference, if any, if the actual Operating Expenses
was in excess of the projected Operating Expenses. If the projected Operating Expenses
exceeded the actual Operating Expenses, Landlord shall refund Tenant's
Share of the excess to Tenant within ten (10) days after
such determination is made or, if requested by

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Tenant, credit such excess against the next
monthly installment(s) of Rent thereafter payable by Tenant.

 

I.
Definition of Operating Expenses. The term "Operating Expenses" as
used herein shall mean all reasonable and necessary expenses, costs and disbursements (but
not: (x) specific costs billed to specific tenants; or (y) replacement of capital investment items, except as set forth in Section 4.I.vii,
below) which Landlord incurs in connection
with the ownership, operation, and maintenance
of the Property and performance of
Landlord's
obligations under this Lease, in each case,
determined in accordance with sound accounting principles consistently applied, without duplication,
including the following costs:

 

		i.	Wages and salaries of the building
manager and all employees below the
grade of building
manager engaged in operating and maintenance
or security of the Property, including taxes, insurance and benefits relating thereto.

 

		ii.	All supplies and materials used in operation and maintenance of the Property.

 

		iii.	All utilities
including surcharges for the Property, the cost of
water, sewer, gas and electricity, if not separately metered to Tenant (but not metered or
submetered utilities paid by other tenants).

 

		iv.	All heating, lighting,
air conditioning and ventilating of the Property, if not separately
metered to Tenant or other tenants.

 

		v.	Cost of all maintenance and service agreements for
the Property and the equipment therein, including but not limited
to security, landscape, irrigation, IT, trash removal,
music, energy management services, window cleaning,
elevator maintenance (if applicable) and janitorial service (except
with respect to replacements that are capital in nature which shall be calculated and
allocated as provided for herein).

 

		vi.	Cost of all
insurance relating to the Property, including the
cost of casualty and liability insurance applicable
to the Property and Landlord's personal property
used in connection therewith.

 

		vii.	Cost of repairs, replacements, and
general maintenance (excluding repairs and general maintenance paid by proceeds of insurance or by Tenant or third
parties, alterations attributable solely to tenants of the Property other than Tenant,
and replacements that are capital in nature which
shall be calculated and allocated as provided
for herein).

 

		viii.	The costs of
any additional services provided by Landlord
in the prudent ownership, service, repair, management, maintenance, and
operation of the Property, except as expressly
excluded under this Lease.

 

		ix.	The cost of any capital improvements
made to the Property after the Lease Commencement Date that, in Landlord's reasonable judgment,
reduces other operating expenses such as lighting retrofit and installation of energy management systems but only to the extent these
capital expenditures result in a reduction of Operating Expenses, as amortized in accordance
with sound real estate accounting principles consistently applied, as well
as capital improvements made in order to comply with any Law hereafter promulgated
by any governmental authority, or any amendment to or any interpretation hereafter rendered
with respect to any existing Law that have the
effect of changing the legal requirements applicable to the Property from those currently in effect, as amortized in accordance with sound
real estate accounting principles consistently applied.

 

		x.	Costs incurred for Landlord's general corporate
overhead and general administrative expenses in an

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amount not
to exceed $100,000.00 per calendar year in the
aggregate.

 

		xi.	Costs associated with managing, repairing,
maintaining, insuring or operating any
parking structure including the cost of payroll
for clerks, attendants and other persons, bookkeeping, parking insurance, parking management fees,
tickets, striping and uniforms directly incurred in operating
the parking garage in an amount not to exceed
$85,000.00 per calendar year in the aggregate,
but only if Tenant is permitted to use at least
10 parking spaces in such garage in lieu of the parking
spaces referred to in Section 44, below.

 

Notwithstanding
anything contained in this Lease to the contrary, "Operating Expenses" shall
not include costs Landlord incurs or is charged for:
(1) Taxes; (2) margin tax costs;
(3) leasing, advertising, and promotional costs; (4) 
any rental and any associated costs, either actual or imputed, for the Landlord's
management or leasing office; (5) 
relocation or takeover expenses, including, without limitation, lease
buy out costs and expenses incurred by Landlord
with respect to any space in the Property; (6) real estate brokerage commissions; (7) attorneys'
fees, other professional fees, entertainment expenses, listing fees,
lease concessions and inducements, and other costs related to cleaning, showing, leasing, or making ready leasable space, demolition,
construction, and related costs incurred in connection with
the alteration and improvement of leasable space for, or in preparation for, occupancy;
(8) any costs (including permit, license, and inspection fees) incurred in renovating,
improving, decorating, painting, or redecorating leasable space for tenants or other occupants or in
vacant space (including the cost of alterations or improvements to the Premises or to the
premises of any other tenant or occupant of the Property), and any cash or other consideration paid by Landlord on account of, with respect
to, or in lieu thereof; (9) costs incurred to provide non-building standard goods, services, or other benefits to one or more
tenants or occupants
of the Premises (other than Tenant) without reimbursement; (10) costs incurred to furnish goods and services to any other tenant
or occupant to the extent Tenant would be required to
pay or reimburse Landlord as a charge separate
from, or in addition to, payment of Operating Expenses under the terms of this Lease; (11) costs incurred to provide goods, services,
or other benefits to other tenants or occupants for which: (a) Landlord is entitled to reimbursement as an additional charge or rental
over and above base rent (including any escalations); or (b) the other tenant or occupant is obligated to pay to a third-party;
(12) costs incurred for Landlord's general corporate overhead and general
administrative expenses in excess of $100,000.00 per
calendar year in the aggregate; (13) costs incurred for wages, salaries, bonuses and other compensation of any officer, executive, or
employee of Landlord above the grade of building
manager or property manager or for any off-site
employees; (14) costs incurred to pay fees or dues, or to make cash or in•kind
contributions, for political, charitable, industry association, or similar organizations;
(15) costs associated with owning, managing, and operating the entity constituting Landlord, including, without limitation,
all costs incurred for: (i) the entity's
tax and financial accounting (but not including the bookkeeping and accounting related to the Property which shall be properly charged
as Operating Expenses); (ii) legal services;
(iii) prosecuting or defending any claims or lawsuits
with any mortgagee (except to the extent Tenant's
acts or omissions are in issue); (iv) selling,
syndicating, financing, mortgaging, or hypothecating Landlord's
interest in the Property; and (v) disputes between Landlord and its employees,
building managers, lenders, contractors, tenants, and other occupants (including Tenant, except as provided in Section 39, below); (16)
costs incurred to buy or rent furniture and office
equipment for Landlord's management,
security, engineering, or other offices of Landlord its leasing
agents, management personnel associated with the Complex; (17)
costs (other than routine maintenance costs) of any art work (such as sculptures or paintings) used to decorate the Property; (18) all
compensation paid to clerks, attendants, concierges, or other persons working in or managing commercial concessions operated by
Landlord; (19) costs associated with managing, repairing, maintaining, insuring or
operating any parking structure including the cost of
payroll for clerks, attendants and other persons, bookkeeping, parking insurance, parking
management fees, tickets, striping and uniforms directly incurred in operating the parking garage in
excess of $85,000.00 per calendar year in the aggregate; (20) costs of installing or, to
the extent operational costs exceed those normally
incurred for providing general office space, the cost of operating any specialty service, such as an observatory, broadcasting facility,
luncheon club, or athletic or recreational club; (21) costs incurred as a result of any breach of any contractual, statutory, tort, or
other legal duty by Landlord or its agents to
Tenant, to any other tenant, or to any third-party; (22) costs, penalties, and fines incurred by Landlord as a result of the violation
by Landlord, or by any other tenant or occupant of the Property, of Applicable Laws, except reasonable

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and necessary
costs incurred in any successful contest of the
alleged violation of Applicable Laws; (23) penalties, interest, or similar
charges incurred as a result of any late
payment by Landlord, including, without limitation,
penalties for late payment of taxes, equipment
leases, and other amounts owed by Landlord
to any third party; (24)   payments to any
parent, subsidiary, or affiliate of Landlord
for services (other than the management fee), or for goods, supplies or other materials, to the extent that the costs of such services,
goods, supplies, or materials exceed the cost that would have been paid had
the services, goods, supplies or materials been
provided by parties unaffiliated with Landlord;
(25) contributions to operating expense reserves, tenant improvement reserves, leasing commission reserves, capital improvement reserves,
or any other reserve; (26) legal, auditing, consulting and professional fees paid or
incurred in connection with negotiations
for financings, refinancings, sales, or exchanges of the Property; (27) payments of principal, interest, defeasance charges, or other
charges in connection with any loan secured,
in whole or in part, by the Building or the Building
and payment of rent under any ground lease; (28) depreciation, amortization, payments
on any encumbrances on the Building and the cost of capital improvements or additions; (29) costs
incurred to remediate mold or encapsulate, remove, or abate
asbestos or hazardous substances present at the Property as of the effective date
of this Lease; (30) costs incurred to correct or repair defects in the construction or design of the Premises or the Property or the
Complex, to replace any defective equipment or building system serving the foregoing; (31) costs
of LEED certification and other green programs or initiatives
(32) intentionally omitted; (33) any cost, charge, expense, or liability
incurred by Landlord prior to, or which accrued prior to, the Effective Date except
as expressly itemized on a schedule to this Lease; (34)
Costs and expenses of alterations or capital improvements of
the Premises, Complex, or the premises of other tenants in the Complex;
(35) Costs and expenses associated with the operation of the business of the person or entity
which constitutes Landlord as the same are distinguished from the costs
of operation
of the Property, including accounting and legal matters, costs of defending any lawsuits
with any mortgagee (except to the extent the actions of Tenant or any other
tenant may be in issue), costs of selling or financing any of Landlord's interest in the Property and outside fees paid in connection
with disputes with other tenants; (36) Legal fees, space planner's
fees, real estate brokers' commissions, leasing commissions paid to others and advertising expenses incurred in connection with the original
or future leasing of space in the Property;
or (37) any costs paid to
Landlord or Landlord's affiliates for management services that are in excess of
the market rates for management services of comparable quality rendered by persons or entities of similar
skill, competence and experience.

 

Landlord
and Tenant also agree that Operating Expenses will be "net"
only and, for this purpose, Operating Expenses will be reduced by the
amounts of any reimbursement, recoupment, payment, discount, credit,
reduction, allowance or the like received by
Landlord, or to which Landlord is, or may
be, entitled, in connection with such operations, including, without limitation:
(i) the amount of any discount
or rebate given to Landlord or any affiliate
of Landlord for goods or services
included in Operating Expenses ; (ii) reimbursements
received for repairs, replacements, general maintenance, or other Operating Expenses under
insurance policies, warranties, or other contracts (including tenant leases); and
(iii) any revenue from concessions operated by
Landlord (e.g., snack bar).

 

When used
in calculating “Operating Expenses” for the Complex Common Areas, references in the definition and exclusion
of “Operating Expenses” to “Property”
shall be deemed to refer to the “Property and/or the
Complex, as applicable”; references to “Landlord”
shall be deemed to refer to “Landlord and/or the owner of the
Complex (which, as of the Effective
Date is TRTF), as applicable”.

 

J.
Examination of Books. Upon reasonable prior notice, Tenant, at its expense, shall have
the right during business hours to examine Landlord's books and records relating to Operating Expenses for the Property for a calendar
year in question, for a period of one year following the end of said calendar year. In
the event Tenant's
examination reveals Landlord overstated Tenant's
Share in an amount
equal to or greater than
five percent (5%), Landlord shall pay to Tenant,
within thirty (30) days after receipt of an invoice
therefor from Tenant, Tenant's costs
and expenses incurred in the
performance of said audit. Notwithstanding,
if Tenant does
not audit Landlord's books
and records within one year following
the end of a calendar year, Tenant's
right to audit the Operating Expenses shall lapse
and the Operating Expenses shall
be deemed final and conclusive
for all previous periods, except
for the then current year.

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K.
Survival of Obligation. Tenant's obligation to pay Operating Expenses
during the Term of this Lease shall survive following
any termination of this Lease, and Landlord's obligation to refund overpayments to Tenant, shall survive until
the later of: (1) one year following the end of the calendar
year in which the Operating Expenses were paid;
and (2) any audit timely commenced under Subsection 4(J), above.

 

L.
Demand; Time. Each of the foregoing amounts
of Rent shall be paid to Landlord without demand and without deduction, set-off
or counterclaim on the first (1st) day of every month during the Term of this Lease (except
for the abatement, if any, in the event that the Outside Deadline is not met pursuant to Section
3A). If Landlord shall at any time or times accept Rent after it shall become due and payable,
such acceptance shall not excuse a delay upon subsequent occasions,
or constitute, or be construed as a waiver of any or all of Landlord's rights hereunder.

 

M.
Payment of Rent and Additional
Rent. In addition to and not in limitation of any other rights and remedies which
Landlord may have in case of failure by Tenant to pay any sum of Additional Rent when
due, such non-payment shall entitle Landlord
to the remedies available to it hereunder for non-payment of Rent. All such
charges or expenditures shall be paid to Landlord, at the office of the Landlord, or
to such other party or to such other address
as Landlord may designate from time to time by written notice to Tenant. Any unpaid Basic
Rent or Additional Rent shall accrue interest thereon at the rate of fifteen percent (15%)
per annum commencing thirty (30) days after the date it is due. Any
Basic Rent or Additional Rent not paid within
fifteen (15) days of the date it is due shall be subject to a late charge of five percent (5%) of the
unpaid amount to cover the administrative costs of the late payment.

 

		N.	RESERVED.

 

		5.	UPKEEP OF
PREMISES; UPKEEP OF COMPLEX

 

Except for any obligation of Landlord
with respect to the Premises, Tenant will keep the Premises and fixtures and Tenant's equipment
therein in clean and safe condition, will take good
care thereof, will suffer no waste or injury thereto, and will at the expiration or
other termination of the Term of this Lease, surrender the same broom clean in the same order and condition in which
they are on the Lease Commencement Date, ordinary wear
and tear, casualty, condemnation, and other unavoidable damage excepted. All
injury to the Premises or the Property of which they are a part, caused by moving property
of Tenant's into, in or out of said Property and all breakage done by Tenant, or
the agents, servants, employees, and visitors of Tenant shall be
repaired by Tenant at expense of Tenant. In the event Tenant
shall fail to do so, then Landlord shall have the right to make such reasonably necessary
repairs, alterations and replacements, structural or otherwise and any charge or cost so reasonably incurred by Landlord shall be paid
by Tenant with the right on the part of Landlord to elect in its discretion to regard the
same as Additional Rent, in which event, such cost or charge shall become Additional Rent
payable with the installment of Rent next becoming
due or thereafter falling due under the terms of this Lease.

 

Landlord
shall pay for and make the following repairs as and when reasonably necessary and shall keep
all Common Areas and Property (and cause TRTF
to keep the Complex Common Area) systems in
good order, condition, and repair (subject to
the right to charge any tenants of the Property
for any portion of same that are Operating
Expenses defined above): (1) structural repairs to the Premises and
Common Areas; and (2) repairs required in
order to provide any services to
be furnished by Landlord pursuant to this Lease
(including with respect to the Common Areas);
and (3) repairs to the windows and
roof of the Premises. If a repair which is Landlord's
responsibility is necessitated by an act or
omission of Tenant or its
agents, Landlord shall make the repair, and Tenant shall reimburse Landlord promptly for
the cost of the repair. Tenant shall promptly notify
Landlord of any condition needing repair which is Landlord's responsibility under this
Section and to which Tenant has actual
knowledge. Tenant, at its sole cost and expense,
shall maintain in good order, condition and repair, all
portions of

    	Page 8 of 46 

    	 

    

 

 

 

 

the
Premises not specifically designated as Landlord's
duty in this paragraph, including but not limited
to the HVAC, plumbing, wiring, glazing, interior doors, floors, ceilings, interior
walls and the interior surface of exterior walls, fixtures, lighting,
fire protection and alarm systems, equipment and signs. Provided that such
activities are Operating Expenses within the terms and conditions of this Lease, Tenant shall
reimburse Landlord for the foregoing as part of Tenant's payments of Additional Rent, subject to the terms thereof.

 

		6.	MECHANIC'S LIENS

 

If
any mechanic's or materialmen's lien is filed against the Premises, the Property and/or the land for work
claimed to have been done for, or materials claimed to have been furnished to Tenant or its subtenants (except for work performed by or
at the request of Landlord in furtherance of Landlord's obligations under this Lease), such lien shall be discharged by Tenant
within thirty (30) days after the Tenant receives written notice of such lien, at Tenant's
sole cost and expense by the payment thereof or by filing any bond required by Applicable Law.
If Tenant shall fail to discharge any such mechanic's or materialmen's lien, Landlord
may, at its option, discharge the same and treat the cost thereof as Additional Rent
payable with the monthly installment of Rent next becoming due; it being hereby expressly
covenanted and agreed that such discharge by Landlord shall
not be deemed to waive or release the default of Tenant
in not discharging the same. It is further understood and agreed that in the event Landlord
shall give its written consent to Tenant's making any such Alterations (as defined below) pursuant to Section 7 below, such written consent
shall not be deemed to be an agreement or consent by Landlord to subject Landlord's interest
in the Premises, the Property or the land to any mechanic's or materialmen's liens which may
be filed in respect of any such Alterations made by or on behalf of Tenant.

 

		7.	TENANT ALTERATIONS

 

A.
Alterations. Landlord shall construct all
of the Lease Improvements and Tenant Improvements,
as defined in Exhibit "C".
Landlord shall pay an amount not to exceed $6,529,482.00 (the
“Landlord Cap”) in
connection with the construction of
the Tenant Improvements. If the cost of
the Tenant Improvements exceeds the Landlord Cap, an
amount equal to any excess shall be paid to
the Landlord as Additional Rent 15 days following Substantial Completion. The Lease
Improvements and Tenant Improvements shall be performed by Landlord in
accordance with Exhibit "C" attached hereto. Tenant will not make or
permit anyone to make any material alterations,
decorations, additions or improvements, structural or
otherwise, in or to
the Premises or the Property, without the prior written
consent of Landlord (''Alterations''),
which shall not be unreasonably withheld, delayed, denied, or conditioned; provided, however,
that any such proposed Alterations are in
accordance with an approved Part B and
Part 2 from the THC and NPS, respectively, and would not
otherwise prevent availability of federal
or state Historic Tax Credits or cause recapture
of federal Historic Tax Credits. All of such Alterations must conform to
all applicable rules and regulations established from time to
time by the Underwriters' Association of
the local area and conform to all applicable
requirements of the Federal, state and
local governments, including any requirements or
approvals set forth in Section 50 of
this Lease. When granting its consent, Landlord
may impose any conditions it deems reasonably appropriate, including,
without limitation, approval of
plans and specifications, selection
of contractor and obtaining of specified insurance,
provided the foregoing conditions are reasonable in
nature.

 

B.
Property of Landlord. All alterations, installations, changes, replacements, attached
equipment, laboratory casework, built-in cabinet work sinks and related plumbing fixtures,
laboratory benches, exterior venting fume hoods, additions to, or improvements in, including wall-to-wall carpet, upon the Premises
shall, at the election of the Landlord (which
election Landlord shall deliver in writing to Tenant
at least 120 days prior to the expiration
of the Term; and, if Landlord does not timely
deliver such election to Tenant, Landlord will be deemed to have elected to waive
its rights to designate property to be retained under this Section 7.B), remain upon the Premises, become property of

    	Page 9 of 46 

    	 

    

 

 

 

 

the
Landlord, and be surrendered with the Premises at the expiration or termination of this Lease
or upon expiration of any renewal period hereof without disturbance, molestation or injury;
provided, however, that if Tenant is not then in default in the performance of any of its
obligations under this Lease, Tenant shall have the right (but not the obligation) to remove,
during the 90-day period prior to the Lease Expiration
Date, any of the foregoing items which Landlord does not wish
to retain (or which Landlord is deemed to have waived
its right to retain), together with all of Tenant's movable furniture, movable furnishings,
or movable equipment, or trade fixtures purchased by Tenant at its sole cost and expense and within
the Premises, at the expense of Tenant. If Tenant elects to so remove any such items from
the Premises, Tenant agrees to repair all material damage to the Premises and the fixtures, appurtenances
and equipment of the Landlord therein, and to the Property caused by the Tenant's removal of its furniture, fixtures, equipment, machinery
and the like and the removal of any improvements or alterations. Should the Tenant fail to
repair all the above referred to damage, then, and in such event, the Landlord may repair
the said damage at the Tenant's expense and the Tenant hereby agrees to reimburse the Landlord
for such expense within 10 business days follow receipt of demand therefor.

 

Notwithstanding anything
contained in this Lease to the contrary, Tenant
shall have the exclusive use of the furniture, fixtures
and equipment (“FF&E”) located
on the Premises; the FF&E shall not be removed or
used in another location (but may be
removed by Tenant from the Premises in the same manner as other property which Tenant is
entitled to remove under this Section 7.B during
the final 90 days of the Term).

 

C.
Indemnification. Tenant will indemnify and
hold Landlord, Landlord's mortgagees, and their respective employees, agents, tenants, invitees,
licensees, affiliates, partners, members, shareholders, and principals (each a "Landlord Indemnified Party" and collectively,
the "Landlord Indemnified Parties'
harmless from and against any and all losses, liability, expenses,
liens, claims or damages (each, a "Loss")
to person or property which occur during the Term of this Lease
as a direct result of Tenant's alterations, decorations, additions or improvements, including without
limitation, the Tenant Improvements or any Alteration, except to the extent any such Loss
is caused by Landlord's
breach of its maintenance obligations under Section 5 of this Lease
or Landlord's
willful misconduct. If any such alteration, decoration, addition
or improvement is made without the prior written consent of Landlord and such Alteration is not permitted under this Lease, Landlord may
correct or remove the same, and Tenant shall be liable for any and all reasonable expenses incurred by Landlord in
the performance of this work.

 

		8.	SERVICES

 

Landlord
shall furnish to Tenant during the Term of the Lease hot and cold water, electric current adequate for Tenant's proposed use of the Premises,
and sanitary sewer services at those points of supply up to the demarcation of the Premises
as set forth on Plans and Specifications (as hereinafter defined). Notwithstanding the foregoing, Landlord shall not be liable for failure
to furnish or for suspension or delay in furnishing any of such services under this Section 8 caused by breakdown that is outside of Landlord's
reasonable control, maintenance or repair work (to the extent outside of Landlord's reasonable control) or strike, riot, civil commotion,
natural disaster, or pandemic. If, however, Tenant
is prevented from using, and does not use, the
Premises or access thereto because of the unavailability
of any such service for a period of three
(3) consecutive business days and such unavailability was within
Landlord's reasonable control, then Tenant shall, as its
exclusive remedy be entitled to abatement of
Basic Rent and Additional Rent for
each day that Tenant is so prevented
from using or accessing the Premises. Tenant
shall be responsible for obtaining its own separately metered electricity, telephone, internet, and other desired services.

 

		9.	INSPECTION

 

Tenant will
permit Landlord, or its agents or other representatives to enter the

    	Page 10 of 46 

    	 

    

 

 

 

 

Premises
with three (3) days written notice to Tenant except in the case of an emergency when
Landlord may enter without notice and without charge therefor to
Landlord and without diminution of
the Rent payable by Tenant to examine, inspect
and protect the Premises and the Property and to make such alterations and/or repairs as in the judgment of the Landlord
may be deemed reasonably necessary, or to exhibit the same to prospective tenants or purchasers during the Term of this Lease. Written
notice shall include the names, employer, and purpose of the entry. Landlord acknowledges
that the Premises must comply with various federal security requirements and that Tenant may prescribe additional requirements to comply
with federal laws and maintain the integrity of the laboratory and other facilities within
the Premises; Landlord shall comply with the foregoing
at Tenant's
expense prior to entering the Premises.

 

		10.	DAMAGE TO THE PREMISES OR COMPLEX

 

If
a portion of the Premises or Property shall be damaged by fire or other cause (a "Casualty"), Landlord shall,
within 60 days after such Casualty, deliver to Tenant
a good faith estimate (the
"Damage Notice'') of the
time needed to repair the damage caused by such
Casualty use best efforts to repair such damage at the expense of the Landlord.

 

A.
Tenant's Rights. If the
Premises or the Property are damaged by Casualty
such that Tenant is prevented from conducting
its business in the Premises in a manner reasonably
comparable to that conducted immediately before such Casualty and Landlord reasonably estimates
that the damage caused thereby for which Landlord is responsible
to repair under this Lease pursuant to Section 10.C below cannot
be repaired within 270 days after the commencement
of repairs (the "Repair Period''),
then Tenant may terminate this Lease by delivering
written notice to Landlord of its election to terminate
within 30 days after the Damage Notice
has been delivered to Tenant.

 

B.
Landlord's Rights. If
a Casualty occurs and (1) Landlord estimates that the damage
cannot be repaired within the Repair
Period, (2) the damage
exceeds 50% of the replacement cost thereof
(excluding foundations and footings), as estimated by Landlord,
and such damage occurs during the last two years
of the Term, (3) regardless of
the extent of damage, the damage is not fully
covered by Landlord's insurance policies
or Landlord makes a good faith determination, after
considering the availability of insurance proceeds, that restoring the damage would
be uneconomical, or (4) Landlord is required to
pay any insurance proceeds arising out of the Casualty
to Landlord's mortgagee, then Landlord
may terminate this Lease by giving written
notice of its
election to terminate within 30 days after the
Damage Notice has been delivered to Tenant.

 

C.
Repair Obligation. If neither party elects to terminate
this Lease following a Casualty, then Landlord shall, within
a reasonable time after such Casualty, begin to repair
the Premises and shall proceed with reasonable diligence to restore
the Premises to substantially the same condition as they existed immediately before such
Casualty; however, except for the Landlord Work, Landlord shall not be required
to repair or replace
any improvements, alterations or betterments within the Premises (which shall be promptly
and with due diligence repaired and restored
by Tenant at Tenant's
sole cost and expense) or any furniture,
equipment, trade fixtures or personal property
of Tenant or others
in the Premises or the
Complex, and Landlord's obligation to repair
or restore the Premises
shall be limited to the
extent of the insurance proceeds actually received by Landlord
for the Casualty in question. Landlord shall be entitled
to the full proceeds of the insurance
policies providing coverage for all alterations, improvements and betterments in the
Premises (and, if Tenant has failed to maintain insurance
on such items as required by this
Lease, Tenant shall pay Landlord an amount equal
to the proceeds Landlord would have received had Tenant
maintained insurance on such items as required
by this Lease); for the avoidance of
doubt, notwithstanding anything contained herein to the contrary,
Tenant shall be entitled to the full proceeds
of the insurance policies that Tenant maintains under
Section 11.D, below.

    	Page 11 of 46 

    	 

    

 

 

 

 

D.
Abatement of Rent.
If the Premises are damaged by Casualty, Basic
Rent and Additional Rent for the portion
of the Premises rendered untenantable by the
damage shall be abated on a reasonable
basis from the date of damage
until the earlier of a.
completion of Landlord's
repairs, b. the date upon
which completion of Landlord's repairs
would have occurred but for delays caused by Tenant
Parties, or c. the date of
termination of this Lease by Landlord
or Tenant as provided
above, as the case may be, unless a Tenant
Party caused such damage, in which case, Tenant shall continue to pay
Basic Rent and Additional Rent without
abatement. In the event
that damage to the Premises or to the Property is caused by the negligence or willful misconduct of Tenant or its agents, employees or
invitees, any cost or expense reasonably incurred by Landlord to repair or restore the Premises
or the Property which is not covered by insurance shall be paid by Tenant, in which event
such cost and expense shall become Additional Rent payable with the installment
of Rent next becoming due under
the Terms of this Lease.

 

		11.	INSURANCE

 

A.
Insurance Rating. Except as
permitted in Section 2 or 13A, Tenant will
not conduct or permit to be conducted, any activity,
or place any equipment, material, chemical, fluid
or substance outside of the Premises which will in
any way increase the rate of fire insurance or other
insurance on the Property (unless the rate of fire
insurance increases only with respect to the
Premises and Tenant satisfies such increased premium); if any increase in the rate
of fire insurance or other insurance is stated
by any insurance company or by the applicable Insurance
Rating Bureau to be due to any activity
or equipment of Tenant in
or about the Premises that is not permitted under this Lease (and
the increase in the premium for such policy
is not paid by Tenant under
its policy), such statement shall be conclusive
evidence that the increase in such rate is due to such activity or equipment
and as a result thereof, Tenant shall be liable for
such increase and shall reimburse Landlord therefor upon demand and any
such sum shall be considered Additional Rent payable
hereunder.

 

B.
General Requirements. In all insurance policies carried
by Tenant pursuant to the requirements of this
Lease, Tenant shall name Landlord and Landlord's management
agent, if any, as an additional insured, as their
interests may appear, and shall
contain an endorsement that such policy shall remain in full force and effect
notwithstanding that the insured has waived his right of action against any party
prior to the occurrence of a loss.
Each policy shall contain an endorsement that will prohibit its
cancellation prior to the expiration of thirty
(30) days after notice of such proposed cancellation
to Landlord. All such insurance policies
shall be written as primary
and non-contributory. Tenant shall provide Landlord with Certificates of Insurance evidencing
the coverages required under this Lease
prior to the occupancy and at least annually thereafter.
Each policy shall be with a company or
companies licensed to do business in the State
of Texas and approved by
Landlord and having a Best
Rating of at least "A:VIII".
Tenant shall promptly
notify Landlord of the
cancellation of any insurance required to be carried
by Tenant hereunder. If Tenant fails to maintain
any insurance required by this Section 11, Landlord
may obtain such insurance, and any premium paid by Landlord
shall be immediately payable
by Tenant to Landlord as Additional Rent. Tenant
shall require any permitted sublessee or assignee
of the Premises pursuant to this Lease to
comply with the requirements of this
Section 11.

 

C.
Liability Insurance. Throughout the term, Tenant shall carry
commercial general liability insurance,
including contractual liability, public liability and
property injury, and products and
completed operations liability, with limits of
at least One Million Dollars
($1,000,000) per occurrence and Two Million
Dollars ($2,000,000) aggregate for Tenant's
activities in the Premises, in a form providing occurrence basis
coverage, in a form providing occurrence basis coverage. Tenant
shall provide an Additional Insured endorsement naming the Landlord as additional insured as well as a waiver of subrogation of the insurance
policy in favor of the Landlord.

 

D.
Other Insurance. Tenant shall carry an
all-risk policy of insurance covering any insurable
interest that Tenant may have in the Premises or in
any equipment serving the Premises, Tenant's leasehold improvements, trade fixtures, equipment
and personal property kept at the Premises or
elsewhere in the Property, in an amount not less than
the full replacement cost of such items. Tenant shall carry an umbrella

    	Page 12 of 46 

    	 

    

 

 

 

 

insurance
policy with limits of at least
Five Million Dollars ($5,000,000) per occurrence
and Five Million Dollars
($5,000,000) aggregate. Tenant shall obtain and maintain Worker's
Compensation insurance and Employer's
Liability coverage to cover obligations imposed by federal
and state law covering all of Tenant's
employees, including statutory benefits outlined in the Texas Workers'
Compensation Act and minimum
policy limits for
Employer's
Liability of at least Two Hundred
Fifty Thousand Dollars ($250,000) bodily injury
per accident, Five Hundred Thousand Dollars ($500,000) bodily injury disease policy limit
and Two Hundred Fifty Thousand Dollars
($250,000) per disease per employee.

 

E.
Waiver of Subrogation.
The Landlord and the Tenant each hereby waives its
right of recovery against the other and each
releases the other from any claim arising out
of loss, damage or destruction to the Property, Premises,
or contents thereon or therein, to the extent
its property is covered by a policy
of insurance, whether or not such loss, damage
or destruction may be attributable to the negligence
of either party or its respective
agent, visitor, contractor, servant or employee. Each policy
shall include a waiver of the insurer's rights
of subrogation against the party hereto
who is not the insured under said policy.

 

		F.	Landlord's
Insurance.

 

		i.	Property Insurance. From and
after the date of this Lease, Landlord will
carry a policy or policies of all
risk extended coverage insurance covering the Property (excluding property required to be
insured by Tenant) endorsed to provide replacement
cost coverage and providing protection against perils included within the standard Texas form of fire
and extended coverage insurance policy, together with insurance against sprinkler damage,
vandalism, malicious mischief and such
other risks as Landlord may from time
to time determine
and with any such deductibles as Landlord
may from time
to time determine,
in its commercially reasonable discretion.

 

		ii.	Commercial General Liability
Insurance. Landlord will carry Commercial General
Liability policy or policies covering the
Property against claims for personal
or bodily injury, or death,
or property damage resulting from the negligence of the
Landlord or property manager or their agents,
occurring upon, in or about the Property to afford
protection to the limit of not less than
$2,000,000 per occurrence, and $2,000,000
annual aggregate or such limits and umbrella
coverage as Landlord my determine in its commercially
reasonable discretion. This insurance coverage shall
extend to any liability of Landlord
arising out of this Lease.

 

		iii.	Other Requirements. Any insurance
provided for in this Section 11.F may be effected
by a policy or policies of blanket
insurance covering additional items or locations
or assureds, provided that the requirements of this
Section 11.F are otherwise satisfied. Tenant shall
have no rights in any policy or policies
maintained by Landlord.

 

		12.	CONDEMNATION

 

If
all or a substantial part of the Premises (or
use or occupancy of the Premises) shall be taken
or condemned by any governmental or quasi-governmental
authority for any public or quasi-public
use or purpose (including sale under threat of such
a taking), then the Term of this Lease shall cease
and terminate as of the date when title
vests in such governmental or quasi-governmental authority, and the Rent shall be abated
on the date when such title vests in such governmental or quasi-governmental authority. If less than a substantial part of the Premises
is taken or condemned by any governmental or quasi-governmental authority for any public or quasi-public use or purpose (including sale
under threat of such a taking), Tenant may terminate this Lease only if, in its commercially reasonable opinion, its use of the Premises
will be materially adversely affected by such taking. If this Lease does not terminate pursuant to the terms of this Section 12, the Rent
shall be equitably adjusted (on the basis of the number of square feet of the Premises (and,
as applicable, in the Property) subject to the Lease before and after such event) on the date when title vests in such governmental or
quasi-governmental authority and the Lease shall otherwise continue in full force and effect. Tenant shall have no claim against Landlord
(or otherwise) and hereby agrees to make no

    	Page 13 of 46 

    	 

    

 

 

 

 

claim
against the condemning authority for any portion of the amount that may be awarded as damage as a result of any governmental or quasi-governmental
taking or condemnation (or sale under threat of such taking or condemnation) for the value of any expired or unexpired Term of the Lease
except for the cost of the portion of the Tenant Improvements made by and paid for by Tenant (it being understood and agreed that the
portion of Tenant Improvements paid for by Tenant, for the purpose of allocating condemnation proceeds hereunder, shall not include the
portion paid for by Landlord as part of the "Landlord
Cap" if such has been paid by Landlord to
Tenant), together with any payments made by Tenant to Landlord in connection with any modular
structures placed on the Premises. Tenant may, if allowed by statute, also seek such awards or damages for moving expenses,
loss of profits (provided that, with respect to recovery
of loss of profits, that Landlord's
recovery is not diminished thereby) and fixtures and other equipment installed by
it which do not, under the
Terms of this Lease, become the
property of the Landlord at the
termination hereof. Such awards or damages must be made by a condemnation
court or other authority and must be separate and distinct from award to Landlord and shall not diminish any award of the Landlord. For
purposes of this Section 12, a substantial part of the Premises shall be considered to have been taken if more
than fifty percent (50%) of the Premises are unusable by Tenant as a direct result of such taking.

 

		13.	HAZARDOUS MATERIALS

 

Tenant
shall not cause or knowingly permit any Hazardous Materials (as defined below) to
be brought upon, kept or used in or about the
Premises or the Complex in violation of Applicable Laws
by Tenant or its employees, agents, contractors or invitees (collectively, "Tenant
Parties").
Tenant shall indemnify, save, defend (at Landlord's option and with counsel reasonably acceptable
to Landlord) and hold the Landlord Indemnified Parties harmless from and against any and all
losses, liability, claims, damages, expenses and causes of action ("Claims'')
that are a direct result of the presence of any Hazardous Materials in, on, under or about the Property,
any portion thereof, or any adjacent property, to the extent caused by Tenant Parties.
This indemnification by Tenant includes reasonable
costs incurred in connection with any investigation of site conditions or any clean-up, remedial,
removal or restoration work required by any governmental or quasi-governmental
authority because of the foregoing breach by Tenant which caused Hazardous
Materials to be present in the air, soil or groundwater
above, on or under or about the Property in a manner that violates Applicable Laws
and which was above levels that were present prior
to the Effective Date hereof. Without limiting the foregoing, if the presence of any Hazardous
Materials in, on, under or about the Property, any portion thereof, or any adjacent property, which
is caused or knowingly permitted by Tenant results in any contamination of the Property, any
portion thereof or any adjacent property, then Tenant shall promptly take all actions at its
sole cost and expense as are reasonably necessary
to return the Property, any portion thereof or any adjacent property to
its respective condition existing prior to the time of such contamination (or, if such mitigation is not practicable, then to such level
as is in compliance with Applicable Laws);
provided that Landlord's written approval of such action shall first be obtained, which
approval Landlord shall not unreasonably withhold.

 

A.
Landlord acknowledges that it is not the intent of this Section to prohibit Tenant from operating
its business for the use permitted by Section 2. Tenant may operate its business according
to the custom of Tenant's industry, which includes the operation
of a BSL-2 laboratory, so long as the use or presence of Hazardous Materials is strictly and
properly monitored in accordance with Applicable Laws.
As a material inducement to Landlord to allow Tenant to use Hazardous Materials in connection
with its business, attached Exhibit "E"
illustrates the substances the Tenant intends to have in the space during the term of the
lease. Tenant agrees (a) this list identifying each type of Hazardous Material is to be present
at the Premises that is subject to regulations under any environmental Applicable Laws,
and may be updated periodically by Tenant; (b) a list of any
and all approvals or permits from governmental or quasi-governmental authorities required in connection with the presence of such Hazardous
Material shall be kept at or be made accessible from the Premises, and (c) correct and complete copies of (i) notices of violations of
Applicable Laws related to Hazardous Materials and (ii) plans relating to the installation
of any storage tanks to be installed in, on, under or about the Property (provided that installation
of storage tanks shall only be permitted after Landlord has given Tenant its written consent
to do so, which consent

    	Page 14 of 46 

    	 

    

 

 

 

 

Landlord may withhold
in its sole and absolute discretion) and closure plans or any other documents required by any and all governmental or quasi-governmental
authorities for any storage tanks installed in, on, under or above the Property for the closure of any such storage tanks (collectively,
"Hazardous Materials Documents") shall be provided to Landlord by Tenant
pursuant to the following sentence. Tenant shall deliver to Landlord
updated Hazardous Materials Documents (a) no later than thirty (30) days prior to the initial
occupancy of any portion of the Premises or the initial placement of equipment anywhere at
the Property, (b) if there are any changes to the Hazardous Materials Documents, annually
thereafter no later than December 31st of each year, and (c) thirty (30) days prior to the
initiation by Tenant of any Alterations or changes in Tenant's business that involve any material increase in the types or amounts of
Hazardous Materials. For each type of Hazardous Material listed, the Hazardous
Materials Documents shall include (i) the chemical names, (ii) the material state (e.g., solid,
liquid, gas or cryogen), (ii) the concentration, (iv) the storage amount and storage condition (e.g., in cabinets or not in cabinets),
(v) the use amount and use condition (e.g., open use or closed use), (vi) the location (e.g., room number
or other identification) and (vii) if known, the chemical abstract service number. Notwithstanding anything in this Section to the contrary,
Tenant shall not be required to provide Landlord with
any Hazardous Materials Documents containing information
of a proprietary nature, which Hazardous Materials Documents, in and of themselves, do not
contain a reference to any Hazardous Materials or activities related to Hazardous Materials.
Landlord may, at Landlord's expense, cause the Hazardous Materials Documents to be reviewed
by a person or firm qualified to analyze Hazardous Materials to confirm compliance with the
provisions of this Lease and with Applicable
Laws. In the event that a review of the Hazardous
Materials Documents indicates non-compliance with this Lease
or Applicable Laws, Tenant shall, at its expense, diligently take steps to
bring its storage and use of Hazardous Materials into compliance.

 

B.
Notwithstanding the provisions of this Section 13,
if (a) Tenant or any proposed transferee, assignee, or sublessee of Tenant
has been required by any prior landlord, lender, mortgagee, or governmental or quasi-governmental
authority to take material remedial action in
connection with Hazardous Materials contaminating a property if the contamination resulted from such party's action or omission or use
of the property in question, or (b) Tenant or any proposed transferee, assignee or sublessee
is subject to a material enforcement order issued by any governmental or quasi-governmental
authority in connection with the use, disposal
or storage of Hazardous Materials, then Landlord
shall have the right to terminate this Lease in
Landlord's sole and absolute discretion (with respect to any such matter involving Tenant), and it shall not be unreasonable for Landlord
to withhold its consent to any proposed transfer, assignment, or subletting (with respect
to any such matter involving a proposed transferee, assignee or sublessee).

 

C.
At any time, and from time to time, prior to the expiration of the Term, Landlord shall have
the right, at Landlord's
sole cost and expense, to conduct appropriate tests of the Property or any portion thereof, including without limitation the Premises,
to investigate whether Hazardous Materials are present or that contamination has occurred
due to Tenant or Tenant's employees, agents, contractors or invitees.
Notwithstanding the preceding sentence to the contrary, Tenant shall pay all reasonable cost
of such test if such test reveals that Hazardous Materials exists at the Property
in violation of this
Lease.

 

D.
During the Term, Tenant shall promptly report to Landlord
any actual or suspected
presence of mold or water intrusion at
the Premises of which
Tenant obtains actual knowledge.

 

E.
Tenant's indemnification obligations under
this Section shall survive the expiration or earlier
termination of the lease. During any period
of time needed by Tenant
or Landlord after the termination of this Lease
to complete the removal from the Premises of
any such Hazardous Materials, Tenant shall be
deemed a holdover tenant and subject
to the provisions of Section 16 below.

 

		F.	As used herein, the term "Hazardous
Material" means any hazardous or toxic

    	Page 15 of 46 

    	 

    

 

 

 

 

substance,
material or waste that is or becomes regulated
by any governmental or quasi-governmental authority.

 

		14.	SURRENDER

 

A.
At least ten (10) days prior
to Tenant's surrender of possession of anypart
of the Premises, Tenant shall provide Landlord with
(a) a facility decommissioning and Hazardous
Materials closure plan for the Premises ("Exit
Survey") prepared by an independent
third party reasonably acceptable to Landlord,
(b) written evidence of all appropriate governmental releases obtained by Tenant in
accordance with Applicable Laws, including laws pertaining to the surrender of the Premises,
and (c) proof that the Premises have been decommissioned in accordance with American National
Standards Institute ("ANSI" Publication Z9.11-
2008 (entitled "Laboratory
Decommissioning") or any successor
standard published by ANSI or any successor
organization (or, if ANSI and it successors no longer exit,
a similar entity publishing similar
standards). In addition,
Tenant agrees to remain responsible after the
surrender of the Premises for the
remediation of any recognized environmental conditions (including without limitation,
Hazardous Materials) set
forth in the Exit Survey. Tenant's obligations under this Section shall survive the expiration
or earlier termination of the
Lease.

 

B.
No surrender of possession
of any part of the Premises shall release Tenant from
any of its obligations hereunder, unless such
surrender is accepted in writing byLandlord.

 

C.
The voluntary or other
surrender of this Lease by Tenant shall
not effect a merger with Landlord's fee title
or leasehold interest in the Premises or the
Property, unless Landlord consents
in writing, which shall not be unreasonably withheld,
delayed, denied, or conditioned, and shall,
at Landlord's option, operate as an assignment to Landlord
of any or all subleases. The voluntary or other
surrender of any ground or other underlying
lease that now exists or may
hereafter be executed affecting the Complex, or a mutual
cancellation thereof or of Landlord's interest therein
by Landlord and its lessor
shall not effect a merger with
Landlord's fee title or leasehold
interest in the Premises or the Property.

 

		15.	DEFAULT OF TENANT

 

A. Events
of Default. If Tenant shall (i) fail to pay any monthly installment of Rent (as
required by Section 4 or any other provision of this Lease) as and when due or shall fail to timely make any other payment required
by the terms and provisions hereof and such failure shall continue for a period of ten
(10) days after Tenant receives written notice thereof from Landlord (provided that
Landlord shall not be required to provide written notice thereof more than twice in any rolling 12 -month
period) or, if Landlord is not required to
give such notice because it has already done so in a particular rolling 12-month period,
and such failure continues for a period of ten (10) days after the due date thereof; (ii) violate
or fail to perform any of the other terms, conditions, covenants or agreements herein made by Tenant (or in the Work Letter) and
such other violation or failure shall continue for a period of ten (10) days after written notice thereof to Tenant by Landlord
(or if such obligation is not reasonably capable of being performed within
such 10-day period, if Tenant fails to
commence the cure thereof and diligently pursue such cure); (iii) intentionally deleted; or (iv) make
or consent to an assignment for the benefit of creditors or a common law composition of
creditors, or a receiver of Tenant's assets is appointed, or Tenant files a voluntary petition in any bankruptcy or insolvency
proceeding, or an involuntary petition in any bankruptcy or insolvency proceeding is filed against Tenant and not discharged
by Tenant within one hundred twenty (120)
days, or Tenant is adjudicated a bankrupt, then in any of the
foregoing events (each, an "Event of Default") Landlord
shall be entitled to elect from the following remedies:

 

		i.	Landlord may terminate this Lease by
giving Tenant written notice thereof, in which
event this Lease and the leasehold estate hereby created and all interest of Tenant and all
parties claiming by, through or under Tenant shall automatically terminate upon the effective
date of such notice. If Landlord elects to so terminate this Lease, everything contained in
this Lease on the

    	Page 16 of 46 

    	 

    

 

 

 

 

part of
Landlord to be done and performed shall cease without prejudice, however, to the right of
Landlord to recover from Tenant all Rent and any
other sums accrued up to the time of termination or the date on which Tenant actually vacates
the Premises, whichever is later.

 

Should
Landlord terminate this Lease due to an Event
of Default, Landlord may elect, as its sole remedy: (i) to accelerate the Basic
Rent due hereunder to the end of the Term
hereof, discounted to present value at a per annum rate equal to eight percent (8%), minus the then•
present fair rental value of the Premises for such period, similarly discounted; (ii) to recover possession
of the Premises, by force, summary proceedings, or otherwise or (iii) to relet the Premises
for such Rent and upon such terms as are not unreasonable under the circumstances and, Tenant
shall be liable for all direct, out of pocket damages sustained by Landlord, including, without
limitation, deficiency (if any) in Basic Rent between what Tenant was
obligated to pay as Basic Rent under this Lease and the basic rent actually collected by Landlord,
reasonable attorneys' fees incurred by Landlord against Tenant,
brokerage fees, and expenses of removing Alterations that were not approved by Landlord and
reasonable expenses of placing the Premises in rentable condition that comparable with
that which existed on the Effective Date.

 

		ii.	Landlord may
terminate Tenant's right
to possession of the Premises and enjoyment
of the rent, issues and profits therefrom without terminating
this Lease or the leasehold estate created hereby, re-enter
and take possession of the Premises and remove
all persons and property
therefrom with or without process of law,
without being deemed guilty of any manner of
trespass and without prejudice to any remedies
for arrears of Rent or existing
breaches hereof, and lease, manage and operate the Premises and collect the rents, issues
and profits therefrom all for the account
of Tenant, and credit to the satisfaction of
Tenant's obligations hereunder
the net rental thus received (after
deducting therefrom all reasonable costs and expenses of repossessing,
leasing, managing and operating the Premises). Tenant shall continue to remain liable
to Landlord for all obligations under this Lease,
including without limitation, the
Rent (subject to any offset
for reletting). If the net rental so received
by Landlord exceeds the amounts necessary to satisfy all of Tenant's
obligations under this Lease, nevertheless Landlord shall retain such excess. If Landlord elects to proceed under this Section, it may
at any time thereafter elect to terminate this
Lease as provided in Section 15Ai. Any
damage or loss of Rent sustained by Landlord may be recovered by Landlord at the time of an Event of Default, or at Landlord's option,
at the time of the reletting, or in separate actions, from time to time, as said damage shall have been made more easily ascertainable
by successive relettings, or, at Landlord's option, may be deferred until the expiration of the Term of this Lease, in which event Tenant
hereby agrees that the cause of action shall not be deemed to have occurred until the date of expiration of said Term. Landlord shall
use commercially reasonable efforts to mitigate its damages resulting from an Event of Default. However, provided that Landlord uses commercially
reasonable efforts to relet the Premises, in
no event shall Landlord be liable for failure to
so lease, manage or operate the Premises or
collect the rentals due under any subleases
and any such failure shall
not reduce Tenant's
liability hereunder.

 

B.
Waiver. If, under the provisions hereof, Landlord shall institute proceedings against
Tenant and a compromise or settlement thereof shall be made, the same shall not constitute
a waiver of any other covenant, condition or agreement herein contained,
nor of any of Landlord's rights hereunder, except to the extent covered by such settlement. No
waiver by Landlord of any breach of any covenant, condition or agreement herein contained shall operate as a waiver of such covenant,
condition or agreement itself, or of any subsequent breach thereof. No payment by
Tenant or receipt by Landlord of a lesser amount
than the monthly installment of Rent herein stipulated shall be
deemed to be other than on account of the earliest
stipulated Rent, nor shall any endorsement or statement on any check or letter

    	Page 17 of 46 

    	 

    

 

 

 

 

accompanying
a check for payment of Rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the balance of such
Rent or to pursue any other remedy
provided in this Lease. No re-entry by Landlord,
and no acceptance by Landlord of keys from Tenant,
shall be considered an acceptance or a surrender of the Lease.

 

C.
Right of Landlord
to Cure Tenant's Default. Upon the
occurrence of an Event of Default, Landlord may,
but shall not be required to,
make such payment or do such
act, and charge the amount of the expense
thereof, if made or done
by Landlord, with interest thereon at the rate
of five percent (5%) per annum from the date paid
by Landlord to the date of payment thereof by
Tenant; provided, however, that nothing herein contained shall
be construed or implemented in such a manner
as to allow Landlord to charge or receive
interest in excess of the maximum legal rate then
allowed by law. Such
payment and interest shall constitute Additional Rent hereunder
due and payable with the
next monthly installment of Rent; but the
making of such payment or the taking of such action by Landlord shall not operate to cure such
Event of Default or to estop Landlord from the pursuit of any remedy to which Landlord would
otherwise be entitled unless and until Tenant so performs such obligation.

 

D.
Tenant Remedies Upon Landlord's
Default. If Landlord fails to perform any
of its obligations under this
Lease, and such failure continues for
a period of thirty (30) days after written notice thereof to Landlord
by Tenant (or if such obligation, but only if non-monetary
in nature, is not reasonably capable of being performed within such 30-day period, if Landlord
fails to commence the cure thereof and diligently pursue such cure), Tenant may, in its sole
discretion, as its sole and exclusive remedy, either: (1) cure such failure and receive a
credit toward future Rent for the cost incurred
by Tenant to cure such failure; or (2) terminate this Lease, upon which termination neither
Landlord nor Tenant will have any further obligations
of any kind to each other under this Lease.

 

		16.	HOLDOVER

 

In
the event that Tenant does not immediately surrender the Premises on the date of expiration
of the Term hereof, Tenant shall, by virtue of the provisions hereof, become a month to month
tenant at one hundred fifty percent (150%) the monthly Rent (including all Additional Rent)
in effect during the last month of the Term of this Lease, which
said monthly tenancy shall commence with the first day next after the
expiration of the Term of this Lease. Tenant, a month to month tenant, shall be subject to all of the
terms, conditions, covenants and agreements of this Lease. Tenant shall give to Landlord
at least thirty (30) days written notice of any intention to quit the Premises, and Tenant
shall be entitled to thirty

(30) days written
notice to quit the Premises, unless and Event
of Default has occurred and is continuing, in which event Tenant shall not be entitled to
any notice to quit, the usual thirty (30) days' notice to quit being hereby expressly waived.

 

		17.	NOTICES

 

Any
notice, request, communication or demand under this Lease
shall be in writing and shall be considered properly delivered only when
received or when first
refused by the addressee,
if such notice
is transmitted to
the recipient's
address as hereinafter provided, and such transmittal is given
or served

(i) personally, (ii)
by reputable overnight courier service (such as FedEx or UPS)
or (iii) by registered or certified mail (return receipt requested) deposited in the United States general or branch post office. Any
notice, request, communication or demand by the Tenant to the Landlord
shall be addressed to the Landlord at:

 

1305
E. Houston Street San Antonio, Texas 78205

Attn: Daniel
Koehl, Chief Financial Officer;
dkoehl@kslawllp.com

    	Page 18 of 46 

    	 

    

 

 

 

 

 

With copy to William D. Sutherland,
dsutherland@kslawllp,com, President, TransPecos Development Corp.

 

 

until otherwise directed
in writing by the Landlord and, if requested in writing by the Landlord, given or served simultaneously
to the Landlord's mortgagee at the address specified in such request. Any notice, request,
communication or demand by the Landlord to the Tenant
shall be addressed to the Tenant at:

 

1305 E. Houston
St., Scorpion Biological Services, Inc.

San
Antonio, Texas 78205 Attn: David Halverson, President

 

until otherwise directed
in writing by the Tenant. Rejection or other refusal to accept a notice, request, communication or demand or the inability to deliver
the same because of a changed address of which no notice was
given shall be deemed to be receipt of the notice, request, communication or demand sent.

 

		18.	ASSIGNMENT AND SUBLETTING

 

A.
Landlord's Consent Requirement.
Tenant will not assign, transfer, mortgage, or otherwise encumber this Lease or sublet
or rent the Premises (or permit the occupancy or use
thereof by a person other than Tenant, its employees, licensees, invitees, or affiliates),
or any part thereof, without obtaining the prior written consent of Landlord, which shall not be unreasonably withheld, denied, delayed,
or conditioned. Tenant shall give Landlord written
notice of Tenant's desire to assign or sublet the Premises. Within thirty (30) days following such request, Landlord
shall either consent to such request on such terms and conditions as Landlord
may reasonably require or provide written comments regarding its rejection of same. If Tenant
requests Landlord's consent to an assignment or sublet of all or any portion of the Premises, Tenant
shall reimburse Landlord for reasonable legal fees and expenses, and costs incurred in
connection with the preparation and review of the documents to effectuate the assignment or sublet (and Tenant shall be responsible for
such legal fees and expenses even if Landlord rejects such proposed assignment or sublet,
if such rejection is in accordance with the terms of this Lease). The consent by
Landlord to any assignment or subletting shall not be construed as a waiver or release of
Tenant from the terms of any covenant or obligation under this Lease, nor shall the collection
or acceptance of rent from any such assignee, subtenant or occupant constitute
a waiver or release of Tenant of any covenant
or obligation contained in this Lease, nor shall any such assignment or subletting be construed to relieve Tenant from obtaining the consent
in writing of Landlord to any further assignment or subletting.
If an Event of Default has occurred and is continuing, Tenant hereby assigns to Landlord the
rent due from any subtenant of Tenant and hereby authorizes each such subtenant to pay said
rent directly to Landlord. If the rent agreed upon between Tenant and its proposed subtenant under any permitted subletting (other than
to a Tenant Affiliate) is
greater than the sum of the Basic Rent then payable by Tenant
under this Lease for the portion of the Premises that is subject to such permitted subletting, then the excess shall be paid to Landlord
as Additional Rent when received by Tenant in
the same manner that Tenant pays Basic Rent under this Lease. In addition, any lump sum payment
to Tenant in connection with any permitted assignment or subletting (other than to a Tenant
Affiliate) shall be paid by Tenant to Landlord as Additional Rent.

 

B.
Intra-Tenant Transfer. Notwithstanding the provision of Section 18.A,
above, Tenant may assign this Lease or sublet the Premises or any portion thereof, with
Landlord's reasonable consent, to any limited liability company, partnership, corporation or entity
owned or controlled by Tenant or owned or controlled
by any entity owning one hundred percent (100%) of ownership interests in Tenant (a
"Tenant Affiliate''),
provided that (i) the Tenant Affiliate has the same or better financial position as the Tenant
on the Lease Commencement Date; (ii) there is no change in
the permitted use of the

    	Page 19 of 46 

    	 

    

 

 

 

 

Premises;
and (iii) Tenant remains fully liable for the obligations of the Tenant under this Lease and that regardless of Tenant
remaining liable under the Lease in the event of an assignment, such entity assumes
jointly and severally the obligations of Tenant hereunder. Tenant
shall immediately notify Landlord of any such
assignment or subletting under the terms of this Section 18.B. Unless permitted under the
terms of this Section 18.B., any sale of ownership interests in
Tenant shall be deemed a transfer of this Lease subject to the terms of Section 18.A.
above.

 

		19.	QUIET ENJOYMENT

 

Landlord
covenants that it has the right to make this Lease
for the Term aforesaid, and that if Tenant shall
pay the Rent and perform all of the covenants, terms, conditions and agreements of this Lease
to be performed by Tenant, Tenant shall, during the
Term hereby created, freely, peaceably and quietly occupy and enjoy the full possession of the Premises without molestation, disturbance,
or hindrance by Landlord or any party claiming through or under Landlord, subject to the
provisions of this Lease.

 

		20.	SUBORDINATION

 

Subject
to the delivery of an SNDA (as hereinafter defined), this Lease is subject and subordinate
to all ground or underlying leases and to all mortgages and/or deeds of trust which may now
or hereafter affect such leases or the real property of which the Premises form a part, and
to all renewals, modifications, consolidations, replacements and extensions thereof.
In confirmation of such subordination, Tenant shall execute promptly
any certificate that the Landlord, or the holder of such deed of trust, may reasonably request, provided that such certificate contains
commercially reasonable non- disturbance and attornment provisions. Notwithstanding the foregoing,
in the event of any foreclosure sale under such deed of trust, this Lease shall continue in
full force and effect, and the Tenant hereby attorns to
the party secured by such deed of trust or the purchaser under any such foreclosure sale,
which attornment is self-operative and requires no further instrument or agreement. Tenant
covenants and agrees that, notwithstanding the self-operative nature of the attornment contained herein, Tenant will, at the written request
of the party secured by any such deed of trust, execute, acknowledge and deliver any commercially reasonable instrument that has for its
purpose and effect the confirmation of the subordination, non-
disturbance, and attornment provisions contained herein (the "SNDA").

 

		21.	RULES AND REGULATIONS

 

Tenant,
its agents, employees, invitees, licensees, customers, clients, family members and guests shall at all times abide by and observe the
rules and regulations attached hereto as Exhibit "D". In addition, Tenant, its agents, employees, invitees, licensees,
customers, clients, family members and guests shall abide by and observe such other rules or regulations as may be reasonably promulgated
from time to time by Landlord for the Property
(provided that such updated rules and regulations apply consistently to all tenants, licensees, and invitees
of the Property), with a copy transmitted to Tenant
at least 10 business days prior to the effective date of thereof; provided, however, that the same are not inconsistent with
the provisions of this Lease and do not impose an
unreasonable economic burden on Tenant. Landlord agrees to use commercially reasonable efforts to enforce the rules and regulations of
the complex fairly. If there is any inconsistency between this Lease and the rules and regulations
as set forth in Exhibit "D", as may be updated from time to time, this Lease shall
govern. The Landlord may, upon request by any tenant, waive the compliance by such Tenant
of any of the rules and regulations provided that (i) no waiver shall be effective unless
signed by Landlord or Landlord's authorized agent, (ii) any such waiver shall not relieve
such Tenant from the obligation to comply with such rule or regulation in the future unless
expressly consented to by Landlord, and (iii)
no waiver granted to any tenant shall relieve
any other tenant from the obligation of complying with the following rules and regulations
unless such other tenant has received a similar waiver in writing from
Landlord.

    	Page 20 of 46 

    	 

    

 

 

 

 

 

		22.	ESTOPPEL CERTIFICATE

 

Tenant
agrees, at any time and from time to time, upon not less than fifteen (15) days prior written notice by Landlord, to execute, acknowledge
and deliver to Landlord a statement in writing (i) certifying that this Lease is unmodified
and in full force and effect (or if there have been modifications, that the Lease is in full
force and effect as modified and stating the modification), (ii) stating the Basic Rent,
and the dates to which the Rent and any other charges hereunder have been paid by Tenant,
(iii) stating to the actual knowledge of Tenant, whether Landlord
and Tenant are in default in the performance of any covenant, agreement or condition contained
in this Lease, and if so, specifying each such default of which Tenant may have actual knowledge,
(iv) stating the address to which notices to Tenant
should be sent, (v) stating the Term of the Lease, the area encompassed by it, and
the Lease Commencement Date; (vi) stating that Tenant has not prepaid any Rent
under the Lease; and (vii) stating that Tenant has accepted the Premises in its
"as is"
condition, is in possession of the Premises and that all improvements have been made to the Premises
as required by the Lease (or, providing details to the extent the foregoing in (vii) are not correct). Any
such statement delivered pursuant hereto may be relied upon by the party so named
in such certificate, provided that such party is an owner of the Property,
a prospective purchaser of the Property, a mortgagee or prospective
mortgagee of the Complex or of Landlord's interest in either, or any prospective assignee
of any such mortgagee.

 

		23.	REPRESENTATIONS BY LANDLORD

 

To induce
Tenant to enter into this Lease and in consideration thereof, Landlord hereby makes the
following representations: (a) the Lease Improvements Construction Contract (as defined
on Exhibit C) is in full force and effect, has not been amended except as set forth on Schedule
1.1. to Exhibit C, attached hereto, and Landlord is not aware of any default of Landlord, nor General Contractor (as defined therein),
of their obligations thereunder, nor is Landlord aware of any event which has occurred , that with notice
and/or the passage
of time, would constitute
a default thereunder; (b) Landlord
is not aware of any violations issued by, or orders
or notices of violations of, any public
or quasi-public authorities pertaining to the Complex; (c) Landlord has provided Tenant
with a copy of the Environmental Site Assessment Report prepared by Epperson Environmental Group dated April 15, 2014 and the Limited
Phase II Environmental Site Assessment prepared
by PSI dated January 1, 2014 (“Environmental
Reports”), pertaining to the Complex; Landlord is not aware of and has no other environmental assessments, reports or testing in
its possession or reasonable control pertaining
to the Complex other than the Environmental Reports and information referenced therein; (d) intentionally omitted; (e) Landlord holds
fee title to the Property
free and clear of all liens; (f) Landlord is not aware of any restrictive covenants, encumbrances, exclusive use provisions in
other tenants' leases or other agreements, Laws,
or matters of record which will prevent Tenant from occupying the Premises for the
purposes herein provided or adversely affect Tenant's
use of the Premises, or which prevent the full
use of the parking areas as herein set forth or otherwise prevent the Property from being developed
and operated in accordance with the general layout; (g) neither the execution of nor the performance under this Lease shall cause Landlord
to be in violation of any agreement, instrument, contract,
law, rule or regulation by which Landlord is bound; (h) provided that Tenant is not in violation of this Lease beyond any applicable
cure period, Tenant shall and may peaceably and
quietly have, hold and enjoy the Premises for the full term hereby
granted, free from molestation, eviction or disturbance by Landlord or by any
other person or entity, and Landlord hereby represents that it has the right to make the Lease for the full Term, including any extension
thereof; (i)intentionally omitted; (j) it is not
necessary for any other person or entity to execute this Lease to make it
binding on Landlord other than the party who has
signed this Lease; (k) Landlord has no knowledge that there are any condemnation proceedings or eminent domain proceedings of any kind
pending, or contemplated with respect to the Property; and (m)intentionally omitted. In the event
of a breach by Landlord of any of the foregoing
provisions, and such breach shall continue for a period of thirty (30)
days after written notice thereof from Tenant (or if such breach is not reasonably capable of being cured within
such thirty (30)
days period, if Landlord fails to commence the cure thereof within such 30 day
period and thereafter diligently pursue such cure) Tenant may as its sole
and exclusive remedy,

    	Page 21 of 46 

    	 

    

 

 

 

 

either: (1) cure
such failure and receive a credit toward future Basic Rent for the cost incurred by Tenant
to cure such failure; or (2) terminate this Lease, upon which termination neither Landlord nor Tenant
will have any further obligations of any kind to each other under this Lease.

 

Tenant
agrees and acknowledges that neither Landlord nor any broker, agent or employee of Landlord has made any representations or promises with
respect to the Property except as herein expressly set forth, and no rights, privileges, easements
or licenses are acquired by Tenant except as herein expressly set forth or in a separate writing executed on or after the Effective Date
by Landlord and Tenant. As used in this paragraph 24, the references to the "knowledge"
or "awareness"
of Landlord shall refer only to the current actual knowledge or awareness
of Rick Hernandez, who is
the officer of Texas Research and Technology
Foundation with direct responsibility for the
operation of the Complex, and Daniel Koehl, after December 9, 2022, who is
the officer of Landlord with direct responsibility
for operation of the Property, shall not be
construed, by imputation or otherwise,
to refer to the knowledge of Landlord or any affiliate
of Landlord, to any property manager, or to
any other officer, agent, manager, director, member, representative or employee
of Landlord or any affiliate thereof
(collectively, "Landlord's Representatives")
or to impose any duty to investigate the matter
to which such actual knowledge, or the absence thereof,
pertains. In no event
shall Landlord's Representatives have any personal liability
to Tenant for the breach or inaccuracy
of any representation or warranty or for
the non-performance of any covenant contained in this
Lease.

 

		24.	CONDITION OFPREMISES

 

Except
as set forth in this Lease and except to the extent that Landlord is obligated to construct
the Lease Improvements and Tenant Improvements,
by taking possession of the Premises, Tenant shall be
deemed to have agreed that (a) it had an opportunity to inspect the Premises; (b) it accepts the Premises "AS
IS" and "WITH
ALL FAULTS;"
and (c) Landlord does not make and Tenant does not rely on any
representation or warranty of any kind, expressed or implied, with respect to the condition
of the Premises; and (c) TO THE MAXIMUM EXTENT
PERMITTED BY APPLICABLE LAW, LANDLORD HEREBY DISCLAIMS AND TENANT
WAIVES THE BENEFIT OF, ANY AND ALL IMPLIED WARRANTIES,
INCLUDING THE IMPLIED WARRANTIES OF HABITABILITY AND
FITNESS OR SUITABILITY FOR A PARTICULAR PURPOSE.

 

		25.	TENANT'S FURNISHINGS/EQUIPMENT

 

A.
Furnishings. Landlord shall have the right
to approve the weight and position of equipment or fixtures in the Premises, which shall not
be unreasonably withheld, delayed, denied, or conditioned. Any and all damage or injury to
the Premises or the Complex caused by moving the property of Tenant into, or out of the Premises,
or due to the same being on the Premises, shall be repaired by, and at the sole cost of Tenant.
No furniture, equipment or other bulky matter of any description will be received into the Complex
or moved within the Complex except as approved
by Landlord, and all such furniture, equipment and other bulky matter shall be delivered only through the designated
delivery entrance of the Complex. All moving of furniture, equipment and other materials shall
be under the control and supervision of Landlord who shall, however, not be responsible for any damage to or charges for moving the
same.

 

B.
Equipment. Tenant will be permitted to utilize
such equipment as reasonably necessary in connection with its use of the Premises, as set
forth in Section 2, above. Business machines and mechanical equipment belonging to Tenant
which cause noise or vibration that may be transmitted to the structure of the Complex or
to any space therein to such a degree as to be reasonably objectionable to Landlord or to
any tenant shall be installed and maintained by Tenant, at Tenant's expense, on vibration eliminators or other devices
sufficient to reasonably mitigate such noise and
vibration.

 

		26.	GENDER AND NUMBER

 

    	Page 22 of 46 

    	 

    

 

 

 

 

 

Feminine
or neuter pronouns shall be substituted for those of the masculine form, and the plural shall
be substituted for the singular number, in any place or places herein in which the context may require such substitution.

 

		27.	CAPTIONS

 

The
captions in this Lease are included for convenience only and shall not be taken into consideration
in any construction or interpretation of this Lease
or any of its provisions.

 

		28.	BROKER

 

Landlord
is being represented by CBRE as its realtor and broker and shall pay CBRE per a separate agreement.
Tenant is not represented by a realtor or broker. Each party hereby agrees to indemnify and hold the other party harmless of and from
any and all losses, costs, damages or expenses (including, without limitation, all attorneys'
fees, court costs and disbursements) by reason of any
claim of or liability to any broker or person claiming through such party, and arising out of or in connection with the negotiation, execution
and delivery of this Lease.

 

		29.	LIABILITY OF LANDLORD

 

Landlord
shall not be liable to Tenant, its employees, agents, invitees, licenses, customers, clients, family members or guests for any damage,
compensation or claim arising from the necessity of repairing any portion of the Property,
the interruption in the use of the Property, accident or damage
resulting from the use or operation (by Landlord, Tenant, or any other person or persons whatsoever)
of elevators (if applicable), heating, cooling, electrical or
plumbing equipment or apparatus or the termination of this Lease by reason of destruction
of the Property, or from any fire, robbery, theft, mysterious
disappearance and/or any other casualty, or from any leakage in any part or portion of the
Property, or from water, rain or snow that may leak into or from any
leakage in any part or portion of the drains, pipes or plumbing work in the Property or
from any other cause whatsoever except to the extent such loss or damage is caused by Landlord's gross negligence or arises from Landlord's
breach of its obligations under this Lease or Applicable
Law. Any goods, property or personal effects, stored or placed by the Tenant in or about the
Property shall be at the risk of the Tenant and the Landlord shall not
in any manner be held responsible therefor. The Landlord shall not be liable for any accident
to or injury to
any person or persons or property in or
about the Property which are
caused by the conduct and operation of any business or by virtue of equipment or property of any other tenant in said Complex,
except to the extent arising from Landlord's
gross negligence or Landlord's
breach of its obligations under this Lease or Applicable Law.

 

		30.	INDEMNITY

 

Tenant
hereby agrees to indemnify and hold the Landlord Indemnified Parties harmless from and against any out-of-pocket loss, cost, damage, claim,
liability or expense (including reasonable attorney's fees, but
excluding special, consequential, punitive, or exemplary
damages) (collectively, the "Expenses")
(as qualified herein, each is an "Indemnified
Claim")
incurred by any
Landlord Indemnified Party including in the defense of any such
claim, to the extent directly caused by (i)
Tenant's
use of the Premises or from the conduct of Tenant's
business or from any activity, work,
or other acts or things done, permitted
or suffered by Tenant in or about the
Premises, (ii) any breach or default in the
performance of any obligation on Tenant's
part to be performed under the terms of this
Lease, (iii) any act, omission or
negligence or willful
or misconduct of Tenant in violation
of this Lease, or (iv) any negligence of any
officer, agent, employee, independent contractor, guest,
or invitee of Tenant, in each
case, except to the extent such Expenses are the result of the
gross negligence or willful misconduct of Landlord
or a Landlord Indemnified Party;
provided that

    	Page 23 of 46 

    	 

    

 

 

 

 

Landlord
shall give notice to Tenant of any event giving rise to such loss or damage within
thirty (30) days of Landlord's
knowledge of same. Upon receipt of written
notice from Landlord, Tenant shall, within thirty (30)
days thereafter defend any such Indemnified Claim
at Tenant's expense
by counsel reasonably satisfactory to Landlord. The parties
shall give each other immediate notice in case
of casualty or accidents in the Premises. The
provisions of this Section
30 shall survive the expiration or earlier termination
of this Lease.

 

		31.	SALE BY LANDLORD

 

In
the event the original Landlord hereunder, or any successor owner of the Property,
shall sell or convey the Property, such Landlord’s responsibility
for any then-existing liabilities and obligations shall end; and thereupon all such liabilities
and obligations (including all liabilities and obligations thereafter accruing) shall be binding
on the new owner. Tenant agrees to attorn to such new owner in writing if requested by Landlord
to do so on such form that contains commercially reasonable terms and conditions.

 

		32.	NO PARTNERSHIP

 

Nothing
contained in this Lease shall be deemed or construed to create a partnership or joint venture of or
between Landlord and Tenant, or to create any
other relationship between the parties hereto other than that of Landlord
or Tenant.

 

		33.	AUTHORITY

 

Landlord
and Tenant hereby represent, warrant and covenant each for itself, that each has full right,
power and authority to enter into this Lease upon the terms and conditions herein set forth. If Tenant
signs as a corporation, each of the persons executing this Lease on behalf of Tenant
does hereby covenant and warrant that Tenant is a duly authorized and existing corporation,
qualified to do business in the State of Texas, that the corporation has full right and authority
to enter into this Lease, and that each and both
of the persons signing on behalf of the corporation were authorized to do so.

 

		34.	TIME OF ESSENCE

 

Time
is of the essence with respect to the performance
of each party’s obligations under each provision
of this Lease.

 

		35.	WAIVER OF JURY TRIAL

 

Landlord
and Tenant hereby waive trial by jury in any action, proceeding, or counterclaim brought by
either of the parties hereto against the other on or in respect of any matter whatsoever arising out of or
in any way connected with this Lease, the relationship
of Landlord and Tenant hereunder, Tenant's use or occupancy of the Premises, and/or any
claim of injury or damage.

 

		36.	CHOICE OF LAW

 

This
Lease and all the terms and provisions hereof shall be interpreted in accordance with the laws
of the State of Texas. Any dispute, controversy or claim arising out of or relating to this Lease
or the breach thereof, shall be brought in the state and federal courts of Bexar
County, Texas. By executing and delivering this Lease, each party for itself irrevocable (a)
accepts generally and unconditionally the exclusive jurisdiction and venue of such courts; (b) waives
any defense of forum non conveniens; (c) agrees that service of all process in any such proceeding may be made by registered mail, return
receipt requested, to the applicable party at its address provided herein; and (d) agrees that service as provided in clause (c) above
is sufficient to confer personal jurisdiction on the applicable party in any

    	Page 24 of 46 

    	 

    

 

 

 

 

such proceeding in such court, and otherwise
constitutes effective and binding service in every
respect.

 

		37.	EXAMINATION OF LEASE

 

Submission
of this Lease for examination or signature by Tenant shall
not constitute the reservation of or an option for Lease, and the same shall not be effective as a Lease
or otherwise until execution and delivery by both Landlord and Tenant.

 

		38.	ATTORNEY'S FEES

 

If
as a result of any breach or default in the performance of any of the provisions of this Lease, the non-breaching
party to this Lease uses the services of an attorney in order to secure compliance with such
provisions or recover damages therefor, or to terminate this Lease or (in the case of Landlord) to evict Tenant, the party that prevails
in connection therewith or in any subsequent litigation shall be entitled to reimbursement
from the non-prevailing party for reasonable attorney's fees and costs to enforce the terms
of this lease, upon rendering of a final non-appealable judgment therefor.

 

		39.	RESERVATION OF RIGHTS

 

Landlord
hereby reserves to itself and its successors and assigns the following rights (all of which
are hereby consented to by Tenant): (i) to change the street address and/or name the Property
by providing 90 days prior notice to Tenant,
(ii) to erect, use and maintain pipes and
conduits in and through the public areas of the Property
(but not the Premises), provided that the utilities
that service the Premises and Tenants use of the Premises are not adversely affected thereby.
Landlord may exercise any or all
of the foregoing rights without being deemed to be guilty of an eviction, actual or constructive,
or a disturbance or interruption of the business of Tenant or Tenant's use or occupancy of
the Premises.

 

		40.	INTENTIONALLY DELETED.

 

		41.	PARTIAL INVALIDITY.

  

If
any provision of this
Lease or the application thereof to any person
or circumstances shall to any extent be
invalid or unenforceable, the remainder of
this Lease, or the application of such provision
to persons or circumstances other than
those to which it is invalid or unenforceable,
shall not be affected thereby, and each provision
of this Lease shall be valid
and be enforced to the fullest extent
permitted by Applicable Law.

 

		42.	NO WAIVER

 

The
failure of Landlord to seek
redress for violation of, or
to insist upon the strict performance of, any
covenant or condition of
this Lease, or of any
rule or regulation, shall not prevent a subsequent act,
which would have originally constituted a violation from having all the force and
effect of an original violation.
The receipt by Landlord of Rent with
knowledge of the breach of any
covenant of this Lease, shall not be
deemed a waiver of such breach. No provision of
this Lease shall be deemed to have been
waived by Landlord unless such waiver be in writing,
signed by Landlord.

 

		43.	BENEFIT AND BURDEN

 

The
provisions of this Lease shall be
binding upon, and shall inure to the benefit of, the
parties hereto and each of their
respective representatives, successors and assigns.

    	Page 25 of 46 

    	 

    

 

 

 

 

Landlord
may freely and fully assign its interest hereunder.

 

		44.	PARKING

 

Landlord
shall obtain from the owner
of the Complex the right for Tenant to
use ten (10) parking spaces within a one (1)
block distance of the Property, which Tenant shall have
the right to use in locations designated
by Landlord. If parking
spaces are provided within the Property,
they shall be subject to
such reasonable rules and/or regulations which
may from time to time be established by the owner
of the property containing the parking spaces.
If Tenant holds events that
require special parking arrangements at
the Complex, Tenant
may request Landlord to provide additional parking,
which approval shall not be unreasonably withheld.

 

The
one (1) block distance used in this Section 44 shall be measured from the boundary line of
the Property to the boundary line of the property containing the
parking area or facility, meaning that there could be as much as one (1) city blocks’ distance (as well
as streets and/or alleys) in between the Complex and the
parking area or facility.

 

		45.	LANDLORD LIEN

 

INTENTIONALLY
DELETED

 

		46.	OFAC; FINANCIAL CONTROL LAWS.

 

As
of the effective date of this Lease and at all times throughout the Term
of this Lease, including after giving effect to any transfers of interests permitted pursuant
to this Lease or done in violation of this Lease,
(i) Tenant and every officer, director, trustee, member, partner, manager, person
and entity holding a direct ownership interest in Tenant are in
full compliance with all applicable laws and regulations
of the United States of America that prohibit, regulate or restrict financial transactions,
and any amendments or successors thereto and any applicable regulations promulgated thereunder (collectively, the "Financial Control
Laws''),
including but not limited to those related to money laundering offenses and related compliance and reporting
requirements including any money laundering offenses prohibited under the Money Laundering
Control Act, 18 U.S.C. Sections 1956, 1957 and the Bank Secrecy Act,
31 U.S.C. Sections 5311 et seq.), the Foreign Assets Control Regulations, 31 C.F.R.
Section 500 et seq., Executive Order 13224, 66 Fed.
Reg.49079 (September 25, 2001) (the "Executive
Order''),
and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act and related regulations, as may be amended or supplemented from time
to time (the "Patriot Act'');
(ii) Tenant and every officer, director, trustee, member, partner, manager, person and entity holding a direct or ownership interest in
Tenant are not a Barred Person nor is Tenant owned
or controlled directly by any Barred Person; and neither the Tenant nor any of its officers, directors, trustees, members, partners, managers,
persons or entities holding a direct ownership interest in Tenant is acting, directly or indirectly,
for or on behalf of any Barred Person. The term
"Barred Person"
means: (i) any person, group or entity named as a "Specially Designated National and Blocked
Person" or as a person who commits, threatens
to commit, supports, or is associated with terrorism as designated by the United States Department
of the Treasury's Office of Foreign Assets Control ("OFAC');
(ii) any person, group or entity named in the lists maintained by the United
States Department of Commerce (Denied Persons and Entities); (iii) any government or citizen of any country that is subject to a United
States Embargo identified in regulations promulgated by OFAC;
and (iv) any person, group or entity named as a denied or blocked person or terrorist in any other list maintained by any agency of the
United States government, including the not limited to the Executive Order
and the Patriot Act. Tenant understands and has been advised by legal counsel on the requirements
of the Financial Control Laws.

 

		47.	ENTIRE AGREEMENT

    	Page 26 of 46 

    	 

    

 

 

 

 

This
Lease, together with the Exhibits attached hereto, contains and embodies the entire agreement of the parties hereto, and no representations,
inducements or agreements, oral or otherwise, between the parties not contained in this Lease, the Exhibits, or separate written agreement
entered into on or after the Effective Date, shall be of any force or effect. This Lease may not be modified, changed or terminated in
whole or in part in any manner other than by an agreement in writing duly signed by both parties
hereto. The recitals are hereby incorporated herein to the
same extent as if set forth herein in full.

 

		48.	OPTION TO RENEW

 

Landlord
grants to Tenant one (1) option to extend the Term for
a period of fifteen (15) years commencing upon the
termination of the Initial Term, and one (1) subsequent ten
(10) year period (the "First Extended
Term”)
commencing upon expiration of the first
extended Term, each exercisable by Tenant
giving Landlord notice
in writing not more than two hundred seventy
(270) days and not less than one hundred
twenty (120) days prior to the termination of
the Initial Term or First Extended Term, as the
case may be (each, a "Notice of Intent to Renew”),
provided that an Event of Default is not occurring at the time such option is exercised. Each extension of the Term shall be on the same
terms, covenants or conditions as provided for in the original lease, including the terms of Section 4.B. If Tenant should fail to give
the Notice of Intent to
Renew in a timely manner,
Tenant's
option to extend term under this Lease shall expire automatically.

 

		49.	SIGNS

  

Tenant has the
right to erect signage on the Premises and/or landscaped
portion of the Common Area within or adjoining
the Premises, subject to local ordinance, at Tenant’s sole cost and expense,
and in accordance with those commercially reasonable sign specifications to be
established by Landlord regarding signage within the
Property. Landlord shall have the right to prohibit any other advertisement
of Tenant which in its reasonable opinion tends to impair the reputation of the Property or
its desirability as a high-quality Property for offices, and upon
written notice from Landlord, Tenant shall immediately refrain from and discontinue any such advertisement.
All signage to be installed by Tenant must
first be approved in writing
by Landlord.

 

		50.	TAX
INCENTIVES

   

Landlord
intends to seek Federal and Texas Historic Tax Credits in connection with improvement
of the Property. Tenant agrees to cooperate with Landlord’s efforts, at no cost
to Tenant (other than routine administrative expenses), to obtain HTCs in connection with the “qualified rehabilitation expenses”
made by Landlord with respect to the Premises as that
term is defined in Section 47 of the
Internal Revenue Code. Tenant acknowledges that any improvements
or alterations must be made
in accordance with the Standards for Rehabilitation promulgated under federal and
state law and will cooperate reasonably with Landlord’s
counsel, historic architectural, tax, and accounting consultants in making any Tenant
improvements or alterations under this Lease,
provided that Tenant is not obligated to
change any of the proposed work after Landlord
approves Plans and Specifications.

 

Landlord
may also seek financing for the Property through the New Markets Tax Credit Program and Tenant
shall cooperate reasonably with Landlord in providing non-proprietary and non- confidential
information about its business, to the extent
reasonably necessary, to describe relevant community benefits resulting from Tenant’s business and operations.
In compliance with the New Markets Tax Credit Program, Tenant acknowledges that it shall
not engage in (a)
the rental to others of (i) real property without substantial improvements thereon
or (ii) “residential rental property” (as such term
is defined in Section 168(e)(2)(A) of the Tax
Code); (b) the operation of any private or commercial
golf course, country club, massage parlor, hot tub or suntan
facility, race track or other
facility used for gambling, any store the principal
business of which is the sale of alcoholic
beverages for consumption off premises; (c) the
development or holding of intangibles
for sale or licensing; (d) farming (within the meaning of Section
2032A(e)(5)(A) or (B) of the Tax Code;
(e) the operation of a bank, credit union, or
thrift; (f) any type of sexually
oriented business, adult

    	Page 27 of 46 

    	 

    

 

 

 

 

entertainment,
or adult bookstore; (g) escort services, dating
services, or similar matchmaking
or companion services; (h) without limitation
of (b) above, bingo; (i) payday lending
activities, payday advances, paycheck advances, or any
similar type of lending activity; (j) pawn shops, pawn brokers, car title lender,
or any similar type of lending
activity; (k) check cashing services; (l) debt collection activities, debt consolidation
services; (m) bail bond services of any
kind, or any activities of a bail bond
agent; (o) the sale, distribution, marketing, or production
of medical marijuana, medical cannabis or any constituent
cannabinoids such as THC, as well as
any substance considered to be synthetic cannabinoids;
(p) the sale, distribution, or manufacture of any type
of illicit drug paraphernalia; (q) tattoo parlors
or any establishment that performs tattooing; (r) a bar,
restaurant, or other establishment, the principal business of which
is the sale of alcohol for consumption on-premises; (s) businesses based predominantly
on inbound or outbound telemarketing activities;
or (t) multi-level marketing activities, the
sale of multi-level business opportunities,
or network marketing activities.

 

 

 

 

IN WITNESS
WHEREOF, Landlord and Tenant have executed
this Lease under seal.

 

 

    	Page 28 of 46 

    	 

    

 

 

 

 

 

 

 

List of Exhibits:

 

Exhibit "A" - Legal Description
of Complex

Exhibit "B" - Premises

Exhibit "C"
- Work Letter

Exhibit "D" - Rules
and Regulations

Exhibit "E" - Hazardous
Material List

 

 

 

 

    	Page 29 of 46 

    	 

    

 

 

 

EXHIBIT
" A"

LEGAL DESCRIPTION
OF PROPERTY

 

That portion
of Lot 15, Block 4, NCB
567, The Velocity Center Subdivision, City of San Antonio,
recorded in Volume 20001, Page 1619, Plat Records,
Bexar County, Texas depicted below, consisting of approximately
..817 acre:

 

 

 

 

 

    	Page 30 of 46 

    	 

     

EXHIBIT
"B"

PREMISES

 

 

 

Scorpion
8,042 SF

 

    	 

    	 

    EXHIB1T
"C"

WORK LETTER

 

BASIC
WORK LETTER INFORMATION

 

 

Tenant’s
Representative: Bill Ostrander Landlord’s
Representative: Pat Kennedy

This
Work Letter shall set forth the
terms and conditions relating to the construction of the
Premises. This Work Letter is essentially organized chronologically and addresses
the issues of the construction of the
Premises, in sequence; as such, issues will arise during the
actual construction of the Premises. All
references in this Work Letter to Sections of the
"Lease" shall mean the relevant portions of the Lease to
which this Work Letter is attached as Exhibit C, and
all references in this Work Letter to Sections of "this
Work Letter" shall mean the relevant portions of this
Work Letter. All capitalized terms in this Work Letter that are not defined in this Work
Letter shall have the meanings given them in the
Lease.

 

SECTION
1

 

LANDLORD'S
INITIAL CONSTRUCTION IN THE PREMISES

 

	 	1.1	Construction of Improvements. Landlord is constructing all of the Lease Improvements and Tenant Improvements necessary for Tenant's use of the Premises, as more fully set forth in, or as described or referenced on Schedule 1.1 to this Work Letter. Out of the improvements, the base, shell, and core of the Premises shall be completed by Landlord at Landlord’s sole expense and shall be referred to as the “Lease Improvements.” All other improvements necessary for Tenant's use shall be referred to as the “Tenant Improvements” and shall be completed by Landlord at the sole expense of Landlord, limited to the Landlord Cap in accordance with the Lease, Section 7.A. of the Lease, and the terms hereof (the “Landlord Cap”).

Landlord
agrees not to amend the Lease Improvements Construction
Contract or Schedule 1.1 or the Tenant
Improvements Construction Contract, without Tenant Rep’s prior written consent, which shall
not be unreasonably withheld, delayed, denied or conditioned.
Notwithstanding the previous sentence, Landlord may make such
changes to the Lease Improvements as required by applicable
governmental authorities, along with non-material “field”
changes to the Lease
Improvements, provided Landlord provides advance written notice to Tenant of such changes.

	 	1.2	Appointment of Tenant Rep. Tenant will appoint its Tenant Representative (“Tenant Rep”) with authority to act on behalf of the Tenant for purposes of the construction hereunder of Lease Improvements and Tenant Improvements in accordance with this Exhibit C including Schedule 1.1 and the Lease Improvements Construction Contract and the Tenant Improvements Construction Contract. Tenant Rep duties and authority will include review and approval of: (a) Schedule 1.1, including project plans and specs for the Lease Improvements and Tenant Improvements, and (b) review and approve the Lease Improvements Construction Contract and Tenant Improvements Construction Contract for construction of the Lease Improvements and Tenant Improvements.

 

SECTION
2

 

TENANT
IMPROVEMENTS

 

	 	2.1	Review and Approval. Landlord and Tenant Rep will review and approve the plans and specifications applicable to construction of the Lease Improvements and the Tenant Improvements. Landlord will

    	 

    	 

    cause
construction of the Lease Improvements and the
Tenant Improvements to conform to the approved
plans and specifications, subject to the
terms of the Lease
(including Section 7.A). Tenant agrees not to amend the Plans and Specifications
(as hereinafter defined) without Landlord's prior written consent, which shall not
be unreasonably withheld, delayed, denied, or conditioned.

 

SECTION 3

 

CONSTRUCTION
OF THE LEASE IMPROVEMENTS

 

	 	3.1	Contractors. One or more contractors retained by Landlord and Tenant (the "Contractors") shall construct the Lease Improvements and Tenant Improvements. Tenant may independently contract with separate contractors for work that is not part of the Lease Improvements or Tenant Improvements. to construct incidental improvements or installations.

 

	 	3.2	Contractors’ Warranties and G uaranties. As a condition of Substantial Completion, Landlord shall assign to Tenant, at Landlord's cost, all warranties and guaranties by the Contractors relating to the Lease Improvements, Tenant Improvements and relating to the FF&E, and provide evidence of each Contractors’ or warrantor’s consent to samepursuant to the Lease Improvements Construction Contract and Tenant Improvements Construction Contract (collectively, the “Warranties”). Landlord shall cooperate reasonably with Tenant in requesting performance of the applicable contractor’s obligations under the Warranties and in enforcing Tenant's rights thereunder.

 

	 	3.3	Tenant Rep. The Tenant Rep appointed pursuant to Section 5.2 herein and/or Tenant’s Architect will visit the site at intervals appropriate to the stage of construction, to become generally familiar with the progress and quality of the portion of the Lease Improvements and Tenant Improvements work completed, and to determine in general if such work observed is being performed in a manner indicating that said work, when fully completed, will be in accordance with the Lease Improvements Construction Contract and the Tenant Improvements Construction Contract including their respective plans and specifications (collectively referred to as “Construction Documents”). However, the Tenant Rep and Tenant’s Architect will not be required to make exhaustive or continuous on-site inspections to check the quality or quantity of the work. The Tenant Rep and Tenant’s Architect will not have control over, charge of, or responsibility for the construction means, methods, techniques, sequences or procedures, or for the safety precautions and programs in connection with such Lease Improvements and Tenant Improvements work, since these are solely the Contractor’s rights and responsibilities under the Lease Improvements Construction Contract and Tenant Improvements Construction Contract. The Tenant Rep and Tenant’s Architect will not be responsible for the Contractor’s failure to perform the Work in accordance with the requirements of the Construction Documents. The Owner, Tenant Rep
and Tenant’s Architect will not have control over or charge of, and will not be responsible for acts or omissions of, the Contractor, and its Subcontractors, or their agents or employees, or any other persons or entities performing portions of the Work. The Tenant Rep has authority to reject Work that does not conform to the Construction Documents. Whenever the Tenant Rep and Tenant’s Architect considers it necessary or advisable, the Tenant Rep and Tenant’s Architect will have authority to require inspection or testing of such work.

 

	 	3.4	Change Orders (Lease Improvements). Tenant may request that Landlord submit a change order to the Contractor pursuant to section IV of the Lease Improvements Construction Contract. All change orders requested by Tenant will be subject to the process described in section IV of the Lease Improvements Construction Contract and the course of dealing established between Tenant, Contractor, Project Control of Texas, and Texas Research and Technology Foundation, in their role as owner, for prior change orders. All change orders that are requested as described in this section of the Work Letter will also be approved by Landlord within 24 hours of notice of approval from Project Control of Texas. If Tenant requests a change order and that change order is approved

    	 

    	 

    after
                         going through the process described in this section, and the cost of that change order
                         causes the total amount of the Lease Improvements
                         to exceed $4,373,907.75, then Landlord will pay for the change order
                         as provided in the Lease Improvements
                         Construction Contract and the amount of the
                         first month of Base Rent will increase
                         accordingly.

 

	 	3.5	Change Orders (Tenant Improvements). Tenant may request that Landlord submit a change order to the Contractor in connection with the Tenant Improvements Construction Contract. All change orders requested by Tenant will be subject to the process described in the Tenant Improvements Construction Contract and the course of dealing established between Tenant, Contractor, and Project Control of Texas for prior change orders. All change orders that are requested as described in this section of the Work Letter will also be approved by Landlord within 24 hours of notice of receipt. If Tenant requests a change order and that change order is approved after going through the process described in this section, and the cost of that change order causes the total amount of the Tenant Improvements to exceed $6,529,482.00, then Landlord will pay for the change order as provided in the Tenant Improvements Construction Contract and the amount of the first month of Base Rent will increase accordingly.

 

SECTION 4

 

COMPLETION
OF THE LEASE IMPROVEMENTS:
LEASE COMMENCEMENT DATE

 

4.1 Substantial
Completion. For purposes of the Lease, “Substantial
Completion" of the Lease Improvements
and Tenant Improvements shall occur upon: (a)
completion of construction of the Lease Improvements
and Tenant Improvements in the Premises, as certified in
writing by the Architect with written approval
by the Tenant Rep (with such
certification and approval delivered to Landlord and Tenant),
with the exception of any punch-list items
(together with agreement for the timing of completion
of such punch-list items) and any Tenant fixtures,
workstations, built-in furniture, or equipment to be installed
by Tenant or under the supervision of
the Contractors, all as verified by Tenant Rep
which verification shall occur as soon as reasonably
practicable in a commercially reasonable manner following
Tenant’s receipt of written notice from Landlord
that the Premises are ready for a final
walk-through in order to confirm completion and the content of the
punch-list and completion of Tenant’s
walk-through; (b) Landlord’s assignment of
warranties and guaranties
described in Section 3.2 of this Work Letter and delivery of same to Tenant;
(c) Landlord and Tenant have received all appropriate permits, certification and approvals
from all governmental authorities regarding completion of the Lease Improvements and Tenant
Improvements to the extent such permits and approvals are required for Tenant’s use and occupancy
as evidenced by a final certificate for the permanent occupancy thereof or a temporary certificate of occupancy (without conditions other
than conditions relating to matters that are set forth in the punch list); (d)
evidence that the costs of the Leasehold Improvements have been
paid; and (e) receipt by Tenant of a conditional
lien waiver from
the contractor under the Tenant Improvements
Construction Contract that is conditioned only upon payment of the Prepaid Rent; it
being understood that Landlord agrees to furnish
a final lien waiver from such contractor not later than 10 days after Landlord receives
the Prepaid Rent. Landlord agrees, notwithstanding
Tenant’s payment of Prepaid Rent, to withhold from Contractor, a sum equal to the cost of the work
and materials set forth on the foregoing punch-list
and to pay such sum to Contractor only as, when,
and to the extent the work corresponding
thereto is completed to the approval of Tenant and Tenant has notified Landlord thereof in writing (such approval not to be unreasonably
withheld, delayed, denied, or conditioned); provided, however, that Landlord is
not required to breach the terms of the corresponding construction contract. Landlord and Tenant
shall cooperate reasonably in connection with the completion of such punch-list
work.

 

	 	4.2	Delay
    of Substantial Completion
    of the Premises - Tenant. Except
    as provided in this Section 4, the Lease
    Commencement Date shall occur as set forth in
    the Lease. If there shall be a delay
    or there are delays in the Substantial Completion of the
    Premises (based upon the anticipated date of the

    	 

    	 

    occurrence
of the Lease Commencement Date as set forth
in the Lease) or in the occurrence of any of
the other conditions precedent to the Lease Commencement
Date, as set forth in the Lease, as a direct
result of any of the following (collectively, "Tenant
Delays"):

 

	 	4.2.1	Tenant's failure to timely approve any matter requiring Tenant's approval, provided that Landlord has requested such approval from Tenant’s Representative in writing;

 

	 	4.2.2	A breach by Tenant of the terms of this Work Letter or Lease;

 

	 	4.2.3	Change orders requested by Tenant that are agreed on or directed as provided in Section 3.5, above, except as a result of non-conforming work by Contractor, the condition of the Premises, or the condition of the work performed under the Lease Improvement Construction Contract;

 

then,
notwithstanding anything to the contrary set forth in the Lease and regardless of
the actual date of the
Substantial Completion of the Premises, but provided that the Tenant’s acts
or omissions described in this Section 4.2, cause delay
to the Lease Improvements or Tenant Improvements respective project schedules’ critical
paths, which delays the date of Substantial Completion of the
Premises, the date of Substantial Completion
(for purposes of determining the Lease Commencement
Date) shall be deemed to be the date
on which Substantial Completion of the Premises would
have occurred if no Tenant Delays, as set
forth above, had occurred (subject, however, to the provisions of Section
3A of the Lease and
Section 4.3 of this Lease, to the extent a Landlord
Delay occurs).

 

	 	4.3	Delay of Substantial Completion of the Premises – Landlord. If there is a delay or delays in the Substantial Completion of the Premises as set forth in the Lease as a direct result of any of the following:

 

	 	4.3.1	Landlord’s breach of the terms of this Work Letter, the Lease, the Lease Improvements Construction Contract, or the Tenant Improvements Construction Contract;

 

	 	4.3.2	Landlord fails to furnish payment to Contractor provide approvals required under this Work Letter under either or both construction contracts, or

 

	 	4.3.3	Change orders requested by Landlord,

 

then, a “Landlord Delay” will
be deemed to have occurred.

 

4.4. Contractor
Delay of Substantial Completion of Tenant
Improvements. If Tenant or Tenant
Rep reasonably determine that
Substantial Completion of the Tenant Improvements may not by
achieved by Contractor according to the Tenant
Improvements Construction Contract or the Outside Deadline
(set forth in the Lease), then Tenant or Tenant Rep shall have the right to enforce,
or require Landlord to enforce all of Landlord’s
corresponding rights and remedies for
timely substantial completion pursuant to the Tenant
Improvements Contact. In addition, if Contractor does not achieve Substantial Completion
of the Tenant Improvements according to the Tenant Improvements
Construction Contract or the Outside Deadline, then
Tenant shall have, and Landlord hereby assigns Tenant all of Landlord’s
remedies and relief for delayed Substantial Completion as provided
in the Tenant Improvements Construction Contract. Tenant Rep will be provided
all documents and information reasonably necessary to monitor Contractor’s progress
of the work of the
Tenant Improvements Construction Contract, including without limitation, the latest
updated Project Schedule(s) in native format, and all
periodic progress reports and applications for
payment submitted by Contractor.

 

4.4.1. Landlord
shall not pay Contractor under the Tenant
Improvements Construction Contract until complete pay applications, with conditional lien
waivers, are submitted to Tenant for Tenant’s
review and approval (such

    	 

    	 

    approval
not to be unreasonably withheld, delayed, denied,
or conditioned); provided, however, that Tenant will be deemed
to approve such pay application if Tenant does not reply to Landlord prior to
5:00 p.m. Central Time on the third full business day
following Tenant’s receipt of such pay application package. Tenant agrees that Landlord
may submit copies of such pay application package,
for the purpose of this Section 4.4.1, via e-mail.to
Tenant (bostrander@heatbio.com) and Tenant’s
counsel (jwalsh@bartonbensonjones.com and 
tom@txconstructionlaw.com).

 

SECTION 5

 

MISCELLANEOUS

 

	 	5.1	Tenant’s Entry into the Premises Prior to Substantial Completion. Provided that Tenant and its agents do not interfere with, or delay, the Contractors' work in the Complex and the Premises, the Contractors shall allow Tenant and its Separate Contractor (s) access to the Premises prior to the Substantial Completion of the Premises for the purpose of Tenant installing Tenant's data and telephone equipment and cabling in the Premises. The installation of the telephone and data cabling will be coordinated with the Contractors to cause such work to be performed at a time reasonably designated by the Contractors. Prior to Tenant's entry into the Premises as permitted by the terms of this Section 5.1, Tenant shall submit a schedule to Landlord and the Contractors, for their approval, which schedule shall detail the timing and purpose of Tenant's entry. Tenant shall hold Landlord harmless from and indemnify, protect, and defend Landlord against any loss or damage to the Building or Premises and against injury to any persons caused by Tenant's actions pursuant to this Section 5.1.

 

	 	5.2	Tenant's R e pr e s ent at i ve o r T e nan t’ s R e p . Tenant has designated Tenant's Representative/ Tenant Rep, as set forth above, Section 1.2, as its sole representative with respect to the matters set forth in this Work Letter, who shall have full authority and responsibility to act on behalf of Tenant as required in this Work Letter.

 

	 	5.3	Landlord's Representative. Landlord has designated Landlord's Representative, as set forth above, as its sole representative with respect to the matters set forth in this Work Letter, who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of Landlord as required in this Work Letter.

 

	 	5.4	Time is of the Essence. Time of the essence in this Work Letter, unless otherwise indicated, all references herein to a “number of days" shall mean and refer to calendar days. In all instances where Tenant is required to approve or deliver an item, if no written notice of approval is given or the item is not delivered within the stated time period, at Landlord's sole option, at the end of said period the item shall automatically be deemed approved or delivered by Tenant and the next succeeding time period shall commence.

 

	 	5.5	Tenant's Lease Default. Notwithstanding any provision to the contrary contained in the Lease, if an Event of Default (as defined in Section 15A of the Lease) at any time on or before the Substantial Completion of the Premises, then (i) in addition to all other rights and remedies granted to Landlord pursuant to the Lease, Landlord may cause the Contractors to cease the construction of the Lease Improvements and Tenant Improvements (in which case Tenant shall be responsible for any delay in the Substantial Completion of the Premises caused by such work stoppage as set forth in Section 4.2  of this Work Letter), and all other obligations of Landlord under the terms of this Work Letter shall be suspended until such time as such Event of Default is cured pursuant to the terms of the Lease.

 

    	 

    	 

    Schedule
1.1 to Work Letter

 

The Lease Improvements
shall be the work referenced in the agreement between Texas Research & Technology
Foundation as owner and The Whiting-Turner Contracting
Company as contractor (“Lease Improvements Construction Contract”) and
as further described in the bidding plans and specifications for the Lease Improvements
as prepared by Marmon Mok Architects
(the “Plans and Specifications”), both of which are attached to this Work Letter as Exhibit 1-A, as may be further
amended pursuant to the terms of this Work Letter. The Lease Improvements Construction Contract will be assigned to TPB Merchants Ice
LLC, and its affiliates, as owner, contemporaneous
with the execution of the Lease.

 

The Tenant Improvements shall be for
the work referenced in the certain AIA A133 -2019 Contractual Agreement between the Landlord, TPB Merchants Ice LLC, the Tenant, Scorpion
Biological Services , Inc. and the Contractor, the Whiting-Turner Contracting Company (“Tenant Improvements Construction Contract”),
attached to this Work Letter as Exhibit 1-B, as may be further amended pursuant to the terms of this Work Letter.

    	 

    	 

    EXHIBIT
1-A TO THE 

WORK LETTER

 

LEASE
IMPROVEMENTS CONSTRUCTION CONTRACT

 

 

    	 

    	 

     

 

 

LAB
TENANT FINISH-OUT

CONSTRUCTION
CONTRACT

 

COST
PLUS FEE WITH GUARANTEED
MAXIMUM

 

 

 

 

by and between

 

 

 

TEXAS RESEARCH
& TECHNOLOGY FOUNDATION

(Owner)
and

THE WHITING-TURNER
CONTRACTING COMPANY

(Contractor)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 

    	 

    I N D
E X

 

 

	SECTION	CONTENTS	PAGE
	Section I	Construction	1
	Section II	Time for Performance	4
	Section III	Permits and Licenses	6
	Section IV	Changes	7
	Section V	Payments	8
	Section VI	Discounts, Rebates and Refunds	16
	Section VII	Subcontracts and Purchase Orders	16
	Section VIII	Insurance	17
	Section IX	Indemnity	17
	Section X	Bonds; Subcontractor Default Insurance	18
	Section XI	Independent Contractor	19
	Section XII	Inspection and Audit	19
	Section XIII	Surveys	19
	Section XIV	Termination	20
	Section XV	Notices	21
	Section XVI	Liens and Claims	22
	Section XVII	Title to Work	22
	Section XVIII	Waiver	23
	Section XIX	Conflicts	23
	Section XX	Work in Progress	23
	Section XXI	Compliance with Laws; Owner Policies	23
	Section XXII	Personnel	23
	Section XXIII	Contractor's Warranties	24
	Section XXIV	Defects	24
	Section XXV	Confidentiality and Media Communications	25

 

 

 

 

    	 

    	 

    I N
D E X

 

 

	
    SECTION

     

    Section XXVI
	
    CONTENTS

     

    Representatives
	
    PAGE

     

    25

	Section XXVII	Assignment	26
	Section XXVIII	Limited Recourse	26
	Section XXIX	Nondiscrimination	27
	Section XXX	Construction of Terms	27
	Section XXXI	Captions	27
	Section XXXII	Entire Agreement	27
	Section XXXIII	Severability; Counterparts	27
	Section XXXIV	Drug and Smoke Free Workplace	27
	Section XXXV	Security	28
	Section XXXVI	Lender’s Requirements	28
	
     

    SCHEDULE
    OF EXHIBITS:

     

    Exhibit A
	
     

     

     

    Property Description
	 
	
    Exhibit
    B Exhibit B-1 Exhibit C

    Exhibit C-1
	
    Contract Documents

     

    General Conditions
    of the Construction Contract Project Personnel

    Labor Burden
	 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 

    	 

    CONSTRUCTION
CONTRACT

 

COST
PLUS FEE WITH GUARANTEED
MAXIMUM

 

 

This CONSTRUCTION
CONTRACT is made and entered into as of March
1st, 2022, by and
between Texas Research & Technology Foundation
(hereinafter referred to as "Owner") to
be assigned to TPB Merchants Ice LLC,
and its parent TransPecos Banks, SSB (TPB) and its
affiliates, TransPecos Development, reference Section XXVII, having
an office at 1305 E.
Houston, St. Suite 4057, San Antonio, Texas 78205, and
The Whiting-Turner Contracting Company (hereinafter referred to as "Contractor"), having
its principal office at 17115 San Pedro Avenue,
Suite 120, San Antonio, Texas 78232. The "Agreement"
consists of the terms and conditions
of this Construction Contract, together with
Exhibit A, Exhibit B, Exhibit
B-1, Exhibit C and Exhibit C-1
attached hereto and incorporated herein, the Contract Documents and
all purchase orders, change orders, exhibits
and addenda executed by the parties
from time to time that incorporate this Agreement.
Capitalized terms not defined below shall have the meaning
ascribed to them on the
list of Defined Terms attached hereto as Schedule 1 and
incorporated herein for all purposes.

 

WITNESSETH:

 

In consideration
of the mutual covenants and agreements
set forth herein, Contractor and Owner hereby agree as follows:

 

SECTION
I 

CONSTRUCTION

	 	A.	Construction of the Project.

 

1.
Contractor's Work. Subject to and in
accordance with the terms and provisions
of this Construction Contract, Contractor shall construct,
equip and furnish for Owner, on the property in
San Antonio, Bexar County, Texas, described in
Exhibit A attached hereto (the
"Property"), a Historic Renovation, as may be adjusted
by the Owner's Change Order, together with related
facilities and improvements, all of which
are hereinafter collectively referred to as the "Improvements."
The Improvements shall be described in, and
reasonably inferable from, the drawings and specifications
to be prepared by the Architect ("Drawings
and Specifications") and
reasonably indicated therein or customarily implied
therefrom, and shall be further identified herein. In connection
with the construction, equipping and furnishing of the Improvements, the Contractor
shall provide and furnish all materials, supplies, apparatus, appliances, equipment, fixtures,
tools, implements and all other facilities (hereinafter collectively referred to
as "Materials"), and all labor, supervision, transportation, utilities, storage
and all other services (hereinafter collectively referred to as "Services")
as and when required for or in connection with
the construction, equipping or furnishing
of, or for inclusion or incorporation in,
the Improvements, such construction, equipping and
furnishing of the Improvements and the furnishing
of the Materials and Services being referred to
as the "Work." The Work to construct
the Improvements in accordance with the
Drawings and Specifications shall be referred to herein
as the "Project."

 

1.Performance
of Contractor's Work. The Contractor covenants
with the Owner to furnish Contractor's best skill
and judgment and to cooperate with the Owner, the Owner's Representative and the Architect in furthering the interests
of the Owner. The Contractor
agrees to furnish efficient business administration and superintendence, to furnish at all
times an adequate supply of
workers and materials and to perform the Work in the
best and most sound way and in the most expeditious
and economical manner consistent with the interests
of the Owner. Should any question arise
as to the authority of the Architect, or any
difficulty arise with respect to communication therewith,
the Contractor shall notify the Owner's Project Management Consultant. The Contractor
covenants that all the Work shall be done in
a good and workmanlike manner in accordance with
applicable Drawings and Specifications, free from defects
as per Section XXIV, and that all Materials
furnished and used in connection therewith shall
be new and subject to approval by
the Architect and Owner, except as otherwise expressly provided for
in the Drawings and Specifications. The Contractor
shall cause all Materials and other parts of the
Work to be readily
available as and when required or needed for
or in connection with the construction, equipping and furnishing
of the Improvements.

 

 

Page
1 of 30

 

    	 

    	 

     

	 	B.	Cost of the Work.

 

 

	 	1.	Initial Guaranteed Maximum Cost.

 

a. As soon
as practicable (but in no
event later than thirty (30) days) after delivery to
the Contractor of sufficient Drawings and Specifications to
determine with reasonable accuracy the scope
of the Work, the Contractor shall prepare a
detailed estimate of the Cost of
the Work, including a reasonable Construction Contingency,
the total of which estimate, when it shall have
been reviewed and approved by the
Owner and added to Contractor's Fee, shall be known
as the "Initial Guaranteed Maximum Cost," or "IGMC."
The IGMC shall include the total of all Cost
of the Work to be reimbursed, as set
forth in Section V of this Construction Contract, and
shall incorporate the EP(s). The Initial Guaranteed Maximum Cost
shall be described and incorporated in a second
amendment to this Construction Contract ("Second Amendment"). Such
Second Amendment shall (a) define the "Scope
of the Work", (b) identify
the Drawings and Specifications, and (c) establish
a date on which the Work is to
be commenced and on which it is to be substantially
and finally completed. A summary of line items
constituting the Initial Guaranteed Maximum Cost and the Estimated Contractor's
Cost shall be included in the Second Amendment
at the time of the establishment of the Initial
Guaranteed Maximum Cost.

 

 

b. The Owner
reserves the right to waive the requirements for the establishment of the Initial Guaranteed
Maximum Cost set forth in this
Section I.B. Should the Owner elect to waive the IGMC, the appropriate provisions
of this Section I.B shall be incorporated
into the requirements for establishment of
the Guaranteed Maximum Cost.

 

	 	2.	Guaranteed Maximum Cost.

 

a. When
the Drawings and Specifications have been sufficiently
developed with respect to the Work so
that the Owner may deliver to
the Contractor a set of Drawings and Specifications
denominated "Final Working Drawings and Specifications,"
the Contractor shall, within a reasonable period of time (not
to exceed forty-five (45) days of receipt thereof),
complete all competitive bidding for the purchasing
of materials and subcontracts and prepare for the Owner's
review the Guaranteed Maximum Cost for the Work, including
detailed projections for the estimated Cost of the Work and the proposed schedule
for completing the Work. The estimated Cost of the Work
shall include a general conditions line
item consistent with Contractor’s prior estimates
of same.

 

b. The Construction
Contingency to be included in the Guaranteed Maximum Cost
shall be reduced from the amount for
such Construction Contingency included in the IGMC to
correspond with (i) reduced estimates of the Cost of
the Work; (ii) reduced risk due to completion
of design and (iii) other factors which modify
the Contractor's risk. The Contractor shall,
as a part of the monthly progress report, provide the
Owner with a statement on Contractor's
request for use of the Construction Contingency setting
out charges requested to be made, if any, against
the Construction Contingency, and further noting
the balance remaining in the Construction
Contingency. Notwithstanding the foregoing, the Construction Contingency shall be
a budgeted item paid out to Contractor as applicable
and in accordance with this Agreement
by Owner, and Contractor acknowledges Contractor
will not have direct access
to the Construction Contingency. Sums may be charged
to the Construction Contingency only to the extent that the
same have been paid or are to be paid by the Contractor
out of the Construction Contingency; provided, that
Owner has been made aware of and approved
such charges prior to their accumulation. All charges
to the Construction Contingency will be accounted
for by Change Order decreasing the amount
of Construction Contingency and increasing the Estimated
Contractor's Cost with no adjustment of the
Guaranteed Maximum Cost. Any Construction Contingency remaining at the
time of the Final Payment shall inure solely to
the benefit of the Owner, as set
forth in Section V.A below.

 

 

 

Page
2 of 30

 

 

    	 

    	 

    c. The Guaranteed
Maximum Cost consists of (i) the Estimated Contractor's
Cost (including Allowances, if any, and
the Construction Contingency) and (ii) the Contractor's
Fee. The Guaranteed Maximum Cost shall include
all prior Amendments and the total of all costs
to be reimbursed as set forth under Section
V.B of this Construction Contract, and, subject to
changes in the Scope of the Work as defined
under Section IV, shall not exceed the IGMC. Contractor's
estimate of the Cost of Work included in
the Guaranteed Maximum Cost shall be detailed
in the same line item format utilized for the
IGMC to facilitate easy review and comparison.
In no event (except for changes in
the Scope of the Work) shall
such redetermination result in an increase
in the IGMC or any change in
the construction schedule. The redetermination shall
be accomplished in part by reducing
the Estimated Contractor's Cost by the amount of the
net difference between the total of all such line
items as contracted and ordered and
the corresponding estimated amounts set forth in the
First and Second Amendments. In the event of changes
in the Work resulting in an adjustment
to the Estimated Contractor's Cost, the calculation
of the above referenced redetermination shall
be based on the Estimated Contractor's Cost as so
adjusted. Upon approval by Owner, such re-determined
estimate of the Cost of the Work and re-determined
Construction Contingency, when added to Contractor's Fee, shall be known
as the "Guaranteed Maximum Cost," or the
"GMC," and shall be incorporated in
a third amendment to this Construction Contract ("Third
Amendment"). The First Amendment, Second Amendment
and Third Amendment shall define the scope of work
for each and update the Contract Documents, as set forth
in Exhibit B attached
hereto and incorporated herein.

 

d. It is
understood and agreed that if, in the sole
judgment of the Owner, the Contractor and Owner are unable to
reach an agreement with regard to the GMC or the construction
schedule, the Owner has the right to
terminate this Agreement and performance of the
Work without any further
obligation to the Contractor.

 

e. From time
to time, after commencement of the performance of the Work, the
Owner shall cause the Drawings and Specifications for the Allowances, or for
portions thereof, if any, to be prepared and
delivered to the Contractor. To the
extent that costs for performing Allowance
Work differ from the amount set forth for same, such
difference shall be the subject of an appropriate additive or deductive
Change Order, as the case may be, and the Estimated
Contractor's Cost, and the Guaranteed Maximum
Cost or IGMC, as the case may be, shall
be adjusted pursuant to Section IV hereinafter.

 

	 	C.	Project Schedule.

 

1.
The Contractor shall provide the critical path
scheduling and monthly updating thereof, and other
necessary schedules in the interest of completing
the Improvements in the most
expeditious and economical manner (hereinafter called the "Progress Schedules").
The Progress Schedules shall be in a format
acceptable to the Owner
and shall be consistent with the schedule which
shall be incorporated in the First Amendment. The Progress Schedules
shall indicate the proposed starting and completion dates for
the various subdivisions of the Work, as well
as the completion of the Work. The Progress Schedule
shall be updated every thirty (30) days and
submitted to Owner and to Architect with Contractor's Application for Payment. Each Progress
Schedule shall contain a comparison of
actual progress with the estimated progress for such
point in time stated in the original Progress Schedule. If any schedule
submitted sets forth a date for Substantial
Completion for the Work or any phase of the Work beyond the date(s)
of Substantial Completion or any phase of the
Work established in
this Agreement (as the same may be extended
as provided in the Contract Documents), then Contractor shall
submit to Architect and Owner for their review and approval a narrative
description of the means and methods that Contractor
intends to employ to expedite the
progress of the Work to ensure timely
completion of the various phases of the Work,
as well as the completion of the Work. To ensure
such timely completion, Contractor shall take all necessary action,
including, without limitation, increasing the number of personnel and labor on the
Project and implementing overtime and double
shifts. In that event, Contractor shall not
be entitled to an adjustment in the
Contract Sum or the
Contract Time.

 

2.
The Contractor shall provide competent supervision
and management of all phases of the
Work and shall cause the Work to be performed
in accordance with the Contract Documents
and all things indicated or implied
therefrom. Prior to commencement of construction,
the Contractor shall prepare and submit for the Owner's approval the
Progress Schedules for the Work. The Progress Schedules
shall be related to the construction of
all the Improvements
to the extent required by the Contract Documents. These schedules
shall indicate the dates for the

 

 

Page
3 of 30

 

 

    	 

    	 

    starting
and completion of the various stages of construction
and shall be revised as required by the
conditions of the Work, subject to the Owner's
approval, it being further understood that no construction
activity shall have a duration that exceeds
twenty (20) calendar days.

 

3.
The parties acknowledge and agree that, notwithstanding
any theoretical delays or theoretical extensions
of time for completion as may be shown on any
critical path method ("CPM")
schedules or printouts, the Scheduled Substantial
Completion Date and Scheduled Final Completion Date and
Interim Completion Dates, if any, shall be governed
by this Agreement and shall be extended only
in accordance with the procedures set
forth for same hereinafter.

 

	 	D.	Additional Work.

 

1.
The Contractor shall also prepare and furnish
project cash flow projections, manning data
for critical activities and schedules for the purchase and delivery of all
critical equipment and material, together with periodic updating thereof.

 

2.
The Contractor shall prepare or cause to be
prepared, as part of the Work, all shop drawings
and other submittals not made a part of the Drawings and Specifications that are required.
The Contractor acknowledges that, in performing the Work, the
Contractor shall also provide and be responsible
for all general conditions work, including, but not limited to, hoists,
safety equipment, portable toilets and temporary
site utilities.

 

3.
The Contractor acknowledges that during the progress of the
Work, the Owner may engage separate contractors in accordance with Article 6 of the
General Conditions to perform work with respect to
other projects on the Property. Consequently, the Work to
be performed hereunder must coordinate, without limitation, such matters as access
and staging, and storage of equipment, as well
as the performance of any necessary physical
connection. Accordingly, the Contractor
agrees to schedule, plan and coordinate such matters with the Owner's separate
contractors for each project and, if unable to reach satisfactory
resolution, to immediately notify the Owner and Architect in the manner
provided in the other provisions of the Contract Documents.
The Owner's separate contractors will be required to
provide appropriate indemnification, insurance and waiver of subrogation
in favor of the Owner.

 

SECTION
II

TIME FOR PERFORMANCE

 

A. Time
for Performance.

 

1.
The Contractor shall commence the Work within ten
(10) days after the Contractor's receipt from the Owner
of notice to proceed ("Notice
to Proceed"). Contractor agrees to and shall
diligently prosecute the Work to Substantial
Completion, and agrees to substantially complete the Project on the
date or dates to be identified in the Second
Amendment (herein referred to as the "Scheduled
Substantial Completion Date") and agrees to achieve Final Completion within
forty-five (45) days thereafter (herein referred
to as the "Scheduled Final Completion
Date").

 

2.
It is understood that the Contractor has included in
its schedule duration (above) work days lost due to
weather conditions (e.g., rain, high winds, freezing temperatures).
Contractor shall record on a daily basis whether its job progress
has been materially affected by adverse weather
conditions. The Contractor shall, on a weekly
basis, submit a written report to the Owner
substantiating any Work Days claimed to
have been lost due to adverse weather conditions. Contractor shall
recoup any Work Day lost due to
adverse weather conditions by performing Work on an ensuing
Saturday, and treating such as a Work Day for the
purpose of complying with and meeting the Contractor's
schedule. Requests for extensions of construction time due to adverse weather conditions
shall include

U.S.
Weather Bureau Climatological Reports for the months involved
plus a report indicating the average precipitation,
temperature, etc., for the past ten (10) years
from the reporting station nearest the Project. The ten
(10) year average will be the basis for determining
the number of adverse weather days and the effect
resulting therefrom on construction which the Contractor would
normally expect to encounter. No application for extension
of time will be considered
by the Owner unless or until the Contractor
has lost at least five
(5) Work Days due to unusually severe

 

 

Page
4 of 30

 

 

    	 

    	 

    weather
conditions not reasonably anticipated; and significantly beyond the
recorded normal weather conditions as published in
the National Weather Service records on which the
Contractor had planned and scheduled Work items that
materially affected the schedule. Extensions of time may
be required for any month of construction
for Work Days lost due to adverse weather in
excess of the normally expected lost time; provided,
however, if the Owner determines that the seasonal
average of adverse weather days during
construction is less than would be normally
expected, no Change Order shall be issued and
the request for extension of time
shall be denied.

 

3.
If the Contractor is materially delayed in the performance of the
Work by any act or omission of the Owner
or Architect, or by an employee, agent, representative
or separate contractor of either (other than
by reason of the proper exercise of
their respective rights, duties and obligations
under the Contract Documents), or by changes ordered
in the Work, or any of the following
situations that have in no way been caused
by or resulted from default, negligence or collusion
on the part of the Contractor or by the combined action of workmen (either
those employed on the Work or in any industry
essential to the conduct of the Work), or by force majeure (i.e., strikes, lockouts, embargoes,
fire or other unavoidable casualties, unusual delays in
transportation, national emergency, inclement or unusually severe weather
conditions not reasonably anticipatable) and
had an adverse effect on the scheduled construction,
or by any other causes which the Contractor
could not reasonably control or circumvent,
then the Contractor shall immediately, upon the commencement of any such delay,
notify the Owner that the Contractor is considering
requesting an extension for the delay,
and the Scheduled Substantial Completion Date
and Scheduled Final Completion Date shall be
extended for a period equal to the length of
such delay if, within seven (7) days
after the contractor became aware of such delay, the Contractor delivers to the Owner
a written notice of such delay, provides a written
request for extension of the Scheduled
Substantial Completion Date and Scheduled Final
Completion Date by reason of such delay
and such request is approved by the Owner, which
approval shall not be unreasonably
withheld. Failure to deliver any such notice
or request within the required period shall
constitute an irrevocable waiver
of any extension of the Scheduled Substantial Completion
Date and Scheduled Final Completion Date by reason of the
cause in respect of which notice
was required. In the case of the continuing
cause of delay of a particular nature, the Contractor shall
be required to make only one such request
with respect thereto. The Contractor shall not
be entitled to any monetary claim for
additional time because of inclement or unusually severe
weather or occurrence of force majeure.
No delay of the Scheduled Substantial Completion Date
and Scheduled Final Completion Date (or right on the part of the
Contractor to secure any such
delay) pursuant to this Section II.A shall prejudice any right
the Owner may have under this Agreement, or otherwise,
to terminate this Agreement.

 

4.
The Owner shall endeavor to furnish the Contractor
with all information reasonably necessary for the
Contractor to expeditiously perform the Work. Decisions
and approvals required of the Owner shall
be provided in a timely manner so as not
to delay the orderly progression of the
Work. The Contractor shall be responsible for
promptly notifying the Owner of the need for
specific information or approvals and shall
specifically state within such notice the required
due dates for such information; such
dates will allow a reasonable period of time
for the Owner to respond.

 

 

5.
In the event of inexcusable delay (i.e.
a delay for which the Contractor is not entitled to
an extension of
time pursuant to Section II hereof), the Owner
may direct that the Work be accelerated
by means of overtime,
additional crews or additional shifts or re-sequencing
of the Work. All such acceleration shall
not result in an increase to the Guaranteed Maximum Cost. Failure by
the Owner to direct that the Work
be accelerated shall not be cause for the Contractor
to exceed the construction schedule or otherwise prejudice any
other remedies to which the Owner may be entitled.

 

6.
In the event of excusable
delay (i.e. delay for which the Contractor
is entitled to an extension of time pursuant
to Section II hereof), the Owner may
similarly direct acceleration and the Contractor agrees
to perform same on the basis of reimbursement
of direct cost (i.e. premium portion of overtime pay,
additional crew, shift or equipment cost and such
other items of cost requested in advance by
the Contractor and approved by the Owner, which
approval will not be unreasonably withheld) plus
a fee in the amount provided for
Changes in the Work pursuant to Section
IV hereof, but expressly waives any other compensation
therefor unless otherwise agreed in writing in advance
of performing the accelerated
Work. In the event of any acceleration requested pursuant
to this paragraph, the Contractor shall promptly provide a plan including its recommendations
for the most effective and economical acceleration.

 

 

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    7.
The Owner shall also have the right
to direct that the Work be accelerated
by means of overtime, additional crews or additional
shifts or re-sequencing of the Work notwithstanding
that the Work is progressing without delay in
accordance with the established Progress Schedule.
The Contractor agrees to perform same on
the basis of reimbursement of direct cost (i.e.
premium portion of overtime pay, additional crew, shift
or equipment cost and such
other items of cost requested in advance by
the Contractor and approved by the Owner which
approval will not be unreasonably withheld) plus
a fee in the amount provided for
Changes in the Work pursuant to Section IV hereof,
but expressly waives any other compensation therefor
unless otherwise agreed in writing in
advance of performing the accelerated Work.
The Contractor shall again provide promptly a plan including its recommendations
for the most effective and economical acceleration.
All acceleration or other compensation for delay will
be subject to the Change Order procedure set forth
in Section IV herein, except in the case of inexcusable
delay.

 

B. Time
is of the Essence. The Contractor
acknowledges that the Scheduled Substantial Completion Date and Scheduled Final Completion
Date are essential to the Owner's operational activities,
financing and development plans and therefore time
is of the essence for the Contractor's performance
under this Agreement.

 

C. Remedies.
Extension of time provided for the completion
of the Work shall be the
Contractor's sole remedy for delay (except for
the Contractor's right to terminate the Contract
pursuant to the provisions of
Article 14 of the General Conditions),
unless the same shall have been caused
by acts constituting intentional interference
by Owner with the Contractor's performance of
the Work and where to the extent that such
acts of the Owner continue after Owner's
receipt of Contractor's written notice to Owner of such
interference. The Owner's exercise of any of
its rights under the Contract, including, without limitation,
its rights under Article 7 of the General
Conditions, regardless of the extent or number
of such changes, or the Owner's exercise
of any of its remedies of suspension of the
Work, or requirement of correction or re-execution
of any faulty or defective Work, shall
not under any circumstances be construed
as intentional interference with Contractor’s performance of the Work. Claims
by Contractor for additional costs shall be made
pursuant to Section 4.3 of the
General Conditions.

 

SECTION
III 

PERMITS AND LICENSES

The Contractor
shall obtain all necessary licenses, building and other
trade permits, and similar authorizations from
governmental authorities required to perform
its obligations hereunder, and shall give all notices required by, and otherwise comply with,
all applicable laws, ordinances, rules, regulations
and restrictions. It is not
the responsibility of the Contractor to make
certain that the Contract Documents are
in accordance with applicable laws,
statutes, building codes and regulations. The Contractor
shall, however, use its best efforts to notify the Owner
of all conflicts between the Drawings and Specifications
and any laws, ordinances, rules, regulations
and restrictions bearing upon performance of
the Work by the
Contractor that come to the attention of the Contractor. If the
Contractor performs any of the Work when
Contractor knows, or should know, it
to be contrary to any such laws, ordinances,
rules, regulations or restrictions and fails to give the Owner notice thereof
prior to performance thereof, the Contractor shall bear all
costs arising from such failures to notify.

 

 

SECTION
IV 

CHANGES

A. Change
Orders. From time to time,
the Owner may authorize changes in the Work,
issue additional instructions, require additional Work or direct the
omission of Work previously ordered; provided,
however, that the Contractor shall not under any circumstances
proceed with any change involving any
increase or decrease in cost without
the prior written authorization from the Owner in
accordance with the following procedure:

 

1.
The Owner shall order changes in the Work by
giving the Contractor a written change order
request through the Architect ("Proposal
Request"), setting forth in detail the nature of the requested
change. Upon receipt of a Proposal Request, the Contractor shall promptly, but in no event
more than fourteen (14) days thereafter,

 

 

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    furnish
to the Owner a statement setting forth in detail,
with a breakdown suitable to the Owner by trades
and work classifications, the Contractor's estimate
of the changes in the Estimated
Contractor's Cost attributable to the changes set forth in
such Proposal Request and any proposed adjustment
to the Scheduled Substantial Completion Date and Scheduled Final Completion Date resulting
from such Proposal Request, and any
proposed adjustments of time and costs related
to unchanged Work resulting from such
Proposal Request. The Contractor shall require Subcontractors
to provide pricing for changes representing actual material and labor prices rather than
list or book prices. Lump sum proposals
from Subcontractors for change proposals are not
acceptable without detailed back-up. The Contractor
agrees to negotiate fair pricing for proposed changes from Subcontractors and
suppliers and further agrees to cooperate with the Owner, Architect
and its consultants in substantiating
costs for proposed changes.

 

2.
If the Owner approves in writing such Proposal
Request, the Contractor is thereby authorized to
proceed with the designated changes in
the Work. From time to time, the Architect will
group several of the approved Proposal Requests
into a Change Order and the Estimated Contractor's
Cost, Guaranteed Maximum Cost, Scheduled Substantial
Completion Date and Scheduled Final Completion Date
shall be adjusted as set forth in
such Proposal Request.

 

3.
Change Orders shall include the
Contractor's mark-up of three and five tenths percent (3.5%), which
fee shall be ten percent (10%) for Work done
by the Contractor times the net additive and deductive
costs for work performed by Contractor's
own forces and the Contractor shall be entitled
a Contractor’s Fee of three and five tenths percent
(3.5%) times the net addition and
deduction costs for work performed by Subcontractors and
all other cost of work items. If, upon completion
of the Work the net of all additive and deductive Change
Orders has resulted in a decrease in the
Guaranteed Maximum Cost, then the Contractor's Fee shall not be reduced.

 

B. Cost of Change
Orders. Contractor shall include in
each subcontract a limitation on the amount
of profit and overhead that Subcontractors can include
for changes, which limitation shall not exceed a total of fifteen
percent (15%) combined for profit and overhead, without prior written
approval by Owner. See Section IV, A.
3. for the mark-up allowed for changes self-performed by
Contractor or its other divisions or subsidiaries.
Agreement on any Change Order shall constitute
a final settlement on all items covered therein,
subject to performance thereof and payment therefor,
pursuant to the terms of this Agreement. If the
Owner and Contractor cannot agree on the cost
of any Change Order Work,
then, at the written direction of the Owner,
the Contractor will proceed with the Work
and the cost will
be determined in accordance with Article 7 of
the General Conditions attached hereto.

 

SECTION
V 

PAYMENTS

A. Contract
Sum. In consideration of the full and complete
performance of the Work and all other obligations of Contractor
hereunder, Owner shall pay to Contractor
a sum of money equal to the "Contract
Sum," which is defined to be the
total of (i) the Cost of the
Work, and (ii) Contractor's Fee in an amount
as set forth below, subject to
adjustment as provided in the Contract
Documents. The Contract Sum shall
not exceed the Guaranteed Maximum Cost to be established as set
forth in Section I.B.3 above, subject to adjustments
as provided in the Contract Documents.

 

1.
Contractor's Fee. The "Contractor's Fee"
as listed above is defined to be the amount equal to
the fixed sum of three and five tenths percent
(3.5%) of the Estimated Contractor's Cost included
in the Guaranteed Maximum Cost (subject to
adjustment for Change Order Work as provided in Section IV hereof),
subject to the adjusted
Guaranteed Maximum Cost. It is agreed
that Contractor's Fee is Contractor’s complete fee compensation for
performing the Work as listed herein.

 

	 	2.	Cost of the Work.

 

a. In the
event that the Cost of the
Work is greater than the adjusted
Estimated Contractor's Cost and less than the
Guaranteed Maximum Cost, then the Contractor's
Fee shall be equal to the Cost of the Work subtracted
from the adjusted Guaranteed Maximum Cost subject to
further adjustment pursuant to the provisions of Section IV hereof.
In the event that the Cost of the Work shall
exceed the Guaranteed Maximum Cost,
adjusted as provided herein, Contractor shall pay
such excess from its own funds

 

 

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    and
Owner shall not be required to pay any part
of such excess, and Contractor shall have no
claim against Owner on account thereof.

 

b. In the
event that the Cost of the
Work is less than the adjusted Estimated Contractor's
Cost, then the Contractor's Fee shall nevertheless be two
and twenty-five hundredths percent (2.25%) of the Estimated Contractor's
Cost, subject to adjustment pursuant to Section IV hereof. In the
event that the Cost of the Work shall
be less than the Estimated Contractor's Cost, adjusted as provided
herein, the difference between such Cost of the
Work and such Estimated Contractor's Cost shall constitute
"Savings" (hereinafter so called). One-hundred percent (100%) of Savings
shall be returned to Owner.

 

B. Determining
the Cost of the Work. The term "Cost
of the Work" shall mean a sum of money
equal to the total of all of the
Contractor's Costs. The term "Estimated Contractor's Cost"
shall mean that sum of money
set forth in the First Amendment, the Second
Amendment or the Third Amendment, as the case
may be, opposite the term "Estimated Contractor's Cost," subject to
adjustment as provided in the Contract Documents, which sum is
the Contractor's estimate of all the Contractor's Costs that are to
be incurred and paid by the Contractor in the
performance of the Work. The term "Contractor's
Costs" shall mean those costs
necessarily incurred and paid by the Contractor in connection with
the proper performance of all the Work.
Such Contractor's Costs shall be at rates
comparable to the standard paid in the locality of the
Work, except with prior written consent of the
Owner. The Contractor's Cost shall include and
be limited to the following items:

 

1.
Reasonable and customary salaries, labor burdens
and fringe benefits (not to exceed the labor
burden schedule attached hereto as Exhibit
C-1) paid by the Contractor to its supervisory, engineering and
clerical personnel engaged in the Work at the
construction site (or off-site with the written
approval of Owner) and when engaged
at shops or on the road in
expediting the inspection, production or transportation of the
Material for the Work; company provided vehicles and related rental and/or operating
expenses, exclusive of major repairs and
overhauls.

 

2.
Reasonable costs of the Contractor's job-site field
office and expenditures necessary for the operation of the
field office, such as stationery, supplies, furniture,
fixtures and office equipment.

 

3.
Reasonable and customary wages paid for
labor in the direct employ of the Contractor
in the performance of the Work under applicable
collective bargaining agreements, or under a
salary or wage schedule agreed upon by
the Owner and Contractor, and including labor
burdens, fringe benefits and 401K (excluding
bonuses or profit sharing plan paid by Contractor to
its employees) not to exceed the labor burden schedule
attached hereto as Exhibit C-1); company provided vehicles
and related rental and/or operating expenses, exclusive of major repairs and
overhauls.

 

4.
Actual cost of contributions, assessments or
taxes for such items, without limitation, as Unemployment
Compensation and Social Security, insofar as such
cost is based on the wages,
salaries or other remuneration paid to
employees of the Contractor.

 

5.
Reasonable relocation, transportation, traveling and lodging expenses (as approved in
advance by the Owner) of representatives
of the Contractor referred to in
Section V.B.1 hereof incurred in the discharge of
duties related to the Work.

 

6.
The actual cost of all materials, supplies and
equipment incorporated in the Work, including
costs of transportation thereof; and amounts
due under all subcontracts made in accordance
with the provisions of the Contract
Documents. The cost (including transportation, storage, operating and repair costs,
except of a capital nature) of all materials,
equipment, temporary structures, small tools not
owned by workmen and supplies purchased
or rented for use on the Project. Such costs shall
include a fair rental not to exceed ninety percent (90%) (unless
otherwise approved by Owner) of the published
rates based on "Compilation of Nationally
Averaged Rental Rates," most recent edition, of
the Associated Equipment Distributors, or "AED," approved
by the Owner in advance, for all tools and
equipment furnished by the Contractor from its own stock,
or obtain in writing a third party rental
quotation if not in AED. The cumulative rental costs paid for
such equipment by Contractor shall not exceed
eighty five percent (85%) of the fair market value of such equipment
at the time of its
commitment to the Work.

 

 

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    a. If any equipment
is purchased by the Contractor under a lease
purchase rental agreement where any of the
lease and/or rental payments or fees were charged to
the Owner as a Cost of the Work, then
the appropriate credit adjustments shall be made to job
costs for the difference of the fair market value
and the agreed upon maximum aggregate rental
of the equipment as set forth above at the
time said equipment was acquired or last used on the Project.

 

b. The Contractor
shall, prior to the initial Application for Payment, provide the Owner
a schedule of Contractor owned or related-party-owned
rental equipment to be used in connection with the Work, which
shall identify and describe the equipment to
be rented, the rental rate, purchase
price (along with a copy of the
purchase invoice), estimated fair market value
of the equipment, the date of acquisition
and such other information as
the Owner may reasonably request. Such schedule shall
be updated periodically as necessary and is
subject to the approval of the Owner.

 

c. The Contractor
shall provide, monthly, an inventory
of all equipment and small tools committed to the Project
which are greater than $1,000 in
value, and such inventory shall be in
a form acceptable to the Owner. The Contractor, in
determining whether daily, weekly or monthly rental rates shall apply, shall use those
rates that are most economical to
the Owner. The Owner reserves the right
to dispose of all such materials, equipment, temporary structures,
tools and supplies which shall have been purchased,
when no longer required for the Work, and the Contractor's
Costs shall be credited for the proceeds therefrom
or the reasonable value of any items with respect
to which the Owner takes title.

 

7.
The cost of telephone, cellular phone, Internet service,
postage, photographs, blueprints, express delivery
and related miscellaneous costs incurred in connection
with the Work.

 

8.
Premiums (a) on bonds that the Contractor is obligated
by the Owner to secure and maintain, or that the Contractor
reasonably requires of its Subcontractors and if the Contractor does
not provide SDI (as hereinafter defined), subject
to reasonable approval of the Owner, and for
(b) that portion of insurance and bond premiums
paid by the Contractor, to the extent such premium
charges are based upon this Agreement and such
coverages are required by General Conditions
hereto or otherwise agreed to by the
Owner. Such premium costs, with the exception of bonds, shall
be reimbursable as Cost of the
Work on a pro-rata basis as a percentage of
the completion of the Work.

 

9.
If Contractor provides SDI in lieu of
subcontractor bonds pursuant to
Section X,B., premiums for SDI related to the
Project shall be reimbursed at an amount
not to exceed_NA percent ( NA_%) of the total
subcontracted amount of those Subcontractors chosen by
Owner and Contractor to be covered by
the SDI program. If Contractor, in
its discretion, elects to bond a subcontractor
not covered by
the SDI pursuant to Section X,B., Contractor
shall comply with subcontractor bonding
requirements set forth in
Section X,A. relating to
surety requirements for
subcontractor bonds as
a condition for including the premium cost of
such bonds as Cost
of the Work. In
such event, the actual premium cost of
the subcontractor bonds shall
be reimbursable as
Cost of the
Work; however, any increased cost exceeding the
amount that would
have been reimbursable for
coverage through SDI shall
not be allowed
as Cost of
the Work. SDI premium costs shall
be reimbursable as Cost of the Work on a pro-rata basis as
a percentage of the completion of the Work.

 

10.
Royalties and license fees, provided the Contractor has promptly notified
the Owner of any patent infringement suit, damages for patent infringements and reasonable
cost of defending suits on account of same, to the
extent that such damages or costs shall have
arisen out of the specification by the Architect
or by the Owner of a particular process or product
of a particular manufacturer, and the infringement was unknown to (or disclosed
by) Contractor. The Contractor hereby agrees to
indemnify, defend and hold harmless the Owner, its affiliates and their respective officers,
directors, employees and agents from and against
any and all other claims on account of patent
infringement arising out of the
Work.

 

11.
Fees for all municipal and other trade permits,
and other fees to the extent attributable
to the performance of the Work, licenses and patents, or surveys
and royalties, if any.

 

 

 

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    12.
The cost of obtaining and using all utility services
required solely for the Work, to the extent
not provided by Owner.

  

13.
The cost of crossing or protecting any public
utility, if required and as directed
by the Owner.

 

14.
The cost of removal of all debris from the site
of the Work. (All subcontracts shall require Subcontractors to remove all debris created
by their activities to a dumpster provided by
the Contractor or other central location as
designated by the
Contractor and the Contractor shall enforce such requirements or effect
an appropriate backcharge to those Subcontractors who
fail to meet their requirements in this regard.) The Contractor
shall not be required to remove debris created
by the Owner's separate contractors except pursuant to Change Order procedure set
forth herein.

 

15.
The cost and expense (actually sustained by the Contractor
in connection with the Work) of protecting and repairing
adjoining property, if required
(Owner's prior approval for repairs will
be obtained except in emergencies), and of settlements
for same made with the written consent of the
Owner, except to the extent that any such cost
is reimbursable by insurance or otherwise,
or is the responsibility of the Contractor under
Section IX hereof, or is due to the failure
of the Contractor to comply with the requirements
of the Contract Documents with respect to insurance
specified in Article 11 of the General Conditions attached hereto, or to
the failure of any officer of the
Contractor or of any of its representatives having
supervision or direction of the Work to exercise
good faith or at least the standard of care
normally exercised in the conduct of the
business of a general contractor in the general vicinity of
the Project, in any of which events any such
expenses shall not be included in Contractor's Costs.

 

16.
Federal, state, county, municipal, sales, use and other
taxes, all with respect to Services performed
or Materials furnished for the Work and for which the
Contractor is liable. It is understood that none of the
foregoing includes federal, state or local income
or franchise taxes.

 

17.
Costs incurred due to an emergency affecting
the safety of persons and property, unless caused
by the act or omission
of the Contractor, any Subcontractor, supplier, laborer
or their respective employees or agents.

 

18.
Cost or rental of temporary portable
buildings and toilets, as required, ice, water
containers, cups, fire extinguishers, first aid supplies,
safety equipment, street and sidewalk rental and Owner-approved
off-site storage space or facilities.

 

19.
Losses (other than lost profits or any other consequential
damages) and expenses, not covered by the insurance (excluding applicable deductible)
required to be carried under the General Conditions hereto or otherwise
recovered, sustained by the Contractor in connection
with the Work, provided such losses or expenses
have resulted from causes other than the negligent acts or omissions
of the Contractor, any Subcontractor, supplier, laborer, their
respective employees or agents, or any person for whom
any of such parties may be liable
or responsible (including the failure of the Contractor
or its Subcontractors of whatever tier to provide
the insurance carrier timely and proper notice
of claim). Such losses shall include settlements
made with the written consent and approval of the
Owner. No such losses and expenses shall
be included in the Cost of the Work for
the purpose of determining the Contractor's Fee. If, however,
such loss requires reconstruction and
the Contractor is placed in charge thereof, it shall
be paid for its services a fee proportionate to that
stated in Section V, which fee is outside
the scope of the Work under this Agreement.

 

20.
Costs of the corrective Work for
remedying of defects, as defined in Section
XXIV; subject, however, to the following limitations
and provisions:

 

a. Costs
attributable to or necessitated by negligence
of the Contractor (excluding correction of normal
job construction errors) or any Subcontractor,
supplier, laborer, their respective employees or agents, or any
person for whom any of such parties
may be liable or responsible, or costs
covered by the insurance required to
be carried under the General Conditions hereto shall
not be included in the calculation of the Cost
of the Work.

 

 

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    b. Work performed
by Subcontractors under provisions of their respective
subcontract agreements without additional costs to
the Owner or Contractor shall not be included in
the calculation of the Cost of the
Work, nor shall the Contractor be entitled to any Contractor's
Fee or overhead allowance with respect to same.

 

c. To
the extent that costs for any
corrective Work, whether performed before or
after Final Completion, cause the Cost of the Work payable
by Owner to exceed the Guaranteed Maximum Cost, the amount of such
cost in excess of the Guaranteed Maximum Cost shall
be borne solely by the Contractor.

 

d. No adjustment
in the Guaranteed Maximum Cost shall
be allowed by reason of costs
of corrective Work reimbursable hereunder.

 

21.
Any and all other expenses or
charges incurred, with the prior written
approval of the Owner, in the prosecution of the Work.

 

C. Obligations
of Contractor and Costs Not to be Reimbursed.
Contractor agrees to furnish and/or perform, without
charge other than as a part of the Contractor's
Fee, the following:

 

1.
Information as to
the cost and availability of materials
and methods of construction which may be of
value to the Architect and Owner in determining
the final architectural, structural, mechanical and electrical
design of the Work. The Contractor by providing such
information is not assuming any design
responsibilities of the Architect or other
design professionals.

 

2.
Except as set forth on Exhibit C,
the services and related expenses and salaries of any principal
of the Contractor and of personnel in Contractor's
principal office or offices other that the site
office, including purchasing, estimating, scheduling, safety, accounting, personnel, legal,
labor relations, insurance and tax departments and all
other costs of doing business, including Contractor's
profit, services and related expenses required to maintain and operate Contractor's general
or branch offices.

 

3.
The use of capital, and any interest if
applicable, employed for the Work, provided
that the payments of the
Contract Sum to the Contractor are made
as provided in the Contract Documents.

  

4.
Amounts required to be paid by the Contractor
for federal, state or local income or franchise
taxes.

 

5.
Costs due to the negligence of Contractor, any
Subcontractor, supplier, laborer, their respective employees or agents,
or any person for whom any of
such parties may be liable or responsible,
including, but not limited to, the correction of defective
Work, disposal of materials and equipment wrongfully
supplied, or making good any damage to
property.

 

6.
Costs in excess of the Guaranteed Maximum
Cost (as same may be adjusted from time
to time pursuant to the terms hereof).

 

7.
The services and related expenses of outside experts,
advisors or consultants, such as accountants,
and attorneys, unless such services and/or expenses
are specifically approved in advance by
the Owner.

 

	 	8.	Costs for bonuses, pension, or profit sharing plan paid by Contractor to its employees.

 

9.
Relocation, transportation, traveling and lodging expenses of the Contractor's
personnel relocated in the discharge of duties related
to the Work unless such expenses are specifically approved in
writing in advance by
the Owner.

 

 

 

 

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    10.
Architect's and Architect's consultant fees and reimbursable
expenses, when such fees and expenses are related
to services:

 

a. necessary in
evaluating an extensive number of frivolous or unreasonable
claims submitted by the Contractor, Subcontractors,
suppliers or others in connection with the Work.

 

b. necessary due
to default of the Contractor, Subcontractors, suppliers or others;
by major defects or deficiencies
in the Work or by failure
of performance.

 

 

c. necessary
due to failure of the Contractor to achieve final completion pursuant to Section II
hereof.

 

d. necessary
to review substitutions to the Work as proposed by the Contractor
or Subcontractors after acceptance of the Guaranteed
Maximum Cost. All proposed substitutions must
be submitted to the Owner for review and approval prior to
submission to the Architect. The Owner, at his
sole discretion, may waive the requirements
of this Section V.C.10.d. In the event of such
Architect's and Architect's
consultant fees and reimbursable expenses herein, the
Contractor's Fee will be reduced accordingly.

 

11.
Cost of remedying
Subcontractor defaults, including the cost of enforcing payment
and performance bonds obtained from Subcontractors
and any SDI, unless Contractor has received the prior written
approval of the Owner.

 

	 	12.	Any legal or other professional costs of Contractor.

 

	 	13.	Costs incurred after Final Completion of the Work.

 

	 	14.	Expenses of Contractor’s principal office and offices other than the site office.

 

	 	15.	Overhead and general expenses except as may be expressly included in Section V(B).

 

	 	16.	All costs not specifically and expressly described in Section V(B).

 

17.
Any costs or expense incurred under any indemnification
obligation of Contractor hereunder.

 

 

	 	D.	Applications for Payment.

 

1.
On or before the first day of each month
during the performance of the Work, Contractor shall submit to Architect for its approval
an itemized application for payment ("Application
for Payment") in form
and substance satisfactory to Owner (simultaneously
therewith sending copies to Owner and such consultants and
Owner’s Lender, hereinafter defined, as Owner
may direct). Prior to the Contractor's submission of the Final
Application for Payment (as hereinafter defined) in
accordance with the terms of the
Contract, each Application for Payment shall be for
a sum equal to all of Contractor's Costs incurred
during the preceding month less ten percent (10%) retainage
in accordance with Section 53.101 of the
Texas Property Code. Contractor's Costs shall be segregated
and detailed in a manner satisfactory to
Owner.

 

2.
When an Application for Payment includes materials
or equipment stored off the Project site
or stored on the Project site
but not incorporated in the Work, for which
no previous payment has been requested, a complete
description of such material or equipment shall
be attached to the Application for Payment.
Suitable storage that is off the Project site shall
be a bonded warehouse or appropriate storage
approved by Owner, with the stored
material properly tagged and identifiable for this Project and
properly segregated from other materials. The Owner's
written approval shall be obtained before
the use of off-site storage is made. Such approval
may be withheld in Owner's sole
discretion. Title to all such equipment and materials shall pass to
the Owner upon payment therefor

 

 

Page
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    or incorporation
in the Work, whichever shall first occur, and the
Contractor shall prepare and execute all documents necessary to
effect and perfect such transfer of title.
The vesting of such title shall not impose any obligations on the Owner
or relieve the Contractor of any of
its obligations hereunder. Once an item of
stored materials has been physically incorporated into
the Work, it shall no longer count against or be included
in the aggregate total dollar amount
of outstanding stored materials.

 

3.
The "Schedule of Values,"
as prepared by Contractor and approved by Owner
and Architect in accordance with
Section 9.2 of the General Conditions, shall be itemized to
facilitate payments to Subcontractors and shall be in sufficient detail to show Contractor's
right to the payment claimed.

 

4.
In each Application for Payment, the Contractor shall
certify that such Application for Payment represents
a just estimate of costs reimbursable to the Contractor
under the terms of Section V.B and shall also certify as
follows:

 

"There are
no known mechanics' or materialmen's liens outstanding
at the date of this requisition, that all due
and payable bills with respect to
the Work have been paid to date or are included
in the amount requested in the current application, and that,
except for such bills not paid but so
included, there is no known basis for the filing
of any mechanics' or materialmen's liens on
the Work, and that releases from all
Subcontractors and materialmen have been obtained in such form as to
constitute an effective release of lien
under the laws of the state of Texas
covering all Work theretofore performed and for
which payment has been made by the Owner
to Contractor."

 

5.
The Contractor shall furnish with the first Application
for Payment (a) conditional partial releases of lien
from Contractor, each Subcontractor and each material
supplier that performed work or provided materials included in
the Application for Payment being submitted; and (b) an Affidavit
of Bills Paid in the form required
under Section 53.085 of the Texas Property Code. The Contractor shall furnish with
the second Application for Payment and all subsequent
Applications for Payment (x) conditional partial releases of lien from the Contractor,
each Subcontractor and each material supplier
that performed work or provided materials included
in the Application for Payment being submitted; (y) an affidavit
of Bills Paid in the form required under Section
53.085 of the Texas Property Code; and (z) unconditional
partial releases of lien from Contractor, each Subcontractor
and each material supplier that performed work or provided material
included in the previous Application for Payment and for which payment has been made
by Owner to Contractor. Contractor shall also submit with each Application
for Payment any other such forms as required
by Owner or Owner's title insurer in order to ensure
an effective release of mechanics' or materialmen's
liens in compliance with the laws of
the State of Texas. In no event will any payment
be made until all such waivers, releases and other required
documentation are submitted to Owner. If any lien
holder records a lien in any amount against
the Property for Work paid for by
Owner, no payment will be due
Contractor until such lien is released of record by the filing
of a Release of Lien in
the Real Property Records of Bexar County, Texas,
or Contractor provides Owner a bond satisfactory
to the Owner to indemnify the Owner against
any lien at the Contractor's sole cost which satisfies
the requirements of Subchapter H of Chapter 53 of the
Texas Property Code. The cost of any such bond may
not be included in the Cost of the Work. All
lien releases provided under this Agreement shall
be in the form required by
Section 53.284 of the Texas Property Code.

 

6.
With the submission of each Application for
Payment, the Contractor and each Subcontractor
who has executed a Cost
Plus Fee with Guaranteed Maximum subcontract will
provide to the Owner the complete costs (job
cost to date print out data, reports
associated with the job costs and any other
documentation as may be required by the
Owner) to support the Application for Payment. Additionally,
the Contractor will provide, if requested
by the Owner, copies of Contractor's Subcontractors'
pay requests, invoices, labor sheets
and other information substantiating the Contractor's
right to payment, all verified and summarized by the
Contractor's accounting department.

 

7.
The Contractor shall further submit with each
Application for Payment a monthly progress report
which shall set forth in detail the status of the
Project as of the date of such Application for Payment.
The exact format of the progress report shall
be determined by the Owner and
agreed upon by the Contractor prior to submission
of the initial Application for Payment; however, the progress reports shall
at a minimum describe those aspects of the Work
which have been commenced and the status
thereof, enumerate the tradesmen and Subcontractors
then involved

 

 

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    in
the Work and the amount of personnel employed
on the Project by them, set forth the schedule for major portions
of the Work for the coming month, and include the Contractor's
appraisal of the progress and Cost of the Work, together
with recommendations as to any action which
is required by the Owner or Architect.
Each monthly progress report shall be accompanied
by an update of the
CPM schedule the exact form of which shall be
mutually agreed to by the Owner and
Contractor at the time the format for
the progress report is determined. Additionally, the Contractor
shall provide the Owner with monthly progress
photos of the Work, pursuant to guidelines and requirements to be established
by the Owner.

 

8.
The Contractor shall not submit for the Owner's
review and approval any Application for Payment that
is incomplete, inaccurate or lacks the detail, specificity or supporting
documentation required by this Section V.D. It is
understood and agreed by the Contractor and Owner that
if any Application for Payment is deficient to
such an extent that such does not constitute
a reasonably complete Application for Payment, the Contractor shall be required
to resubmit said Application for Payment in proper form
prior to the Owner incurring any obligation to
make payment on account thereof. The Contractor specifically agrees that it
shall not include in any Application for Payment
sums attributable to Work that the Owner, Architect
or Contractor have rejected or which otherwise
constitute or relate to applications for payments, billings or invoices
of Subcontractors or suppliers that the
Contractor disputes or for any other
reason does not intend to pay.

 

9.
The Owner shall review each such Application for Payment
and may make such exceptions as the
Owner reasonably deems necessary or appropriate under
the state of circumstances then existing. Within twenty-five (25) days
after submission of the Application for Payment
by the Contractor to the Owner (unless such date
falls on a weekend or holiday,
then on the next business day) and provided
the Contractor has submitted its Application for Payment
and supporting documentation in the manner and detail
herein required by this Agreement, the Owner shall
make payment to the Contractor in the amount approved as aforesaid
subject to Section V.E hereof. The payment
of any Application for Payment by the
Owner, including the Final Application for Payment,
does not constitute approval or acceptance of
any item of cost in such Application for Payment.

 

10.
The Contractor agrees that ten percent (10%)
of the amount due under each subcontract shall
be retained by the Owner until
final payment ("Final Payment").
Retainage shall be included in the Contractor's
Application for Payment for the purpose of indicating the value of the
Work performed, however, the Contractor shall not request payment thereof from the Owner
until such retainage is actually paid or payable.

 

11.
Ten (10) days after Final Completion of the Work and
acceptance thereof by the Owner, or as
soon thereafter as possible, the Contractor shall submit
a final request for payment ("Final
Application for Payment"),
which shall set forth all amounts due and remaining unpaid to the Contractor (including the
unpaid portion of the Contractor's Fee, if
any), and upon approval thereof by the Architect
and Owner, the Owner shall pay to
the Contractor the amount due under such Final
Application for Payment. Anything to the contrary contained herein or elsewhere
notwithstanding, Final Payment shall not be made prior to
the later of (a) thirty-one (31) days following
Final Completion of the Work and (b) twenty-five
(25) days following the Contractor's submission
of its Final Application for Payment.

 

12.
The Final Application for Payment shall not be made
until the Contractor completes all deficient or defective
Work and delivers to the Owner a certificate
of occupancy, a complete and detailed computation
of final job costs,
all warranties, guarantees, training, operation and maintenance manuals, and a complete
set of As- Built Record Drawings, in
a form acceptable to Owner. In addition, Contractor
shall deliver (a) a notarized affidavit and certificate of
completion that certifies that (i)
all claims, liens and judgments have been satisfied
by the Contractor,

(ii)
the Work has been completed in accordance
with the Drawings and Specifications and all governmental
laws and regulations and (iii) all labor, services
and supplies used in such Work have been paid for;
(b) a final unconditional complete release of
all liens from Contractor and all Subcontractors and
suppliers that provided materials or labor in
connection with the Work in the form required by Section 53.284 of the
Texas Property Code; and (c) any other evidence
reasonably requested by Owner to show that all payrolls,
material bills and other indebtedness connected with the Work have been paid in
full or otherwise satisfied. Contractor shall, if
any Subcontractor or supplier refuses to furnish
a release in full, furnish a bond satisfactory to the
Owner to indemnify the Owner against any lien at the
Contractor's sole cost, which bond must satisfy the requirements of
Subchapter H of Chapter 53 of the
Texas Property Code and be recorded as required
by the Texas Property Code.

 

 

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    E. Withholding
Payments. Any provision hereof to the contrary notwithstanding,
the Owner shall be entitled to withhold payment to
the Contractor here under in part or in whole
to the extent necessary to protect the Owner if
any one or more of the
following conditions exist:

 

1.
The Contractor is in default
of any of its
obligations hereunder or otherwise is in
default under any of the Contract Documents;

 

2.
Any part of such payment is attributable to
Work that is defective or not performed in
accordance with the Drawings and Specifications;
provided, however, such payment shall be made
as to the part thereof attributable to Work
that is performed in accordance with the Drawings
and Specifications and is not defective;

 

3.
The Contractor has failed to make payments promptly to
the Contractor's Subcontractors or for materials
or labor used in the Work for which the Owner
has made payment to the Contractor and provided written notice to Contractor (in such instance
the Owner specifically reserves the right with no
implied obligation to make direct or joint payment
to such Subcontractors or for
such material or labor);

 

4.
If the Owner, in its good faith
judgment, determines that the portion of the Guaranteed
Maximum Cost then remaining unpaid will not be sufficient
to complete the Work in accordance with
the Drawings and Specifications, whereupon no additional
payments will be due the Contractor hereunder unless and until the
Contractor, at its sole cost, performs a sufficient
portion of the Work so that such portion of
the Guaranteed Maximum Cost then remaining unpaid
is determined by the Owner to be sufficient to
so complete the Work; or

 

5.
If the Owner in good faith
determines that the Contractor has not met, or will
not with prompt acceleration of the Work meet,
the Scheduled Substantial Completion Date or Interim Completion Dates, if
any.

 

Furthermore,
no partial payment made hereunder shall be or shall be construed
to be final acceptance or approval of that
part of the Work to which
such partial payment relates, or relieve the
Contractor of any of its obligations hereunder
with respect thereto.

 

F. Application
of Sums. Except for the Contractor's Fee,
Contractor shall use the sums advanced to it pursuant
to this Section V solely for the purpose of performance
of the Work and
the construction, equipping and furnishing of the
Improvements in accordance with the Drawings
and Specifications. However, no provision hereof shall
be construed to require Owner to see to the proper disposition
or application of the monies
so advanced to Contractor.

 

SECTION
VI

DISCOUNTS, REBATES
AND REFUNDS

A.
The Contractor shall determine the availability
of discounts, rebates, refunds and returns applicable
to the Work in order that
the benefits thereof can be obtained. All
cash discounts shall accrue to the Contractor unless the
Owner deposits funds with the Contractor with which
to make payments, or Contractor
included them in an Application for Payment
which Owner paid, in which case the
cash discounts shall accrue to the Owner, and
the Contractor shall notify the Owner adequately
in advance of
the availability of such
cash discounts in order that
the Owner may make available funds therefor.

 

B. All
trade discounts, rebates and refunds, dividends on any
bond, including performance and payment bonds and all
returns from sale of surplus materials and equipment,
whether provided by the Contractor or
Subcontractors under a Cost Plus Fee with Guaranteed
Maximum subcontract, shall accrue to the Owner
as a deduction from the Cost of the
Work, and the Contractor shall endeavor to make provisions
for the securing thereof. Any discounts accruing to
the Owner pursuant to this Section VI shall
not result in an adjustment of the Guaranteed
Maximum Cost.

 

 

 

 

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    C. All
materials, equipment, tools and supplies acquired in
connection with the Work and remaining at the
completion thereof shall be sold or otherwise
disposed of in accordance with Section V.G,
and the proceeds therefrom or the salvage value
thereof shall be credited to the Cost of the Work.

 

SECTION
VII 

SUBCONTRACTS AND PURCHASE ORDERS

	 	A.	Selection of Subcontractors.

 

1.
All portions of the
Work that Contractor's organization has not
been accustomed to perform shall be performed
under subcontracts. Prior to solicitation of bids from subcontractors
and materials suppliers, Contractor shall submit to the Owner and Architect a proposed list
of bidders. The Owner reserves the right to
approve or disapprove any such bidders and to add
to such list. Such approval, disapproval or addition
shall be in writing and shall not be unreasonably
withheld or delayed. Contractor shall request a minimum
of three (3) bids from subcontractors and, subject
to the approval of Owner,
will determine which bid(s) will
be accepted. For all Contractor- provided self-performed
Work, Contractor shall put said Work out for
bid by at least two (2) other
subcontractors. Owner shall then select the subcontractor (whether Contractor or
one of the other two subcontractors that bid), and
its bid for the applicable portion of
the Work. Contractor will
provide Owner for Contractor's bid the same
breakdown of scope and bid as required by subcontractors.
It is understood and agreed by Contractor that,
as to any affected systems, and any other areas identified
by Owner to Contractor, only those subcontractors
previously identified to Contractor by Owner
and mutually agreed as approved and qualified to bid may be considered or awarded
subcontracts for such work. In the event of a conflict
between Owner and Architect regarding the selection of subcontractors,
the Owner's decision in selection of Subcontractors
shall govern.

 

2.
The Contractor shall forward to the Owner for review
and approval a summary of all
subcontractor and supplier bids as received, which summary shall
delineate the base bid amount, all alternates, credits, discounts, allowances, contingencies,
etc. This information will be in a form
to allow for comparison to line items contained within the line item summary constituting
the IGMC and the Contractor's estimate of
the Costs of Work included in the Guaranteed
Maximum Cost. Wherein any actual subcontract or purchase
order amount is less or greater
than the corresponding amount contained within the Contractor's
estimate of the Cost of Work included in the Guaranteed Maximum Cost,
such difference shall be added to or deducted
from the Construction Contingency.

 

3.
Except as regards the subcontractors for
the specific portions of the Work identified and referred to above, if the Owner directs
the acceptance of a subcontract bid in excess
of the bid for
the same work utilized by the Contractor
in calculating the Estimated Contractor's Cost
and the Guaranteed Maximum Cost, such excess
shall be treated as an additive change
in the Work in accordance with
Section IV.

 

	 	4.	All Subcontractors shall conform to the requirements of this Agreement, including Section 5.3 of the General Conditions attached hereto and the Contractor's standard subcontract form. The Contractor is fully responsible for subcontract requirements that do not conform to the requirements set forth in this Agreement. Subcontracts shall not be awarded on the basis of cost plus fee without prior consent of Owner. Subject to such consent, subcontracts awarded on the basis of Cost Plus Fee with Guaranteed Maximum Cost shall also be subject to the provisions of this Agreement insofar as applicable.

 

	 	B.	Contract Provisions.

 

1.
All subcontracts, rental agreements and purchase
orders shall include provisions that require
payment of all applicable sales/use taxes
by all Subcontractors, suppliers and vendors.
Subcontracts, rental agreements and purchase
orders will clearly state that Texas taxes are
included in subcontract, rental or purchase
order amounts. Each subcontract, rental agreement
and purchase order will contain the
Subcontractor's, supplier's or vendor's
Texas sales and use tax permit number. It is
the Contractor's sole responsibility to insure that all applicable Texas sales/use taxes
related to the Work are remitted
to the state of Texas. Contractor shall not collect
any sales or use taxes to the extent that
Owner provides Contractor with a direct payment certificate
indicating that Owner has the right to pay
such taxes itself directly to the taxing authority,
or to the extent that Owner provides Contractor with
a valid exemption certificate or other proof
that Owner is exempt from payment of
the taxes at issue.

 

 

Page
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    2.
All subcontracts and purchase orders shall,
so far as practicable, contain unit prices and
any other reasonable formula for use in the
determination of the
cost of changes in the Work.

 

3.
The Contractor agrees to hold all Subcontractors, including all persons
directly or indirectly employed by them, responsible
for any damages due to breach of contract or any
negligent act and to diligently endeavor to effect recoveries of such
damages.

 

SECTION
VIII 

INSURANCE

A. The
Contractor shall provide insurance of
the type and on the terms and conditions
set forth to be furnished by
the Contractor under Article 11 of the
General Conditions attached hereto. The cost of this insurance shall be specifically
itemized in the
Estimated Contractor's Cost and the Guaranteed Maximum Cost.

 

B. Notwithstanding
insurance requirements herein above set forth
or limits of liability set forth therein, the Contractor
shall defend, indemnify and hold harmless the Owner, Project Control
of Texas, Inc. and their respective agents (not including
design professionals) and employees in
accordance with Paragraphs 3.18.1, 3.18.2, and
3.18.3 of the General Conditions.

 

C. No cost
or expenses paid or incurred for which
the Contractor is responsible under this Article shall be considered
as a part of the Contractor's Cost for the Cost of the
Work, except for the cost of insurance premiums as provided herein.

 

SECTION
IX 

INDEMNITY

A. To
the extent permitted by applicable law
and notwithstanding any of the insurance requirements
hereinabove set forth or limits of liability
set forth therein, the Contractor shall defend, indemnify and hold
harmless the Owner, Project Control of Texas,
Inc., their affiliates and subsidiaries and their
respective agents (not including design professionals) and employees in
accordance with Paragraphs 3.18.1, 3.18.2, and 3.18.3 of the General Conditions.

 

B. No costs or
expenses paid or incurred for which the
Contractor is responsible under this Section IX shall
be considered as a part of the Contractor's Costs or the
Cost of the Work, except for the cost of insurance
premiums as expressly permitted under
Section V.B.8 of this Construction Contract.

 

SECTION
X

BONDS; SUBCONTRACTOR DEFAULT
INSURANCE

 

A. If required
by the Owner, the Contractor shall obtain and
thereafter at all times during the performance
of the Work maintain a performance
bond and a labor and material payment bond each in
form and substance satisfactory to the Owner.
The initial penal sum for each such
bond shall be in an
amount equal to the Guaranteed Maximum Cost,
and thereafter the penal sum for each such bond
will be adjusted monthly as needed
to reflect any adjustments to said Guaranteed Maximum Cost.
It is understood by the Contractor and its surety
that the penal sum will automatically be deemed
equal to the Guaranteed Maximum Cost as adjusted from time to time. To verify
the above automatic adjustments of the penal sums,
the Contractor shall periodically provide the Owner
with copies of correspondence, endorsements, confirmations or other documentation
received by the Contractor evidencing acknowledgment
by surety of such
adjustments. Contractor shall cause any payment and performance
bond to be recorded as required
by Texas Property Code. Such bonds shall be
issued by independent
corporate surety of recognized
financial standing satisfactory to the Owner and licensed to do business
in the state of Texas.

 

B. Should
the Owner forego requiring the Contractor to furnish a performance
and payment bond, the Owner shall have the right
to require the Contractor to obtain bonds from any or all
Subcontractors. It is understood

 

 

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    that
the cost of Subcontractor bonds shall be included
in the Estimated Contractor's Cost and the Guaranteed Maximum Cost
and may be charged as a Cost
of the Work under Section V.B. as long as such
bonds have been requested and approved by the
Owner. Copies of such bonds with dual oblige
riders in favor of the Owner, in form acceptable
to the Owner, shall
be submitted to the Owner promptly upon issuance
thereof and prior to any payment with
respect thereto. With Owner’s prior written
approval, if Contractor elects to purchase subcontractor
default insurance for all Subcontractors (“SDI”), Contractor shall
specifically endorse the Project to their subcontractor
default insurance policy. The following requirements must be met
for the SDI policy:

 

1.
Limits must be maintained
at no less than $20,000,000.00 per occurrence,
$30,000,000.00 aggregate, and $5,000,000.00 indirect
costs sublimit. Owner, at its
request, may require Contractor to obtain a Financial Interest Endorsement to the SDI
policy, specifically naming the Owner as the Scheduled
Entity.

 

2.
Contractor must provide a copy of the
current policy and a copy of any and all endorsements
prior to any Work commencing. New copies must
be provided upon renewal.

 

3.
Contractor must notify Owner if the aggregate
limits of the policy are impaired by fifty percent
(50)%. At such time as
the limits are
impaired by more
than fifty percent (50%), Owner may, at its
option require Contractor to provide, if not
previously required, at Contractor's
expense and not as
a Cost of the
Work, an umbrella policy to
the SDI Policy.

 

4.
Contractor agrees that any deductibles
or copays associated with or
due under the SDI policy
will be at the
expense of Contractor and not to be
included as a Cost
of the Work.

 

5.
Contractor agrees that Owner's total charge
for SDI will be
_NA percent (_NA_%) of
subcontractor's contract amounts
for all subcontractors that meet Contractor's
pre-qualification standards. The rate is in
accordance with Contractor's
accepted proposal and, thus, is
not subject to audit. For subcontractors
that do not qualify for
SDI, a payment and
performance bond may
be obtained by
Contractor, but the
cost of such
bond shall not exceed NA_percent (_NA_%)
of subcontractor's contract amount
when added to the Cost of the
Work.

 

 

SECTION
XI 

INDEPENDENT CONTRACTOR

Notwithstanding
any provision herein to the contrary, it is the
intent of this
Agreement that the Contractor shall in all events be acting
hereunder as an independent contractor
and never as an agent
of or joint venture of the Owner, Architect
or Project Control of Texas, Inc. Neither Contractor
nor anyone employed or engaged by it
shall be, represent, act, purport to act,
or be deemed to be the agent, representative, employee
or servant of Owner, nor shall Contractor or
anyone employed or engaged by
it be treated as an employee
of Owner, including for purposes of tax and social
security coverage and withholding, or any Owner provided employee benefits. Contractor shall
have responsibility for and control over the details and means
for performing the Work, provided that Contractor is
in compliance with the terms of this
Agreement. Anything in this Agreement that may appear to
give Owner the right to direct Contractor
as to the details of
the performance of the Work,
or to exercise a measure of
control over Contractor, shall mean that
Contractor shall follow the desires of Owner only as
to the intended results of
the Work.

 

SECTION
XII 

INSPECTION AND AUDIT

A. The
Contractor represents that it has inspected the Property and the
location or locations of the Work and has satisfied
itself as to the conditions thereof, including, as of the
time of execution of
the Amendment establishing the Guaranteed Maximum
Cost, review of the
geotechnical report setting forth the subsurface
conditions at the Project, and that the
Guaranteed Maximum Cost is just and reasonable
compensation for all the Work, including measures
and workmanship to preserve, protect and support
the historic structure of the building, and all
foreseen or reasonably foreseeable risks, hazards and difficulties in connection therewith
subject to Paragraph 4.3.6 of the General Conditions.

 

 

Page
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    B. The
Owner at all times shall have reasonable access to
the Work for inspection thereof, but shall not be obligated
to conduct any such inspection. The Contractor
shall provide proper and safe facilities
for such access and inspection. If any of the Work is required to be inspected
or approved by any public authority, the Contractor
shall cause such inspection or approval to be performed.

 

C. The
Contractor understands and acknowledges that
the Owner may require periodic inspection and certification
by the Board of Fire Underwriters. Consequently, the
Contractor especially agrees to make the site available at all reasonable
times for inspection and shall coordinate with the Owner's Representative to make
the Property available at appropriate times for inspection
by representatives of
the Board of Fire Underwriters.

 

D. No inspection
performed or failed to be performed by
the Owner hereunder shall be a waiver of any
of the Contractor's obligations hereunder or be construed
as an approval or acceptance of the
Work or any part thereof.

 

E. The Contractor
shall check all materials, equipment and labor entering into the Work site
and shall keep such full and detailed accounts as may be necessary to determine the Contractor's
Cost and for proper financial management under this
Agreement. The Contractor's accounting shall
be performed in accordance with
accounting principles customary in the industry
and shall be maintained in a manner
reasonably satisfactory to the Owner.

 

F. The
Owner shall have access to the
Work and the right to audit at any time all the Contractor's
(and each guaranteed maximum cost sub-contractor's)
books, records, correspondence, instructions, drawings, receipts, vouchers, memoranda and
similar data relating to the Work and this Agreement,
and the Contractor shall preserve all such records for
a period of three (3) years after receipt of
the Final Payment hereunder. Such records subject
to audit shall include, but not be limited to,
those records necessary to evaluate and verify
direct and indirect costs (including overhead allocations, if any) as they
may apply to cost associated with this Agreement.
All stipulated rates included in Exhibit C (labor
rates, burden, insurance) shall not be auditable.

 

 

SECTION
XIII 

SURVEYS

Intentionally
Omitted.

 

 

SECTION
XIV 

TERMINATION

A. Default
by Owner. If the Owner fails to perform any of
its material obligations hereunder, the Contractor shall have the right to give
the Owner a written notice thereof,
stating the nature of the default complained of.
If the Owner does not cure a material
default within thirty (30) days after receipt of such notice,
except for non- payment which shall follow Article
9.7, then Contractor's sole remedy shall be the right
to terminate this Agreement by giving the Owner written notice thereof at any
time thereafter while such material default remains uncured,
and payment shall be made to the Contractor for all Work executed and
for any proven loss sustained upon any
materials, equipment, tools, construction equipment and machinery, and
reasonable demobilization costs and fees earned to
date of termination. The Contractor shall similarly
have the right to terminate upon thirty (30) days' prior notice
if the Work is suspended for a period
of ninety (90) consecutive days or more
from causes not the fault of the Contractor.

 

B. Default
by Contractor. If the Contractor shall fail to
(1) commence the Work in accordance with
the provisions of this
Agreement, (2) to diligently prosecute the
Work to completion thereof in a diligent,
efficient, timely, workmanlike, skillful and careful manner and in strict accordance
with the provisions of the
Contract Documents (including the Scheduled Substantial
Completion Date and Interim Completion Dates,
if any), (3) to
use an adequate amount or quality of
personnel or equipment to complete the Work
without undue delay, (4) to perform any of its
obligations under the Contract Documents (or
under any other agreement, related or unrelated,
between Owner and Contractor) or (5) to make
prompt payments to its
Subcontractors, materialmen or laborers, then the

 

 

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    Contractor
shall be in default hereunder. If the Contractor
shall not cure any such default
after seven (7) days' written notice thereof (or, if
such default is of such
a nature as to be incapable
of cure within such period, shall not commence action
to cure said default within such period and thereafter diligently and continuously
pursue such action to complete such cure promptly, and in
all events within thirty (30) days of such notice),
provided that Contractor shall only have seven
(7) days to cure a monetary default, or if
the Contractor is in default under any other agreement, related or unrelated,
between the Owner and Contractor beyond any
applicable cure or grace period provided in
such other agreement, then such shall be an "Event of Default"
hereunder.

 

	 	C.	Remedies of Owner.

 

1.
Upon an Event of Default, the Owner shall have the
right to (1) terminate this Agreement
for cause; (2) take possession of and use all
or any part of the Contractor's materials, equipment incorporated
or to be incorporated in the work, supplies
and other property of every kind
used by the Contractor in
the performance of the Work and to use such
property in the completion of the Work; (3)
complete the Work in any manner it deems desirable,
including engaging the services of other parties therefor; or (4) exercise
any combination of the remedies set out in
(1)  through
(3). Any such act
by the Owner shall not be deemed
a waiver of
any other right or remedy of Owner set
forth herein or under law
or equity. If after
exercising any such remedy
the cost to the Owner of the performance
of the balance of
the Work is in excess
of that part of the Guaranteed Maximum
Cost which has not
theretofore been paid to the Contractor hereunder,
the Contractor shall be liable for and shall
reimburse the Owner for such excess, in addition (notwithstanding
anything provided in Section XXVIII)
to any other direct
damages, incidental damages, special damages and
reasonably foreseeable consequential damages, including
any amounts Owner is entitled to receive from
or require payment by Contractor,
or to withhold, deduct, or
offset against the
sums otherwise due Contractor. The obligation
of payment shall survive termination
of the Contract.

 

2.
The Owner may, if the Contractor
neglects to prosecute the Work properly or to
perform any provision of the Contract Documents, or otherwise
does, or omits to do, anything whereby safety
or proper construction may be endangered, or whereby
damage or injury may result to person or property,
after three (3) days' prior written notice to
the Contractor, without prejudice to any other remedy the Owner may have,
make good all Work, material, omissions
or deficiencies, and may deduct the cost therefor
from the amount included in the Guaranteed Maximum
Cost due or which may thereafter
become due the Contractor, but no action taken
by the Owner hereunder shall affect any
of the other rights or remedies of
the Owner granted by
the Agreement or by law or equity or relieve the
Contractor from any consequences or liabilities arising from such
acts or omissions.

 

3.
It is recognized that if the Contractor is adjudged
as bankrupt, or makes a general
assignment for the benefit of creditors, or if
a receiver is appointed for the benefit of
creditors, or if a receiver
is appointed on account of Contractor's
insolvency, or Contractor undergoes a substantial
change in ownership (more than 50% of
the equity ownership of Contractor],
or Contractor transfers substantially all of its assets,
such could impair or frustrate the Contractor's
performance of this Agreement. Accordingly, it is agreed that,
upon the occurrence of any such event, the Owner
shall be entitled to request of the
Contractor or its successor in interest adequate assurance of future
performance in accordance with the terms
and conditions hereof. Failure to comply with
such request within ten (10) days after delivery
of the request shall entitle the Owner to terminate
this Agreement and to the accompanying rights set forth above in
Section XIV.A. In all events, pending receipt of adequate
assurance of performance and actual performance
in accordance therewith, the Owner shall
be entitled to proceed with the Work with
its own forces or with other contractors
on a time and material or other appropriate
basis, the cost of which will be backcharged
against the Contract Sum hereof.

 

	 	D.	Right of Termination.

 

1.
Notwithstanding anything to the contrary,
the Owner hereby reserves the right to terminate this Agreement without regard to fault
or breach, upon written notice to the Contractor, effective immediately unless otherwise
provided in said notice. Upon receipt of written notice
from the Owner of such termination for the Owner’s
convenience, the Contractor shall (1) cease all operations
as directed by the
Owner in the notice; (2) take
actions necessary, or that the Owner may direct,
for the protection and preservation of the
Work; and (3) except for Work directed to be
performed prior to the effective date of termination
stated in the notice, terminate all existing subcontractors
and purchase orders and enter into no further subcontracts and purchase
orders. In the event of such

 

 

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    termination
for convenience, the Owner shall pay as the
sole amount due to the Contractor in connection with
this Project costs reimbursable hereunder for Work performed
to date plus the Contractor's Fee applicable
to such costs for Work performed
(except retainage sums shall not be paid
prior to thirty-one (31) days following the
date of termination), which shall not include
any amount for lost profit. Owner shall
not be responsible for the payment of
any portion of Contractor’s unearned Fee. Notwithstanding
the foregoing, Contractor acknowledges that the Project may be terminated
during the schematic design document
or design document phases, and in the event
Owner terminates this Agreement prior to
issuing the Notice to Proceed described in Section
II.A hereof (e.g., prior to commencement of
construction), Owner shall pay as the sole amount
due to the Contractor those amounts due to Contractor under Section
V of this Construction Contract.

 

2.
Such sums will be due
and payable on the same conditions as set forth
in Section V.D hereof and Paragraph 9.10.2 of
the General Conditions, for final payment to
the extent applicable. Upon receipt of such payment, the parties
hereto shall have no further obligations to each other except for the Contractor's obligations
to perform corrective and/or warranty work and
to indemnify the Owner as provided for
in this Agreement. It is understood and
agreed that no fee shall be due or payable
for unperformed Work. The Contractor agrees
that each subcontract and purchase order issued
by it will reserve
for the Contractor a comparable right
of termination provided by this Section XIV.D,
and the Contractor further agrees to require that comparable provisions be included
in all lower tier subcontracts and purchase orders.

 

E. Wrongful Termination.
Upon a final judicial determination (and all
appeals exhausted) that termination of the Contractor
or its successor in interest pursuant to this Section XIV was
wrongful, such termination will be deemed converted to a termination
for convenience pursuant to Section XIV.D and the Contractor's remedy for
wrongful termination in such event shall be limited
solely to the recovery of the payments permitted
for termination for convenience as set forth in
Section XIV.D, plus the Contractor's reasonable attorneys'
fees and interest at the rate of six percent
(6%) per annum.

 

F. Non-Exclusive.
The rights and remedies
of the Owner and Contractor under this
Section XIV shall be non-exclusive, and shall
be in addition to all the other remedies available
to such parties at law or in equity, subject, however, in
the case of the Contractor, to the limitation
contained in Section XIV.D and E, and other provisions
of this Agreement.

 

SECTION
XV 

NOTICES

All
notices to be given hereunder shall be in
writing, and may be given, served or made
by depositing the same in the United States
mail addressed to the authorized Representative
(as specified in Section
XXVI hereof) of the party to
be notified, postpaid and certified with
return receipt requested; or by delivering the same
in person to the said authorized Representative of such
party. Notice deposited in the mail shall
be effective upon actual receipt, rejection
or the first attempted delivery thereof. Notice given
in any other manner shall be effective
only if and when received by
the party to be notified. All
notices to be given to the parties
hereto shall be sent to or made at the
addresses heretofore set forth. By giving the
other party at least fifteen (15) days'
prior written notice thereof, the parties hereto shall
have the right to change their respective addresses and
specify as its address for the purposes hereof
any other address in the United States of America.

 

SECTION
XVI 

LIENS AND CLAIMS

A.
The Contractor shall not permit any laborer's, materialmen's,
mechanics' or other similar lien to be
filed or otherwise imposed on any part of the
Work or the Property, and shall provide Owner
with partial and final lien releases in
the form required by the Texas Property Code from
all parties performing any part of the Work
or providing materials for the Work. Contractor shall
defend, indemnify, and hold Owner harmless from and against all claims,
actions, losses, costs, damages, expenses, liabilities and
obligations, including without limitation, reasonable attorney’s fees, resulting from
(1) the assertion or filing of any claim
for amounts alleged to be due to the
claimant for labor, services, materials, supplies, machinery, fixtures or
equipment furnished in

 

 

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    connection
with the construction of the Work, (2) the
foreclosure of any mechanic’s or materialman’s
lien that allegedly secured the amounts allegedly
owed claimant, (3) any other legal proceedings
initiated in connection with that claim.

 

B. If any
laborer's, materialmen's, mechanics' or other similar
lien or claim thereof is filed and if
the Contractor does not cause such lien to
be released and discharged forthwith, or file
a bond in lieu thereof at the Contractor's sole
cost which satisfies the requirements of
Subchapter H of Chapter 53 of the
Texas Property Code, within ten (10) days following
the filing of same, the Owner shall have
the right to pay all sums
necessary to obtain such release and discharge
and deduct amounts so paid from the Guaranteed
Maximum Cost, or deduct same from the Contractor's
Fee portion of the next succeeding Application
for Payment until the total amount of same shall
be recouped, as the Owner may elect.

 

C. Not
withstanding anything contained in Section XVI to the
contrary. If any such lien is filed or otherwise
imposed, at the request of the Owner, the
Contractor shall cause such lien to be released
and otherwise discharged within ten (10) days following receipt of a request
from Owner. The Contractor shall indemnify and
hold harmless the Owner from all claims, losses,
demands, causes of action or suits of
whatever nature arising out of any
such lien or that part of the Work covered
thereby with respect to Work theretofore
performed and for which payment has been made
by the Owner to
the Contractor.

 

SECTION
XVII 

TITLE TO WORK

The Contractor
warrants and agrees that title to all Work will
pass to the Owner either by incorporation in the
Project or upon the receipt of payment therefore
by the Contractor, whichever occurs first, free and
clear of all liens, claims, title retention agreements, security interests or encumbrances
whatsoever; provided, that the vesting of such title shall not, alone, relieve Owner
of its obligation to pay for such Work in
accordance with the provisions of
the Contract Documents, impose any obligations
on Owner or relieve Contractor of any
of its obligations under this Agreement.
The Contractor warrants and agrees that Contractor
shall remain responsible for damage to
or loss of the Work, whether
completed or under construction, until the Work has
been accepted by Owner in the manner set forth in
the Contract Documents. Contractor further warrants and agrees
that no Work covered by an Application
for Payment will have
been acquired by the Contractor, or by any other person performing
Work at the site or furnishing Materials and equipment
for the Project, subject to an agreement
under which an interest
therein or an encumbrance thereon is retained by
the seller or otherwise imposed by
the Contractor or such other person.

 

SECTION
XVIII 

WAIVER

A.
No consent or waiver, express or implied,
by either party to
this Construction Contract to or of any breach or default
by the other in the performance of any obligations
hereunder shall be deemed or construed
to be a consent or waiver to
or of any other breach or default by such party
hereunder. Except as expressly provided otherwise under
this Construction Contract, failure on the
part of any party hereto to complain of or declare
the other party in breach or default hereunder, irrespective
of how long such failure continues, shall not constitute a waiver
of the rights of such party hereunder.

 

B.
Inspection, payment or tentative approval or
acceptance by the
Owner or the failure of the Owner
to perform any inspection hereunder shall not constitute a final
acceptance of the Work or any part thereof, and shall not release the Contractor of
any of its obligations hereunder.

 

SECTION
XIX 

CONFLICTS

In case
of conflicts between the provisions of
this Construction Contract, any
ancillary documents executed contemporaneously herewith or prior
hereto, or any other of the Contract Documents, the provisions of this

 

 

 

Page
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    Construction
Contract (including all Exhibits) shall prevail, except that the First, Second and
Third Amendments to this Construction Contract, to be executed
hereafter, shall prevail over the aforesaid Contract Documents.

 

SECTION
XX 

WORK IN PROGRESS

The Contractor
shall use reasonable efforts to complete and make
available portions of the Project for
occupancy by the Owner prior to the Scheduled Substantial
Completion Date, provided such does not
delay the Contractor's performance of the Work. Any
such early occupancy shall be pursuant to
an appropriate agreement setting forth (A) responsibility
for utility cost; (B) commencement of warranty obligations for
the portion of the Improvements to be occupied; (C) insurance
to be maintained by the Owner and its respective
separate contractors; and (D) reimbursement of additional
cost to the Contractor, if any, reasonably incurred
to minimize interference of the Work resulting
from such early occupancy. As portions
of the Project are completed and occupied, the
Contractor shall ensure that continuing construction activity will not
unreasonably interfere with the use, occupancy
and quiet enjoyment of the completed portions thereof.

 

SECTION
XXI

COMPLIANCE WITH LAWS;
OWNER POLICIES

 

Any provisions
hereof to the contrary notwithstanding, the Contractor
shall observe and abide by and perform all
of its obligations hereunder in accordance with all
applicable Laws. In addition, Contractor agrees to
perform its obligations hereunder in accordance with
Owner's applicable policies, including, but not limited to, safety
policies.

 

SECTION
XXII 

PERSONNEL

A. All
personnel used by the
Contractor in the performance of the Work shall
be qualified by training
and experience to perform their assigned tasks. At
the reasonable request of the Owner, the Contractor
shall not use in the performance of the
Work any personnel deemed by the
Owner to be incompetent, careless, unqualified to perform the work
assigned to him, or otherwise unsatisfactory to the Owner. It is
specifically agreed that the Contractor's
Project personnel and staff shall be those listed
on Exhibit C. Such Project personnel
and staff will devote such time to the Work as
is necessary to properly perform their
respective duties to ensure that the Work will be diligently
prosecuted in accordance with the Contract
Documents, and such Project personnel and staff
will continue such role unless prior release
is approved or directed by the Owner's Representative
(as defined below) in writing, unless such personnel
shall cease to be employed by the Contractor.
Replacement of or addition to the Contractor's key personnel
shall be subject to prior approval by
the Owner. The Contractor further agrees not to remove
from the Work any employee which the Owner's
Representative considers to be necessary for
the proper performance of the Work, without
the prior approval of the Owner's Representative.

 

B. It is
understood and agreed that if, in the sole reasonable judgment of the Owner, the Contractor
and Owner are unable
to reach agreement with regard to personnel and staffing of the
Contractor's employees engaged at the construction site,
the Owner has the right to terminate this Agreement
and perform the Work without any further
obligation to the Contractor, except for sums due in accordance
herewith for Work performed to date of termination.

 

 

SECTION
XXIII 

CONTRACTOR'S WARRANTIES

A. The
Contractor warrants to the Owner (in addition
to any other representations and warranties
contained elsewhere in the Contract Documents
as an inducement to Owner to execute this Agreement):

	 	a.	that it is financially solvent, able to pay its debts as they mature, and possessed of sufficient working capital to complete this Agreement;

 

 

 

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    	 	b.	that it is able to furnish the plant, tools, materials, supplies, equipment and labor required to complete the Work and perform its obligations hereunder;

	 	c.	that it is experienced in and competent to perform the Work contemplated by this Agreement;

	 	d.	that it is qualified to do the Work herein and is authorized to do business in the state of Texas;

	 	e.	that it holds all licenses, permits (including a valid Texas sales and use tax permit) and other necessary documentation required by law to perform the services included in this Agreement;

	 	f.	that it will perform all Work called for hereunder in a good and workmanlike manner in accordance with the Drawings and Specifications and all things required thereby or reasonably inferable therefrom; and

	 	g.	that it shall comply with and satisfy law, statute, ordinance, order, rule, regulation or requirement of the United States, the state, county, city and political subdivisions in which the Project is located or which exercises jurisdiction over the Project, and any agency, department, commission, board, bureau or instrumentality of any of them which exercises jurisdiction over the Project applicable to performance of the Work;

 

The foregoing
warranties are in addition to, and not in
lieu of, any and all other liability imposed upon the
Contractor by law with respect to
the Contractor’s duties, obligations and performance hereunder. The Contractor’s
liability hereunder shall survive the Owner’s final acceptance of and
payment for the Work. All representations
and warranties set forth in this Agreement,
including, without limitation, this paragraph, shall survive the final completion of the
Work or the earlier termination of this Agreement.
The Contractor acknowledges that the Owner is
relying on these representations and warranties in
entering into this Agreement with Contractor.

 

 

B. The Contractor
warrants to the Owner that Contractor
holds all licenses, permits (including a valid Texas sales
and use tax permit) and other necessary documentation
required by law to perform the
services included in this Agreement.

 

 

SECTION
XXIV 

DEFECTS

A. The
Contractor shall promptly (i) re-execute any parts of the Work that
fail to conform with the requirements of this
Agreement that appear in the progress of the
Work; (ii) remedy any defects in
the Work due to faulty materials
or workmanship that appear within a period of
one (1) year from Substantial Completion
of the Work hereunder, or within
such longer period of time as may
be set forth in the Drawings and Specifications
or other Contract Documents; and (iii) replace,
repair or restore any parts of the Project or furniture,
fixtures, equipment or other items placed therein
(whether by the Owner or any other party) that
are (a) injured or damaged by
any such parts of the Work that
do not conform to the requirements of this
Agreement or (b) defects in the Work.
The re-execution, remedy, replacement, repair, restoration
and/or correction shall be made at the
convenience of the Owner during such times
as will not interfere with the Owner's normal
use and occupancy of the Improvements.

 

B. If,
however, the Owner deems it inexpedient to require
the correction of Work damaged or not
done in accordance with the Contract
Documents, an equitable deduction from the Cost
of the Work and the Guaranteed Maximum Cost
shall be made by agreement
between the Contractor and Owner. Until such settlement, the Owner
may withhold such sums as the Owner deems just
and reasonable from monies, if any, due the Contractor. The settlement
shall not be unreasonably delayed by either
party, and the amount of money withheld shall be based on the
estimated actual cost of the correction to the Owner.

 

C. The
provisions of this Section XXIV apply to
Work done by Subcontractors of the Contractor,
as well as work
done directly by employees of the Contractor.
The provisions of this Section XXIV shall
not apply to corrective work attributable solely to
the acts or omissions of any separate
contractor of the Owner (unless the Contractor
is acting in such capacities). The cost
to the Contractor for performing any of its obligations under this
Section XXIV shall be borne by the Contractor
and shall not be included in the Cost of the Work.
The Contractor's

 

 

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    express
warranty herein shall be in addition
to, and not in lieu of,
any other remedies the Owner may have under
this Agreement, at law, or in
equity for defective Work.

 

SECTION
XXV 

CONFIDENTIALITY AND MEDIA COMMUNICATIONS

The Contractor
shall treat all information relating to the Project
and all information supplied to the Contractor by the Owner or Architect
as confidential and proprietary information
of the Owner or Architect and shall not permit its
release to other parties or make any public
announcement or publicity releases without the Owner's written
authorization. The Contractor shall also require
its Subcontractors, low tier Subcontractors and
vendors to comply with this requirement. The
provisions of this Section shall
remain binding obligations on the Contractor after completion, expiration or termination
of this Agreement, until the Owner reasonably determines
that the confidential information referred to herein has become part of the
public domain by means
of other disclosures or releases prohibited
by this Agreement, or until the date two
(2) years after completion of the Work, whichever
occurs first. Although not purposefully supplied
by Owner or Architect, information of which
Contractor only becomes aware due to, or as
a result of, Contractor's Work on the Project, shall
also be considered confidential information for purposes of this
Section; provided, that such information is not otherwise a part of the
public domain.

 

SECTION
XXVI 

REPRESENTATIVES

A. Upon
execution of this Agreement, the Owner shall
designate in writing to the Contractor the name of the party who
is to be the "Owner's Representative"
with full authority to execute any
and all instruments requiring the Owner's signature
and to act on behalf of the Owner with
respect to all matters arising out of this
Agreement. The "Owner's Project Management Consultant"
shall be Project Control of Texas (PCT) and
Texas Research & Technology Foundation (TRTF).
The Owner's Project Management Consultant is
authorizedto represent the Owner, run project meetings
and issue instructions to the Contractor.

 

B. Upon
execution of this Agreement, the Contractor shall designate
in writing to the Owner the name of the
party who is to be the
"Contractor's Representative" with
full authority to execute any and all instruments requiring the Contractor's signature and
to act on behalf of the Contractor with respect to
all matters arising out of this Agreement.

 

SECTION
XXVII 

ASSIGNMENT

A. Except
as otherwise provided in this Section XXVII,
neither party to this Agreement shall assign
this Agreement or sublet it as a whole
without the written consent of the other; nor
shall the Contractor assign any monies
due or to become due to it hereunder, without the previous written
consent of the Owner. However, notwithstanding
the foregoing, the Owner will assign this
Agreement to TPB Merchants Ice LLC,
, by providing written notice to the Contractor.
Further, the Owner may assign this Agreement to
any other affiliated or non-affiliated party
or entity, provided the Owner continues to be
responsible for the performance by such assignee
of all undertakings of the
Owner hereunder. Subject to the foregoing, this Agreement
shall inure to the benefit of and be binding
on the parties hereto and their respective successors and assigns.

 

B. All
subcontract agreements shall conform to the requirements
of the Contract Documents, and Contractor hereby
assigns to Owner (and Owner's successors or permitted
assigns) all its interest in any subcontract
agreements and purchase orders now existing
or hereafter entered into by the Contractor
for performance of any part of the Work,
which assignment will be effective
upon acceptance by the Owner in
writing and only as to those subcontract agreements
and purchase orders that Owner designates in
writing. Owner may accept said
assignment at any time during the course
of construction prior to Final Completion. Upon
such acceptance by Owner: (1) Contractor shall
promptly furnish to Owner true and correct copies
of the designated subcontract agreements, and
purchase orders, and (2) Owner
shall only be required to compensate the designated Subcontractor(s) or supplier(s)
for compensation accruing to such party(ies) for Work done or Materials
delivered from and after the date on
which Owner determines

 

 

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    to
accept the subcontract agreement(s) or purchase
order(s). All sums due and owing by
Contractor to the designated Subcontractor(s) or supplier(s)
for work performed or material supplied prior to Owner's determination to accept the
subcontract agreement(s) or purchase order(s) and
for which the Contractor has been paid, shall constitute a debt between such
parties and Contractor. All subcontract agreements
and purchase orders shall provide that they
are freely assignable by the
Contractor to the Owner and its assigns as provided above. Such
assignment constitutes part of the consideration to
the Owner for entering into the Agreement
with the Contractor and may not be withdrawn
prior to Final Completion. Contractor shall deliver or cause to
be delivered to Owner a written
acknowledgment in form and substance satisfactory to
Owner from each of its Subcontractors and suppliers
of the contingent assignment described herein
no later than ten (10) days after the date of
execution of each subcontract agreement and
purchase order with such parties.

 

SECTION
XXVIII 

LIMITED RECOURSE

A.
The Contractor agrees that no liability shall attain in
favor of the Contractor against any officer,
director, member, agent or employee of Owner
or Owner's affiliates or subsidiaries, and that
Contractor will look solely to the assets of Owner for satisfaction
of any obligation hereunder.

 

B. Notwithstanding
anything in this
agreement to the contrary, the Contractor and Owner each waive
claims against the other for consequential damages arising out of or relating
to this Agreement. This mutual waiver includes:

 

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

 

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

 

This mutual
waiver is applicable, without limitation, to
all consequential damages due to either party's breach of
this Agreement and survives termination of
this agreement.

 

SECTION
XXIX 

NONDISCRIMINATION

The Contractor
agrees that in the performance of its
work under this Agreement it will
not knowingly violate any applicable Laws prohibiting
discrimination in employment.

 

SECTION
XXX 

CONSTRUCTION OF TERMS

Unless
the context clearly intends to the contrary,
words singular or plural in number
shall be deemed to include the other, and pronouns having
a masculine or feminine gender shall be deemed
to include the other.

 

SECTION
XXXI 

CAPTIONS

The captions
used for the Sections in this Construction
Contract are inserted only as a matter of convenience
and for reference and in no way define, limit
or describe the scope of the intent of this Construction
Contract or any Section hereof.

 

SECTION
XXXII

 

 

Page
26 of 30

 

 

    	 

    	 

    ENTIRE AGREEMENT

 

The Contract
Documents constitute the entire agreement between
the parties hereto with respect to the matters covered
thereby. All prior negotiations, representations and agreements with respect thereto
not incorporated in such Contract Documents are hereby canceled.
This Agreement can be modified or amended only
by a document duly executed
on behalf of the parties hereto.

 

SECTION
XXXIII 

SEVERABILITY; COUNTERPARTS

If any term,
covenant or condition of this Agreement or the
application thereof to any person or circumstances shall be invalid
or unenforceable, the remainder of this Agreement,
or the application of such term or provision
to persons or circumstances other than
those to which it is held invalid or unenforceable
shall not be affected thereby, and each term shall
be valid and enforceable to the fullest extent
permitted by law. This Agreement
may be executed in multiple counterparts, all of which
taken together shall constitute one agreement binding on all parties, notwithstanding
that all the parties are not
signatories of the same counterpart.

 

SECTION
XXXIV

DRUG AND SMOKE FREE
WORKPLACE

 

The Contractor
shall cooperate with Owner's policy of
maintaining a drug and smoke
free environment. The Owner may require the Contractor to immediately remove any of
its employees that do not comply with
the Owner's drug and smoke free policy. The Contractor shall require a drug
and smoke free environment, including all of its
Subcontractors.

Smoking

All
Owner facilities are non-smoking environments. Smoking
is not permitted in
the Owner’s buildings. This policy applies to
all workers as well. You are expected to inform
visitors of this policy when necessary.

 

Substance
Abuse

The Owner
is committed to maintaining a safe and healthy work
environment for its associates, to protecting its own property and the property of
its clients and customers, and to helping protect the
traveling public on the routes traveled
by its equipment. The use of alcohol
and/or drugs can undermine workers productivity, the
quality of the Owner’s services,
and reputation. For these reasons, and
in compliance with the Drug-Free Workplace Act,
the Owner has implemented the following Substance Abuse
Policy. All workers are prohibited from reporting
to work or performing any work duties under the
influence of alcohol, illegal drugs or inhalants,
or other controlled substances. The manufacture, sale,
distribution, transfer, possession, purchase, or use of alcohol,
illegal drugs or inhalants, or other controlled
substances on the Owner’s property is
strictly prohibited. Drug means any substance
other than alcohol capable of altering an
individual’s mood, perception, pain level,
or judgment. Illegal drug is
any drug or controlled substance the sale or
consumption of which is
illegal. Alcohol use means the consumption of any beverage,
mixture, or preparation, including any
medication, containing alcohol.

 

SECTION
XXXV 

SECURITY

The Contractor
agrees that the Owner shall not be obligated to provide security at the
Project site to protect against vandalism, theft, breakage or damage,
that the Owner shall not be responsible
or liable for any such vandalism, theft, breakage
or damage, and that the Contractor shall assume full
responsibility and liability for such vandalism, theft, breakage or damage
until the Work is fully completed, to
the extent that any such vandalism, theft, breakage or damage
is not covered by any Builder's Risk insurance policy. In the
event of any loss of or damage to any
portion of the Work or materials
incorporated into the Work stored on the
Property that are covered by a Builder's
Risk insurance policy, the Contractor shall
not be allowed any increase to the contract
sum for the cost of the deductibles associated with
the claim, but will be entitled to
use contingency funds to cover this deductible
up to $25,000.

 

SECTION
XXXVI

 

 

Page
27 of 30

 

 

    	 

    	 

    LENDER’S
REQUIREMENTS

 

Contractor
shall provide at Owner’s request, any information to
any third party furnishing financing or Tax
Credit Investor requirements for the development and
construction of the Project, if any, or
any regulatory agency (referred to herein collectively as “Owner’s Lender”)
any Project information that Owner’s Lender
or its (their) designated representatives reasonably require or any such
certification the Contractor is obligated to provide to
the Owner under the Contract Documents. The Contractor
further agrees to execute such documents required
by Owner’s Lender and which are consistent
with reasonable commercial practices for the financing or tax
credit of the project of the size and scope of
the Project.

 

 

IN
WITNESS WHEREOF, this Construction Contract is hereby executed
as of the date first above set forth.

 

[SIGNATURE
PAGES FOLLOW]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page
28 of 30

 

 

    	 

    	 

    COUNTERPART
SIGNATURE PAGE TO

CONSTRUCTION CONTRACT
BY AND BETWEEN

TEXAS RESEARCH & TECHNOLOGY
FOUNDATION AND THE WHITING-TURNER CONTRACTING COMPANY DATED 03/01/2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page
29 of 30

 

    	 

    	 

    COUNTERPART
SIGNATURE PAGE TO

CONSTRUCTION CONTRACT
BY AND BETWEEN

TEXAS RESEARCH & TECHNOLOGY
FOUNDATION AND THE WHITING-TURNER CONTRACTING COMPANY DATED 03/01/2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Page
30 of 30

 

 

    	 

    	 

    SCHEDULE 1 TO

CONSTRUCTION CONTRACT
BY AND BETWEEN

TEXAS RESEARCH & TECHNOLOGY
FOUNDATION AND THE WHITING-TURNER

CONTRACTING COMPANY DATED 03/01/2022

 

 

DEFINED
TERMS

 

 

"AED" shall
have the meaning set forth in Section
V.B.6.

 

"Additional
Insureds" shall have the meaning set forth in
Paragraph 11.1.1 of the General Conditions.

 

"Allowances"
shall mean those items identified as such
pursuant to the First Amendment. The amounts
listed for such Allowances are included in the IGMC and
in the Estimated Contractor's
Cost.

 

"Allowance
Work" shall mean Work performed
in connection with the Allowances, as set forth
in the First Amendment.

 

"Application
for Payment" shall have the meaning
set forth in Section V.D.

 

"Architect"
shall refer to Douglas Architects, unless the Owner gives the Contractor written notice
naming another party as the Architect, and is further
defined in Paragraph 4.1.1 of the General Conditions.

 

"Certificate
for Payment" shall have the meaning
set forth in Section 9.4 of the General Conditions.

 

"Change in
Scope" shall mean a change in
the Work that affects the Scheduled
Substantial Completion Date and Scheduled Final Completion Date, but shall not include
a change resulting from errors or omissions of
the Architect or Architect's consultants or
time extensions related to weather delays pursuant to Section II.

 

"Change Order"
shall have the meaning set forth in Paragraph
7.2.1 of the General Conditions. "Change Order Work"
shall have the meaning set forth in Section
IV.A.3.

"Claim"
shall have the meaning set forth in Paragraph
4.3.1 of the General Conditions.

 

"Construction Change Directive"
shall have the meaning set forth in
Paragraph 7.3.1 of the General Conditions.

 

"Construction
Contingency" shall mean the amount
available to the Contractor to cover the costs resulting from (i)
unforeseen conditions, and (ii) events not evidenced at the time of the execution
of this Agreement or the
establishment of the Guaranteed Maximum Cost,
which costs are otherwise reimbursable pursuant to Section V.B hereof.
However, the Construction Contingency shall not be used in
connection with repair of or replacement of
rejected or defective work.

 

"Contract
Documents" shall mean
the Construction Contract, all the items enumerated in Exhibit B and
all amendments, Change Orders or addenda issued with respect thereto.

 

"Contract Sum"
shall have the meaning set forth in
Section V.A.

 

"Contract
Time" shall mean a finite
number of months, commencing on the commencement
date and ending on the completion
date, to be more particularly described and
set forth in the Second Amendment (following execution of
same).

 

"Contractor"
shall mean the person identified as such in
the preamble to the Construction Contract, as further
defined in Paragraph 6.1.2 of the General Conditions.

 

 

Schedule
1 – Page 1

 

    	 

    	 

    "Contractor's Costs"
shall have the meaning set forth in Section
V.B. "Contractor's Fee" shall
have the meaning set forth in Section V.A.1.
"Contractor's Representative" shall
have the meaning set forth in Section
XXVI.B. "Cost of the Work" shall
have the meaning set forth in Section V.B.

"CPM" shall
have the meaning set forth in Section
I.C.3.

 

"Drawings and Specifications"
shall have the meaning set forth in Section
I.A.1.

 

“Early Package” shall
have the meaning set forth in Section
I.B.1.

 

"Estimated
Contractor's Cost" shall have the meaning set forth in
Section V.B. "Event of Default"
shall have the meaning set forth in Section XIV.B.

"Final Application
for Payment" shall have the meaning
set forth in Section
V.D.11.

 

"Final
Completion" or "finally
complete" (whether upper case or lower
case letters are used) as used in this Agreement
means performance of all of the Work including
minor items of unfinished
work and all remedial work and issuance of a
permanent certificate of occupancy (or if
same cannot be delivered for reasons
not the fault or responsibility of the
Contractor, nevertheless all the Contractor's obligations
necessary to the issuance of such permanent certificate
of occupancy have been performed). Such
term is further defined in Paragraph 9.10.1 of
the General Conditions.

 

"Final Payment"
shall have the meaning set forth in Section
V.D.10.

 

"Final Working
Drawings and Specifications" shall have the
meaning set forth in Section I.B.3.a. "First Amendment"
shall have the meaning set forth in Section I.B.1.

"Guaranteed
Maximum Cost" ("GMC") shall have the meaning
set forth in Section I.B.3.c. "Improvements"
shall have the meaning set forth in Section
I.A.1.

"Initial
Guaranteed Maximum Cost" ("IGMC") shall have the meaning
set forth in Section I.B.2.a.

 

"Interim Completion
Dates" shall mean have the meaning set forth
in the Second Amendment (following execution of same).

 

"Laws" shall
mean any and all applicable federal, state/provincial, municipal and local codes,
constitutions, decrees, directives, laws, licenses,
ordinances, injunctions, order, permits, regulations, requirements, rules and statutes.

 

"Materials" shall
have the meaning set forth in
Section I.A.1.

 

"Not In
Contract," or "NIC," work
shall have the meaning set forth in Paragraph 3.20.4 of
the General Conditions. "Notice to Proceed"
shall have the meaning set forth in Section II.A.1.

"Occupant"
shall have the meaning set forth in Paragraph
9.9.3 of the General Conditions.

 

"Owner"
shall be the person identified as such
in the preamble to the Construction Contract, as further
defined in Paragraph 2.1.1 of the General Conditions.

 

“Owner’s Lender”
shall have the meaning set forth in Section XXXVI.

 

Schedule
1 – Page 2

 

    	 

    	 

    "Owner's Project Management
Consultant" shall the person identified
as such in Section I.A.,
as further defined in Section XXVI.A.

 

"Owner's Representative"
shall have the meaning set forth in Section XXVI.A.

 

"Person"
(whether upper case or lower case letters
are used) shall be deemed to include an
individual, corporation, partnership, trust, unincorporated
organization, government and governmental agency or subdivision, as the
context shall require.

 

"Preliminary
Initial Guaranteed Maximum Cost" ("PIGMC") shall have the meaning set forth in Section I.B.1.

 

"Product Data" shall
have the meaning set forth in Paragraph 3.12.2 of the General Conditions.

 

"Progress Schedules"
shall have the meaning set forth in Section I.C.1.

 

"Project" shall have
the meaning set forth in Section I.A.1.

 

"Property" shall
have the meaning set forth in Section I.A.1.

 

"Proposal Request"
shall have the meaning set forth in Section IV.A.1.

 

"Samples" shall
have the meaning set forth in Paragraph 3.12.3 of the General Conditions.

 

"Savings" shall
have the meaning set forth in Section V.A.2.b.

 

"Schedule of Values"
shall have the meaning set forth in Section V.D.3.

 

"Scheduled Final Completion Date"
shall have the meaning set forth in Section II.A.1.

 

"Scheduled Substantial Completion
Date" shall have the meaning set forth in Section II.A.1.

 

"Scope of the Work" shall
have the meaning set forth in Section I.B.2.a.

 

"Second Amendment"
shall have the meaning set forth in Section I.B.2.a.

 

“SDI” shall have the
meaning set forth is Section X.B.

 

"Services" shall have
the meaning set forth in Section I.A.1.

 

"Shop Drawings"
shall have the meaning set forth in Paragraph 3.12.1 of the General Conditions.

 

"Subcontractor"
shall have the meaning set forth in Paragraph 5.1.1 of the General Conditions.

 

"Sub-Subcontractor"
shall have the meaning set forth in Paragraph 5.1.2 of the General Conditions.

 

"Submittal Schedule"
shall have the meaning set forth in Paragraph 3.12.11 of the General Conditions.

 

"Substantial
Completion" or "substantially complete" (whether upper case or lower case letters are used) shall have the meaning
as set forth in Paragraph 9.8.1 of the General Conditions and shall have the meaning as set forth in Section II.A, meaning performance
of all of the Work (exclusive of minor items of unfinished work which does not preclude beneficial use of the Improvements).

 

"Third Amendment" shall have the meaning set
forth in Section I.B.3.c.

 

"Work" shall have the meaning set forth in
Section I.A.1.

 

Schedule
1 – Page 3

 

    	 

    	 

    "Work Day"
shall mean and refer to any
of Contractor's normal eight (8) or ten
(10) hour days, as the case may be, Monday through
Friday or Monday through Thursday, as the
case may be, of any given week, exclusive of customarily
recognized and agreed national holidays.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule
1 – Page 4

 

    	 

    	 

    EXHIBIT A TO

CONSTRUCTION CONTRACT BY AND
BETWEEN

TEXAS RESEARCH & TECHNOLOGY
FOUNDATION AND THE WHITING-TURNER

CONTRACTING COMPANY DATED 03/01/2022

 

PROPERTY
LOCATION

 

 

1350 East
Houston Street, San Antonio, Texas 78205

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit
A – Page 1

 

    	 

    	 

    EXHIBIT B TO

CONSTRUCTION CONTRACT
BY AND BETWEEN

TEXAS RESEARCH & TECHNOLOGY
FOUNDATION AND THE WHITING-TURNER CONTRACTING COMPANY DATED 03/01/2022

 

CONTRACT DOCUMENTS

 

 

To be provided
and set forth in each Amendment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit
C-1 – Page 1

 

    	 

    	 

    EXHIBIT B-1 TO

CONSTRUCTION CONTRACT
BY AND BETWEEN

TEXAS RESEARCH & TECHNOLOGY
FOUNDATION AND THE WHITING-TURNER

CONTRACTING COMPANY DATED 03/01/2022

 

 

GENERAL CONDITIONS OF THE CONSTRUCTION
CONTRACT

 

ARTICLE 1 

GENERAL PROVISIONS

	 	1.1	BASIC DEFINITIONS

 

1.1.1
The "Contract Documents" consist
of the documents listed in Exhibit B to
the Construction Contract, as said Exhibit may be amended
from time to time. Unless specifically enumerated
in said Exhibit B,
the Contract Documents do not
include other documents, such as bidding
requirements (e.g., advertisement or invitation to bid, instructions
to bidders, sample forms, the Contractor's
bid or portions of addenda relating
to bidding requirements). Capitalized terms not
defined in the terms and conditions shall have the meaning
ascribed to them elsewhere in the Agreement.

 

1.1.2
The "Agreement," which includes the Construction
Contract, the Contract Documents, the exhibits to the Construction Contract (including these
General Conditions), as well as all
purchase orders, change orders, exhibits and
addenda executed by the parties represent the entire
and integrated agreement between the parties hereto and supersede prior negotiations,
representations or agreements, either written or oral. The Agreement
may be amended or modified only by
a written modification signed by both parties
("Modification").

 

1.1.3
The "Project" is the total construction of which
the Work performed under the Contract Documents
may be the whole or a part and which may include
construction by the Owner or by separate
contractors.

 

1.1.4
The "Project Manual" is the volume or volumes
of written construction documents that include(s) sample
forms and certain of the Contract
Documents, such as the Conditions of the Contract and
Specifications.

 

1.1.5
The "Drawings" are the graphic and pictorial portions of the
Contract Documents, wherever located and whenever issued, showing the design, location
and dimensions of the Work, generally
including plans, elevations, sections, details, schedules
and diagrams.

 

1.1.6
The "Specifications" are that
portion of the Contract Documents consisting
of the written requirements for materials, equipment,
construction systems, standards and workmanship for the Work, and
performance of related services.

 

	 	1.2	EXECUTION, CORRELATION AND INTENT

 

1.2.1
Execution of the Agreement by the
Contractor is a representation that the Contractor
has visited the site, become familiar with local conditions under which the Work is
to be performed and correlated personal observations with requirements of the
Contract Documents.

 

1.2.2
The Contract Documents include all items necessary
for the proper execution and completion of the
Work by the Contractor. The Contract Documents
are complementary, and what is
required by one shall be as binding as if
required by all. In general, Drawings
show dimensions, materials, locations and kinds
of construction; Specifications describe quality of materials
and workmanship. Work not particularly detailed,
noted or specified shall be the
same as similar parts that are detailed,
noted or specified. Unless specifically noted to the contrary, it is the intention
of the Drawings and Specifications that all Work, equipment,
casework, mechanical, electrical and similar devices of whatever nature, be completely installed,
hooked-up, made operational and fully functional, and that all costs therefor be included
in the Contractor's Cost.

 

 

Exhibit
B-1 – Page 1

 

    	 

    	 

    1.2.2.1
The most recently issued document takes precedence
over previous issues of the same document. The
order of precedence is as follows,
with "1" being the highest authority:

 

	 	1.	Modifications signed by the Contractor and Owner (including Change Orders).

 

	 	2.	The Agreement, including exhibits and attachments.

 

	 	3.	General Conditions.

 

	 	4.	The Construction Documents, as to which the Drawings govern over the Specifications for quantity and locations, the Specifications govern over the Drawings for quality and performance and the figured dimensions on Drawings shall govern other scale drawings without figured dimensions.

 

If,
even after following the order of priority above,
the resolution of the
discrepancy or conflict is unclear, Contractor shall notify Owner in
writing and request clarification and final decision by Owner. The general
rule for interpretation will be that the discrepancy or conflict
will be resolved in favor of providing the
better quality, greater quantity or more stringent requirement of work and/or
materials.

 

1.2.3
Organization of the Specifications into divisions,
sections and articles, and arrangement of Drawings,
shall not control the Contractor in dividing the Work among Subcontractors or in
establishing the extent of Work to be performed
by any trade.

 

1.2.4
Unless otherwise stated in the Contract Documents, words and abbreviations that have well-known
technical or construction industry meanings
are used in the Contract Documents in accordance
with such recognized meanings.

 

1.2.5
The general character of detail work is shown
on the Drawings and in other Contract Documents, but
subsequent clarifications may be made by
additional layouts or large-scale or full-size
details. When the Architect furnishes miscellaneous large scale or full size details
to further clarify the Work, such details shall
be considered a part of the Agreement. If, in
the Contractor's opinion, such details are more
elaborate than indicated on the Drawings and Specifications,
written notice shall be given to the Owner and
Architect within fourteen (14) days after receipt thereof
by Contractor, concurrent with
other reporting obligations of receipt thereof.
In such case, and only if Owner concurs with
Contractor and instructs the Architect to issue
a Proposal Request, any Modifications
to the Estimated Contractor's Cost, Guaranteed Maximum Cost and Scheduled Substantial
Completion Date and Scheduled Final Completion Date will be determined
in accordance with the procedures set forth
in Section IV of the Construction Contract. Failure to receive timely notice shall relieve
the Owner from claims for resultant additional cost or extension
of the Scheduled Substantial Completion Date and Scheduled Final
Completion Date.

 

1.2.6
The Contractor acknowledges that it has visited and
examined the site and is fully familiar with all physical and other
conditions affecting the site. In connection therewith,
Contractor represents to Owner that the Contractor
has, understood: (1) the nature, location and character of the
Project and the site, including, without limitation, Owner provided geotechnical
reports, civil plans, the surface and subsurface conditions
of the site, all natural and man-made structures and obstructions
thereon and thereunder, and all surface and subsurface
water conditions; (2) the nature, location and
character of the general area in which the Project is
located, including, without limitation, its climatic conditions, available labor supply
and labor costs, and available equipment supply and
equipment costs; and (3) the quality and quantity of
all materials, supplies, tools, equipment, labor and
professional services necessary to complete the Work in
the manner and within the cost and time required by the
Contract Documents. In addition, the Contractor acknowledges that if
it becomes aware of any such discrepancies, omissions, ambiguities or conflicts
in the Contract Documents, it will notify
the Owner and the Architect in writing of such
fact within ten (10) days after Contractor first
becomes aware of such
fact. Contractor recognizes the extra degree of care required under the urban site
construction circumstances with respect to safety,
protection of pedestrians and Owner's clients, cleanliness
of the site, health and other laws,
and protection of existing utilities, adjacent streets
and property. In arriving at the
Contract Sum and the Contract Time, Contractor has, as an experienced and
prudent contractor, exercised its best judgment and expertise to include the impact
of such circumstances upon the Contract Sum
and the Contract Time.

 

 

Exhibit
B-1 – Page 2

 

    	 

    	 

    1.2.7
The Contract Documents include all items necessary
for the proper execution and completion of the
Work by the Contractor. The Work shall consist
of all items specifically included in the Contract
Documents, as well as all additional items
of work which are reasonably inferable from that which
is specified in order to complete
the Work in accordance with the Contract
Documents, including, without limitation, all the necessary drawings, plans, specifications
and other related materials necessary to obtain
all required permits, licenses, and certificates from the applicable governing
authorities, together with the costs thereof, and the costs of other charges
or assessments necessary to either permit, construct
or operate as intended the Work, its components
and systems. The Contract Documents are complementary,
and what is required by any one Contract
Document shall be binding as if
required by all. Any differences between
the requirements of the Drawings and the Specifications
or any differences noted within the Drawings themselves
or within the Specifications themselves discovered by
the Contractor have been referred to the Owner and
Architect by Contractor prior to
the submission of bids and have been clarified
by an addendum issued to all bidders. If any
such differences or conflicts were not called to
the Owner's and Architect's attention prior to submission
of bids, the Owner or Owner’s Project
Manager shall decide which of the
conflicting requirements will govern based upon
the most stringent of the requirements,
and, subject to the approval of the Owner, the
Contractor shall perform the Work at no
additional increase to the GMP in accordance with
the Architect's decision. Work not covered in
the Contract Documents will not be required unless
it is consistent therewith and is reasonably inferable
therefrom.

 

1.2.8
When more than one material, brand or process
is specified for a particular item of Work, the choice
shall be determined by the Contractor
and the Owner. Approval by the Architect
or Owner of materials, suppliers, processes or Subcontractors
does not imply a waiver of any Contract requirements,
including, without limitation, Contractor's warranties.

 

1.2.9
All Work shall conform to
the Agreement. No change therefrom shall
be made without review and written acceptance
by Architect and Owner.

 

	 	1.3	OWNERSHIP AND USE OF ARCHITECT'S DRAWINGS, SPECIFICATIONS AND OTHER DOCUMENTS

 

1.3.1
All Drawings, Specifications and other documents and
copies thereof included in the Contract Documents and
furnished by the Architect are and
shall remain the sole property of the
Owner. Such Contract Documents are to be used
by the Contractor only with
respect to the Project. With the exception of
one contract set for the Contractor, such documents are to
be returned or suitably accounted for to the Owner,
on request, upon completion of the Work. Submittal
or distribution to meet official regulatory requirements
or for other purposes in connection with the
Project is not to be construed as publication
in derogation of the Architect's or Owner's
copyright or other reserved rights. Neither the Contractor nor any Subcontractor,
Sub-Subcontractor or material or equipment
supplier shall own or claim a copyright in the Drawings,
Specifications and other documents prepared by the
Architect.

 

	 	1.4	CAPITALIZATION

 

	 	1.4.1	Terms capitalized in these General Conditions include those which are (1) specifically defined, and

(2) 
the titles of numbered articles and identified
references to sections, paragraphs and
subparagraphs in the Contract
Documents.

 

	 	2.1	INTERPRETATION

 

2.1.1
In the interest of brevity the Contract Documents
frequently omit modifying words such as "all"
and "any" and articles such as "the" and "an," but the fact
that a modifier or an article is absent from
one statement and appears in another is not
intended to affect the interpretation of either statement.

 

 

 

 

 

 

 

 

 

Exhibit
B-1 – Page 3

 

    	 

    	 

    ARTICLE 2

OWNER

	 	2.1	DEFINITION

 

2.1.1
The "Owner" is the person or entity
identified as such in the
Agreement and is referred to throughout the Contract Documents as if
singular in number..

 

2.1.2
At the request of
the Owner, the Contractor shall
join with the Owner in filing
an affidavit of commencement with the county clerk
where the Project site is located, establishing
the date of commencement of the Work
at the Project site.

 

	 	2.2	INFORMATION AND SERVICES REQUIRED OF THE OWNER

 

2.2.1
The Owner shall furnish to the Contractor reasonable evidence that financial arrangements have
been made to fulfill the Owner's obligations
under the Agreement..

 

2.2.2
To the extent in Owner's possession,
the Owner shall furnish surveys describing physical
characteristics, legal limitations and utility locations for the site of the Project,
and a legal description of the
site. This information is furnished to the Contractor only in order to
make complete disclosure of such material and for no other purpose. By furnishing
such material, the Owner does not represent, warrant or guarantee
its accuracy either in whole, in part, implicitly
or explicitly, or at all. Contractor shall be
fully responsible for locating (and shall locate prior to
performing any Work) all
utility lines, telephone company lines and
cables, sewer lines, water pipes, gas lines
and electrical lines, including, without limitation,
all buried pipelines and buried telephone cables, and shall perform the Work in
such a manner so as to avoid
damaging any such lines, cables,
pipes and pipelines.

 

2.2.3
Except as provided in Section III of the
Construction Contract, the Owner shall secure and pay for necessary approvals,
easements, assessments and charges required
for construction, use or occupancy of permanent
structures or of permanent changes in
existing facilities.

 

2.2.4
Information or services under the
Owner's control shall be furnished by
the Owner with reasonable promptness to avoid
delay in orderly progress of
the Work, provided that Contractor shall notify
Owner in writing
if Contractor believes that such information
or services are not being provided with
reasonable promptness.

 

	 	2.2.5	Intentionally left blank.

 

2.2.6
The foregoing are in addition to
other duties and responsibilities of the Owner enumerated
herein and especially those in respect to Article
6 (Construction by Owner
or by Separate Contractors), Article 9 (Payments
and Completion) and Article 11 (Insurance and
Bonds).

 

2.2.7
The Owner's personnel may, but shall
not be obligated to, be present at the
construction site during the progress of the
Work.

 

	 	2.3	OWNER'S RIGHT TO STOP THE WORK

 

2.3.1
If the Contractor fails to correct Work that is not
in accordance with the requirements of
the Contract Documents, as required by
Section 12.2, or persistently fails to carry out
Work in accordance with the Agreement,
the Owner, by written
order signed personally or by an agent
specifically so empowered by the Owner in writing,
may order the Contractor to stop the Work, or any portion thereof,
until the cause for such order has been eliminated; however,
the right of the Owner to stop the Work shall
not give rise to a duty on the part of the Owner
to exercise this right for the benefit of the
Contractor or any other person or entity, except to
the extent required by Paragraph 6.1.3.

 

	 	2.4	OWNER'S RIGHT TO CARRY OUT THE WORK

 

2.4.1
If Contractor defaults or fails to carry out
the Work in accordance with the Agreement,
and fails within a seven (7)-day period after
receipt of written notice from Owner to commence
and continue correction of the

 

Exhibit
B-1 – Page 4

 

    	 

    	 

    default
or neglect with diligence and promptness, then
Owner may, after that seven (7)-day period, without
prejudice to other remedies Owner may have,
correct the deficiencies. To the
extent necessary to effect such corrective and remedial action, Owner may
exclude Contractor from all or part of the
Project Areas, take possession of all or part
of the Work, and suspend Contractor's services related
thereto, and incorporate in the Work all materials and equipment
stored at the Project Areas as may be
necessary in Owner's judgment. In such case,
an appropriate Change Order shall be issued
that deducts from payments then or thereafter
owed to Contractor the cost of correcting the deficiencies,
including, without limitation, compensation for Architect's additional services and for
any other expenses of Owner made necessary by
the default, neglect or failure. If payments
then or thereafter due Contractor are not sufficient
to cover those amounts, Contractor shall promptly pay
the difference to Owner. No extension of time
for performance of the Work shall be
allowed because of any delay attributable to the exercise
by Owner of its rights hereunder, provided that
Owner shall in that event proceed with due
diligence. The right of the Owner to stop the
Work pursuant to this Subparagraph 2.4.1 shall not
give rise to any duty on the part of the Owner to
exercise this right for the benefit of the Contractor
or any other person or entity.

 

ARTICLE 3 

CONTRACTOR

	 	3.1	DEFINITION

 

3.1.1
The "Contractor" is the person or entity
identified as such in the Agreement
and is referred to throughout the Contract Documents
as if singular in number. The Contractor
shall be lawfully licensed, if required in the jurisdiction where the Project is
located. The term "Contractor" means the Contractor or the
Contractor's authorized representative.

 

	 	3.2	REVIEW OF CONTRACT DOCUMENTS AND FIELD CONDITIONS BY CONTRACTOR

 

3.2.1
The Contractor shall have a continuing duty
to read, carefully study and compare each of
the Contract Documents, the Shop Drawings and
the Product Data, and shall give written notice to
the Owner and Architect of any inconsistency, ambiguity,
error or omission which the Contractor may discover with
respect to these documents before proceeding with
the affected Work. If the Contractor knowingly proceeds with
the work so affected without instructions from the Owner or the
Architect, the Contractor shall make good any resulting damage or defects.
The issuance, or the express or implied
approval by the Owner or the Architect of the
Contract Documents, Shop Drawings or Product
Data, shall not relieve the Contractor of the
continuing duties imposed hereby, nor shall any such approval be evidence
of the Contractor's compliance with the
Contract. The Owner has requested the Architect to only prepare documents
for the Project, including the Drawings and
Specifications for the Project, which are reasonably accurate,
coordinated, adequate and sufficient for construction
of the Improvements. HOWEVER, THE OWNER
MAKES NO REPRESENTATION OR WARRANTY OF ANY NATURE WHATSOEVER TO
THE CONTRACTOR CONCERNING SUCH DOCUMENTS. By the
execution of the Agreement and these General Conditions, the Contractor
acknowledges and represents that it (i)
will receive, review and carefully
examine such documents, and (ii) will not
claim that it has relied upon any representations
or warranties by the Owner concerning such documents
as no such representations or warranties
have been or are hereby made. The Contractor
will give written notice to the Owner and Architect
within fourteen (14) days after receipt of the
documents should the Contractor discover the Drawings or Specifications, or any other
documents, to be incomplete, inaccurate, inadequate, inconsistent, uncoordinated or
insufficient for construction of the Improvements.
Notwithstanding the foregoing, the Contractor shall not be responsible for cost or
delay which result from such incomplete or insufficient
documents.

 

3.2.2
The Contractor shall take field measurements and verify field conditions and shall
carefully compare such field measurements and conditions
and other information known to the Contractor with the Contract Documents before commencing
activities. Errors, inconsistencies or omissions discovered shall be reported
immediately to the Architect and the Owner, and if such reporting is done verbally in the
interest of time, Contractor shall follow
up with written
verification of what was reported verbally.

 

3.2.3
The Contractor shall perform the Work in
accordance with the Contract Documents and submittals approved pursuant
to Section 3.12.

 

	 	3.3	SUPERVISION AND CONSTRUCTION PROCEDURES

 

Exhibit
B-1 – Page 5

 

    	 

    	 

    3.3.1
The Contractor shall supervise and direct the
Work, using the Contractor's best skill and attention.
The Contractor shall be solely responsible for and
have control over construction means, methods, techniques, sequences and procedures, and
for coordinating all portions of the Work under the
Construction Contract, unless Contract Documents give other specific instructions concerning
these matters. Where other specific instructions are provided, the
Contractor shall (1) review any specified
construction or installation procedure (including
those recommended by the manufacturers); (2)
advise the Architect if the specified
procedure deviates from appropriate construction practices;
(3) notify the Owner if following the procedure
will affect any warranties,
including the Contractor's general warranty; (4) promptly
state any objections to the specific instructions
provided by the Architect; and (5) as appropriate, propose
alternative procedures which the Contractor
will warrant.

 

3.3.2
The Contractor shall be responsible to the Owner
for acts and omissions of the Contractor's employees,
Subcontractors and their agents and employees, and other persons performing portions
of the Work under a contract
with the Contractor. The relationship of Contractor to
Owner shall be that of an independent
contractor. Nothing contained in the Contract
Documents or inferable therefrom shall be deemed
or construed to (1) make Contractor
the agent, servant or employee of
the Owner, or (2) create any partnership, joint
venture or other association between Owner and
Contractor. Any direction or instruction by Owner
in respect of the Work shall
relate to the results the Owner desires to
obtain from the Work, and shall in no way affect Contractor's
independent contractor status as described herein.

 

3.3.3
The Contractor shall not be relieved of obligations
to perform the Work in accordance with
the Contract Documents either by activities
or duties of the
Architect in the Architect's administration of the Contract,
or by tests, reports, inspections or
approvals required or performed by
persons other than the Contractor.

 

3.3.4
The Contractor shall be responsible for inspection
of all portions of Work already performed under
this Agreement to determine that such portions are in
proper condition to receive subsequent Work.

 

3.3.5
The Contractor has the responsibility to ensure that all Subcontractors, suppliers and vendors,
their agents and employees adhere to the Contract Documents, and that upon the Contractor's receipt of the
Drawings, Specifications or written directions from the
Owner or the Owner's Representative, they will
promptly order and provide Materials, taking into account
the current market and delivery conditions. The Contractor
shall coordinate its Work with that of all
others on the Project, including deliveries, storage,
staging, installation and construction utilities. The Contractor shall be responsible
for the space requirements, locations and routing
of equipment. In areas and
locations where the proper and most effective space requirements,
locations and routing cannot be made
as indicated, the Contractor shall meet with all others involved, before installation,
to plan the most effective and efficient method
of overall installation, subject to review of
the Owner and Architect.

 

3.3.6
The Contractor shall establish and maintain
bench marks and all other grades, lines and
levels necessary for the Work and
shown on the Contract Documents, and shall report
any observed errors or inconsistencies to the Owner and Architect
before commencing Work, and review the placement
of the building and permanent facilities on
the site with the Owner and Architect after all lines are staked
out and before foundation Work is started. Contractor
shall provide access to the Work for the Owner,
the Architect, other persons designated by Owner, and governmental inspectors. Any encroachments
made by Contractor or its Subcontractors on adjacent properties
due to construction as revealed
by an accurate survey, except for encroachments arising
from errors or omissions not reasonably discoverable by
Contractor, shall be the sole responsibility
of the Contractor, and Contractor shall, at Contractor's
sole cost and expense, correct such encroachments
within thirty (30) days after delivery of such
survey (or as soon thereafter as reasonably possible),
either by the removal of the encroachment (and
subsequent reconstruction on the Project site) or agreement
with the adjacent property owner(s) (in
form and substance satisfactory to Owner in
its sole discretion) allowing the encroachments to
remain.

 

	 	3.4	LABOR AND MATERIALS

 

3.4.1
Unless otherwise provided in the Contract Documents,
the Contractor shall provide and pay for labor,
materials, equipment, tools, construction equipment
and machinery, water, heat, utilities, transportation and other facilities and services necessary
for proper execution and completion of the
Work, whether temporary or permanent and whether
or not incorporated or to be incorporated in the
Work.

 

 

Exhibit
B-1 – Page 6

 

    	 

    	 

    3.4.2
The Contractor shall at all times
enforce strict discipline and good order among the
Contractor's employees and other persons carrying out the Contract. The Contractor
shall not permit employment of unfit persons, persons
not skilled in tasks assigned to them or persons
not qualified or permitted to work by
Law. Contractor agrees that whenever Owner informs
it in writing that any employee
or employees employed by Contractor
or its Subcontractors and engaged in work at the
Project are, in Owner's reasonable opinion, objectionable or disorderly,
the employee or employees shall be removed
from work on the Project and shall not again
be used without Owner's prior written consent.

 

3.4.3
After the Contract Documents are executed, if it becomes
necessary for the Contractor to substitute a material
or product of a different brand or manufacturer
in lieu of that specified, Contractor shall submit a written
request to the Architect for approval of such proposed substitution
in accordance with the requirements set forth by
the Architect in the Project Manual.
Each request for substitution shall state any
amount of change to the Contract Sum and shall
be accompanied by complete descriptive literature and performance data upon both the
specified item and the proposed substitution,
plus any samples as may be required
by the Architect or the Owner. Each proposed substitution
shall require the written approval of the Owner and Architect
before its incorporation into the Work. The Contractor
shall submit requests for substitution as
soon as practicable after the need
for the substitution is determined
to allow for adequate consideration of such
request and to minimize delay in the progress
of the Work. In the event a substitution
is proposed for the convenience
of the Contractor and requires extensive evaluation by
the Architect, Contractor may be required to
pay the Architect's fee for investigating and evaluating
such substitution.

 

3.4.4
Materials shall conform to manufacturer's standards
in effect at the date of execution of the
Agreement and shall be installed in strict
accordance with manufacturer's directions. The Contractor
shall, if required by the Owner or Architect,
furnish satisfactory evidence as to the kind
and quality of any materials. All
packaged materials shall be shipped to the site in
the original containers clearly labeled, and delivery
slips shall be submitted with bulk materials
identifying thereon the source, and warranting quality and
compliance with the Contract Documents.

 

3.4.5
When the Contract Documents require the Work
to be above the standards required by applicable
laws, ordinances, rules, regulations and other
statutory provisions pertaining to the Work,
such Work shall be
performed and completed by the Contractor in
accordance with the Contract Documents.

 

3.4.6
Contractor shall require that all employees for whom
it is either directly or indirectly
responsible abide by all applicable regulations
of the Project and all authorized government agencies relative to safety practices and
relative to their behavior, movements and identification while the employees are on
the Work areas and surrounding premises.

 

	 	3.5	WARRANTY

 

3.5.1
The Contractor warrants to the Owner and Architect
that materials and equipment furnished under the Contract will be of good quality
and new unless otherwise required or permitted
by the Contract Documents, that the
Work will be free from defects, including
defects resulting from soil or other subsurface conditions
at the site, and that
the Work will conform with the requirements
of the Contract Documents. Work not
conforming to these requirements, including substitutions not properly approved and
authorized, will be considered defective. The Contractor's
warranty excludes a remedy for damage or defect
caused by abuse, modifications not executed by
the Contractor, improper or insufficient maintenance,
improper operation, or normal wear and tear
under normal usage. If requested by
the Architect or Owner,
the Contractor shall furnish satisfactory evidence as to
the kind and quality of
materials and equipment.

 

3.5.2
The warranty provided in Paragraph 3.5.1 shall
be in addition to and not in limitation of any
other warranty or remedy required by law or
by the Contract Documents, and such warranty
shall be interpreted to require, without otherwise limiting Owner's remedies or period
of time in which
to bring a warranty claim, the Contractor to
replace defective materials and equipment and re-execute
defective Work which is disclosed to
the Contractor by the Owner within (i)
a period of one (1) year after Substantial Completion
(ii) or if a latent defect, within one
(1) year after discovery thereof by Owner, or
(iii) within one (1) year after replacement
of defective equipment and completion of re-execution
of defective Work pursuant
to the warranty provided in Paragraph 3.5.1. Contractor
will stay involved until all perpetual problems are resolved
to all parties satisfaction.

 

 

Exhibit
B-1 – Page 7

 

    	 

    	 

    3.5.3
The Contractor shall issue in writing to the Owner as a condition precedent to
Final Payment a "General Warranty" reflecting the terms and conditions
of Subparagraphs 3.5.1 and
3.5.2 for all Work under the Contract Documents. This General Warranty shall
be assignable. Submittal of all
warranties and guarantees are required
as a prerequisite to the Final Payment.

 

3.5.4
Subject to Paragraph 3.5.5 below, the Contractor
shall warrant for a period of twelve (12) months
following Substantial Completion of the Work that
the building(s) shall be watertight and
leak proof at every point and in every area,
except where leaks can be attributed
to damage to the building(s) by external forces beyond Contractor's
control. The Contractor shall, immediately upon notification
by the Owner of water penetration, determine
the source of water penetration, and at its
own expense do any work necessary to make
the building(s) watertight in accordance with
Contract Documents. Contractor shall also, at its
own expense, repair or replace any other damaged material, finishes and furnishings damaged
as a result of this water penetration, to return
the building(s) to its (their) original condition.

 

3.5.5
The General Warranty shall be begin
to run upon Substantial Completion of
the Work and shall be in
form and content otherwise satisfactory to the Owner.

 

3.5.6
Each subcontract shall contain a similar guaranty,
and the Owner shall be the beneficiary of
each such guarantee made by any Subcontractor and shall
be entitled to, though not obligated to, enforce
the guaranty directly against any Subcontractor.
The Contractor will obtain guarantees
and warranties, to the fullest extent possible,
from suppliers, vendors and manufacturers thereof, of all
machinery, all heating and plumbing fixtures and supplies, all electrical motors,
appliances and devices, all hardware, and all other fixtures and equipment for which
guarantees and warranties are customarily given,
used in the Work by the Contractor or any Subcontractor,
and to the extent feasible the Contractor shall obtain or cause
to be obtained and delivered to the Owner assignments thereof to
the Owner, or written confirmations from guarantors
that such guarantees and warranties run to the
benefit of the Owner.

 

3.5.7
All warranties shall include labor and
materials and shall be signed by the manufacturer
or Subcontractor, as the case may be, and
countersigned by the Contractor.

 

	 	3.6	TAXES

 

3.6.1
The Contractor shall pay sales,
consumer, use and similar taxes for the
Work or portions thereof provided by the Contractor
which are legally enacted when bids are received
or negotiations concluded, whether or not
yet effective or merely
scheduled to go into effect.

 

3.6.2
Contractor specifically represents that it is
an employer within the meaning of the Federal Unemployment
Tax Act, the Federal Insurance
Contributions Act, and all state laws relating to unemployment compensation; and that all
of its Subcontractors and vendors that will
perform work or furnish materials under the
Construction Contract will also be employers within the meaning of such
laws. Furthermore, Contractor hereby accepts liability
for the payment to the respective state
and federal governments of all taxes, contributions,
interest and penalties provided in such laws, and any
amendments thereto, or in any similar laws
that may hereafter be enacted with respect to
the wages and salaries paid to
Contractor's employees for services rendered in connection with
this Agreement; and also, shall require the
aforesaid Subcontractors and vendors to
do likewise with respect to
the wages and salaries paid to their employees.

 

	 	3.7	PERMITS, FEES AND NOTICES

 

	 	3.7.1	See Section III of the Construction Contract.

 

	 	3.8	ALLOWANCES

 

3.8.1
The Contractor shall include in the Contract Sum all
allowances stated in the Contract Documents.
Items covered by allowances shall be supplied
for such amounts and by such persons
or entities as the Owner may direct,
but the Contractor shall not be required to employ persons
or entities against which the Contractor makes reasonable
objection.

 

	 	3.8.2	Unless otherwise provided in the Contract Documents:

 

Exhibit
B-1 – Page 8

 

    	 

    	 

    	 	1.	materials and equipment under an allowance shall be selected reasonably promptly by the Owner to avoid delay in the Work;

 

	 	2.	allowances shall cover the cost to the Contractor of materials and equipment delivered at the site and all required taxes, less applicable trade discounts;

 

	 	3.	Contractor's Costs for unloading and handling at the site, labor, installation costs, overhead, profit and other expenses contemplated for stated allowance amounts shall be included in the Contract Sum and not in the allowances;

 

	 	4.	whenever costs are more than or less than allowances, the Contract Sum shall be adjusted accordingly by Change Order. The amount of the Change Order shall reflect (1) the difference between actual costs and the allowances under Subparagraph 3.8.2.2 and (2) changes in Contractor's Costs under Subparagraph 3.8.2.3.

 

	 	3.9	SUPERINTENDENT

 

3.9.1
The Contractor shall employ a competent superintendent
and necessary assistants who shall
be in attendance at the Project site
during performance of the Work. The superintendent
shall represent the Contractor, and communications given to
the superintendent shall be as binding as
given to the Contractor. Important communications shall
be similarly confirmed on written request in
each case.

 

3.9.2
Contractor's agrees that Clayton Henson shall
be and remain the general superintendent assigned
by Contractor generally and directly to
supervise and coordinate the performance of the Work is
and was a material inducement to Owner to enter into the Contract. If Clayton
Henson is not the general superintendent or does not remain
the general superintendent for any reason whatsoever, the
Owner reserves the right to review and approve or
disapprove said general superintendent's replacement, in Owner's sole
discretion. If said replacement is disapproved, the
Contract may, at Owner's option, be terminated
for cause.

 

3.9.3
Owner shall have the right, upon notice,
to demand that the superintendent or other
key personnel retained by Contractor be replaced
by Contractor. In the event of such
demand, Contractor shall, within seven (7) days after
notification thereof, replace said individual(s) with an individual
satisfactory to Owner, in Owner's sole
discretion. If said replacement is
disapproved, the Contract may, at Owner's option,
be terminated for cause.

 

	 	3.10	CONTRACTOR'S CONSTRUCTION SCHEDULE

 

3.10.1
See Section I.C.1 of the Construction Contract.

 

3.10.2
The Contractor shall prepare and keep current, for
the Architect's review, a schedule of submittals
that is coordinated with the Contractor's
construction schedule and allows the Architect reasonable time to review submittals.

 

3.10.3
The Contractor shall perform the Work in
accordance with the most recent schedules
submitted to the Owner.

 

3.10.4
Contractor's construction schedule includes, but is
not limited to, specification of items
requiring long lead time, identification of major
milestones for completion of the Work, and any other
items necessary for critical path construction.

 

	 	3.11	DOCUMENTS AND SAMPLES AT THE SITE

 

3.11.1
Contractor shall maintain at the site
for the Owner one record copy of the Drawings, Specifications, addenda, Change
Orders and other Modifications, in good order
and marked currently to record field changes and selections
made during construction, and one record
copy of approved Shop Drawings, Product Data, Samples
and similar required submittals. These shall be available
to Architect and shall be delivered to the
Architect for submittal to Owner upon completion of the
Work.

 

Exhibit
B-1 – Page 9

 

    	 

    	 

    3.11.2
Upon completion of the Work, and
as a condition of final payment, Contractor shall transfer
to all actual locations, additions, deletions, corrections revisions and
other changes made during construction and not otherwise
documented on the Drawings, which [drawings] shall be defined
hereinafter as "As-Builts."
The work on the
blueline drawings shall be neatly
and accurately done by a competent draftsman; and shall
be signed by the Contractor and Subcontractor(s) involved
certifying that, to the best of their knowledge, the As-Builts are true
and accurate and that the indications thereon represent the actual condition of the
Work performed in the construction of the Project.
Contractor shall then deliver the blueline drawings
and Contractor's marked record set to Architect and deliver one set of prints from
the completed blueline drawings to Owner. Blueline
drawings provided by Architect shall include all
revisions issued by Architect. At the earlier
of termination of the Agreement or termination
of the Work, the As-Builts shall become the property of
the Owner.

 

	 	3.12	SHOP DRAWINGS, PRODUCT DATA AND SAMPLES

 

3.12.1
"Shop Drawings" are drawings, diagrams, schedules and other data specially
prepared for the Work by the Contractor or a
Subcontractor, Sub-Subcontractor, manufacturer, supplier or distributor
to illustrate some portion of the Work.

 

3.12.2
"Product Data" are illustrations,
standard schedules, performance charts, instructions, brochures, diagrams and other information
furnished by the Contractor to illustrate materials
or equipment for some portion of the
Work.

 

3.12.3
"Samples" are physical examples which
illustrate materials, equipment or workmanship and establish standards by which
the Work will be judged.

 

3.12.4
Shop Drawings, Product Data, Samples and similar submittals
are not Contract Documents. The purpose of their submittal
is to demonstrate for those portions of the Work for
which submittals are required
the way the Contractor proposes to conform to the information
given and the design concept expressed in
the Contract Documents. Review by the Architect
is subject to the limitations of Paragraph 4.2.7.

 

3.12.5
The Contractor shall review, approve and submit to
the Architect and Owner, at the Owner's option, Shop Drawings, Product Data, Samples
and similar submittals required by the
Contract Documents with reasonable promptness and in such sequence as to
cause no delay in the Work or
in the activities of the Owner or of Owner's
separate contractors. Submittals made by
the Contractor which are not required by the
Contract Documents may be returned without action.

 

3.12.5.1  
The Architect will take no action on Shop
Drawings, Product Data and Samples that have
not first been certified by stamped signed
notation, as having been checked and
approved by the Contractor for use in
the Work.

 

3.12.5.2  
Shop Drawings, Product Data or
Samples that contain excessive errors or that
are incomplete will be rejected, and any delay
caused thereby will be the responsibility of
the Contractor.

 

3.12.6
The Contractor shall perform no portion of the
Work requiring submittal and review of Shop Drawings,
Product Data, Samples or similar submittals until
the respective submittal has been approved by the Architect.
Such Work shall be in
accordance with approved submittals.

 

3.12.7
By approving and submitting Shop Drawings, Product Data, Samples
and similar submittals, the Contractor represents that the Contractor
has reviewed and determined and verified materials,
field measurements and field construction criteria related thereto, or will do so,
and has checked and coordinated the information contained within such submittal
with the requirements of the Work and of the
Contract Documents.

 

3.12.8
The Contractor shall not be relieved of responsibility
for deviations from requirements of the
Contract Documents by the Architect's
approval of Shop Drawings, Product Data, Samples
or similar submittals unless the Contractor has specifically
informed the Architect in writing of such deviation
at the time of submittal and the Architect has
given written approval to the specific deviation. Deviation
from the requirements of the Contract

 

 

Exhibit
B-1 – Page 10

 

    	 

    	 

    Documents indicated
on Shop Drawings, Product Data and Samples does
not constitute the required notification "in writing"
unless specific notation is made of each deviation
on the submittal.

 

3.12.9
The Contractor shall direct specific attention,
in writing or on
resubmitted Shop Drawings, Product Data, Samples or similar
submittals, to revisions other than those requested by
the Architect on previous submittals.

 

3.12.10   
Informational submittals upon which
the Architect is not expected to take responsive
action may be so identified in the Contract
Documents.

 

3.12.11   
Contractor shall submit for Architect's review and comments
a Shop Drawing and Sample Submittal Schedule for
each division of the Work as soon as practicable
after award of applicable subcontracts,
but no later than forty-five (45) days after
award. This Shop Drawing and Sample Submittal
Schedule (the "Submittal Schedule") shall indicate the timing and
handling necessary for the processing of Shop
Drawings, Samples and Product Data related to the expeditious execution of
the Work.

 

The Submittal
Schedule shall allow appropriate review time from the date Architect
receives a Submittal, not to be greater than
ten (10) business days for submittals and shorter duration as outlined
in project schedule for critical identified submittals
until the date the Submittal is required
to be mailed back to
Contractor; or a longer period of time reasonably
appropriate for Architect's review of major submittals,
such as structural steel, curtainwall, reinforcing
steel and others of a similar
magnitude, and shall anticipate the possibility that
Shop Drawings and Samples may be returned
for revisions and resubmission. The Submittal
Schedule shall, from time-to-time, be revised
and resubmitted by Contractor for review as may
be required by changes in
the progress of Work and as Subcontractors
for different divisions of the Work are
let. Contractor shall submit Shop Drawings and
Samples in accordance with
the Submittal Schedule with such promptness as to cause
no delay in the Work or in
that of any separate contractor. No extensions
of time will be granted
because of failure to have Shop Drawings and Samples
submitted in ample time to allow for processing.
Subcontractors shall submit their Shop Drawings and Samples through Contractor.
Architect and Contractor understand that out-of-sequence and extraordinarily-expeditious processing of Shop
Drawings may be required due to changes, field
conditions and actions that preclude normal review procedures in
order to maintain job
progress, and agree to use best efforts to expedite
the processing of Shop
Drawings. Owner and/or Owner's Project Management
Consultant may waive the requirements relating
to the Submittal Schedule in writing with
respect to the purchase or installation of certain
items when required due to the fast-track nature of the Project or other
acceleration of the Work on the Project
is required by Contractor.

 

3.12.12   
Architect will review and approve
Shop Drawings, both for design intent
and for all appropriate detailing; however, Architect's
review approval thereof shall not be construed
as a complete check, nor shall it relieve Contractor from responsibility for
any departures or deviations from the
requirements of the Contract Documents unless
Contractor has, in writing, called Architect's and Owner's attention to such deviations at the
time of submission, and secured Architect's approval thereto,
nor shall it relieve Contractor from responsibility for
errors of any sort in Shop Drawings or Schedules, nor
from the responsibility for proper fitting of the Work, nor
from the necessity of furnishing any
Work required by the Contract Documents
that may not be indicated in Shop
Drawings when reviewed. Architect will
review the Shop Drawings in accordance with the Submittal
Schedule in Paragraph 3.12.11 hereof and will return them to
Contractor with Architect's stamp and signature affixed thereto, indicating the appropriate action.
Contractor shall not be relieved from responsibility
for its errors or omissions in the Shop
Drawings, Product Data or Samples by
Architect's review thereof.

 

	 	3.13	USE OF SITE

 

3.13.1
The Contractor shall confine its operations, including
the operations of its Subcontractors, at the
site to areas designated by Owner, permitted
by law, ordinances, permits and the Contract
Documents, and shall not unreasonably encumber the site with
materials or equipment. Contractor acknowledges that Owner has
operational facilities that provide services to third party clients
adjacent to the portion of the Property where
the Work will be performed and Contractor
will use best efforts
to not interfere with Owner's operations.

 

	 	3.14	CUTTING AND PATCHING

 

3.14.1
The Contractor shall be responsible for cutting, fitting
or patching required to complete the Work or
to make its parts fit
together properly.

 

Exhibit
B-1 – Page 11

 

    	 

    	 

    3.14.2
The Contractor shall not damage or endanger a
portion of the Work or fully or partially completed construction of the
Owner or separate contractors by cutting,
patching or otherwise altering such construction, or by
excavation. The Contractor shall not cut or
otherwise alter such construction by the Owner
or a separate contractor except with the written
consent of the Owner and of such
separate contractor; such consent shall not be unreasonably
withheld. The Contractor shall not unreasonably
withhold from the Owner or a separate contractor the
Contractor's consent to cutting or otherwise altering the Work.

 

	 	3.15	CLEANING UP

 

3.15.1
The Contractor shall keep the Property and surrounding
area free from accumulations of waste materials
or rubbish caused by operations under the
Agreement. At completion of the Work, the Contractor
shall remove from and about the Project waste
materials, rubbish, the Contractor's tools, construction equipment,
machinery and surplus materials.

 

3.15.2
If the Contractor fails to clean up as provided in
the Contract Documents, the Owner may do so
and the cost thereof shall
be charged to the Contractor.

 

3.15.3
Immediately prior to inspections to determine the date or dates of Substantial
Completion, the Contractor shall remove from the Project all
spots, stains, paint splatters, temporary protection, labels, finger prints and blemishes
by thoroughly cleaning and polishing all exposed surfaces
and materials. Manufacturers' recommendations for cleaning materials and methods
shall be followed.

 

	 	3.16	ACCESS TO WORK

 

3.16.1
The Contractor shall provide the Owner and Architect
access to the Work in preparation and progress wherever located.

 

	 	3.17	ROYALTIES AND PATENTS

 

3.17.1
The Contractor shall pay all
royalties and license fees. The Contractor shall
defend suits or claims for infringement of patent
rights and shall hold the Owner and Architect harmless from loss on account
thereof in accordance with Section V.B.9
of the Construction Contract.

 

	 	3.18	INDEMNIFICATION

 

3.18.1
TO THE FULLEST EXTENT PERMITTED BY
LAW, THE CONTRACTOR SHALL INDEMNIFY, DEFEND (WITH COUNSEL SELECTED BY OWNER IN
THE CASE OF UNINSURED EVENTS AND ACCEPTABLE
TO OWNER IN THE CASE OF INSURED
EVENTS) AND HOLD HARMLESS THE OWNER, PROJECT CONTROL OF TEXAS, INC., THEIR RESPECTIVE AFFILIATES,
SUBSIDIARIES, AGENTS, PARTNERS, OFFICERS, DIRECTORS
AND EMPLOYEES, FROM AND AGAINST ALL CLAIMS, DAMAGES, LOSSES AND EXPENSES,
INCLUDING, BUT NOT LIMITED TO, ATTORNEYS' FEES TO
THE EXTENT ARISING OUT OF, OR RESULTING FROM THE PERFORMANCE OF THE WORK, INCLUDING, WITHOUT
LIMITATION, ANY SUCH CLAIM, DAMAGE, LOSS OR
EXPENSE ATTRIBUTABLE TO BODILY OR PERSONAL INJURY, SICKNESS, DISEASE OR DEATH, OR TO INJURY
TO OR DESTRUCTION OF TANGIBLE PROPERTY (INCLUDING THE WORK ITSELF),
, CAUSED IN WHOLE OR IN PART BY THE NEGLIGENT
ACTS OR OMISSIONS OF THE CONTRACTOR, ANY SUBCONTRACTOR, ANYONE DIRECTLY OR INDIRECTLY EMPLOYED BY ANY OF THEM
OR ANYONE FOR WHOSE ACTS ANY OF THEM MAY BE LIABLE.
SUCH OBLIGATION SHALL NOT BE CONSTRUED TO NEGATE, ABRIDGE OR REDUCE OTHER RIGHTS OR
OBLIGATIONS OF INDEMNITY THAT WOULD OTHERWISE EXIST AS TO
A PARTY OR PERSON DESCRIBED IN THIS SECTION 3.18.

 

3.18.2
IN ANY AND ALL CLAIMS AGAINST ANY PERSON OR
ENTITY INDEMNIFIED UNDER THIS SECTION 3.18 BY
ANY EMPLOYEE OF CONTRACTOR, ANY SUBCONTRACTOR,
ANYONE DIRECTLY OR INDIRECTLY EMPLOYED BY ANY
OF THEM OR ANYONE FOR WHOSE ACTS
ANY OF THEM MAY BE LIABLE, THE INDEMNIFICATION
OBLIGATION UNDER THIS SECTION 3.18 SHALL
NOT

 

Exhibit
B-1 – Page 12

 

    	 

    	 

    BE LIMITED IN ANY
WAY BY ANY LIMITATION ON THE AMOUNT
OR TYPE OF DAMAGES, COMPENSATION OR BENEFITS PAYABLE
BY OR FOR CONTRACTOR OR ANY SUBCONTRACTOR UNDER WORKERS' OR WORKMEN'S COMPENSATION ACTS,
DISABILITY BENEFIT ACTS OR OTHER EMPLOYEE BENEFIT ACTS.

 

3.18.3
NOTHING IN THESE GENERAL CONDITIONS OR IN THE AGREEMENT IS
INTENDED TO REQUIRE THE CONTRACTOR TO INDEMNIFY, DEFEND OR HOLD HARMLESS THE OWNER,
PROJECT CONTROL OF TEXAS, INC., AND THEIR RESPECTIVE AFFILIATES, SUBSIDIARIES, , PARTNERS,
OFFICERS, DIRECTORS AND EMPLOYEES, FROM ANY CLAIMS RENDERED INVALID
OR UNENFORCEABLE BY SECTION 151.102 OF THE
TEXAS INSURANCE CODE OR TO REQUIRE THE CONTRACTOR TO
PROVIDE THE OWNER WITH ANY INSURANCE COVERAGE AGAINST SUCH
INVALID OR UNENFORCEABLE CLAIMS.

 

3.18.4
The provisions of Paragraph 3.18 shall survive
the termination of this Contract, however caused, and
no payment, partial payment, nor issuance of a certificate of Substantial
completion nor a certificate of final
completion nor acceptance of occupancy in whole
or in part of the Work shall
waive or release any of the
provisions of Paragraph 3.18

 

	 	3.19	MEETINGS

 

3.19.1
Contractor shall send its qualified representative(s) to periodic meetings held at such
time and such place as Architect or Owner shall
designate. Contractor shall be responsible for
securing attendance of its Subcontractors, suppliers
or vendors at such meetings, if
deemed necessary by Owner or Architect.

 

	 	3.20	ADDITIONAL REQUIREMENTS

 

3.20.1
Contractor agrees to comply with all Laws applicable
to any activities carried out in the name of
or on behalf of Owner under the provisions
of the Construction Contract and/or any amendments
to it. Contractor agrees that all financial
settlements, billings and reports rendered to Owner, as provided for
in the Construction Contract and/or any amendments to it, will to the best of
its knowledge reflect properly the facts about
all activities and transactions handled for the account of
Owner, which data may be relied
upon as being complete and accurate in any further
recording and reporting made by Owner, for whatever purpose. Contractor
agrees to notify Owner in writing within five (5) days after discovery of any instance
where the Contractor fails to comply with provisions of
this Paragraph 3.20.1, or where Contractor has
reason to believe the data covered
by this Paragraph 3.20.1 is no longer accurate and
complete.

 

3.20.2
Contractor specifically agrees to comply with
and abide by Sections 101 and
102 of the Immigration Reform and Control Act of 1986. Furthermore,
Contractor agrees to cooperate with and assist Owner
in the institution of necessary procedures to
comply with any regulations promulgated
pursuant to said Act.

 

	 	3.20.3	Intentionally Deleted.

 

3.20.4
Contractor shall arrange to accommodate "Not In Contract,"
or "NIC," work, which shall be defined
as work excluded from the Contract. When information
is inadequate, Contractor shall request further instructions
before proceeding.

 

3.20.5
Contractor shall prepare quotations for proposed
changes in the
Work as directed by Architect or Owner.
Quotations shall be in a "break-down"
form giving the number of units, unit cost of
materials, hours of labor, hourly cost of labor,
tool costs, overhead and profit, and shall reflect credits as well
as extras.

 

3.20.6
Contractor shall timely secure required inspection
and occupancy certificates, and promptly transmit them
to the Architect.

 

	 	3.21	CONFIDENTIAL INFORMATION

 

3.21.1
All Work shall be considered confidential
by Contractor. Contractor agrees to use its best
efforts to prevent information and data which
Contractor or Contractor's employees, agents or Subcontractors
obtain directly or

 

Exhibit
B-1 – Page 13

 

    	 

    	 

    indirectly
concerning the Work, the Work site or any
of Owner's property, plans or operations, from
being disclosed to any persons, companies or
others without the prior written consent of
Owner.

 

3.21.2
Contractor agrees that it will not make, nor
consent to, publicity releases or announcements concerning
the Agreement or Contractor's participation in
the Work. Contractor shall not take photographs
of the Project, Work site or any of Owner's
property without first obtaining Owner's written consent
except as otherwise set forth herein. Contractor shall require each of its
Subcontractors and agents to agree to the same limitations and obligations provided in this
Section 3.21.

 

3.21.3
The provisions of this Section 3.21 shall
remain binding obligations of Contractor after
the completion, expiration or termination of
the Agreement until Owner reasonably determines
that the confidential information referred to herein
has become part of the public domain by means
other than disclosures or releases prohibited
by the Agreement, or until the
date five (5) years after Final Completion of
the Work, whichever occurs first.

ARTICLE 4

ADMINISTRATION OF THE AGREEMENT

	 	4.1	ARCHITECT

 

4.1.1
The "Architect" is the person lawfully licensed to practice architecture
or an entity lawfully practicing architecture identified
as such in the Construction Contract, and is
referred to throughout
the Contract Documents as if singular in number and
masculine in gender. The term "Architect" means
the Architect or the Architect's authorized
representative.

 

4.1.2
The Owner reserves the right to appoint a representative
empowered to act for the Owner during the Construction Phase and to supersede the Architect's
Construction Phase responsibility to the extent set forth in written notice to the Architect
and Contractor. Similarly, from time to time, the Owner
may expand or reduce the Owner’s delegation of powers to
the Architect, with the Owner so notifying the
Contractor of any such changes. The Architect
shall not be construed as a third-party
beneficiary to the Contract and can in no way
object to any expansion or reduction of powers
as set forth herein. In no
event, however, shall the Owner have control over
or charge of, or be responsible for, construction means,
methods, techniques, sequences or procedures or for safety precautions
or programs in connection with
the Work, since these are fully the Contractor’s
responsibility. The Owner will not be responsible
for the Contractor's failure to carry out the
Work in accordance with the Contract Documents.
The Owner will not have control over or charge
of, and will not be responsible
for, the acts or omissions of the Contractor's Subcontractors, or their
agents or employees, or of any other persons
performing portions of the Work.

 

4.1.3
In case of termination of
employment of the Architect, the Owner may appoint
an architect whose status under the
Contract Documents shall be the same
as that of the former architect.

 

	 	4.2	ARCHITECT'S ADMINISTRATION OF THE AGREEMENT

 

4.2.1
The Architect will provide administration of
the Agreement as described in the Contract
Documents, and will be the Owner's representative (1) during
construction, (2) until final payment is
due and (3) with the Owner's concurrence,
from time to time during the correction period
described in Section 12.2. The Architect will
advise and consult with the Owner. The Architect
will have authority to
act on behalf of the Owner only to the extent
provided in the Contract Documents, unless
otherwise modified by written instrument
in accordance with other provisions
of the Agreement.

 

4.2.2
The Architect will visit
the site at intervals appropriate to the stage
of construction to become generally familiar with
the progress and quality of the completed Work and
to determine in general if the Work is being performed in
a manner indicating that the Work, when completed,
will be in accordance with the
Contract Documents. However, the Architect will not
be required to make
exhaustive or continuous on-site inspections to check
quality or quantity of the Work. On the basis of on-site observations as an architect,
the Architect will keep the Owner
and Contractor informed of progress of
the Work, and will endeavor to guard the Owner against
defects and deficiencies in the
Work.

 

 

Exhibit
B-1 – Page 14

 

    	 

    	 

    4.2.3
The Architect will not have control over or charge
of, and will not be responsible for, construction
means, methods, techniques, sequences or procedures, or for safety precautions and programs
in connection with the Work, since
these are fully the Contractor's responsibility
as provided in Section 3.3. The Architect will
not be responsible for the Contractor's failure to
carry out the Work in accordance with the Contract
Documents. The Architect will not have control over or charge
of, and will not be responsible
for, acts or omissions of the Contractor, Subcontractors,
or their agents or employees, or of any other
persons performing portions of the Work.

 

4.2.4
Except as otherwise provided in
the Contract Documents or when direct communications
have been specifically authorized, the Owner and Contractor shall
endeavor to communicate through the Architect. Communications by
and with the Architect's consultants shall be through
the Architect. Communications by and with
Subcontractors and material suppliers shall be through
the Contractor. Communications by
and with separate contractors shall be through the
Owner. The Contractor shall provide written
confirmations of communications made directly with
the Owner and immediately provide copies of such
confirmation to the Architect.

 

4.2.5
Based on the Architect's observations and evaluations of the
Contractor's Applications for Payment, the Architect will review and certify the amounts
due the Contractor and will issue Certificates
for Payment in such amounts.

 

4.2.6
The Architect and the Owner’s Representative
each have authority to reject Work that does
not conform to the Contract Documents. Whenever the
Architect considers it necessary or advisable for implementation of the intent of
the Contract Documents, the Architect will have authority
to require inspection or testing of the Work in accordance with
Paragraphs 13.5.2 and 13.5.3, whether
or not such Work is fabricated, installed
or completed. However, neither this authority of
the Architect nor a decision made in good faith
either to exercise or not to exercise such authority shall
give rise to a duty or responsibility of the Architect
to the Contractor, Subcontractors, material and equipment suppliers, their agents
or employees, or other persons performing portions
of the Work.

 

4.2.7
The Architect will review and
approve or take other appropriate action
upon the Contractor's submittals such as Shop Drawings,
Product Data and Samples. The Architect's
action will be taken with
such reasonable promptness as to
cause no delay in the Work or in the activities
of the Owner, Contractor or separate contractors, and
will take no more than 10 business days for submittals and shorter
duration as outlined in the project schedule
for critical identified submittals. The Architect's review of the
Contractor’s submittals shall not relieve the Contractor of the obligations
under Sections 3.3, 3.5 and 3.12. The Architect's
review shall not constitute approval of safety precautions
or, unless otherwise specifically stated by
the Architect, of any construction
means, methods, techniques, sequences or procedures. The Architect's
approval of a specific item shall not indicate
approval of an assembly of which the item is
a component.

 

4.2.8
The Architect will prepare Change
Orders and Construction Change Directives, and may authorize minor changes in
the Work as provided in Section 7.4.

 

4.2.9
The Architect will conduct inspections
to determine the date or dates of Substantial Completion and the date of Final
Completion, will receive and forward to the
Owner for the Owner's review and records written warranties
and related documents required by the Contract
and assembled by the Contractor, and will
issue a final Certificate for Payment upon compliance
with the requirements of the
Contract Documents.

 

4.2.10
If the Owner and Architect agree, the
Architect will provide one or more
project representatives to assist the Architect in
carrying out the Architect's responsibilities at the site.

 

4.2.11
In the event the Owner appoints a representative
empowered to act for the Owner during the Construction
Phase and to supersede the Architect's Construction Phase responsibility as set forth in
written notice to the Architect and Contractor, the Architect shall not be responsible for
any activities occurring or events resulting
from activities occurring during any period of superseded
responsibility unless and only to the extent from the time
that the Architect shall be redirected to resume
responsibility by the Owner.

 

4.2.12
Interpretations and decisions of the Architect
will be consistent with the intent of and
reasonably inferable from the Contract Documents, and will
be in writing or in the form of drawings.
When making such interpretations and decisions,
Architect will endeavor to secure faithful performance by Contractor.

 

 

Exhibit
B-1 – Page 15

 

    	 

    	 

    4.2.13
Architect's decisions on matters relating to aesthetic
effect will be final if
consistent with the intent expressed in the Contract
Documents, subject to the prior approval
of Owner.

 

4.2.14
In reviewing the quality and progress of the
Work and submittals received from the Contractor, the
Architect is acting solely for
the convenience of the Owner in following the
Work. Neither the Owner nor Architect has any
responsibility to assist the Contractor in the supervision or performance
of the Work. Unless otherwise expressly agreed in writing by
Owner in each instance, no action, approval
or omission to act or failure to advise the
Contractor as to any matter
by the Owner or Architect
shall in any way relieve the Contractor
from its responsibility for the performance of the Work in
strict accordance with the Contract
Documents.

 

	 	4.3	CLAIMS AND DISPUTES

 

4.3.1
DEFINITION. A "Claim" is a demand
or assertion by one of the
parties seeking, as a matter of right,
adjustment of the terms of the Agreement, payment
of money, extension of
time or other relief with respect to
the terms of the Agreement. The term "Claim"
also includes other disputes and matters in
question between Owner and Contractor arising
out of or relating to the Contract. Claims must
be made by written
notice. The responsibility to substantiate Claims rests with
the party making the Claim.

 

4.3.2
DECISION OF ARCHITECT. Any Claim
may, upon written request of Owner,
be referred initially to the Architect for a recommendation.

 

4.3.3
TIME LIMITS ON CLAIMS. Claims by
Contractor must be made within fourteen (14)days
after occurrence of the event giving rise to
such Claim, or within fourteen (14)days after Contractor first
recognizes or should have reasonably observed or discovered
the condition giving rise to the Claim, whichever is later. Claims must be made
by written notice to the other party hereto.
No additional Claim made after the initial
Claim has been implemented by Change
Order or otherwise will be considered.

 

4.3.4
CONTINUING CONTRACT PERFORMANCE. Pending final resolution of a Claim,
unless otherwise agreed in writing, Contractor shall proceed diligently with performance
of the Contract and Owner shall continue to make payments in
accordance with the Contract Documents, subject
to Owner's right to withhold payments for sums that it does not
agree are due the Contractor. The resolution
of any Claim under this Paragraph 4.3.4 shall
be reflected by a Change Order executed
by Owner, Architect and Contractor.

 

4.3.5
FINAL PAYMENT. The making of final
payment shall not constitute a waiver of any Claims by
Owner

 

4.3.6
CLAIMS FOR CONCEALED OR UNKNOWN CONDITIONS. If conditions
are encountered at the site which are (1) subsurface
or otherwise concealed physical conditions which differ materially
from those indicated in the Contract Documents or (2) unknown
physical conditions of an unusual nature, which
differ materially from those ordinarily found
to exist and generally recognized as inherent in
construction activities of the character provided
for in the Contract Documents, then notice by
Contractor shall be given to Owner promptly
before conditions are disturbed and in no event
later than ten (10) days after first observance
of the conditions or after
Contractor first recognizes or should have reasonably observed
or discovered such condition, whichever is later. Owner
will promptly investigate such conditions and, if
the Owner determines that they differ materially and cause an increase or decrease
in the Contractor's cost of, or time required
for, performance of any part of the Work,
will recommend an equitable adjustment in the Contract
Sum or Contract Time, or both. If Owner
determines that the conditions at the site are not
materially different from those indicated in the Contract Documents and
that no change in the terms of the Contract is justified, Owner shall so notify Contractor
and Architect in writing, stating the reasons. Claims
by Contractor in opposition to
such determination must be made within twenty-one (21) days
after Owner has given notice of the decision.
If Owner and Contractor cannot agree on an
adjustment in the Contract Sum
or Contract Time, the adjustment shall be referred
to Architect for initial determination, subject to further proceedings pursuant to Section
4.4

 

4.3.7
CLAIMS FOR ADDITIONAL COST. If Contractor
wishes to make Claim for an increase in the
Contract Sum, written notice as provided herein shall be given
before proceeding to execute the Work. Prior notice
is not required for Claims relating to an emergency
endangering life or property arising under Section
10.3. If Contractor believes that additional cost is
involved for reasons including, but not limited
to, (1) a written interpretation

 

Exhibit
B-1 – Page 16

 

    	 

    	 

    from Architect,
(2) an order by Owner to stop the Work where the Contractor
was not at fault,
(3) a written order for a minor
change in the Work issued by Architect,
(4) failure of payment by
the Owner, (5) termination of
the Contract by Owner, (6) Owner's suspension
or (7) other reasonable grounds, Claim shall
be filed in accordance with the procedure established
in the Contract Documents, including Section II.A.

 

	 	4.3.8	CLAIMS FOR ADDITIONAL TIME. See Section II of the Agreement.

 

4.3.9
INJURY OR DAMAGE TO PERSON OR PROPERTY. If either
party to the Contract suffers injury or damage
to person or property because of an act
or omission of the other party, of any of
the other party's employees or agents, or of
others for whose acts such party is legally
liable, written notice of such injury or damage,
whether or not insured, shall be
given to the other party within a reasonable
time not to exceed ten (10) days
after first observance. The notice shall provide sufficient
detail to enable the other party to investigate
the matter. If a Claim for additional cost or time
related to this Claim is to
be asserted, it shall be filed as provided in
Paragraphs 4.3.7 or 4.3.8.

 

	 	4.4	ARBITRATION

 

4.4.1
CONTROVERSIES AND CLAIMS SUBJECT TO ARBITRATION.
At Owner's option, any controversy
or Claim arising out of or related to the Contract,
or the breach thereof, shall be settled
by arbitration in
accordance with the Construction Industry Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrator or arbitrators
may be entered in any court having
jurisdiction thereof, except controversies or Claims relating to
aesthetic effect.

 

4.4.2
RULES AND NOTICES FOR ARBITRATION. Claims
between Owner and Contractor not resolved shall, if
subject to arbitration under Paragraph 4.4.1, be decided by arbitration
in accordance with the Construction Industry Arbitration Rules of the
American Arbitration Association currently in effect,
unless the parties mutually agree otherwise. Notice of demand
for arbitration shall be filed in writing
with the other party to the Construction Contract,
parties to be joined, if any, and the American Arbitration Association, and a copy
shall be filed with the Architect.

 

4.4.3
CONTRACT PERFORMANCE DURING ARBITRATION. During arbitration proceedings, Owner
and Contractor shall comply with Paragraph 4.3.4.

 

4.4.4
WHEN ARBITRATION MAY BE DEMANDED. Owner's demand for arbitration shall be made
within a reasonable time after the Claim has arisen,
and in no event shall it be made
after the date when institution of legal
or equitable proceedings based on such Claim
would be barred by the applicable statute of
limitations.

 

4.4.5
ADDITIONAL PARTIES. Subject to
Paragraph 4.4.1, any and all arbitration proceedings arising out of or relating
to any of the Contract Documents or any
breach thereof shall include by consolidation,
joinder or joint filing, any additional person
or entity not a party to the Construction
Contract to the extent necessary for the final
resolution of the matter in controversy. Contractor shall
include a similar arbitration and consolidation provision in
each of its subcontracts and purchase orders
and shall provide that a similar
provision be included in all sub- subcontracts. This agreement
to arbitrate shall be specifically enforceable under the
prevailing arbitration law. The location for settlement for any and
all claims, controversies and disputes arising out of or relating to
any of the Contract Documents or any breach thereof,
whether by arbitration or litigation,
shall be Bexar County, Texas.

 

4.4.6
CLAIMS AND TIMELY ASSERTION OF CLAIMS.
Any notice of demand for arbitration must
assert in the demand all Claims then known to
that party on which arbitration is permitted
to be demanded. When a party fails to include
a Claim through oversight, inadvertence or excusable
neglect, or when a Claim has matured
or been acquired subsequently, the arbitrator
or arbitrators may permit amendment.

 

4.4.7
JUDGMENT ON FINAL AWARD. The award
rendered by the arbitrator or arbitrators
shall be final, and judgment may be entered
upon it in accordance with applicable law in
any court having jurisdiction thereof.

 

4.4.8
LITIGATION. Notwithstanding any other
provision in this Section 4.4, Owner
shall have the option to pursue any Claims
through litigation instead of through arbitration.
Venue for any litigation shall be exclusive
in Bexar County, Texas. Both parties
waive a trial by
jury.

 

Exhibit
B-1 – Page 17

 

    	 

    	 

     

ARTICLE 5 

SUBCONTRACTORS

	 	5.1	DEFINITIONS

 

5.1.1
A "Subcontractor" is a person
or entity who has a direct contract with the
Contractor to perform a portion of the Work
at the site. The term "Subcontractor" is referred to throughout the Contract
Documents as if singular in number and means
a Subcontractor or an authorized representative of
the Subcontractor. The term "Subcontractor" does not
include a separate contractor or subcontractors
of a separate contractor.

 

5.1.2
A "Sub-Subcontractor" is a person or entity
who has a direct or indirect contract with a Subcontractor
to perform a portion of the Work at the site. The term
"Sub-Subcontractor" is referred to throughout the Contract Documents as if
singular in number and means a Sub-Subcontractor
or an authorized representative of the Sub-Subcontractor.

 

	 	5.2	AWARD OF SUBCONTRACTS AND OTHER CONTRACTS FOR PORTIONS OF THE WORK

 

	 	5.2.1	See Section VII of the Agreement.

 

	 	5.3	SUBCONTRACTUAL RELATIONS

 

5.3.1
By appropriate agreement, written where legally required for
validity, the Contractor shall require each Subcontractor,
to the extent of the Work to be performed
by the Subcontractor, to be bound to the Contractor
by terms of
the Contract Documents, and to
assume toward the Contractor all the obligations and responsibilities which the Contractor,
by these Contract Documents, assumes toward the Owner
and Architect. Each subcontract agreement shall preserve and protect the
rights of the Owner and Architect under
the Contract Documents with respect to
the Work to be performed by
the Subcontractor so that subcontracting thereof will
not prejudice such rights, and shall allow to
the Subcontractor, unless specifically provided otherwise in
the subcontract agreement, the benefit of all
rights, remedies and redress against the Contractor that
the Contractor, by the Contract Documents, has against the Owner.
Where appropriate, the Contractor shall require each Subcontractor to enter into similar
agreements with Sub- Subcontractors. The Contractor shall make available to each proposed
Subcontractor, prior to execution of
the subcontract agreement, copies of the Contract
Documents to which the Subcontractor will be
bound, and, upon written request of the
Subcontractor, identify to the Subcontractor terms and conditions of the proposed
subcontract agreement which may be at variance with
the Contract Documents. Subcontractors shall similarly
make copies of applicable portions of such
documents available to their respective proposed Sub-Subcontractors.

 

	 	5.4	CONTINGENT ASSIGNMENT OF SUBCONTRACTS

 

	 	5.4.1	See Section XXVII of the Agreement.

 

ARTICLE
6

CONSTRUCTION BY OWNER OR
BY SEPARATE CONTRACTORS

 

	 	6.1	OWNER'S RIGHT TO PERFORM CONSTRUCTION AND AWARD SEPARATE CONTRACTS

 

6.1.1
The Owner reserves the right to perform construction
or operations related to the Project with the Owner's
own forces, and to award separate contracts in connection with other portions of the Project
or other construction or operations on the
site under Conditions of the Contract identical
or substantially similar to these, including those portions related to
insurance and waiver of subrogation. If the
Contractor claims that delay or additional cost
is involved because of such action by
the Owner, the Contractor shall make such Claim as
provided elsewhere in the
Contract Documents.

 

 

 

 

Exhibit
B-1 – Page 18

 

    	 

    	 

    6.1.2
When separate contracts are awarded for different portions
of the Project or other construction or operations
on the site, the term "Contractor"
in the Contract Documents in each case
shall mean the Contractor who executes
each separate construction contract.

 

6.1.3
The Owner shall provide for coordination of
the activities of the Owner's own forces
and of each separate contractor with the Work of the
Contractor, who shall cooperate with them.
The Contractor shall participate with other separate contractors and the Owner in
reviewing their construction schedules when directed to do so.

 

	 	6.2	MUTUAL RESPONSIBILITY

 

6.2.1
The Contractor shall afford the Owner and separate
contractors reasonable opportunity for introduction
and storage of their materials and equipment
and performance of their activities and shall connect
and coordinate the Contractor’s construction and operations with
theirs as required by
the Contract Documents.

 

6.2.2
If any part of the Contractor's Work depends for
proper execution or results upon construction
or operations by the Owner or a separate
contractor, the Contractor shall, prior to proceeding
with that portion of the Work, promptly report to the Architect apparent discrepancies
or defects in such other
construction that would render it unsuitable for such proper execution and results.
Failure of the Contractor so to report shall constitute
an acknowledgment that the
Owner's or separate contractors' completed or partially
completed construction is fit and proper to receive
the Contractor's Work, except to defects not then
reasonably discoverable.

 

6.2.3
Any costs caused by delays or by improperly timed
activities or defective construction shall
be borne by the party responsible therefor.

 

6.2.4
The Contractor shall promptly remedy damage
wrongfully caused by the Contractor
to completed or partially completed construction or to
property of the Owner or separate contractors as provided
in Paragraph 10.2.5.

 

6.2.5
Claims and other disputes and
matters in question between the Contractor and
a separate contractor shall be subject to the provisions
of Section 4.3, provided the separate contractor has
reciprocal obligations.

 

6.2.6
The Owner and each separate contractor shall have the
same responsibilities for cutting and patching as are described for the Contractor in Section
3.14.

 

	 	6.3	OWNER'S RIGHT TO CLEAN UP

 

6.3.1
If a dispute arises between the Contractor, separate
contractors and the Owner as to the responsibility under
their respective contracts for maintaining the Property and surrounding area free
from waste materials and rubbish as described in
Section 3.15, the Owner may clean up and charge
the cost to Contractor or any separate contractor,
in accordance with their respective responsibilities.

 

 

ARTICLE 7 

CHANGES IN THE WORK

	 	7.1	CHANGES

 

7.1.1
Changes in the
Work may be accomplished after execution of
the Contract, and without invalidating the Contract,
by Change Order, Construction
Change Directive or order for a minor change
in the Work, subject to the limitations stated in this Article 7 and
elsewhere in the Contract Documents.

 

7.1.2
A Change Order shall be based upon agreement
among the Owner, Contractor and Architect; a Construction
Change Directive requires agreement by
the Owner and Architect and may or
may not be agreed to by
the Contractor; an order for a minor
change in the Work may
be issued by the
Architect alone.

 

 

 

 

Exhibit
B-1 – Page 19

 

    	 

    	 

    7.1.3
Changes in the
Work shall be performed under applicable provisions
of the Contract Documents, and
the Contractor shall proceed promptly, unless otherwise provided in
the Change Order, Construction Change Directive or order for
a minor change in
the Work.

 

7.1.4
If unit prices are stated in
the Contract Documents or subsequently agreed
upon, and if quantities originally contemplated
are so changed in a proposed Change
Order or Construction Change Directive such that application
of such unit prices to quantities of Work proposed
will cause substantial inequity to the Owner
or Contractor, the applicable unit prices shall
be equitably adjusted.

 

	 	7.2	CHANGE ORDERS

 

7.2.1
A "Change Order" is a written instrument
prepared by the Architect and signed
by the Owner, Contractor and Architect, stating their
agreement upon all of the
following:

 

	 	1.	a change in the Work;

 

	 	2.	the amount of the adjustment in the Contract Sum, if any; and

 

	 	3.	the extent of the adjustment in the Contract Time, if any.

 

7.2.2
Methods used in determining adjustments to the Contract
Sum may include those
listed in Paragraph 7.3.3.

 

	 	7.3	CONSTRUCTION CHANGE DIRECTIVES

 

7.3.1
A "Construction Change Directive"
is a written order prepared by the
Architect and signed by the Owner and Architect, directing a change
in the Work and stating a proposed basis for
adjustment, if any, in the Contract Sum
or Contract Time, or both. The Owner may by
Construction Change Directive, without invalidating the Contract,
order changes in the Work within the general
scope of the Contract consisting of additions, deletions
or other revisions, the Contract Sum and Contract Time
being adjusted accordingly.

 

7.3.2
A Construction Change Directive shall be used in the
absence of total agreement on the terms of a
Change Order.

 

7.3.3
If the Construction Change Directive provides for
an adjustment to the Contract Sum, the adjustment
shall be based on one of the following methods:

 

	 	1.	mutual acceptance of a lump sum properly itemized and supported by sufficient substantiating data to permit evaluation;

 

	 	2.	unit prices stated in the Contract Documents or subsequently agreed upon;

 

	 	3.	cost to be determined in a manner agreed upon by the parties and a mutually accepted fixed or percentage fee; or

 

	 	4.	as provided in Paragraph 7.3.6.

 

7.3.4
Upon receipt of a Construction Change Directive, the Contractor shall
promptly proceed with the change in the Work involved
and advise the Architect of the Contractor's agreement
or disagreement with the method, if any, provided in
the Construction Change Directive for determining the proposed adjustment
in the Contract Sum
or Contract Time.

 

7.3.5
A Construction Change Directive signed by the
Contractor indicates the agreement of the Contractor therewith, including adjustment in Contract
Sum and Contract Time or the
method for determining them. Such agreement shall be effective immediately and shall
be recorded as a Change Order.

 

 

 

Exhibit
B-1 – Page 20

 

    	 

    	 

    7.3.6
If the Contractor does not respond promptly
or disagrees with the method for adjustment
in the Contract Sum, the method
and the adjustment shall be determined by the Architect
on the basis of reasonable expenditures and savings
of those performing the Work attributable
to the change, including, in case of an increase
in the Contract Sum, a reasonable allowance for overhead and profit. In such
case, and also under Subparagraph 7.3.3.3, the Contractor shall
keep and present, in such form as the Architect and Owner may
prescribe, an itemized accounting of actual costs together
with appropriate supporting data. Unless
otherwise provided in the Contract Documents, costs for the purpose of this
Paragraph 7.3.6 shall be limited to costs reimbursable
pursuant to Section V of the Construction Contract.

 

7.3.7
Pending final determination of cost to the Owner,
amounts not in dispute
may be included in Applications for Payment exclusive of fee
and subject to the Agreement. The amount
of credit to be allowed by the Contractor
to the Owner for a deletion or change
which results in a net decrease in
the Contract Sum shall be actual
net cost as confirmed by the Architect. When
both additions and credits covering related Work or substitutions
are involved in a change,
the allowance for overhead and profit shall be figured
on the basis of net increase, if
any, with respect to that change. Any adjustments
to the Contractor's Fee shall be in accordance
with Section IV of the Construction
Contract.

 

7.3.8
If the Owner and Contractor do not
agree with the adjustment in Contract Time or method
for determining it, the adjustment or method shall be referred
to the Architect for determination.

 

7.3.9
If the Owner and Contractor agree with the determination made
by the Architect concerning the adjustments
in the Contract Sum and Contract Time,
or otherwise reach agreement upon the
adjustments, such agreement shall be effective immediately and shall
be recorded by preparation and execution of an appropriate Change
Order.

 

	 	7.4	MINOR CHANGES IN THE WORK

 

7.4.1
Upon approval of Owner, the Architect will have authority
to order minor changes in
the Work not involving adjustment in the Contract
Sum or extension of the Contract
Time and not inconsistent with the intent of
the Contract Documents. Such changes shall be
effected by written order and
shall be binding on the Owner and Contractor.
The Contractor shall carry out such written
orders promptly. Such changes will be in
accordance with the procedure set forth in
Section IV of the Construction Contract.

 

 

 

ARTICLE 8 

TIME

8.1See
Section II of the Construction Contract. All
time limits stated in the Contract Documents
are of the essence.

 

ARTICLE 9 

PAYMENTS AND COMPLETION

	 	9.1	INTENTIONALLY LEFT BLANK

 

	 	9.2	SCHEDULE OF VALUES

 

9.2.1
Before the first Application for Payment, the Contractor shall
submit to the Architect a schedule of values allocated to various portions of the
Work, prepared in such form and supported by
such data to substantiate its accuracy as the
Architect may require. This schedule, unless
objected to by the Architect or Owner,
shall be used only as a basis for reviewing
the Contractor's Application for Payment.

 

	 	9.3	APPLICATIONS FOR PAYMENT

 

 

Exhibit
B-1 – Page 21

 

    	 

    	 

    	 	9.3.1	See Section V.D. of the Construction Contract.

 

	 	9.4	CERTIFICATES FOR PAYMENT

 

9.4.1
The Architect will, within five (5) days after
receipt of the Contractor's Application for Payment, either issue to the Owner a Certificate
for Payment, with a copy to the Contractor,
for such amount as the Architect determines is
properly due, or notify the Contractor and Owner in
writing of the Architect's reason for
withholding certification in whole or in part as provided in
Paragraph 9.5.1.

 

9.4.2
The issuance of a Certificate for Payment will
constitute a representation by
the Architect to the Owner, based on the Architect's
observations at the site and the data comprising
the Application for Payment, that the Work has progressed to the point indicated and that,
to the best of the Architect's knowledge, information and belief, quality of
the Work is in
accordance with the Construction Documents.
The foregoing representations are subject to
an evaluation of the Work for conformance with the
Contract Documents upon Substantial Completion, to
results of subsequent tests and inspections, to minor
deviations from the Contract Documents correctable
prior to completion and to specific qualifications expressed by
the Architect. The issuance of a Certificate
for Payment will further
constitute a representation that the Contractor is
entitled to payment in the amount certified
subject to the Owner's approval. However, the issuance
of a Certificate for Payment will not be a representation
that the Architect has (1) made exhaustive or continuous
on-site inspections to check the quality
or quantity of the Work, (2) reviewed
construction means, methods, techniques, sequences or procedures, (3) reviewed copies
of requisitions received from Subcontractors and material
suppliers and other data requested by the Owner
to substantiate the Contractor’s right to payment or (4) made
examination to ascertain how or for what purpose
the Contractor has used money previously paid on account
of the Contract Sum.

 

	 	9.5	PAYMENTS WITHHELD

 

9.5.1
The Architect may decline to certify payment
and may withhold a Certificate
for Payment in whole or in part, to the extent
reasonably necessary to protect the Owner, if
in the Architect's opinion the representations
to the Owner required by Paragraph 9.4.2 cannot be made.
If the Architect is unable to make representations to the Owner and certify payment
in the amount of the
Application for Payment, the Architect will notify the Contractor and Owner as provided
in Paragraph 9.4.1. If the Contractor and Architect
cannot agree on a revised
amount, the Architect will promptly issue
a Certificate for Payment for the amount for which the Architect is able to
make such representations to the Owner. The Architect
may also decline to certify payment or, because
of subsequently discovered evidence or subsequent
observations, may nullify the whole or
a part of a Certificate for Payment previously issued, to
such extent as may be necessary in the Architect's
opinion to protect the Owner from loss because of:

 

	 	1.	defective Work not remedied;

 

	 	2.	third party claims filed or reasonable evidence indicating probable filing of such claims;

 

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

 

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

 

	 	5.	damage to the Owner or separate contractor;

 

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

 

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

 

9.5.2
When the above grounds for withholding certification
by Architect are removed, certification
will be made for amounts previously withheld.
Owner shall not be deemed in default by
reason of withholding payment

 

Exhibit
B-1 – Page 22

 

    	 

    	 

    as provided in
Paragraph 9.5.1. If the Architect withholds certification for payment under Subparagraph
9.5.1.3, the Owner may, at its sole option, issue
joint checks to the Contractor and to any Subcontractor
or material or equipment suppliers to whom the
Contractor failed to make payment for Work properly performed
or material or equipment suitably delivered.
If the Owner makes payments by
joint check, the Owner shall notify the
Architect and Architect will reflect such payment on the next Certificate of
Payment.

 

	 	9.6	PROGRESS PAYMENTS

 

9.6.1
After the Architect has issued a Certificate
for Payment, the Owner shall make payment in the manner and within
the time provided in the Contract
Documents, and shall so notify the Architect.
Notwithstanding the foregoing, the Owner may refuse
to make payment on any Application for Payment (including, without limitation, the final
Certificate for Payment) for any default under the Contract Documents, including, but not
limited to, those defaults set forth in Subparagraphs
9.5.1.1 through 9.5.1.7 hereof. The Owner
shall not be deemed in default by reason
of withholding payment while any such defaults
remain uncured.

 

9.6.2
The Contractor shall promptly pay each Subcontractor,
no later than seven days after receipt of payment
from the Owner, out of the amount paid to
the Contractor on account of such Subcontractor's
portion of the Work, the amount to which said Subcontractor is entitled, reflecting
percentages actually retained, if any,
from payments to the Contractor on account
of such Subcontractor's portion of the Work.
The Contractor shall, by appropriate
agreement with each Subcontractor, require each Subcontractor
to make payments to Sub-Subcontractors in similar manner.

 

9.6.3
The Architect will, on request,
furnish to a Subcontractor, if practicable, information regarding percentages of
completion or amounts applied for
by the Contractor and action taken thereon by
the Architect and Owner on account of portions
of the Work done by such
Subcontractor.

 

9.6.4
Neither the Owner nor Architect shall have an
obligation to pay or see to the payment of money
to a Subcontractor except as may otherwise
be required by law.

 

9.6.5
Payment to material suppliers shall be treated in
a manner similar to that provided in Paragraphs
9.6.2, 9.6.3 and 9.6.4.

 

9.6.6
A Certificate for Payment, a progress payment,
or partial or entire use or occupancy of the
Project by the Owner shall not constitute acceptance of Work not
in accordance with the Contract Documents.

 

	 	9.7	FAILURE OF PAYMENT

 

9.7.1
If the Architect does not issue a Certificate
for Payment, through no fault of the Contractor,
within five (5) days after receipt of the Contractor's
Application for Payment, or if the Owner
does not pay the
Contractor within ten (10) days after the date established
in the Contract Documents the sum determined
to be due pursuant to the Contract Documents,
then the Contractor may, upon seven (7) additional
days' written notice to the Owner and Architect, stop
the Work until payment of the
sum determined to be due has been made.
The Contract Time shall be extended appropriately
and the Contract Sum shall
be increased by the amount of
the Contractor's reasonable costs of shut-down,
delay and start-up, which shall be accomplished
as provided in Article 7.

 

	 	9.8	SUBSTANTIAL COMPLETION

 

9.8.1
"Substantial Completion" is the stage in
the progress of the Work when
the Work or designated portion thereof
is sufficiently complete in accordance with the
Contract Documents so Owner can occupy or utilize the Work for
its intended use, and all remaining Work is of a minor
"punch-list" nature. The Work will not
be considered suitable for Substantial Completion review until all Project systems
included in the Work are operational as designed
and scheduled, all designated or required governmental inspections and
certifications have been made, posted, or issued,
as the case may be, including, without limitation,
permanent certificates of occupancy (or temporary certificates of occupancy,
provided the conditions relating thereto to the issuance of a permanent
certificate of occupancy are satisfactory to Owner), designated instruction of Owner's
personnel in the operation of each system has
been completed, and all final finishes required by
the Contract Documents are in place. In general,
the only remaining Work shall be minor
in nature, so that Owner and/or Owner's tenants
could occupy the building on that
date and the

 

Exhibit
B-1 – Page 23

 

    	 

    	 

    completion
of the Work by the Contractor would not
materially interfere or hamper Owner's or Owner's
tenants' (or those claiming by, through or under Owner)
normal business operations. As a further condition
of Substantial Completion acceptance, Contractor shall
certify that all remaining Work, the same being
solely of a "punch-list" nature, will be completed
within forty-five (45) consecutive calendar days after the date thereof.

 

9.8.2
When Contractor considers that the Work, or
a designated portion thereof which Owner agrees to
accept separately, is substantially
complete and a Certificate of Occupancy or temporary Certificate
of Occupancy has been obtained
for the Work or portion thereof, Contractor shall prepare and
submit to Owner and Architect a comprehensive
list of items to be completed or corrected.
Contractor shall proceed promptly to complete or correct items
on the list. Failure to include an item on such list
does not alter the responsibility of Contractor
to complete all Work in accordance with
the Contract Documents. Upon receipt of Contractor's
list, the Architect will make
an inspection to determine whether the Work or designated
portion thereof is substantially complete. If
Architect's inspection discloses any item, whether
or not included on Contractor's list, which is
not in accordance with the requirements
of the Contract Documents, Contractor shall,
before issuance of the Certificate of Substantial
Completion, complete or correct such item upon notification
by Architect. Contractor shall then submit a request for
another inspection by Architect to determine
Substantial Completion. When Architect, on the
basis of an inspection, determines that the Work or designated
portion thereof is substantially complete and has received
a temporary or permanent Certificate of Occupancy
therefor, the Architect will prepare for Owner's
acceptance a Certificate of Substantial Completion,
which shall include a recommendation to Owner
as to the actual date of Substantial Completion
and shall fix the time within which Contractor shall
complete the items listed therein, which time shall be no
longer than forty-five (45) calendar days after the Scheduled Substantial Completion
Date. Preparation of Architect's list and Owner's
acceptance thereof shall establish the actual date of Substantial
Completion of the Work. Warranties required
by the Contract Documents shall commence on the
date of Substantial Completion of the Work or designated
portion thereof unless otherwise provided in
the Certificate of Substantial
Completion. The Certificate of Substantial Completion
shall be submitted to Owner and Contractor for their written acceptance of responsibilities
assigned to them in such Certificate.

 

	 	9.9	PARTIAL OCCUPANCY OR USE

 

9.9.1
Owner may occupy or use any completed or partially
completed portion of the Work at any
stage when such portion is designated by separate
agreement with Contractor, providing such
occupancy or use is authorized by public authorities
having jurisdiction over the Work. Such partial
occupancy or use may commence whether or not
the portion is substantially complete, provided Owner and Contractor
have accepted in writing the responsibilities
assigned to each of them for payments, retainage if
any, security, maintenance, heat, utilities, damage to the Work and
insurance, and have agreed in
writing concerning the period for correction of the
Work and commencement of warranties required
by the Contract Documents. When Contractor
considers a portion substantially complete, Contractor shall prepare and
submit a list to Architect as provided under
Paragraph 9.8.2. Consent of the Contractor to
partial occupancy or use shall not be unreasonably withheld.
The stage of the progress of the
Work shall be determined by
written agreement between Owner and Contractor
or, if no agreement is reached, by decision of Architect.
In addition to the foregoing,
the Owner shall have the absolute right to use
completed Phases of the Work as designated
in the Drawings, if any.

 

9.9.2
In the event of partial occupancy, the Contractor
shall promptly secure an
endorsement from its insurance carrier(s), consent from its surety(ies),
if any, and consent from public authorities
having jurisdiction over the Work permitting such partial occupancy.

 

9.9.3
In the event of partial occupancy, Contractor shall
cooperate with the owners, tenants or occupants
thereof (collectively, "Occupant") in making available for Occupant's
use and benefit such building services as
heating, ventilating, cooling, water, lighting, telephone,
elevators and security for the portion or portions
to be occupied, and if the Work required
to furnish such services is not entirely completed at the time Occupant desires to
occupy the aforesaid portion or portions, Contractor
shall make every reasonable effort to complete such Work or make
temporary provisions for such Work as soon as
possible so that the aforementioned building services may be
put into operation and use.

 

9.9.4
In the event of partial occupancy, mutually
acceptable arrangements shall be made between Occupant
and Contractor in respect of the operation and
cost of necessary security, maintenance and utilities,
including heating, ventilating, cooling, water, lighting and telephone
services and elevators. Occupant shall assume

 

Exhibit
B-1 – Page 24

 

    	 

    	 

    proportionate
and reasonable responsibility for the cost of the above services
reduced by any savings to Contractor for such services realized by reason of partial
occupancy. Further, mutually acceptable arrangements
shall be made between Occupant and Contractor
in respect of insurance and damage to the Work.
Contractor's acceptance of arrangements proposed
by Occupant in respect of
such matters shall not be unreasonably withheld, delayed,
or conditioned.

 

9.9.5
Immediately prior to partial occupancy, Owner, Contractor
and Architect shall jointly inspect the area to
be occupied or portion of the Work to
be used in order determine and record the
conditions of same.

 

9.9.6
Unless otherwise agreed upon, partial occupancy
or use of a portion or portions of the
Work shall not constitute acceptance of the Work
not complying with the requirements
of the Contract Documents.

 

 

	 	9.10	FINAL COMPLETION AND FINAL PAYMENT

 

9.10.1
Upon receipt of written notice that the Work is
ready for final inspection and acceptance
and upon receipt of a final Application for Payment and a permanent
Certificate of Occupancy, the Architect
will promptly make such inspection
and, when the Architect finds the Work acceptable under the Contract
Documents and the Contract fully performed (i.e.: "Final Completion"),
the Architect will promptly issue a final Certificate
for Payment stating that, to the best of the Architect's
knowledge, information and belief, and on the
basis of the Architect's observations and inspections,
the Work has been completed in accordance
with terms and conditions of the Contract Documents
and that the entire balance found to be due
the Contractor as noted in said
final Certificate is due and payable. The Architect's final Certificate for Payment
will constitute a further
representation that conditions listed in Paragraph 9.10.2 as precedent to the Contractor's
being entitled to final payment have been fulfilled,
and such final Certificate shall constitute the Architect's certification to the Owner with respect to
payment due the Contractor. All warranties and guarantees
required under or pursuant to the Contract Documents
shall be assembled and delivered by
Contractor to the Owner as part of the final Application
for Payment. The final Certificate of Payment
will not be issued
until all warranties and guarantees have been received
and accepted by Owner.

 

9.10.2
Neither Final Payment nor any remaining retained percentage
shall become due until Contractor submits to Architect (1) an affidavit
that payrolls, bills for materials and equipment, and other indebtedness connected with the Work for
which Owner or Owner's property might
be responsible or encumbered (less amounts withheld
by Owner) have been paid or otherwise
satisfied, (2) a certificate evidencing that insurance
required by the Contract Documents to
remain in force after Final Payment is
currently in effect and will not
be cancelled or allowed to expire until at least
thirty (30) days' prior written notice has been given
to Owner, (3) a written statement that Contractor
knows of no substantial reason that the insurance
will not be renewable to cover the period
required by the Contract Documents, (4) consent
of surety, if any,
to final payment, (5), if required by
Owner, other data establishing payment or satisfaction
of obligations, such as receipts,
releases and waivers of liens, claims,
security interests or encumbrances arising out
of the Contract, to the
extent and in such form as may be designated
by Owner, and (6) evidence
of compliance with all requirements
of the Contract Documents; notices,
certificates, affidavits, other requirements to complete obligations under the
Contract Documents, including, but not limited to, (a) instruction
of Owner’s representatives in the operation of mechanical,
electrical, plumbing and other systems, (b) delivery of keys
to Owner with keying schedule: master, sub-master and special keys, (c)
delivery to Architect of Contractor’s General
Warranty (as described in Section 3.5) and each
written warranty and assignment thereof prepared
in duplicate, certificates of
inspections, and bonds for Architect's review
and delivery to Owner, (d) delivery to Architect
of printed or typewritten operating, servicing, maintenance
and cleaning instructions for all Work; parts lists and special
tools for mechanical and electrical Work, in
approved form, (e) delivery to Architect of
specified Project record documents, and (f)
delivery to Owner of a final waiver, discharge
and release of all preliminary notices of
claim of liens, liens, claims of liens, in
form satisfactory to Owner, covering all Work, including,
without limitation, that of all Subcontractors, suppliers, vendors, laborers, materialmen
and service providers, executed under oath by
an authorized officer of Contractor. In addition
to the foregoing, all other submissions required by other
articles and paragraphs of the Specifications, including final construction schedule, shall
be submitted to Architect before approval of final
payment. If a Subcontractor refuses to furnish a release or waiver
required by Owner, Contractor shall furnish a bond satisfactory to
Owner and which satisfies the requirements of
the Texas Property Code to indemnify Owner against
such lien. If such lien remains unsatisfied
after payments are made, Contractor shall refund
to Owner all money that Owner may be
compelled to pay in discharging such lien,
including all costs and reasonable attorneys' fees.

 

 

Exhibit
B-1 – Page 25

 

    	 

    	 

    9.10.3
If, after Substantial Completion of the Work,
final completion thereof is materially
delayed through no fault of the Contractor or by issuance
of Change Orders affecting final completion,
and the Architect so confirms, the Owner shall,
upon application by the Contractor and certification
by the Architect, and without
terminating the Contract, make payment of the balance
due for that portion of the Work fully completed and
accepted. If the remaining balance for the Work
not fully completed or corrected is
less than retainage stipulated in the Contract Documents, and if bonds have
been furnished, the written consent of surety
to payment of the balance due for that portion of the
Work fully completed and accepted shall be submitted
by the Contractor to the Architect prior to
certification of such payment. Such payment shall be made
under the terms and conditions governing Final Payment,
except that it shall not constitute a waiver
of claims. The making of Final
Payment shall not constitute a waiver of claims
by the Owner, as provided in
Paragraph 4.3.5.

 

9.10.4
Acceptance of Final Payment by the Contractor,
a Subcontractor or material supplier shall constitute
a waiver of claims by
that payee except those previously made in writing
and identified by that payee as unsettled
at the time of final Application for Payment.

 

ARTICLE
10

PROTECTION OF PERSONS
AND PROPERTY

 

	 	10.1	SAFETY PRECAUTIONS AND PROGRAMS

 

10.1.1
The Contractor shall be responsible for initiating,
maintaining and supervising all safety precautions and programs in
connection with the performance of the
Agreement.

 

10.1.2
In the event the Contractor encounters on the
site material reasonably believed to be asbestos or polychlorinated
biphenyl (PCB) that has not been rendered
harmless, the Contractor shall immediately stop the Work in
the affected area and report the condition to
the Owner and Architect in writing. The Work in
the affected area shall not thereafter be resumed
except by written agreement of the Owner
and Contractor if in fact the material is asbestos
or polychlorinated biphenyl (PCB) and has not
been rendered harmless. The Work in the affected
area shall be resumed in the absence of asbestos
or polychlorinated biphenyl (PCB), or when it
has been rendered harmless, by written
agreement of the Owner and Contractor, or in
accordance with final determination by the Architect on which
arbitration has been demanded, or by arbitration under Section 4.4.

 

10.1.3
The Contractor shall not be required pursuant to Article
7 to perform without consent any
Work relating to asbestos or polychlorinated biphenyl
(PCB).

 

10.1.4
To the fullest extent permitted by law, the
Owner shall indemnify and hold harmless the
Contractor, Subcontractor, Architect, Architect’s consultants and agents and employees
of any of them from and against claims, damages, losses
and expenses, including but not limited to attorneys’
fees arising out of or resulting from performance
of the Work in the affected area if
in fact the material or substance presents the
risk of bodily injury or death and has not been
rendered harmless and the existence of such
material or substance has been disclosed
to the Owner in writing, provided that such
claim, damage, loss, or expense is
attributable to bodily injury, sickness, disease
or death, or injury to or destruction
of tangible property (other than the Work itself,
and provided that such damage, loss or expense
is not due to the
sole negligence of a party seeking indemnity. Contractor shall only be held responsible
for written notification to the Owner for hazardous
material or substance that they have been made
aware of.

 

	 	10.2	SAFETY OF PERSONS AND PROPERTY

 

10.2.1
The Contractor shall take all reasonable precautions
for safety of, and shall provide all
reasonable protection to prevent damage, injury or loss
to:

 

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

 

	 	2.	all the Work and all materials and equipment to be incorporated therein, whether in storage on or off the site, under care, custody or control of the Contractor or Contractor's Subcontractors or Sub-Subcontractors; and

 

Exhibit
B-1 – Page 26

 

    	 

    	 

    	 	3.	other property at the site or adjacent thereto, including trees, shrubs, lawns, walks, pavements, roadways, structures and utilities not designated for removal, relocation or replacement in the course of construction.

 

10.2.2
The Contractor shall give all notices and comply
with all applicable Laws, including, but not limited to, lawful
orders of public authorities bearing on safety of persons or property or their
protection from damage, injury or loss.

 

10.2.3
The Contractor shall erect and maintain, as
required by existing
conditions and performance of the Agreement, all reasonable safeguards
for safety and protection, including posting danger signs and other
warnings against hazards, promulgating safety regulations and notifying
owners and users of adjacent sites
and utilities.

 

10.2.4
When use or storage of explosives
or other hazardous materials or equipment or
unusual methods are necessary for execution
of the Work, the Contractor shall exercise
utmost care and carry on such activities
under supervision of properly qualified personnel.

 

10.2.5
The Contractor shall promptly remedy all damage or
loss (other than damage or loss insured under
property insurance required by the
Contract Documents) to property referred to in Subparagraphs 10.2.1.2 and
10.2.1.3 caused in whole or in part by
the Contractor, any Subcontractor, any Sub-Subcontractor,
or anyone directly or indirectly employed by any
of them, or by anyone for whose acts they may be
liable and for which the Contractor is responsible
under Subparagraphs 10.2.1.2 and 10.2.1.3, except damage or loss
attributable to acts or omissions of the Owner
or Architect or anyone directly or indirectly
employed by either of them, or by anyone
for whose acts either of them may be liable,
and not attributable to the fault or negligence
of the Contractor. The foregoing obligations
of the Contractor are in addition to
the Contractor's obligations under Section 3.18.

 

10.2.6
The Contractor shall designate a responsible member
of the Contractor's organization at the site whose
duty shall be the prevention of accidents. This
person shall be the Contractor's superintendent unless
otherwise designated by the Contractor in writing
to the Owner and Architect.

 

10.2.7
The Contractor shall not load or permit any
part of the construction or site to be loaded
so as to endanger its safety.

 

	 	10.2.8	The Contractor shall comply with Owner's applicable policies as well as the Contract Documents.

 

	 	10.3	EMERGENCIES

 

10.3.1
In any emergency affecting safety of persons or property,
the Contractor shall act, at the Contractor's discretion,
to prevent threatened damage, injury or loss. Additional compensation or extension
of time claimed by the
Contractor on account of emergency work shall be determined as provided in
Section 4.3 and Article 7.

 

 

 

 

 

 

 

 

 

 

Exhibit
B-1 – Page 27

 

    	 

    	 

    ARTICLE 11

INSURANCE AND BONDS

	 	11.1	CONTRACTOR'S INSURANCE

 

11.1.1
Contractor shall, at all times during the period
in which the Agreement
is in force, provide and
maintain the following types of insurance protecting the interest of Owner and
Contractor, with limits not less than those as set forth
below:

 

	 	1.	Commercial General Liability:

 

	 	(a)	$2,000,000 General – aggregate – per project - Designated Construction Project(s) General Aggregate Limit endorsement (CG 25 03) to be provided to specify that aggregate limit applies specifically to this Project

 

	 	(b)	$2,000,000 Products and Completed Operations – aggregate

 

	 	(c)	$1,000,000 Personal and Advertising Injury – per occurrence

 

	 	(d)	$1,000,000 Bodily Injury and Property Damage – per occurrence

 

	 	2.	Automobile Liability (including owned, non-owned and hired motor vehicles):

 

	 	(a)	$1,000,000 Combined Single Limit – per accident

 

	 	3.	Worker's Compensation and Employer's Liability:

 

	 	(a)	State and Federal (as applicable): To fully cover all liability under workers compensation laws of the state of Texas or anywhere else work may be performed – no alternative forms of insurance permitted

 

	 	(b)	Employer’s Liability: (without restriction to Worker’s Compensation coverage)

	 	(i)	$1,000,000 Accident – per occurrence

	 	(ii)	$1,000,000 Disease – policy limit

	 	(iii)	$1,000,000 Disease – per employee

 

	 	4.	Contractor's Professional Liability (including construction management): $2,000,000 occurrence/aggregate limit

 

	 	5.	Contractor's Pollution Liability (including mold coverage): $2,000,000 occurrence/aggregate limit

 

	 	6.	Umbrella/Excess Liability (follow form coverage):

 

	 	(a)	$10,000,000 per occurrence

 

(b)$10,000,000 aggregate.

 

The Umbrella/Excess
Liability insurance required herein shall provide following form coverage
in excess of the underlying Commercial General Liability,
Automobile Liability and Worker's Compensation and Employer's Liability policies.

 

Umbrella/Excess
Liability and Commercial General Liability insurance,
as it pertains to Products and Completed Operations
coverage, shall also be maintained for a period of ten

(10) years
after final completion of the Work.

 

 

Exhibit
B-1 – Page 28

 

    	 

    	 

     

	 	8.	In the event that Contractor or any of the Subcontractors has or obtains insurance coverage in amounts in excess of those listed above, such additional insurance coverage shall also inure to the benefit of Owner.

 

All
insurance described herein shall be procured
from an insurance company eligible to do business
in the state of Texas and having
and maintaining a Financial Strength Rating
of "A-" or better and a Financial
Size Category of "VII" or better, as rated
in the A.M. Best Key rating guide for
Property and Casualty Insurance Companies. All
policies (except Workers Compensation, Contractor’s
Pollution Liability, and Contractor’s Professional Liability) shall be endorsed to
name Owner, Project Control of Texas, Inc.,
and their respective directors, officers, employees, agents and representatives and
affiliated companies as additional insureds (collectively
referred to herein as the "Additional Insureds"), both for on-going
and completed operations. All policies
shall provide a Waiver of Subrogation
in favor of the
Additional Insureds. All insurance coverages provided by Contractor
shall be primary to any insurance carried
by the Additional Insureds for their own account.
The coverage provided to the Additional Insureds shall
be as broad as that provided to Contractor or Subcontractors,
as applicable, under such policies and shall include coverage for Additional Insureds' concurrent
negligence to the extent available under Texas law, subject to
the limitations set forth in Paragraph 3.18.3.
Designated Construction Project(s) General Aggregate Limit endorsement (CG 25 03)
for Contractor's Commercial General Liability policy shall
be provided to specify that aggregate limit applies specifically
to this Project. The Commercial General Liability policy must
be written on Insurance
Services Office (ISO) Form CG 00 01 12 04 or
substitute form providing equivalent coverage and will
include coverage for sudden and accidental pollution exposure. If the
Contractor, or any Subcontractor fails to procure
and maintain the above described insurance,
or any portion thereof, the Owner shall have the right,
but not the obligation, to procure and maintain the required insurance for and
in the name of such party and such party shall
pay the cost thereof and shall
furnish all information necessary to acquire and maintain such insurance. Contractor
and its Subcontractors shall not violate or knowingly
permit any violation of any
conditions or terms of the
policies of insurance described herein.

 

11.1.2
Nothing contained herein shall limit
or waive Contractor's legal or contractual
responsibilities to Owner or others.

 

11.1.3
Contractor shall have its insurance carrier(s) furnish
to the Owner insurance certificates specifying the
types and amounts of coverage
in effect, the expiration dates of each policy, and a statement
that no insurance will be canceled or materially
changed while the Work is in
progress without thirty (30) calendar days'
prior written notice to Owner. Contractor shall permit Owner to examine the insurance
policies, or at Owner's option, Contractor shall furnish Owner with
copies, certified by the
carrier(s), of insurance policies required in Paragraph 11.1.1. If Contractor
neglects or refuses to provide any insurance
required herein, or if any insurance is
canceled, Owner may procure such insurance and
the provisions of Paragraph 11.1.5 hereof
shall apply.

 

11.1.4
Contractor and its Subcontractors shall not commence the shipment of equipment
or materials or commence the Work at the
site until all of
the insurance coverage required of Contractor
and its Subcontractors are in force and the necessary certificates and
statements pursuant to Subparagraphs 11.1.3 hereof have been received
by Owner.

 

11.1.5
As an alternative, and at the Owner's option
and expense, the Owner may elect to furnish
or to arrange for the Contractor any part or all of
the insurance required by Section 11.1 hereof.
If the Owner so elects, it shall notify, in writing,
the Contractor and issue a Change Order therefor,
but no adjustment to the Scheduled Completion Date or the
Contractor's Fee shall be allowed. All
Owner provided insurance shall provide a Waiver
of Subrogation in
favor of the Contractor.

 

11.1.6
Before commencement of the Work, Contractor shall
obtain, and thereafter at all times during the
performance of the Contract maintain, All Risk Builder's Risk
Insurance in such form as is acceptable to Owner,
insuring the interest of Owner, Contractor and
Subcontractors as their interests may appear, set
forth in a single policy, including coverage against collapse and
the coverage available under the so-called Installation Floater, written on the completed
value basis in an amount not less than
the Contract Sum of Contractor's contract
(including subcontracts). The named insured
on the All Risk Builder’s Risk Insurance policy shall
be both Owner and Contractor. Coverage will
include and cover portions of
the Work stored off the site
after written approval of the Owner at the value

 

Exhibit
B-1 – Page 29

 

    	 

    	 

    established
in the approval, portions of the Work
in transit, and all materials, supplies and equipment that are specifically
intended for installation into the Work while such
materials, supplies and equipment are temporarily located off the site of the
Work for the purpose of repair, adjustment,
or storage at the risk of one
of the insured parties. Coverage will not
include any tools or clothing of workmen
or of any tools, equipment, protective fencing, scaffolding,
temporary structures, forms and equipment, or other
property owned, retained or used by
Contractor, any Subcontractors or Sub-Subcontractors
and used in the performance of the Work, unless
the value of such items is included in the Cost of the Work, and
such items are specifically identified in the Contract
Documents. The All Risk Builder's Risk
policy shall include, without limitation, insurance
against the perils of fire (with extended coverage)
and physical loss or damage, including, without duplication of coverage,
theft, vandalism, malicious mischief, collapse, earth movement, flood, windstorm, false work,
testing and startup, temporary buildings
and debris removal, including demolition occasioned by enforcement
of any applicable legal requirements, and shall cover
reasonable compensation Contractor's services and expenses required as a result of
such insured loss. Prior to commencement of
the Work, Contractor shall provide proof of
such property insurance to Owner by
submission of an Evidence
of Commercial Property Insurance form (ACORD
28 (2003/10)) reflecting the required coverages
and, upon request of Owner,
a copy of the property insurance policy and endorsements.
Owner shall not be liable or responsible
for any loss or damage
whatever to the items excluded in this Subparagraph and
Contractor shall indemnify Owner and hold Owner harmless from any
claims or causes of action
brought by any persons or parties
as a result of loss or damage
to such excluded items. At Owner's option,
the Owner may require the Contractor to include
in the All Risk Builder’s Risk policy
coverage for Owner’s lost income and continuing
expenses in an amount of reasonably requested
by Owner in the event of an occurrence
which both results in a claim against said
policy and delays Substantial Completion and/or Final
Completion of the Project by Contractor. In
addition to the provisions of Section V(B)(8)
of the Agreement, if Owner elects this option,
only the actual additional premium cost incurred
by Contractor for the coverage shall be considered
Cost of the Work.

 

In the
event that it is necessary to
operate permanently installed equipment on anything
other than a testing basis, or in
the event it is necessary for
Owner to occupy a part or the entirety of the Work, the
All Risk Builder's Risk Insurance
policy must be endorsed to permit same. Contractor must
give the Owner at least ten (10) days'
prior written notice concerning anticipated testing
of equipment.

 

11.1.7
Contractor(s) shall require all policies of insurance
that are in any way related to the Work and
that are secured and maintained by the
Contractor and all tiers of Subcontractors to include
clauses providing that each underwriter shall waive all of its
rights of recovery, under subrogation
or otherwise, against Owner, Project Control
of Texas, Inc., Contractor(s), and all tiers of Subcontractors.

 

The Contractor
waives all rights of recovery against Owner, Project Control
of Texas, Inc., other contractor(s), and all tiers of Subcontractors
which the Contractor may have or require because
of deductible clauses in or inadequacy
of limits of
any policies of insurance
that are in any way related to the Work and
that are secured and maintained by Contractor.
The Contractor has the right to cover deductibles
as cost of work within
the GMP (not to exceed $25,000 per occurrence).

 

The Contractor
shall require all tiers of Subcontractors to waive the rights of recovery (as aforesaid
waiver by Contractor) against Owner, Project Control
of Texas, Inc., Contractor(s), and all tiers of Subcontractors.

 

The Builder's
Risk policy will be endorsed waiving the carrier's
rights of recovery under subrogation against Owner, Project Control
of Texas, Inc., Contractor(s), and all tiers of Subcontractors
whose interest is insured under such
policy.

 

The cost of
any losses sustained because of clauses under
the "All Risk" Builder's Risk policy as specified
in Paragraph 11.1.6 will be paid to Owner, for
the interest of all parties.

 

Contractor
shall not allow any endorsements to be included
with any of the policies required herein which would otherwise adversely affect or
limit the coverages to be provided by such
policies as required herein. Contractor and,
as applicable, the Subcontractors shall bear all risks
and be responsible for any uninsured loss due to
policy deductibles, self-insured retentions, exclusions, limitation inadequacy and/or absence
of coverage, whether such policies are purchased
by Contractor, Subcontractor and/or Owner.

 

 

 

Exhibit
B-1 – Page 30

 

    	 

    	 

    All
insurance proceeds received by Contractor shall
be considered construction trust funds under
the Texas Property Code and shall be applied solely
to the Project. Owner shall have the right to be informed
and consulted regarding any settlement made relating
to the Project under the insurance policies to be obtained
by Contractor and Subcontractors as provided for herein.

 

11.1.8
The coverages referred to above are set forth in
full in the
respective policy forms, and the foregoing descriptions of such
policies are not intended to be complete,
or to alter or amend
any provision of the actual policies and in matters, if any, in which the said description may
be conflicting with such instruments, the provisions
of the policies of the insurance shall govern.

 

	 	11.2	OWNER'S LIABILITY INSURANCE

 

11.2.1
Owner shall be responsible for purchasing
and maintaining Owner's usual commercial liability insurance. Optionally, Owner may
purchase and maintain other insurance for self-protection against claims which may arise
from operations under the Contract. Contractor shall
not be responsible for purchasing and maintaining
this optional Owner's liability insurance unless specifically required by the
Contract Documents.

 

	 	11.3	MISCELLANEOUS INSURANCE PROVISIONS

 

11.3.1
Contractor's attention is directed to the fact that
because of the nature of the
Work, Contractor will have
in its care, custody and control,
at various stages of the
Work, property of others which may be subject to damage.
This situation is set forth here, so that Contractor
will take into consideration this exposure and possibility
of loss that would
not be covered under a General Liability
policy and provide necessary protection for
itself.

 

11.3.2
BOILER AND MACHINERY INSURANCE.
At the request of the Owner, Contractor shall purchase
and maintain such boiler and machinery insurance
as may be required by the Contract Documents or
by Law. This insurance
shall include the interests of Owner, Contractor, Subcontractors
and Sub-Subcontractors in the Work.

 

11.3.3
LOSS OF USE INSURANCE. The Owner,
at the Owner's option, may purchase and maintain
such insurance as will insure Owner
against loss of use of the Owner's property
due to fire or other hazards, however caused.

 

11.3.4
If during the Project construction period Owner
insures properties, real or personal or both,
adjoining or adjacent to the site by property insurance
under policies separate from those insuring the Project, or
if after final payment property insurance is to be provided on the
completed Project through a policy or policies
other than those insuring the Project during
the construction period, Owner shall waive
all rights in accordance with
the terms of Paragraph 11.3.5 for damages caused by
fire or other perils covered by such
separate property insurance. All separate
policies shall provide this waiver of subrogation
by endorsement or otherwise.

 

11.3.5
WAIVER OF SUBROGATION. The Contractor
waives all rights against (1) the Owner, Project
Control of Texas, Inc. and any of their respective
agents, employees, partners and mortgagees and (2) separate contractors, if any, and
any of their subcontractors, Sub-Subcontractors, agents
and employees, for damages caused by fire or
other causes of loss to
the extent covered by property insurance
obtained or required to be obtained pursuant to Section 11.1 or other
property insurance applicable to the
Work. THE CONTRACTOR ACKNOWLEDGES AND AGREES THAT THE FOREGOING WAIVER WAIVES ANY CLAIMS RESULTING FROM THE APPLICABLE PARTY'S OWN
NEGLIGENCE. The Contractor shall require Subcontractors,
Sub- Subcontractors, agents and employees of
any of them by
appropriate agreements, written where legally required
for validity, similar waivers, each in favor
of other parties enumerated herein. The policies shall
provide waivers of subrogation by
endorsement or otherwise.
A waiver of subrogation shall be effective
as to a person or entity even though that
person or entity would otherwise have a duty of indemnification,
contractual or otherwise, did not pay
the insurance premium directly or indirectly, and whether
or not the person or entity had an insurable
interest in the damaged property.

 

11.3.6
A loss insured under Owner's property insurance shall
be adjusted by Owner as fiduciary and made
payable to Owner as fiduciary for the insureds,
as their interests may appear, subject to
requirements of any applicable mortgagee clause
and of Paragraph 11.3.7. Contractor shall pay
Subcontractors their just shares of insurance
proceeds received by the Contractor,
and by appropriate agreements, written where legally required
for validity, shall require Subcontractors to make payments to their Sub-Subcontractors in similar manner.

 

Exhibit
B-1 – Page 31

 

    	 

    	 

    11.3.7
As an alternative and at Owner's option and
expense, Owner may elect to furnish, or to
arrange for Contractor, the insurance that Contractor
carries or to assume the responsibility for
any part of all of
the property specified in this Section 11.3. If Owner
so elects, it shall notify, in writing, Contractor and issue a Change Order therefor,
but no adjustment to the Scheduled Completion
Date shall be allowed. Nothing contained herein shall
preclude Owner from self-insuring any part or all
the property mentioned herein.

 

Owner
and Contractor shall take reasonable steps to obtain consent of the insurance company
or companies and shall, without mutual written consent, take no action with respect to
partial occupancy or use that would cause
cancellation, lapse or reduction of insurance.

 

	 	11.4	PERFORMANCE BOND AND PAYMENT BOND; SUBCONTRACTOR DEFAULT INSURANCE

 

	 	11.4.1	See Section X of the Construction Contract.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit
B-1 – Page 32

 

    	 

    	 

    ARTICLE 12

UNCOVERING AND CORRECTION
OF WORK

 

	 	12.1	UNCOVERING OF WORK

 

12.1.1
If a portion of the Work is covered contrary
to the Architect's request or to requirements specifically expressed in the Contract
Documents, it must, if required in writing by the
Architect, be uncovered for the Architect's observation and be replaced at the
Contractor's expense without change in
the Contract Time.

 

12.1.2
If a portion of the Work has been covered
which the Architect has not specifically requested to observe prior to
its being covered, the Architect may request to
see such Work and it shall be uncovered
by the Contractor. If such Work is
in accordance with the Contract Documents,
costs of uncovering and replacement shall, by appropriate Change
Order, be charged to the Owner. If such Work
is not in accordance with the Contract
Documents, the Contractor shall pay such costs unless the condition was caused by
the Owner or a separate contractor in which
event the Owner shall be responsible for payment
of such costs.

 

	 	12.2	CORRECTION OF WORK

 

12.2.1
The Contractor shall remove from the site portions
of the Work
that are not in accordance with
the requirements of the Contract Documents and
are neither corrected by the Contractor nor
accepted by the Owner.

 

12.2.2
If the Contractor fails to correct nonconforming
Work within a reasonable time, the Owner may
correct it in accordance with Section 2.4. If
the Contractor does not proceed with correction
of such nonconforming Work within a reasonable
time fixed by written
notice from the Architect, the Owner may remove
it and store the salvageable materials or equipment
at the Contractor's expense. If the Contractor
does not pay costs of such removal and storage within
ten (10) days after written notice, the Owner may
upon ten (10) additional days' written notice sell
such materials and equipment at auction or at private
sale and shall account for the proceeds thereof, after deducting costs and damages
that should have been borne by the Contractor,
including compensation for the Architect's services
and expenses made necessary thereby. If such
proceeds of sale do not cover costs which the Contractor
should have borne, the Contract Sum shall
be reduced by the deficiency. If payments
then or thereafter due the Contractor are not sufficient
to cover such amounts, the Contractor shall pay
the difference to the Owner.

 

12.2.3
The Contractor shall bear the cost of correcting
destroyed or damaged construction, whether completed or partially
completed, of the Owner or separate contractors caused
by the Contractor's correction or removal of
Work which is not
in accordance with the requirements of
the Contract Documents.

 

12.2.4
Nothing contained in this Section 12.2 shall
be construed to establish a period of limitation with
respect to other obligations that the Contractor
might have under the
Contract Documents.

 

12.2.5
The corrective remedies set forth in this Section
12.2 are not exclusive and shall not deprive the
Owner of any action,
right or remedy otherwise available to it
for breach of any of the provisions of
the Contract Documents.

 

	 	12.3	ACCEPTANCE OF NONCONFORMING WORK

 

	 	12.3.1	See Section XXIV of the Construction Contract.

 

ARTICLE 13 

MISCELLANEOUS PROVISIONS

	 	13.1	GOVERNING LAW

 

	 	13.1.1	The Contract shall be governed by the law of the state of Texas.

 

	 	13.2	SUCCESSORS AND ASSIGNS

 

Exhibit
B-1 – Page 33

 

    	 

    	 

    	 	13.2.1	See Section XXVII of the Construction Contract.

 

	 	13.3	WRITTEN NOTICE

 

	 	13.3.1	See Section XV of the Construction Contract.

 

	 	13.4	RIGHTS AND REMEDIES

 

	 	13.4.1	See Section XIV and XVII of the Construction Contract.

 

	 	13.5	TESTS AND INSPECTIONS

 

13.5.1
Tests, inspections and approvals of portions
of the Work required by the Contract Documents
or by Laws, ordinances, rules, regulations or
orders of public authorities having jurisdiction shall be made
at an appropriate time. Unless otherwise provided, the
Contractor shall schedule such tests, inspections and approvals with the Owner’s independent
testing laboratory.

 

13.5.2
If the Architect, Owner or public authorities
having jurisdiction determine that portions of the
Work require additional testing, inspection or approvals
not included under Paragraph 13.5.1, the Architect will,
upon written authorization from the Owner, instruct
the Contractor to make arrangements for such additional testing, inspection or approval
by an entity acceptable to the Owner, and the Contractor
shall give timely notice to the Architect
of when and where tests and inspections are to
be made so the Architect may observe such procedures.
The Owner shall bear such costs except as provided
in Paragraph 13.5.3, and a Change
Order shall be issued.

 

13.5.3
If such procedures for testing, inspection or
approval under Paragraphs 13.5.1 and 13.5.2 reveal
failure of the portions of the Work to
comply with requirements established by the Contract Documents,
the Contractor shall bear all costs made necessary by
such failure including those of repeated procedures
and compensation for the Architect's services and expenses.

 

13.5.4
Required certificates of testing, inspection
or approval shall, unless otherwise required by the
Contract Documents, be secured by the Contractor
and promptly delivered to the Architect.

 

13.5.5
If the Architect is to observe tests, inspections or approvals required
by the Contract Documents, the Architect will
do so promptly and, where practicable, at the
normal place of testing.

 

13.5.6
Tests or inspections conducted pursuant to the Contract Documents shall
be made promptly to avoid unreasonable delay
in the Work.

 

13.5.7
If Work installed is found not in compliance with the Contract Documents,
investigation, testing and subsequent re-testing of the Work arising
out of such deficiencies and defects shall
be performed by the
Contractor. The type and nature of the inspections
and tests shall be reasonable. The Contractor
shall bear the costs of such investigations, testing and
re-testing.

 

 

	 	13.6	INTEREST

 

13.6.1
Payments due and unpaid under the Contract Documents shall
bear interest from the date payment is due at
such rate as the parties may
agree upon in writing or, in
the absence thereof, at the "prime rate"
prevailing from time to time at the place
where the Project is located.

 

	 	13.7	FORCE MAJEURE

 

13.7.1
Contractor should be entitled to
reasonable costs for increased general conditions required to timely complete
the Project if delays were caused by reasons
not within the Contractor's control; provided,
notice thereof is given to the Owner as soon as
practicable but no later than five (5) business
days after the start of such event causing the
delay.

 

Exhibit
B-1 – Page 34

 

    	 

    	 

    	 	13.8	ATTORNEYS' FEES

 

13.8.1
If either party retains an attorney to
enforce the Construction Contract, the party prevailing in
litigation is entitled to recover reasonable attorney’s fees, court and
other costs, and related expenses.

 

ARTICLE
14

TERMINATION OR SUSPENSION
OF THE CONTRACT

 

	 	14.1	TERMINATION BY THE CONTRACTOR

 

	 	14.1.1	See Section XIV and XVII of the Construction Contract.

 

	 	14.2	TERMINATION BY THE OWNER FOR CAUSE

 

	 	14.2.1	See Section XIV of the Construction Contract.

 

	 	14.3	SUSPENSION BY THE OWNER FOR CONVENIENCE

 

14.3.1
Owner may, without cause, order Contractor in writing
to suspend, delay or interrupt the Work in whole
or in part for such period of time
as Owner may determine. In addition to, and
not in lieu of, Owner's right
to suspend, delay or interrupt Contractor from any part of the
Work pursuant to the Contract Documents, Owner may,
at any time and without cause, suspend, delay
or interrupt any part of the
Work or any subcontract or all of the Work whatsoever
for such period of time as Owner may
determine by giving
seven (7) days' prior written notice to Contractor specifying the part of the
Work or subcontract to be suspended, delayed
or interrupted and the effective date of such suspension,
delay or interruption. Contractor shall continue to prosecute the part of the
Work not suspended, delayed or interrupted
and shall properly protect and secure the part of the
Work so suspended, delayed or interrupted, so far as is
necessary in Owner’s reasonable opinion. Notwithstanding
the provisions of Paragraph 7.3.3, if any part
of the Work or subcontract is so suspended, delayed
or interrupted, Contractor shall be entitled to payment
of reasonable standby fees (or at Owner's
option, payment for demobilization and subsequent re-mobilization) and of
costs directly associated with protecting and
securing the affected Work, provided said costs are authorized
in advance by Architect and Owner. No payment
shall be made by Owner, however,
to the extent that such Work or subcontract
is, was, or could have been suspended,
delayed or interrupted under the Contract Documents or an equitable
adjustment is made or denied under another provision of
the Contract. In case of
such suspension, delay or interruption, Owner
will issue a Construction Change Directive or
authorize a Change Order making
any required adjustment to the Date
of Substantial Completion and/or the Contract Sum.
For the remainder of the Work, the Contract Documents
shall remain in full force and effect.

 

14.3.2
An adjustment shall be made for increases in
the cost of performance of
the Work, including Contractor's Fee on the
increased cost of performance, caused by suspension,
delay or interruption by Owner under Paragraph
14.3.1. No adjustment shall be made
to the extent:

 

	 	1.	that performance is, was or would have been so suspended, delayed or interrupted by another cause for which Contractor is responsible;

 

	 	2.	that an equitable adjustment is made or denied under another provision of the Construction Contract; or

 

	 	3.	the suspension, delay or interruption occurs prior to Owner issuing the Notice to Proceed set forth in Section II.A of the Construction Contract.

 

~~~~~~~~~~~~~~~~~~ END OF DOCUMENT
~~~~~~~~~~~~~~~~~~

 

 

 

 

 

Exhibit
B-1 – Page 35

 

    	 

    	 

    EXHIBIT C TO

CONSTRUCTION CONTRACT
BY AND BETWEEN

TEXAS RESEARCH & TECHNOLOGY
FOUNDATION AND THE WHITING-TURNER

CONTRACTING COMPANY DATED 03/01/2022

 

PROJECT PERSONNEL

 

 

Project Executive
– Cyrena Davis 

Lead Superintendent – Cardo Odom

Lead
Project Manager – Matthew Elder

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit
C – Page 1

 

    	 

    	 

    EXHIBIT C-1 TO

CONSTRUCTION CONTRACT
BY AND BETWEEN

TEXAS RESEARCH & TECHNOLOGY
FOUNDATION AND THE WHTIING-TURNER

CONTRACTING COMPANY DATED 03/01/2022

 

 

LABOR BURDEN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit
C-1 – Page 1

 

    	 

    	 

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit
D – Page 1EX-10.1

 Exhibit 10.1 

THIS AMENDED AND RESTATED PROMISSORY NOTE (“NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”). THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE
AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. 
 AMENDED AND RESTATED PROMISSORY NOTE 

 

			
	Principal Amount: up to $5,500,000.00	  	Dated as of December 30, 2022

 (as set forth on the Schedule of Borrowings attached hereto) 

Reference is made to that certain Promissory Note, dated September 15, 2022 (“Original Note”), between Prime Impact
Acquisition I, a Cayman Islands exempted company (“Maker”), and Prime Impact Cayman, LLC, a Cayman Islands limited liability company, or its registered assigns or successors in interest (“Payee”). This Amended and
Restated Promissory Note (this “Note”) amends and restates the Original Note in its entirety. Make hereby promises to pay to Payee the principal sum of up to US$5,500,000.00 (as set forth on the Schedule of Borrowings attached
hereto) in lawful money of the United States of America, on the terms and conditions described below. All cash payments on this Note shall be made by check or wire transfer of immediately available funds or as otherwise determined by Maker to such
account as Payee may from time to time designate by written notice in accordance with the provisions of this Note. 
 1. Principal.
The principal balance of this Note shall be payable on the earlier of (i) December 31, 2023, (ii) the date on which the Maker redeems 100% of its public shares for cash and (iii) the consummation of the Maker’s initial business
combination (the “Business Combination”). The principal balance may be prepaid at any time without penalty. 
 2.
Interest. No interest shall accrue on the unpaid principal balance of this Note. 
 3. Application of Payments. All payments
shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the payment in full of any late charges and finally to the
reduction of the unpaid principal balance of this Note. 
 4. Events of Default. The following shall constitute an event of default
(“Event of Default”): 
 (a) Failure to Make Required Payments. Failure by Maker to pay the principal amount due
pursuant to this Note within five (5) business days of the date specified above. 
 (b) Voluntary Bankruptcy, Etc. The
commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of Maker or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become
due, or the taking of corporate action by Maker in furtherance of any of the foregoing. 
 (c) Involuntary Bankruptcy, Etc. The entry
of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee,
custodian,trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days. 

 5. Remedies. 

(a) Upon the occurrence of an Event of Default specified in Section 4(a) hereof, Payee may, by written notice to Maker, declare this Note
to be due immediately and payable, whereupon the unpaid principal amount of this Note, and all other amounts payable thereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding. 
 (b) Upon
the occurrence of an Event of Default specified in Sections 4(b) and 4(c), the unpaid principal balance of this Note, and all other sums payable with regard to this Note, shall automatically and immediately become due and payable, in all cases
without any action on the part of Payee. 
 6. Waivers. Maker and all endorsers and guarantors of, and sureties for, this Note waive
presentment for payment, demand, notice of dishonor, protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the terms of this Note, and all benefits that might
accrue to Maker by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of
execution, exemption from civil process, or extension of time for payment; and Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued hereon, may be sold upon any
such writ in whole or in part in any order desired by Payee. 
 7. Unconditional Liability. Maker hereby waives all notices in
connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be affected in any
manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the
payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice to Maker or affecting Maker’s liability hereunder. 

8. Notices. All notices, statements or other documents which are required or contemplated by this Note shall be: (i) in writing
and delivered personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address designated in writing, (ii) by facsimile to the number most recently provided to such
party or such other address or fax number as may be designated in writing by such party or (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic mail address as may be designated
in writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by facsimile or
electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail. 

9. Construction. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF. 

 10. Severability. Any provision contained in this Note which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 
 11. Trust Waiver.
Notwithstanding anything herein to the contrary, the Payee hereby waives any and all right, title, interest or claim of any kind (“Claim”) in or to any distribution of or from the trust account established by Maker in connection
with Maker’s IPO (including the deferred underwriters discounts and commissions) and the proceeds of the sale of the warrants issued in a private placement that occurred in connection with the consummation of the IPO were deposited, as
described in greater detail in the registration statement and prospectus filed by Maker with the Securities and Exchange Commission in connection with the IPO, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any
Claim against the trust account for any reason whatsoever. 
 12. Amendment; Waiver. Any amendment hereto or waiver of any provision
hereof may be made with, and only with, the written consent of Maker and Payee. 
 13. Assignment. Other than in connection with the
Business Combination, no assignment or transfer of this Note or any rights or obligations hereunder may be made by any party hereto (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted
assignment without the required consent shall be void. 
 [Signature page follows] 

 IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note
to be duly executed by the undersigned as of the day and year first above written. 
  

			
	Prime Impact Acquisition I
	 a Cayman Islands exempted company

		
	 By:
	 	 /s/ Mark Long

		 	 Name: Mark Long

		 	 Title: Co-Chief Executive Officer

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