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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
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(Mark
One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1999
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-27597
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NAVISITE, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-2137343
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation)
100 Brickstone Square
Andover, Massachusetts 01810
(Address of principal executive (Zip Code)
offices)
(978) 552-3300
(Registrant's telephone number, including area code)
----------------
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period than the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes No X (*)
As of December 14, 1999, there were 28,048,812 shares of the registrant's
Common Stock, par value $.01 per share, outstanding.
(*)The registrant has been subject to such filing requirements since October
21, 1999.
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NAVISITE, INC
Form 10-Q for the Quarter ended October 31, 1999
INDEX
<TABLE>
<CAPTION>
Page
Number
------
PART I. FINANCIAL INFORMATION
<C> <S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of October 31, 1999 (unaudited)
and July 31, 1999............................................ 3
Consolidated Statements of Operations for the three months
ended
October 31, 1999 and 1998 (unaudited)........................ 4
Consolidated Statements of Cash Flows for the three months
ended
October 31, 1999 and 1998 (unaudited)........................ 5
Notes to Interim Consolidated Financial Statements............ 6
Management's Discussion and Analysis of Financial Condition
Item 2. and Results of Operations.................................... 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk.... 21
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds..................... 22
Item 4. Submission of Matters to a Vote of Security Holders........... 23
Item 6. Exhibits and Reports on Form 8-K.............................. 24
SIGNATURE.............................................................. 25
EXHIBIT INDEX.......................................................... 26
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
NAVISITE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
<TABLE>
<CAPTION>
October 31, July 31,
1999 1999
----------- --------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.............................. $ 69,560 $ 3,352
Accounts receivable, less allowance for doubtful
accounts of $416 and $262 at October 31, 1999 and July
31, 1999, respectively................................ 3,167 1,881
Accounts receivable from related parties............... 2,290 77
Prepaid expenses....................................... 707 628
Deferred IPO costs..................................... -- 831
-------- --------
Total current assets................................. 75,724 6,769
-------- --------
Property and equipment, net.............................. 19,806 13,159
Deposits................................................. 2,847 389
Goodwill, net of accumulated amortization of $270 and
$220 at October 31, 1999 and July 31, 1999,
respectively............................................ 743 794
-------- --------
Total assets............................................. $ 99,120 $ 21,111
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable....................................... $ 5,923 $ 2,224
Amount payable to related party........................ 112 --
Accrued expenses and deferred revenue.................. 7,016 3,963
Capital lease obligations, current portion............. 175 229
Software vendor payable, current portion............... 718 708
Notes payable, current portion......................... 1,000 1,000
-------- --------
Total current liabilities................................ 14,944 8,124
-------- --------
Capital lease obligations, less current portion.......... 144 178
Software vendor payable, less current portion............ 1,622 1,757
-------- --------
Total liabilities........................................ 16,710 10,059
-------- --------
Series C Convertible Redeemable Preferred Stock, $.01
par value, 1,095 shares authorized; 0 and 1,095 shares
issued and outstanding at October 31, 1999 and July
31, 1999, respectively (at liquidation value)......... -- 8,088
Series D Convertible Redeemable Preferred Stock, $.01
par value, 993 shares authorized; 0 and 993 shares
issued and outstanding at October 31, 1999 and July
31, 1999, respectively (at liquidation value)......... -- 7,333
-------- --------
Total redeemable preferred stock......................... -- 15,421
-------- --------
Commitments and contingencies
Stockholders' equity (deficit):
Series A Convertible Preferred Stock, $.01 par value,
1,324 shares authorized; 0 and 1,324 shares issued and
outstanding at October 31, 1999 and July 31, 1999,
respectively ......................................... -- 13
Series B Convertible Preferred Stock, $.01 par value,
1,000 shares authorized; 0 and 542 shares issued and
outstanding at October 31, 1999 and July 31, 1999,
respectively ......................................... -- 5
Preferred Stock, $.01 par value, 5,000 shares
authorized; 0 and 0 shares issued and outstanding at
October 31, 1999 and July 31, 1999, respectively...... -- --
Common Stock, $.01 par value, 150,000 shares
authorized; 27,224 and 69 shares issued and
outstanding at October 31, 1999 and July 31, 1999,
respectively.......................................... 272 1
Additional paid-in capital............................. 127,368 30,291
Accumulated deficit.................................... (45,230) (34,679)
-------- --------
Total stockholders' equity (deficit)..................... 82,410 (4,369)
-------- --------
Total liabilities and stockholders' equity (deficit)..... $ 99,120 $ 21,111
======== ========
</TABLE>
See accompanying notes to interim consolidated financial statements.
3
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NAVISITE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three months
ended
October 31,
-----------------
1999 1998
-------- -------
<S> <C> <C>
Revenue:
Revenue................................................... $ 2,470 $ 490
Revenue, related parties.................................. 3,396 1,178
-------- -------
Total revenue........................................... 5,866 1,668
Cost of revenue............................................. 9,069 3,786
-------- -------
Gross profit (loss)....................................... (3,203) (2,118)
-------- -------
Operating expenses:
Selling and marketing..................................... 3,806 1,429
General and administrative................................ 2,601 543
Product development....................................... 891 267
-------- -------
Total operating expenses................................ 7,298 2,239
-------- -------
Loss from operations........................................ (10,501) (4,357)
Other income (expense):
Interest expense, net..................................... (50) (156)
Other expense, net........................................ -- 4
-------- -------
Net loss.................................................... $(10,551) $(4,509)
======== =======
Basic and diluted net loss per common share................. $ (3.49) $ (0.56)
======== =======
Basic and diluted weighted average number of common shares
outstanding................................................ 3,021 8,056
======== =======
Pro forma basic and diluted net loss per share.............. $ (0.48) $ (0.36)
======== =======
Pro forma basic and diluted weighted average number of
shares outstanding......................................... 21,802 12,476
======== =======
</TABLE>
See accompanying notes to interim consolidated financial statements.
4
<PAGE>
NAVISITE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three months
ended October
31,
-----------------
1999 1998
-------- -------
<S> <C> <C>
Cash flows from operating activities:
Net loss.................................................. $(10,551) $(4,509)
Adjustments to reconcile net loss to net cash used for
operating activities:
Depreciation and amortization........................... 793 333
Provision for/(recovery of) bad debts................... 154 (2)
Changes in operating assets and liabilities, net of
impact of acquisition in 1998:
Accounts receivable................................... (1,439) (320)
Accounts receivable from related parties.............. (2,213) --
Prepaid expenses...................................... 752 5
Deposits.............................................. (2,458) (53)
Accounts payable ..................................... 3,699 946
Accrued expenses and deferred revenue................. 3,053 153
-------- -------
Net cash used for operating activities.............. (8,210) (3,447)
-------- -------
Cash flows from investing activities:
Purchases of property and equipment....................... (7,389) (671)
-------- -------
Net cash used for investing activities.............. (7,389) (671)
-------- -------
Cash flows from financing activities:
Proceeds from increase in debt to CMGI, net............... 12,368 4,508
Proceeds from issuance of common stock, net of issuance
costs.................................................... 69,640 --
Proceeds from exercise of stock options................... 13 --
Payments of capital lease obligations..................... (89) (15)
Payments of software vendor obligations................... (125) (375)
-------- -------
Net cash provided by financing activities........... 81,807 4,118
-------- -------
Net increase in cash........................................ 66,208 --
Cash and cash equivalents, beginning of period.............. 3,352 --
-------- -------
Cash and cash equivalents, end of period.................... $ 69,560 $ --
======== =======
Supplemental disclosure of cash flow information:
Cash paid during the period for interest.................... $ 81 $ 3
======== =======
</TABLE>
See accompanying notes to interim consolidated financial statements.
5
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NAVISITE, INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
October 31, 1999
1. Basis of Presentation
The accompanying consolidated financial statements have been prepared by
NaviSite, Inc. ("NaviSite" or the "Company") in accordance with generally
accepted accounting principles and pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. It is suggested that the financial
statements be read in conjunction with the audited financial statements and
the accompanying notes included in the Company's Registration Statement on
Form S-1 (File No. 333-83501), which was declared effective by the Securities
and Exchange Commission on October 21, 1999.
The information furnished reflects all adjustments which, in the opinion of
management, are of a normal reoccurring nature and are considered necessary
for a fair presentation of results for the interim periods. Such adjustments
consist only of normal recurring items. It should also be noted that results
for the interim periods are not necessarily indicative of the results expected
for the full year or any future period.
The preparation of these consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
2. Initial Public Offering
On October 21, 1999, the Company's Registration Statement on Form S-1 (File
No. 333-83501) was declared effective by the Securities and Exchange
Commission. Pursuant to the Registration Statement, the Company sold 5,500,000
shares of its common stock, par value $.01 per share (the "Common Stock") at
$14 per share. Upon the closing of the Company's initial public offering,
which was held on October 27, 1999, all outstanding shares of the Company's
convertible preferred stock were converted into 21,622,315 shares of Common
Stock. On November 18, 1999, the underwriters of the Company's initial public
offering exercised their over-allotment option in full to purchase an
additional 825,000 shares of Common Stock at $14 per share. The closing in
connection with the exercise of the over-allotment option was held on November
23, 1999. The Company received proceeds of approximately $80,382,000, net of
offering costs of approximately $8,169,000, from its initial public offering
and the subsequent exercise by the underwriters of the over-allotment option.
In connection with the closing of the Company's initial public offering on
October 27, 1999, all of the outstanding shares of Series A, Series B, Series
C and Series D convertible preferred stock, par value $.01 per share, of the
Company automatically converted into 21,622,315 shares of Common Stock.
Immediately following the automatic conversion of all of the Company's
outstanding shares of convertible preferred stock, the Company filed an
amended and restated certificate of incorporation. Under the amended and
restated certificate of incorporation, the Company is authorized to issue
150,000,000 shares of Common Stock and 5,000,000 shares of preferred stock,
par value $.01 per share. There currently are no shares of preferred stock
issued and outstanding.
3. Principles of Consolidation
The accompanying financial statements include the accounts of the Company
and its wholly owned subsidiary, Servercast Communications, L.L.C., after
elimination of all significant intercompany balances and transactions.
6
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NAVISITE, INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
4. Cash and Cash Equivalents
Cash equivalents consist of a money market fund with a unit value of $1.00,
investing in high quality short-term debt obligations, including commercial
paper, asset-backed commercial paper, corporate bonds, U.S. government agency
obligations, taxable municipal securities and repurchase agreements.
During the fiscal 2000 first quarter, non-cash financing activities
included the issuance of 87,548 shares of the Company's Series B convertible
preferred stock in exchange for a $12,257,000 reduction in debt to CMGI.
5. Net Loss Per Common Share
The Company has adopted Statement of Financial Accounting Standards
("SFAS") No. 128, Earnings Per Share ("SFAS 128"). In accordance with SFAS
128, basic earnings (loss) per share is computed using the weighted average
number of common shares outstanding during the period. Diluted earnings (loss)
per share is computed using the weighted average number of common and dilutive
common equivalent shares outstanding during the period, using either the "as-
if-converted" method for convertible preferred stock or the treasury stock
method for options, unless such amounts are anti-dilutive.
For the three months ended October 31, 1999 and 1998, net loss per basic
and diluted share is based on weighted average common shares and excludes any
common stock equivalents, as they would be anti-dilutive due to the reported
loss. For the three months ended October 31, 1999 and 1998, a pro forma basic
and diluted loss per share calculation, assuming the conversion of all amounts
due to CMGI and all outstanding shares of preferred stock into common stock
using the "as-if-converted" method from the later of the date of issuance or
beginning of the period, is presented. The following table provides a
reconciliation of the denominators used in calculating the pro forma basic and
diluted earnings (loss) per share for the three months ended October 31, 1999
and 1998:
<TABLE>
<CAPTION>
Three Months
Ended October
31,
-----------------
1999 1998
-------- -------
<S> <C> <C>
Numerator:
Net loss............................................ $(10,551) $(4,509)
Denominator:
Basic weighted average number of common shares
outstanding........................................ 3,021 8,056
Assumed conversion of amounts due to CMGI and
preferred stock.................................... 18,781 4,420
-------- -------
Weighted average number of pro forma basic and diluted
shares outstanding................................... 21,802 12,476
======== =======
Pro forma basic and diluted net loss per share........ $ (0.48) $ (0.36)
======== =======
</TABLE>
7
<PAGE>
6. New Accounting Pronouncements
In November 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin ("SAB") No. 100, Restructuring and Impairment
Charges ("SAB 100"). In December 1999, the SEC issued SAB No. 101, Revenue
Recognition in Financial Statements ("SAB 101"). SAB No. 100 expresses the
views of the SEC staff regarding the accounting for and disclosure of certain
expenses not commonly reported in connection with exit activities and business
combinations. This includes the accrual of exit and employee termination costs
and the recognition of impairment charges. The Company does not expect the
provisions of SAB No. 100 to have a material impact on its consolidated
financial statements. SAB No. 101 expresses the views of the SEC staff in
applying generally accepted accounting principles to certain revenue
recognition issues. The Company is still in the process of analyzing the
impact of SAB No. 101 on its consolidated financial statements and related
disclosures.
7. Subsequent Events
As described in Note 2 above, on November 18, 1999, the underwriters of the
Company's initial public offering exercised their over-allotment option in
full to purchase an additional 825,000 shares of our Common Stock at $14 per
share. The closing in connection with the exercise of the over-allotment
option was held on November 23, 1999.
On December 3, 1999, we executed a $10.3 million letter of credit in
connection with the construction of a new 150,000 square foot facility in
Andover, Massachusetts, which includes a new data center.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Form 10-Q contains forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, that involve
risks and uncertainties. All statements other than statements of historical
information provided herein are forward-looking statements and may contain
information about financial results, economic conditions, trends and known
uncertainties. Our actual results could differ materially from those discussed
in the forward-looking statements as a result of a number of factors, which
include those discussed in this section and elsewhere in this report and the
risks discussed in the Company's other filings with the Securities and
Exchange Commision. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's analysis, judgment,
belief or expectation only as of the date hereof. The Company undertakes no
obligation to publicly reissue these forward-looking statements to reflect
events or circumstances that arise after the date hereof.
Overview
We provide enhanced, integrated hosting and management services for
business Web sites and Internet applications. We also provide application
rentals to customers and developers and supply related consulting services.
Our Internet application service offerings allow businesses to outsource the
deployment, configuration, hosting, management and support of their Web sites
and Internet applications in a cost-effective and rapid manner. Our focus on
enhanced management services, beyond basic co-location services, allows us to
meet the expanding needs of businesses as their Web sites and Internet
applications become more complex. The cost for our services varies from
customer to customer based on the number of hosted or managed servers and the
nature and level of services provided.
We intend to expand both domestically and internationally. As part of this
expansion, we currently have a new 150,000 square foot facility being
constructed to our specifications in Andover, Massachusetts, which will
include a new data center. In May 1999, we executed a 12-year lease for this
new facility. On December 3, 1999, we executed a $10.3 million letter of
credit in connection with the construction of the Massachusetts facility. We
anticipate that work will be completed on the new Massachusetts facility in
the spring of 2000. In addition, since the end of the fiscal 2000 first
quarter, construction has been completed on a new 66,000 square foot facility
located in San Jose, California, which includes a new data center. In May
1999, we executed a seven-year lease for this facility. The new San Jose data
center opened on December 2, 1999.
We derive our revenue from a variety of services, including: Web site and
Internet application hosting, which includes access to our state-of-the-art
data centers, bandwidth and basic back-up, storage and monitoring services;
enhanced server management, which includes custom reporting, hardware options,
load balancing and mirroring, system security, advanced back-up options,
remote management and the services of our business solution managers;
specialized application management, which includes management of e-commerce
and other sophisticated applications and their underlying services, including
ad-serving, streaming, databases and transaction processing; and application
rentals and related consulting and other professional services. Revenue also
includes income from the rental of equipment to customers and one-time
installation fees. Revenue is recognized in the period in which the services
are performed and installation fees are recognized in the period of
installation. Our contracts generally are a one-year commitment.
Our revenue from sales to related parties principally consists of sales of
services to CMGI, Inc. and other entities in which CMGI holds an equity
interest. In general, in pricing the services provided to CMGI and these CMGI
affiliates, we have: negotiated the services and levels of service to be
provided; calculated the price of the services at those service levels based
on our then-current, standard prices; and, in exchange for customer referrals
provided to us by CMGI, discounted these prices by 10%.
9
<PAGE>
Three-month period ended October 31, 1999 compared to the three-month period
ended October 31, 1998
Revenue
Total revenue increased 252% to approximately $5.9 million for the three-
month period ended October 31, 1999, from approximately $1.7 million for the
same period in 1998. The increase in revenue is due to additional business
with CMGI and CMGI affiliates and the increase in the number of unaffiliated
customers to 134 as of October 31, 1999, from 46 as of October 31, 1998.
Cost of Revenue
Cost of revenue principally includes labor and headcount expenses,
additional equipment and maintenance costs and increased bandwidth and
connectivity charges. Cost of revenue increased 140% to approximately $9.1
million for the three-month period ended October 31, 1999, from approximately
$3.8 million for the same period in 1998. As a percentage of revenue, cost of
revenue decreased to 155% for the three-month period ended October 31, 1999,
from 227% for the same period in 1998. The dollar-value increase in each
period is due primarily to the costs associated with increased investment in
our existing data centers.
Operating Expenses
Selling and Marketing. Selling and marketing expenses primarily include
salaries and commissions and expenses for marketing programs, advertising and
product literature. Selling and marketing expenses increased 166% to
approximately $3.8 million for the three-month period ended October 31, 1999,
from approximately $1.4 million for the same period in 1998. This increase is
due primarily to the development of NaviSite's sales and marketing capability
in connection with the commencement of sales to unaffiliated customers.
General and Administrative. General and administrative expenses primarily
include the costs of financial, leasing and administrative personnel,
professional services and corporate overhead. General and administrative
expenses increased 379% to approximately $2.6 million for the three-month
period ended October 31, 1999, from approximately $543,000 for the same period
1998. The increase is due to hiring of additional administrative and finance
personnel to support our growing operations.
Product Development. Product development expenses consist mainly of
salaries and related costs. Product development expenses increased 234% to
approximately $891,000 for the three-month period ended October 31, 1999, from
approximately $267,000 for the same period in 1998. This increase is due
primarily to the costs associated with an increase in product development
personnel as of October 31, 1999 to 21, from 12 employees for the same period
in 1998. This growth in product development personnel reflects our increased
service offerings and emphasis on application services.
Interest Expense, net
Interest expense, net decreased 68% to approximately $50,000 in the three-
month period ended October 31, 1999, from $156,000 for the same period in
1998. This decrease is due primarily to the reduced intercompany interest
expense to CMGI and the interest income earned from funds available for
investment. Other interest expense is due to the term note in connection with
our acquisition, in July 1998, of Servercast Communications, L.L.C., interest
expense on long-term capital lease obligations and imputed interest on a
software license purchase.
Liquidity and Capital Resources
Since our inception, our operations have been funded primarily by CMGI
through the issuance of preferred stock and convertible debt, the issuance of
preferred stock and our initial public offering in October 1999.
10
<PAGE>
Net cash used for operating activities for the three-month period ended
October 31, 1999 amounted to $8.2 million, resulting primarily from net
operating losses and increases in accounts receivable, which are partially
offset by non-cash depreciation and amortization charges and increases in
accounts payable and accrued expenses. The net increase in accounts receivable
is a result of the revenue growth for the period.
Net cash used for investing activities for the three-month period ended
October 31, 1999 amounted to $7.4 million. The net cash used for investing
activities was utilized to acquire property and equipment required to support
the growth of the business and to expand data center infrastructure.
Net cash provided by financing activities for the three-month period ended
October 31, 1999 amounted to $81.8 million. Cash provided by financing
activities included $69.6 million of net proceeds from our initial public
offering as well as funds advanced from CMGI, totaling $12.3 million, to fund
our operations for the period August 1, 1999 through the closing of the
initial public offering on October 27, 1999.
Until the completion of our initial public offering on October 27, 1999,
CMGI funded our operations as needed, increasing our obligations to CMGI and
allowing us to maintain a zero-balance cash account. Customer and other
receipts were remitted to CMGI and applied to reduce our obligations to CMGI.
We issued a secured convertible demand note to CMGI in exchange for the
cancellation of all outstanding intercompany debt incurred by us to CMGI prior
to April 30, 1999. This note also provides for additional advances by CMGI to
us after April 30, 1999. Prior to the completion of our initial public
offering, the amount of each borrowing represented by the note was convertible
from time to time into the number of shares of Series B convertible preferred
stock equal to one-tenth of the quotient of the aggregate amount of principal
and interest to be so converted, divided by the applicable conversion price
for that fiscal quarter. The conversion price applicable to advances made
during the fiscal quarter in which our initial public offering occurred was
determined by the offering price of the initial public offering. Any future
advances from CMGI under this note will be convertible from time to time into
the number of shares of common stock equal to the quotient of the aggregate
amount of principal and interest to be so converted, divided by the applicable
conversion price for that fiscal quarter.
Under this note, CMGI converted intercompany debt in the aggregate amount
of approximately $12.3 million, representing funds advanced during the period
subsequent to the quarter ended July 31, 1999 through October 21, 1999 (the
effective date of the registration statement relating to our initial public
offering), into 87,548 shares of Series B convertible preferred stock (based
upon a conversion price of $140.00, ten times the initial public offering
price of $14.00 per share). Upon the closing of our initial public offering,
each issued and outstanding share of Series B convertible preferred stock
converted into ten shares of common stock, or 6,294,070 shares of common stock
in the aggregate. We have not borrowed funds from CMGI since the completion of
our initial public offering on October 27, 1999, and we do not expect to
borrow funds from CMGI in the future.
On December 3, 1999, in connection with the construction contract for our
new Andover, Massachusetts facility, we obtained a letter of credit in the
amount of $10.3 million, representing the remaining balance due under the
construction contract.
We have experienced a substantial increase in our expenditures since
inception consistent with our growth in operations and staffing. We anticipate
that expenditures will continue to increase for at least three years as we
accelerate the growth of our business. Additionally, we will continue to
evaluate investment opportunities in businesses that management believes will
complement our technologies and market strategies.
We currently anticipate that our available cash resources will be
sufficient to meet our anticipated needs for working capital and capital
expenditures over the next 12 months, assuming we obtain additional lease
financing credit lines. However, we may need to raise additional funds in
order to fund more rapid expansion, to develop new, or enhance existing,
services or products, to respond to competitive pressures or to acquire
complementary businesses, products or technologies. In addition, on a long-
term basis, we may require additional external financing for working capital
and capital expenditures through credit facilities, sales of additional equity
or other financing vehicles. If additional funds are raised through the
issuance of equity or convertible debt securities, the percentage ownership of
our stockholders will be reduced and our stockholders may experience
additional
11
<PAGE>
dilution. We cannot assure you that additional financing will be available on
terms favorable to us, if at all. If adequate funds are not available or are
not available on acceptable terms, our ability to fund our expansion, take
advantage of unanticipated opportunities, develop or enhance services or
products or otherwise respond to competitive pressures would be significantly
limited.
Year 2000 Considerations
Currently, many installed computer systems and software products are coded
to accept only two-digit entries in the date code field. Beginning in the year
2000, these date code fields will need to accept four-digit entries to
distinguish 21st century dates from 20th century dates. As a result, many
companies' software and computer systems may need to be upgraded or replaced
in order to continue to function properly into the Year 2000 and beyond. We
recognize the need to assure that our operations will not be adversely
impacted by Year 2000 software and computer system failures. NaviSite
confronts the Year 2000 problem in several contexts:
Our Facilities and Services. We are a hosting and application management
services provider, and we rely on our network infrastructure, software and
hardware to provide our services. Because we offer computer-related services
and because of the business-critical nature of many of our customers'
applications, our risk of lawsuits related to Year 2000 issues is likely to be
greater than that of companies in some other industries. We currently have 10
full-time employees and consultants dedicated to completing our internal Year
2000 project plan. As of October 31, 1999, we have spent nearly $1.7 million
(approximately $707,000 for the three months ended October 31, 1999) on our
Year 2000 compliance effort and we have budgeted up to an additional $343,000
to complete our internal Year 2000 project plan.
Our Year 2000 project plan consists of five phases:
. awareness, which consists of informing our employees, customers and
suppliers (orally and in writing) of the need to remediate computer
systems and software products relating to our operations;
. inventory, which is comprised of our efforts to identify and record the
computer systems and software products involved in the provision of our
service offerings and elsewhere in our operations;
. assessment, which is the process of isolating Year 2000 issues with the
systems and products identified in the inventory phase of our Year 2000
project plan and identifying necessary upgrades and replacements to
address these Year 2000 issues;
. remediation, which consists of implementing the necessary upgrades and
replacements identified in the assessment phase of our Year 2000 project
plan and is designed to remediate Year 2000 problems at the operating
system and BIOS levels as to computer systems used by customers for whom
we provide management services; and
. contingency planning, which involves both the proactive visioning of
failures of computer systems and software products and of other adverse
impacts on our operations caused by the failure or inadequate completion
of one or more of the first four phases of our Year 2000 project plan
and the suggestion and documentation of reasonable solutions to resolve
these potential failures.
We have substantially completed all phases of our Year 2000 project plan.
We continue to conduct awareness campaigns as needed, update our inventory and
conduct Year 2000 assessment on an ongoing basis as new computer systems and
software products are introduced to our data centers or integrated into our
operations. We intend to continue this ongoing inventory and assessment
process through at least December 31, 2000. The awareness, inventory and
assessment phases of our Year 2000 project plan revealed to us a number of
potential problems at the operating system and BIOS levels with: hosted
servers owned by both us and our customers; our networked and standalone
desktop computers; and our network operations centers. In addition, these
phases of our plan revealed potential problems with hardware devices utilized
as part of our network infrastructure, including, for example, routers. All of
the revealed problems are ordinary and routine in nature, and all are able to
be remedied with standard software or hardware patches. In most cases, if time
permits, we test vendor software patches for Year 2000 compliance.
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At this time, we continue to provide software updates or patches upon customer
request and to implement newly issued vendor releases critical to the Year
2000 readiness of our operations. We expect these activities, together with
ongoing updates to our contingency plans, to continue into the new year.
Moreover, as new managed servers are brought online through at least December
31, 1999, we will certify Year 2000 compliance before these servers are
installed. As described in further detail below, our co-location customers
have full responsibility for remediating their own servers and applications,
and all of our customers are responsible for remediating their own application
software and any desktop computers used by them in connection with the
services we provide. Year 2000 problems isolated to date with respect to our
desktop computers, network operations centers and network infrastructure have
been substantially remediated.
Because our infrastructure incorporates components from different
providers, we may be unable to determine whether any of these components will
cause unexpected Year 2000 problems or whether different components will
interact in a way that causes malfunctions. While we expect that our network
infrastructure and all other material components of our facilities will not
experience any Year 2000-related failures, we cannot assure you that we will
not experience these failures or that we will not discover any compliance
problems in the future. Our failure to timely and adequately address Year 2000
compliance issues in our business could result in lost revenues and claims of
mismanagement, misrepresentation or breach of contract and related litigation,
which could be costly and time-consuming for us to defend.
Our Customers. We also face risks from customer-provided computer systems
and application software that we host in our data centers that in many cases
has been customized by outside service providers or customer personnel. While
we inform our co-location customers that they are responsible for the Year
2000 compliance of their hosted computer systems and all customers that they
are responsible for the Year 2000 compliance of their own application
software, we cannot assure you that our customers will take the necessary
steps to achieve Year 2000 compliance. The failure of customers and third-
party providers to ensure that their hosted computer systems and application
software is Year 2000 compliant could disrupt our operations, resulting in
lost revenue and increased operating costs. In addition, our customers
maintain their internal operations on networks which may be impacted by Year
2000 complications, which could in turn affect our internal structure or our
ability to provide services to them. We cannot assure you that our customers
will upgrade their internal networks or otherwise provide appropriate
remediation for Year 2000 compliance. In addition, in the event that a
significant number of our customers experience Year 2000-related problems,
whether due to our products or not, demand for technical support and
assistance may increase dramatically. In this case, our costs for providing
technical support may rise and the quality of our service or our ability to
manage incoming requests may be impaired.
Our Suppliers. In addition, we depend on software and hardware supplied by
numerous vendors to provide our application hosting and management services,
rental services and consulting services. We are currently seeking assurances
from our existing vendors that their products are Year 2000 compliant, and we
require that all new software application providers certify that they are Year
2000 compliant before we enter into agreements with them. However, because in
most cases we do not independently verify the Year 2000 compliance of vendors'
products, we cannot assure you that these vendors' guarantees are true or
sufficient or that we will not encounter Year 2000 compliance problems
involving their products.
We cannot assure you that we will be able to provide our services and
maintain our operations if we are unable to obtain products, services or
systems that are Year 2000 compliant when we need them. In addition, if
vendors and service providers cannot deliver their products because of their
own Year 2000 compliance problems or as a result of systemic failures such as
power outages relating to the Year 2000, we could experience increased
operating costs and lost revenue.
Inflation
We believe that our revenues and results of operations have not been
significantly impacted by inflation.
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Additional Risk Factors that May Affect Future Results
The risks and uncertainties described below are not the only ones NaviSite
faces. Additional risks and uncertainties not presently known to NaviSite or
that are currently deemed immaterial may also impair its business operations.
If any of the following risks actually occur, NaviSite's financial condition
and operating results could be materially adversely affected.
NaviSite has a history of operating losses and expects future losses. We
cannot assure you that we will ever achieve profitability on a quarterly or
annual basis or, if we achieve profitability, that it will be sustainable. We
were organized in 1996 by CMGI, Inc. to support the networks and host the Web
sites of CMGI and a number of CMGI affiliates. It was not until the Fall of
1997 that we began providing Web site hosting and Internet application
management services to companies unaffiliated with CMGI. Since our inception
in 1996, we have experienced operating losses and negative cash flows for each
quarterly and annual period. As of October 31, 1999, we had an accumulated
deficit of $45.2 million. The income potential of our business is unproven,
and our limited operating history makes it difficult to evaluate our
prospects. We anticipate increased expenses as we continue to expand and
improve our infrastructure, invest in additional applications, enhance our
application management expertise, expand our sales and marketing efforts and
pursue additional industry relationships. As a result, we expect to incur
operating losses for at least the next two years.
Fluctuations in NaviSite's quarterly operating results may negatively
impact its stock price. Our quarterly operating results may fluctuate
significantly in the future as a result of a variety of factors, many of which
are outside our control. These factors include: the demand for and market
acceptance of our Web site and Internet application hosting and management
services; our ability to develop, market and introduce new services on a
timely basis; downward price adjustments by our competitors; changes in the
mix of services provided by our competitors; technical difficulties or system
downtime affecting the Internet generally or our hosting operations
specifically; our ability to meet any increased technological demands of our
customers; the amount and timing of costs related to our marketing efforts and
service introductions; and economic conditions specific to the Internet
application service provider industry. Our operating results for any
particular quarter may fall short of our expectations or those of investors or
securities analysts. In this event, the market price of our common stock would
be likely to fall.
NaviSite is controlled by CMGI, and CMGI may have interests that conflict
with the interests of NaviSite's other stockholders. As of October 31, 1999,
CMGI beneficially owned approximately 71.8% of NaviSite's outstanding common
stock. Following the exercise, on November 18, 1999, of the over-allotment
option by the underwriters in connection with our initial public offering,
CMGI beneficially owns approximately 69.7% of NaviSite's outstanding common
stock. Accordingly, CMGI has the power, acting alone, to elect a majority of
NaviSite's board of directors and has the ability to determine the outcome of
any corporate actions requiring stockholder approval, regardless of how
NaviSite's other stockholders may vote. Under Delaware law, CMGI may exercise
its voting power by written consent, without convening a meeting of the
stockholders, meaning that CMGI could effect a sale or merger of NaviSite
without prior notice to, or the consent of, NaviSite's other stockholders.
CMGI's interests could conflict with the interests of NaviSite's other
stockholders.
The possible need of CMGI to maintain control of NaviSite in order to avoid
becoming a registered investment company could influence future decisions by
CMGI as to the disposition of any or all of its ownership position in
NaviSite. CMGI would be subject to numerous regulatory requirements with which
it would have difficulty complying if it were required to register as an
investment company. As a result, CMGI may be motivated to maintain at least a
majority ownership position in NaviSite, even if other stockholders of
NaviSite might consider a sale of control of NaviSite to be in their best
interests. As long as it is a majority stockholder, CMGI has contractual
rights to purchase shares in any future financing of NaviSite sufficient to
maintain its majority ownership position. CMGI's ownership may have the effect
of delaying, deferring or preventing a change in control of NaviSite or
discouraging a potential acquiror from attempting to obtain control of
NaviSite, which in turn could adversely affect the market price of NaviSite's
common stock.
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A significant portion of NaviSite's revenue currently is generated by
services provided to CMGI and companies affiliated with CMGI, and the loss of
this revenue would substantially impair the growth of NaviSite's business.
NaviSite anticipates that it will continue to receive a significant portion of
its revenue in the future from CMGI and CMGI affiliates. CMGI and CMGI
affiliates accounted for approximately 58% of NaviSite's revenue in the three-
month period ended October 31, 1999 and approximately 71% of NaviSite's
revenue in the three-month period ended October 31, 1998. NaviSite cannot
assure you that revenues generated by CMGI and CMGI affiliates will continue
or that it will be able to secure business from unaffiliated customers to
replace this revenue in the future. The loss of revenue from CMGI and CMGI
affiliates, or NaviSite's inability to replace this operating revenue, would
substantially impair the growth of its business.
NaviSite's ability to grow its business would be substantially impaired if
it were unable to obtain, on commercially reasonable terms, certain equipment
that is currently provided under leases executed or guaranteed by CMGI.
Certain of the equipment that NaviSite uses or provides to its customers for
their use in connection with its services is provided under leases executed or
guaranteed by CMGI. We do not expect CMGI to continue this practice, and
accordingly, NaviSite or its customers will have to obtain this equipment
directly, on an unguaranteed basis. NaviSite cannot assure you that it or its
customers can do so on similar financial terms.
If the growth of the market for Internet commerce and communication does
not continue, there may be insufficient demand for NaviSite's services, and as
a result, NaviSite's business strategy may not be successful. The increased
use of the Internet for retrieving, sharing and transferring information among
businesses and consumers has developed only recently, and the market for the
purchase of products and services over the Internet is new and emerging. If
acceptance and growth of the Internet as a medium for commerce and
communication does not continue, NaviSite's business strategy may not be
successful because there may not be a continuing market demand for its Web
site and Internet application hosting and management services. In addition, in
order for the market for NaviSite's services to grow, consumers who have
historically purchased and communicated through traditional means must elect
to purchase products and services and conduct their communication online.
These transitions must continue to ensure a growing market for NaviSite's Web
site and Internet application hosting and management services.
NaviSite's growth could be substantially limited if the market for Internet
application services fails to develop or if NaviSite cannot achieve broad
market acceptance. The market for Internet application services has only
developed recently and is evolving rapidly. There is significant uncertainty
as to whether the Internet application service market will ultimately prove to
be viable or, if it becomes viable, that it will continue to grow.
Historically, businesses have been reluctant to outsource the hosting and
management of sophisticated applications and have considered third-party
service vendors to be unequipped to manage Internet applications critical to
their businesses. If the market for outsourced system and network management
of Web sites and Internet applications fails to develop, or develops more
slowly than we expect, or if our Web site and Internet application hosting and
management services do not achieve broad market acceptance, our growth could
be substantially limited.
NaviSite's ability to successfully market its services could be
substantially impaired if it is unable to deploy new Internet applications or
if new Internet applications deployed by it prove to be unreliable, defective
or incompatible. We cannot assure you that we will not experience difficulties
that could delay or prevent the successful development, introduction or
marketing of Internet application services in the future. If any newly
introduced Internet applications suffer from reliability, quality or
compatibility problems, market acceptance of NaviSite's services could be
greatly hindered and NaviSite's ability to attract new customers could be
adversely affected. We cannot assure you that new applications deployed by us
will be free from any reliability, quality or compatibility problems. If we
incur increased costs or are unable, for technical or other reasons, to host
and manage new Internet applications or enhancements of existing applications,
our ability to successfully market our services could be substantially
impaired.
The market NaviSite serves is highly competitive, and as an early stage
company, NaviSite may lack the financial and other resources, expertise or
capability needed to capture increased market share. NaviSite competes in the
Internet application service market. This market is rapidly evolving, highly
competitive and likely
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to be characterized by an increasing number of market entrants and by industry
consolidation. NaviSite believes that participants in this market must grow
rapidly and achieve a significant presence to compete effectively. As an early
stage company, NaviSite's business is not as developed as that of many of our
competitors. For example, NaviSite's facilities currently have limited growth
capacity and we have a significantly smaller number of customers than many of
the companies that compete in our market. We estimate that the growth capacity
of our facilities may be sufficient only for the next two years. Insufficient
growth capacity in our facilities could impair our ability to achieve rapid
growth through an increase in our customer base.
Moreover, many of our competitors have substantially greater financial,
technical and marketing resources, greater name recognition and more
established relationships in the industry than we have. We may lack the
financial and other resources, expertise or capability needed to capture
increased market share in this environment in the future.
Any interruptions in, or degradation of, NaviSite's private transit
Internet connections could result in the loss of customers or hinder
NaviSite's ability to attract new customers. Our customers rely on our ability
to move their digital content as efficiently as possible to the people
accessing their Web sites and Internet applications. We utilize our direct
private transit Internet connections to major backbone providers as a means of
avoiding congestion and resulting performance degradation at public Internet
exchange points. We rely on these telecommunications network suppliers to
maintain the operational integrity of their backbones so that our private
transit Internet connections operate effectively.
Increased costs associated with NaviSite's private transit Internet
connections could result in the loss of customers or significant increases in
operating costs. NaviSite's private transit Internet connections are already
more costly than alternative arrangements commonly utilized to move Internet
traffic. If providers increase the pricing associated with utilizing their
bandwidth, NaviSite may be required to identify alternative methods to
distribute its customers' digital content. We cannot assure you that our
customers will continue to be willing to pay the higher costs associated with
direct private transit or that we could effectively move to another network
approach. If NaviSite is unable to access alternative networks to distribute
its customers' digital content on a cost-effective basis or to pass any
additional costs on to its customers, NaviSite's operating costs would
increase significantly.
If NaviSite is unable to maintain existing and develop additional
relationships with Internet application software vendors, the sale, marketing
and provision of NaviSite's Internet application services may be unsuccessful.
We believe that to penetrate the market for our Web site and Internet
application hosting and management services we must maintain existing and
develop additional relationships with industry-leading Internet application
software vendors and other third parties. We license or lease our software
applications from Internet application software vendors. The loss of any of
these applications could materially impair our ability to provide services to
our customers or require us to obtain substitute software applications of
lower quality or performance standards or at greater cost. In addition,
because we generally license applications on a non-exclusive basis, our
competitors may license and utilize the same software applications. In fact,
many of the companies with which we have strategic relationships currently
have, or could enter into, similar license agreements with our competitors or
prospective competitors. We cannot assure you that software applications will
continue to be available to us from Internet application software vendors on
commercially reasonable terms. If we are unable to identify and license
software applications which meet our targeted criteria for new application
introductions, we may have to discontinue or delay introduction of services
relating to these applications.
NaviSite purchases from a limited number of suppliers key components of its
infrastructure, including networking equipment, that are available only from
limited sources in the quantities and with the quality that it demands. For
example, NaviSite purchases most of the routers and switches used in its
infrastructure from Cisco Systems Inc. and most of the intelligent Web
switching technology from ArrowPoint Communications Inc. NaviSite cannot
assure you that it will have the necessary hardware or parts on hand or
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that its suppliers will be able to provide them in a timely manner in the
event of equipment failure. NaviSite's inability or failure to obtain the
necessary hardware or parts on a timely basis could result in sustained
equipment failure and a loss of revenue due to customer loss or claims for
service credits under NaviSite's service level guarantees.
NaviSite's inability to scale its infrastructure or otherwise manage its
anticipated growth and the related expansion of its operations could result in
decreased revenue and continued operating losses. NaviSite has experienced
rapid growth in its service offerings and its customer base. As of October 31,
1998, NaviSite was a Web site hosting provider with approximately 60
customers. As of October 31, 1999, NaviSite was providing Web site and
Internet application hosting and management services to approximately 158
customers. In order to service its growing customer base, NaviSite will need
to continue to improve and expand its network infrastructure, in particular
through the construction of new data centers. The ability of NaviSite's
network to connect and manage a substantial number of customers at high
transmission speeds while maintaining superior performance is largely
unproven. If its network infrastructure is not scalable, NaviSite may not be
able to provide our services to additional customers, which would result in
decreased revenue.
In addition, between October 31, 1998 and October 31, 1999, NaviSite
increased the number of its employees from 108 to 253. This growth has placed,
and likely will continue to place, a significant strain on NaviSite's
financial, management, operational and other resources. To effectively manage
its anticipated growth, NaviSite will be required to continue to enhance its
operating and financial procedures and controls, to upgrade or replace its
operational, financial and management information systems and to attract,
train, motivate, manage and retain key employees. If NaviSite is unable to
effectively manage its rapid growth, it could experience continued operating
losses.
You may experience additional dilution because NaviSite's historical source
of funding is expected to change, and other funding may not be available to
NaviSite on favorable terms, if at all. Until the completion of our initial
public offering, CMGI funded our operations as needed, increasing our
obligations to CMGI and allowing us to maintain a zero-balance cash account.
As a result of the completion of our initial public offering, our net
obligations to CMGI, together with all convertible preferred stock held by
CMGI, was converted into common stock. We do not expect to borrow additional
funds from CMGI in the future. After the application of the net proceeds from
its initial public offering, we may need to raise additional funds. We cannot
assure you that additional financing will be available on terms favorable to
us, if at all. If adequate funds were not available or were not available on
acceptable terms, our ability to respond to competitive pressures would be
significantly limited. Moreover, if additional funds are raised through the
issuance of equity or convertible debt securities, your percentage ownership
in us will be reduced, and you may experience additional dilution.
NaviSite's network infrastructure could fail, which would impair its
ability to provide guaranteed levels of service and could result in
significant operating losses. To provide its customers with guaranteed levels
of service, NaviSite must operate its network infrastructure on a 24-hour-a-
day, seven-day-a-week basis without interruption. In order to operate in this
manner, NaviSite must protect its network infrastructure, equipment and
customer files against damage from human error, natural disasters, unexpected
equipment failure, power loss or telecommunications failures, sabotage or
other intentional acts of vandalism. Even if we take precautions, the
occurrence of a natural disaster, equipment failure or other unanticipated
problem at one or more of our data centers could result in interruptions in
the services NaviSite provides to its customers. We cannot assure you that our
disaster recovery plan will address all, or even most, of the problems we may
encounter in the event of such a disaster.
We have experienced service interruptions in the past, and any future
service interruptions could: require us to spend substantial amounts of money
to replace equipment or facilities; entitle customers to claim service credits
under our service level guarantees; cause customers to seek damages for losses
incurred; or make it more difficult for us to attract new customers or enter
into additional strategic relationships. Any of these occurrences could result
in significant operating losses.
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The misappropriation of NaviSite's proprietary rights could result in the
loss of its competitive advantage in the market. NaviSite relies on a
combination of trademark, service mark, copyright and trade secret laws and
contractual restrictions to establish and protect its proprietary rights.
NaviSite does not own any patents that would prevent or inhibit competitors
from using its technology or entering its market. We cannot assure you that
the contractual arrangements or other steps taken by us to protect our
proprietary rights will prove sufficient to prevent misappropriation of our
proprietary rights or to deter independent, third-party development of similar
proprietary assets. In addition, NaviSite provides its services in other
countries where the laws may not afford adequate protection for its
proprietary rights.
Third-party infringement claims against NaviSite's technology suppliers,
customers or NaviSite could result in disruptions in service, the loss of
customers or costly and time consuming litigation. NaviSite licenses or leases
most technologies used in the Internet application services that it offers.
NaviSite's technology suppliers may become subject to third-party infringement
claims which could result in their inability or unwillingness to continue to
license their technology to us. NaviSite expects that we and our customers
increasingly will be subject to third-party infringement claims as the number
of Web sites and third-party service providers for Web-based businesses grows.
In addition, NaviSite has received notices alleging that our service marks
infringe the trademark rights of third parties. We cannot assure you that
third parties will not assert claims against us in the future or that these
claims will not be successful. Any infringement claim as to our technologies
or services, regardless of its merit, could result in delays in service,
installation or upgrades, the loss of customers or costly and time-consuming
litigation, or require us to enter into royalty or licensing agreements.
The loss of key officers and personnel could impair NaviSite's ability to
successfully execute its business strategy, because NaviSite substantially
relies on their experience and management skills, or could jeopardize
NaviSite's ability to continue to provide service to our customers. NaviSite
believes that the continued service of key personnel, including Joel B. Rosen,
our Chief Executive Officer, and Robert B. Eisenberg, our founder and
President, is a key component of the future success of our business. None of
our key officers or personnel is currently a party to an employment agreement
with us. This means that any officer or employee can terminate his or her
relationship with us at any time. In addition, we do not carry life insurance
for any of our key personnel to insure our business in the event of their
death. In addition, the loss of key members of NaviSite's sales and marketing
teams or key technical service personnel could jeopardize our positive
relations with our customers. Any loss of key technical personnel would
jeopardize the stability of our infrastructure and our ability to provide the
guaranteed service levels our customers expect.
If NaviSite fails to attract and retain additional skilled personnel, its
ability to provide Web site and Internet application management and technical
support may be limited, and as a result, NaviSite may be unable to attract
customers and grow its business. NaviSite's business requires individuals with
significant levels of Internet application expertise, in particular to win
consumer confidence in outsourcing the hosting and management of mission-
critical applications. Competition for such personnel is intense, and
qualified technical personnel are likely to remain a limited resource for the
foreseeable future. Locating candidates with the appropriate qualifications,
particularly in the desired geographic location, can be costly and difficult.
NaviSite may not be able to hire the necessary personnel to implement its
business strategy, or may need to provide higher compensation to such
personnel than it currently anticipates.
Any future acquisitions NaviSite makes of companies or technologies may
result in disruptions to NaviSite's business or distractions of its management
due to difficulties in assimilating acquired personnel and operations.
NaviSite's business strategy contemplates future acquisitions of complementary
businesses or technologies. If we do pursue additional acquisitions, our risks
may increase because our ongoing business may be disrupted and management's
attention and resources may be diverted from other business concerns. In
addition, through acquisitions, we may enter into markets or market segments
in which we have limited prior experience.
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Once we complete an acquisition, we will face additional risks. These risks
include: difficulty assimilating acquired operations, technologies and
personnel; inability to retain management and other key personnel of the
acquired business; and changes in management or other key personnel that may
harm relationships with the acquired business's customers and employees.
In addition, for at least the next two years, NaviSite's acquisitions must
be accounted for using the purchase method of accounting, which could result
in unfavorable accounting for acquisitions. We cannot assure you that any
acquisitions will be successfully identified and completed or that, if one or
more acquisitions are completed, the acquired business, assets or technologies
will generate sufficient revenue to offset the associated costs or other
adverse effects.
The international market for NaviSite's services is unproven, and as a
result, the revenue generated by any current or future international
operations may not be adequate to offset the expense of establishing and
maintaining those operations. One component of NaviSite's long-term strategy
is to expand into international markets. We cannot assure you that we will be
able to market, sell and provide our services successfully outside the United
States. We could suffer significant operating losses if the revenue generated
by any current or future international data center or other operations is not
adequate to offset the expense of establishing and maintaining those
international operations.
NaviSite faces risks inherent in doing business in international markets
which could adversely affect the success of its international operations.
There are risks inherent in doing business in international markets, including
different regulatory requirements, trade barriers, challenges in staffing and
managing foreign operations, currency risk, different technology standards,
different tax structures which may adversely impact earnings, different
privacy, censorship and service provider liability standards and regulations
and foreign political and economic instability, any of which could adversely
affect the success of NaviSite's international operations.
Problems relating to the "Year 2000 issue" could disrupt NaviSite's
operations, resulting in lost revenue and increased operating costs. Because
NaviSite offers computer-related services and because of the business-critical
nature of many of its customers' applications, NaviSite's risk of lawsuits
related to Year 2000 issues is likely to be greater than that of companies in
some other industries. NaviSite's worst case scenario regarding the Year 2000
issue involves the complete or partial failure of one or more computer systems
or software products that underlie or comprise its services. A failure of this
kind could cause service interruptions or disruptions for one or more of
NaviSite's customers. This scenario could arise as a result of a failure by
NaviSite or its product or service vendors to identify or effectively address
Year 2000 problems in these systems or products. For example, Year 2000
patches provided to us by key software or hardware vendors for customer
servers or network devices could fail, causing customer outages or degraded
network performance. Alternatively, patches provided by third parties for our
desktop computers could fail, impeding network access or compromising network
performance.
NaviSite confronts the Year 2000 problem in several contexts:
NaviSite's Facilities and Services. Because our network infrastructure
incorporates components from multiple hardware and software providers, we may
be unable to determine whether any of these components will cause unexpected
Year 2000 problems or whether different components will interact in a way that
causes malfunctions. In most cases, NaviSite does not independently verify
through testing the Year 2000 compliance of vendors' products, and NaviSite
cannot offer any assurance that vendors' guarantees, if and when provided, are
true or sufficient or that NaviSite will not encounter Year 2000 compliance
problems associated with those products. While we believe that our network
infrastructure and all other material components of our facilities are Year
2000 compliant, we cannot assure you that we will not discover any compliance
problems in the future. Our failure to adequately address Year 2000 compliance
issues in our network infrastructure could result in claims of mismanagement,
misrepresentation or breach of contract and related litigation, which could be
costly and time-consuming for us to defend.
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NaviSite's Customers. NaviSite also faces risks from customer-provided
hardware or software that NaviSite hosts in its data centers. The failure of
our customers and third-party providers to ensure that this hardware and
software is Year 2000 compliant could result in unforeseen problems within our
network infrastructure, which could result in lost revenue and increased
operating costs. In addition, we cannot give any assurances that our customers
will upgrade their internal networks which interface with our network
infrastructure or will otherwise provide appropriate remediation for Year 2000
compliance.
NaviSite's Suppliers. We cannot assure you that we will be able to provide
our services and maintain our operations if we are unable to obtain products,
services or systems that are Year 2000 compliant when we need them. In
addition, if vendors and service providers cannot deliver their products
because of their own Year 2000 compliance problems, we could experience
increased operating costs and lost revenue.
Information on our state of readiness, costs and contingency plans
regarding the Year 2000 issue is included in this Form 10-Q under the heading
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Year 2000 Considerations."
The emergence and growth of a market for NaviSite's Internet application
services will be impaired if third parties do not continue to develop and
improve the Internet infrastructure. The recent growth in the use of the
Internet has caused frequent periods of performance degradation, requiring the
upgrade of routers and switches, telecommunications links and other components
forming the infrastructure of the Internet by Internet service providers and
other organizations with links to the Internet. Any perceived degradation in
the performance of the Internet as a means to transact business and
communicate could undermine the benefits and market acceptance of our Web site
and Internet application hosting and management services. NaviSite's services
are ultimately limited by, and dependent upon, the speed and reliability of
hardware, communications services and networks operated by third parties.
Consequently, the emergence and growth of the market for NaviSite's Internet
application services will be impaired if improvements are not made to the
entire Internet infrastructure to alleviate overloading and congestion.
NaviSite could be subject to increased operating costs, as well as claims,
litigation or other potential liability, in connection with risks associated
with Internet security and the security of our systems. A significant barrier
to the growth of e-commerce and communications over the Internet has been the
need for secure transmission of confidential information. Several of
NaviSite's Internet application services utilize encryption and authentication
technology licensed from third parties to provide the protections necessary to
effect secure transmission of confidential information. NaviSite also relies
on security systems designed by third parties and the personnel in its network
operations centers to secure those data centers. Any unauthorized access,
computer viruses, accidental or intentional actions and other disruptions
could result in increased operating costs. For example, we may incur
significant costs to protect against these interruptions and the threat of
security breaches or to alleviate problems caused by such interruptions or
breaches, and we expect to expend significant financial resources in the
future to equip our new and existing data centers with state-of-the-art
security measures. If a third party were able to misappropriate a consumer's
personal or proprietary information, including credit card information, during
the use of an application solution provided by us, we could be subject to
claims, litigation or other potential liability.
NaviSite may become subject to burdensome government regulation and legal
uncertainties that could substantially impair the growth of its business or
expose it to unanticipated liabilities. It is likely that laws and regulations
directly applicable to the Internet or to Internet application service
providers may be adopted. These laws may cover a variety of issues, including
user privacy and the pricing, characteristics and quality of products and
services. The adoption or modification of laws or regulations relating to
commerce over the Internet could substantially impair the growth of NaviSite's
business or expose NaviSite to unanticipated liabilities. Moreover, the
applicability of existing laws to the Internet and Internet application
service providers is uncertain. These existing laws could expose NaviSite to
substantial liability if they are found to be applicable to its business. For
example, NaviSite provides services over the Internet in many states in the
United States and in the United Kingdom and facilitates the activities of its
customers in these jurisdictions. As a result, NaviSite
20
<PAGE>
may be required to qualify to do business, be subject to taxation or be
subject to other laws and regulations in these jurisdictions, even if it do
not have a physical presence, employees or property there.
NaviSite may be subject to legal claims in connection with the information
disseminated through its network which could have the effect of diverting
management's attention and require NaviSite to expend significant financial
resources. NaviSite may face potential direct and indirect liability for
claims of defamation, negligence, copyright, patent or trademark infringement,
violation of securities laws and other claims based on the nature and content
of the materials disseminated through its network. For example, lawsuits may
be brought against NaviSite claiming that content distributed by some of its
current or future customers may be regulated or banned. In these and other
instances, NaviSite may be required to engage in protracted and expensive
litigation which could have the effect of diverting management's attention and
require us to expend significant financial resources. NaviSite's general
liability insurance may not necessarily cover any of these claims or may not
be adequate to protect us against all liability that may be imposed.
In addition, on a limited number of occasions in the past, businesses,
organizations and individuals have sent unsolicited commercial e-mails from
servers hosted at NaviSite's facilities to massive numbers of people,
typically to advertise products or services. This practice, known as
"spamming," can lead to complaints against service providers that enable such
activities, particularly where recipients view the materials received as
offensive. NaviSite has in the past received, and may in the future receive,
letters from recipients of information transmitted by its customers objecting
to such transmission. Although we prohibit our customers by contract from
spamming, we cannot assure you that our customers will not engage in this
practice, which could subject us to claims for damages.
The market price of NaviSite's common stock may experience extreme price
and volume fluctuations. The market price of NaviSite's common stock may
fluctuate substantially due to a variety of factors, including: any actual or
anticipated fluctuations in NaviSite's financial condition and operating
results; public announcements concerning NaviSite or its competitors, or the
Internet industry; the introduction or market acceptance of new service
offerings by NaviSite or its competitors; changes in industry research
analysts' earnings estimates; changes in accounting principles; sales of
NaviSite's common stock by existing stockholders; and the loss of any of
NaviSite's key personnel.
In addition, the stock market has experienced extreme price and volume
fluctuations. The market prices of the securities of technology and Internet-
related companies have been especially volatile. This volatility often has
been unrelated to the operating performance of particular companies. In the
past, securities class action litigation often has been brought against
companies that experience volatility in the market price of their securities.
Whether or not meritorious, litigation brought against NaviSite could result
in substantial costs and a diversion of management's attention and resources.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
We are exposed to market risk related to changes in interest rates. We
invest excess cash balances in cash equivalents. We believe that the effect,
if any, of reasonably possible near-term changes in interest rates on our
financial position, results of operations and cash flows will not be material.
21
<PAGE>
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds.
(c) Since July 31, 1999, NaviSite has issued the following securities that
were not registered under the Securities Act of 1933, as amended (the
"Securities Act"):
(i) Issuance of Capital Stock
On October 25, 1999, we issued 87,548 shares of Series B convertible
preferred stock to CMGI, Inc. in exchange for the cancellation of an
aggregate of approximately $12,257,000 of intercompany debt pursuant to a
secured convertible demand note to CMGI dated May 1, 1999. Upon completion
of our initial public offering on October 27, 1999, each share of Series B
convertible preferred stock converted into ten shares of common stock, as
described below.
On October 27, 1999, in connection with the closing date of our
initial public offering, we issued 21,622,315 shares of common stock to
three stockholders of the company upon the automatic conversion of all
outstanding shares of convertible preferred stock held by such
stockholders.
From July 31, 1999 through October 21, 1999 (the date on which our
Registration Statement on Form S-1 was declared effective by the Securities
and Exchange Commission), we issued an aggregate of 32,014 shares of common
stock upon the exercise of employee stock options. The aggregate
consideration received for such shares was $13,212.68. No options were
exercised from October 21, 1999 through the end of the fiscal 2000 first
quarter (October 31, 1999). On October 28, 1999, our Form S-8 registration
statement relating to the shares issued under our employee and director
stock option plans was filed with the Securities and Exchange Commission
and became effective.
(ii) Grants of Stock Options
From July 31, 1999 through the end of the fiscal 2000 first quarter
(October 31, 1999), we have granted options to purchase an aggregate of
353,000 shares of common stock under our Amended and Restated 1998 Equity
Incentive Plan, exercisable at a weighted average exercise price of $14.00
per share.
On August 18, 1999, we granted options to purchase 25,000 shares of
common stock under our Amended and Restated 1998 Director Stock Option Plan
at an exercise price of $14.00 per share.
No underwriters were involved in the foregoing sales of securities.
These sales were made in reliance upon an exemption from the registration
provisions of the Securities Act set forth in Section 4(2) thereof relative
to sales by an issuer not involving any public offering or the rules and
regulations thereunder, or, in the case of options to purchase common stock
granted prior to October 21, 1999 and in the case of common stock purchased
pursuant to the Amended and Restated 1998 Equity Incentive Plan, Rule 701
of the Securities Act. All of the foregoing securities are deemed
restricted securities for purposes of the Securities Act.
(d) Use of Proceeds of the Initial Public Offering
On July 22, 1999, NaviSite filed a Registration Statement on Form S-1
(File No. 333-83501) to register under the Securities Act 5,500,000 shares
of its common stock, par value $.01 per share (plus an additional 825,000
shares subject to an over-allotment option granted to the underwriters).
The Registration Statement was declared effective by the Securities and
Exchange Commission on October 21, 1999.
The managing underwriters for the offering were BancBoston Robertson
Stephens Inc., Hambrecht & Quist LLC and FAC/Equities, a division of First
Albany Corporation.
The initial public offering commenced on October 22, 1999 and closed on
October 27, 1999, on which date NaviSite sold 5,500,000 shares of common
stock to the underwriters at an initial public offering price of $14.00 per
share. On November 18, 1999, the underwriters exercised in full their over-
allotment option to purchase an additional 825,000 shares of common stock
at $14.00 per share. The over-allotment closing
22
<PAGE>
was held on November 23, 1999. The aggregate proceeds of the initial public
offering (including the over-allotment option) were $88,550,000. NaviSite's
aggregate proceeds from the initial public offering (including the proceeds
received in connection with the exercise of the over-allotment option), net
of underwriting discounts and commissions, were $82,351,500.
From the effective date of the Registration Statement through the end of
the fiscal 2000 first quarter (October 31, 1999), NaviSite incurred the
following expenses in connection with the initial public offering:
<TABLE>
<S> <C>
Underwriting discounts and
commissions*................ $ 5,390,000
Other expenses (estimated)... $ 1,970,000
-----------
Total expenses*............ $ 7,360,000
-----------
Net offering proceeds to
NaviSite*................... $69,640,000
===========
</TABLE>
- --------
* These amounts do not reflect the exercise of the over-allotment option by
the underwriters on November 18, 1999.
None of the expenses incurred by NaviSite in connection with the initial
public offering were paid, directly or indirectly, to directors, officers,
persons owning ten percent or more of NaviSite's equity securities or
affiliates of NaviSite.
From the effective date of the Registration Statement through the end of
the fiscal 2000 first quarter (October 31, 1999), NaviSite has utilized
$1.4 million of the proceeds of the initial public offering for working
capital requirements. None of net proceeds of the initial public offering
were used to pay, directly or indirectly, directors, officers, persons
owning ten percent or more of NaviSite's equity securities or affiliates of
NaviSite.
Unused proceeds of the initial public offering are currently invested in
a U.S. Treasury Money Market Fund.
Item 4. Submission of Matters to a Vote of Security Holders.
On October 8, 1999, NaviSite's stockholders, acting by unanimous written
consent, approved the form, terms and provisions of the following documents in
connection with NaviSite's initial public offering: (i) the Amended and
Restated Certificate of Incorporation, which was filed immediately prior to
the closing of the Offering; (ii) two amendments to the 1998 Equity Incentive
Plan increasing the number of shares of Common Stock which could be issued
upon the exercise of awards granted under the 1998 Equity Incentive Plan;
(iii) the Amended and Restated 1998 Equity Incentive Plan, which was effective
as of October 8, 1999; (iv) the Amended and Restated 1998 Director Stock
Option Plan, which was effective as of October 8, 1999; (v) the 1999 Stock
Option Plan for Non-Employee Directors, which was effective as of October 8,
1999; and (vi) the 1999 Employee Stock Purchase Plan, which was effective upon
the closing of the initial public offering on October 27, 1999. The written
consent was given by holders of 20,767,048 of Common Stock, on an as-converted
basis, representing all of NaviSite's outstanding capital stock as of October
8, 1999.
23
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------- -------
<C> <S>
3.1 Amended and Restated Certificate of Incorporation
3.2 Amended and Restated By-Laws
4.1* Specimen certificate representing shares of common stock
4.2* Series C Convertible Preferred Stock Purchase Agreement dated as
of June 3, 1999 by and between NaviSite, Inc. and Dell USA L.P.
4.3* Series D Convertible Preferred Stock Purchase Agreement dated as
of June 3, 1999 by and between NaviSite, Inc. and Microsoft
Corporation
4.4 Investor Rights Agreement dated as of October 27, 1999 by and
among NaviSite, Inc. and CMGI, Inc.
10.1+ Amended and Restated 1998 Equity Incentive Plan
10.2+ Amended and Restated 1998 Director Stock Option Plan
10.3+ 1999 Employee Stock Purchase Plan
10.4+ 1999 Stock Option Plan for Non-Employee Directors
10.5+ Deferred Compensation Plan
10.6 Form of Director Indemnification Agreement, as executed by
Directors
10.7 Facilities and Administrative Support Agreement dated as of
October 27, 1999 between NaviSite, Inc. and CMGI, Inc.
10.8 Tax Allocation Agreement dated as of October 27, 1999 between
NaviSite, Inc. and CMGI, Inc.
10.9 Standard Form of Agreements dated as of June 14, 1999 between
NaviSite, Inc., as Owner, and XL Construction, as Design/Builder,
for NaviSite, Inc. Zanker Road Data Center, San Jose, California
10.10 Cost Plus Fee Standard Form of Agreement dated as of April 12,
1999 between NaviSite, Inc., as Tenant, and Gilbane Building
Company, as Construction Manager
27 Financial Data Schedule
</TABLE>
- --------
+ Indicates a management contract or any compensatory plan, contract or
arrangement.
* Incorporated by reference to NaviSite's Registration Statement on Form S-1
(File No. 333-83501) originally filed with the Securities and Exchange
Commission on July 22, 1999 and declared effective on October 21, 1999.
(b) Reports Submitted on Form 8-K
The Registrant did not file any reports on Form 8-K during the quarter
ended October 31, 1999.
24
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
NAVISITE, INC.
Date: December 15, 1999
By /s/ Kenneth W. Hale
-----------------------------------
Kenneth W. Hale
Chief Financial Officer (Principal
Financial and Accounting
Officer)
25
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------- -------
<C> <S>
3.1 Amended and Restated Certificate of Incorporation
3.2 Amended and Restated By-Laws
4.1* Specimen certificate representing shares of common stock
4.2* Series C Convertible Preferred Stock Purchase Agreement dated as of
June 3, 1999 by and between NaviSite, Inc. and Dell USA L.P.
4.3* Series D Convertible Preferred Stock Purchase Agreement dated as of
June 3, 1999 by and between NaviSite, Inc. and Microsoft Corporation
4.4 Investor Rights Agreement dated as of October 27, 1999 by and among
NaviSite, Inc. and CMGI, Inc.
10.1+ Amended and Restated 1998 Equity Incentive Plan
10.2+ Amended and Restated 1998 Director Stock Option Plan
10.3+ 1999 Employee Stock Purchase Plan
10.4+ 1999 Stock Option Plan for Non-Employee Directors
10.5+ Deferred Compensation Plan
10.6 Form of Director Indemnification Agreement, as executed by Directors
10.7 Facilities and Administrative Support Agreement dated as of October
27, 1999 between NaviSite, Inc. and CMGI, Inc.
10.8 Tax Allocation Agreement dated as of October 27, 1999 between
NaviSite, Inc. and CMGI, Inc.
10.9 Standard Form of Agreements dated as of June 14, 1999 between
NaviSite, Inc., as Owner, and XL Construction, as Design/Builder, for
NaviSite, Inc. Zanker Road Data Center, San Jose, California
10.10 Cost Plus Fee Standard Form of Agreement dated as of April 12, 1999
between NaviSite, Inc., as Tenant, and Gilbane Building Company, as
Construction Manager
27 Financial Data Schedule
</TABLE>
- --------
+ Indicates a management contract or any compensatory plan, contract or
arrangement.
* Incorporated by reference to NaviSite's Registration Statement on Form S-1
(File No. 333-83501) originally filed with the Securities and Exchange
Commission on July 22, 1999 and declared effective on October 21, 1999.
26
<PAGE>
EXHIBIT 3.1
-----------
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
NAVISITE, INC.
NaviSite, Inc. (the "Corporation"), a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware (the
"DGCL"), does hereby certify as follows:
1. The Corporation filed its original Certificate of Incorporation with
the Secretary of the State of Delaware on December 28, 1998.
2. Pursuant to an Action By Written Consent of the Board of Directors of
the Corporation dated as of October 8, 1999, a resolution was duly adopted,
pursuant to Sections 141(f), 242 and 245 of the DGCL, setting forth an Amended
and Restated Certificate of Incorporation of the Corporation and declaring said
Amended and Restated Certificate of Incorporation advisable. The stockholders of
the Corporation duly approved said proposed Amended and Restated Certificate of
Incorporation by written consent in accordance with Sections 228, 242 and 245
of the DGCL. The resolution setting forth the Amended and Restated Certificate
of Incorporation is as follows:
RESOLVED: That the Certificate of Incorporation of the Corporation, be and
--------
hereby is amended and restated in its entirety so that the same shall read as
follows:
FIRST. The name of the Corporation is:
NaviSite, Inc.
SECOND. The address of the Corporation's registered office in the State
of Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of its registered agent at such address is The Corporation
Trust Company.
<PAGE>
THIRD. The nature of the business or purposes to be conducted or
promoted by the Corporation is as follows:
To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 155,000,000 shares, consisting of
(i) 150,000,000 shares of Common Stock, par value $.01 per share ("Common
Stock"), and (ii) 5,000,000 shares of Preferred Stock, par value $.01 per share
("Preferred Stock").
The following is a statement of the designations and the powers, privileges
and rights, and the qualifications, limitations or restrictions thereof, in
respect of each class of capital stock of the Corporation.
A. COMMON STOCK.
------------
1. General. The voting, dividend and liquidation rights of the holders
-------
of the Common Stock are subject to and qualified by the rights of the holders of
the Preferred Stock of any series as may be designated by the Board of Directors
upon any issuance of the Preferred Stock of any series.
2. Voting. The holders of the Common Stock shall have voting rights at
------
all meetings of stockholders, each such holder being entitled to one vote for
each share thereof held by such holder. There shall be no cumulative voting.
The number of authorized shares of Common Stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of the stock of the Corporation
entitled to vote, irrespective of the provisions of Section 242(b)(2) of the
DGCL.
3. Dividends. Dividends may be declared and paid on the Common Stock
---------
from funds lawfully available therefor as and when determined by the Board of
Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.
4. Liquidation. Upon the dissolution or liquidation of the Corporation,
-----------
whether voluntary or involuntary, holders of Common Stock will be entitled to
2
<PAGE>
receive all assets of the Corporation available for distribution to its
stockholders, subject to any preferential rights of any then outstanding
Preferred Stock.
B. PREFERRED STOCK.
---------------
Preferred Stock may be issued from time to time in one or more series, each
of such series to have such terms as stated or expressed herein and in the
resolution or resolutions providing for the issue of such series adopted by the
Board of Directors of the Corporation as hereinafter provided. Any shares of
Preferred Stock which may be redeemed, purchased or acquired by the Corporation
may be reissued except as otherwise provided by law. Different series of
Preferred Stock shall not be construed to constitute different classes of
shares for the purposes of voting by classes unless expressly provided.
Authority is hereby expressly granted to the Board of Directors from time
to time to issue the Preferred Stock in one or more series, and in connection
with the creation of any such series, by resolution or resolutions providing for
the issuance of the shares thereof, to determine and fix such voting powers,
full or limited, or no voting powers, and such designations, preferences and
relative participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, including without limitation thereof,
dividend rights, conversion rights, redemption privileges and liquidation
preferences, as shall be stated and expressed in such resolutions, all to the
full extent now or hereafter permitted by the DGCL. Without limiting the
generality of the foregoing, the resolutions providing for issuance of any
series of Preferred Stock may provide that such series shall be superior or rank
equally or be junior to the Preferred Stock of any other series to the extent
permitted by law. Except as otherwise provided in this Certificate of
Incorporation, no vote of the holders of the Preferred Stock or Common Stock
shall be a prerequisite to the designation or issuance of any shares of any
series of the Preferred Stock authorized by and complying with the conditions of
this Amended and Restated Certificate of Incorporation, the right to have such
vote being expressly waived by all present and future holders of the capital
stock of the Corporation.
FIFTH. The Corporation shall have a perpetual existence.
SIXTH. Election of directors need not be by written ballot, except as and
to the extent provided in the By-Laws of the Corporation.
3
<PAGE>
SEVENTH. Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of the DGCL or on the application of trustees in
dissolution or of any receiver or receivers appointed for the Corporation under
the provisions of Section 279 of the DGCL order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of the Corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of the Corporation, as the case
may be, and also on the Corporation.
EIGHTH. Except to the extent that the DGCL prohibits the elimination or
limitation of liability of directors for breaches of fiduciary duty, no director
of the Corporation shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty as a
director, notwithstanding any provision of law imposing such liability. No
amendment to or repeal of this provision shall apply to or have any effect on
the liability or alleged liability of any director of the Corporation for or
with respect to any acts or omissions of such director occurring prior to such
amendment or repeal.
NINTH. a. Actions, Suits and Proceedings Other than by or in the Right of
---------------------------------------------------------------
the Corporation. The Corporation shall indemnify each person who was or is a
- ---------------
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Corporation), by
reason of the fact that such person is or was, or has agreed to become, a
director or officer of the Corporation, or is or was serving, or has agreed to
serve, at the request of the Corporation, as a director, officer, partner,
employee or trustee of, or in a similar capacity with, another corporation,
partnership, joint venture, trust or other enterprise (including any employee
benefit plan), or by reason of any action alleged to have been taken or omitted
in
4
<PAGE>
such capacity against all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person or on such person's behalf in connection with such action, suit or
proceeding and any appeal therefrom, if such person acted in good faith and in a
manner such person reasonably believed to be in, or not opposed to, the best
interests of the Corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe such person's conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent,
---------------
shall not, of itself, create a presumption that such person did not act in good
faith and in a manner which such person reasonably believed to be in, or not
opposed to, the best interests of the Corporation and, with respect to any
criminal action or proceeding, had reasonable cause to believe that such
person's conduct was unlawful.
b. Actions or Suits by or in the Right of the Corporation. The
------------------------------------------------------
Corporation shall indemnify each person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the Corporation to procure a judgment in its favor by reason of
the fact that such person is or was, or has agreed to become, a director or
officer of the Corporation, or is or was serving, or has agreed to serve, at the
request of the Corporation, as a director, officer, partner, employee or trustee
of, or in a similar capacity with, another corporation, partnership, joint
venture, trust or other enterprise (including any employee benefit plan), or by
reason of any action alleged to have been taken or omitted in such capacity,
against all expenses (including attorneys' fees) and, to the extent permitted by
law, amounts paid in settlement actually and reasonably incurred by such person
or on the such person's behalf in connection with such action, suit or
proceeding and any appeal therefrom, if such person acted in good faith and in a
manner such person reasonably believed to be in, or not opposed to, the best
interests of the Corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the Corporation unless and only to the extent that the
Court of Chancery of Delaware shall determine upon application that, despite the
adjudication of such liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
(including attorneys' fees) which the Court of Chancery of Delaware shall deem
proper. Each person seeking indemnification pursuant to Paragraphs a. and b. of
this Article Ninth shall hereafter be referred to as an "Indemnitee."
5
<PAGE>
c. Indemnification for Expenses of Successful Party. Notwithstanding the
------------------------------------------------
other provisions of this Article Ninth, to the extent that an Indemnitee has
been successful, on the merits or otherwise, in defense of any action, suit or
proceeding referred to in Paragraphs a. and b. of this Article Ninth, or in
defense of any claim, issue or matter therein, or on appeal from any such
action, suit or proceeding, the Indemnitee shall be indemnified against all
expenses (including attorneys' fees) actually and reasonably incurred by the
Indemnitee or on the Indemnitee's behalf in connection therewith. Without
limiting the foregoing, if any action, suit or proceeding is disposed of, on the
merits or otherwise (including a disposition without prejudice), without (i) the
disposition being adverse to the Indemnitee, (ii) an adjudication that the
Indemnitee was liable to the Corporation, (iii) a plea of guilty or nolo
----
contendere by the Indemnitee, (iv) an adjudication that the Indemnitee did not
- ----------
act in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Corporation and (v) with respect to any criminal
proceeding, an adjudication that the Indemnitee had reasonable cause to believe
his conduct was unlawful, the Indemnitee shall be considered for the purposes
hereof to have been wholly successful with respect thereto.
d. Notification and Defense of Claim. As a condition precedent to an
---------------------------------
Indemnitee's right to be indemnified, the Indemnitee must notify the Corporation
in writing as soon as practicable of any action, suit, proceeding or
investigation involving the Indemnitee for which indemnity will or could be
sought. With respect to any action, suit, proceeding or investigation of which
the Corporation is so notified, the Corporation will be entitled to participate
therein at its own expense and/or to assume the defense thereof at its own
expense, with legal counsel reasonably acceptable to the Indemnitee. After
notice from the Corporation to the Indemnitee of its election so to assume such
defense, the Corporation shall not be liable to the Indemnitee for any legal or
other expenses subsequently incurred by the Indemnitee in connection with such
action, suit, proceeding or investigation, other than as provided below in this
Paragraph d. The Indemnitee shall have the right to employ the Indemnitee's own
counsel in connection with such action, suit, proceeding or investigation, but
the fees and expenses of such counsel incurred after notice from the Corporation
of its assumption of the defense thereof shall be at the expense of the
Indemnitee unless (i) the employment of counsel by the Indemnitee has been
authorized by the Corporation, (ii) counsel to the Indemnitee shall have
reasonably concluded that there may be a conflict of interest or position on any
significant issue between the Corporation and the Indemnitee in the conduct of
the defense of such action, suit, proceeding or investigation or (iii) the
Corporation shall not in fact have employed counsel to assume the defense of
such action, suit, proceeding or investigation, in each of which cases the fees
and expenses of counsel for the Indemnitee shall be at the expense of the
Corporation, except as otherwise expressly provided by this Article Ninth. The
Corporation shall not be entitled, without the consent of the Indemnitee, to
assume the defense of any claim brought by or in the right of the Corporation or
as to which counsel for the Indemnitee shall have reasonably made the conclusion
provided for in clause (ii) above. The Corporation shall not be required to
indemnify the Indemnitee under this Article Ninth for any amounts paid in
settlement of any action, suit, proceeding or investigation effected without its
written consent. The Corporation shall not settle any action, suit, proceeding
or
6
<PAGE>
investigation in any manner which would impose any penalty or limitation on
the Indemnitee without the Indemnitee's written consent. Neither the Corporation
nor the Indemnitee will unreasonably withhold its consent to any proposed
settlement.
e. Advance of Expenses. Subject to the provisions of Paragraph f. below,
-------------------
in the event that the Corporation does not assume the defense pursuant to
Paragraph d. of this Article Ninth of any action, suit, proceeding or
investigation of which the Corporation receives notice under this Article Ninth,
any expenses (including attorneys' fees) incurred by an Indemnitee in defending
a civil or criminal action, suit, proceeding or investigation or any appeal
therefrom shall be paid by the Corporation in advance of the final disposition
of such matter; provided, however, that the payment of such expenses incurred by
-------- -------
the Indemnitee in advance of the final disposition of such matter shall be made
only upon receipt of an undertaking by or on behalf of the Indemnitee to repay
all amounts so advanced in the event that it shall ultimately be determined that
the Indemnitee is not entitled to be indemnified by the Corporation as
authorized in this Article Ninth; and further provided that no such advancement
------- --------
of expenses shall be made if it is determined that (i) the Indemnitee did not
act in good faith and in a manner the Indemnitee reasonably believed to be in,
or not opposed to, the best interests of the Corporation or (ii) with respect to
any criminal action or proceeding, the Indemnitee had reasonable cause to
believe the Indemnitee's conduct was unlawful. Such undertaking shall be
accepted without reference to the financial ability of the Indemnitee to make
such repayment.
f. Procedure for Indemnification. In order to obtain indemnification or
-----------------------------
advancement of expenses pursuant to Paragraph a., b., c. or e. of this Article
Ninth, the Indemnitee shall submit to the Corporation a written request,
including in such request such documentation and information as is reasonably
available to the Indemnitee and is reasonably necessary to determine whether and
to what extent the Indemnitee is entitled to indemnification or advancement of
expenses. Any such indemnification or advancement of expenses, unless ordered
by a court, shall be made, with respect to requests under Paragraph a., b. or
e., only as authorized in the specific case upon a determination by the
Corporation that the indemnification of the Indemnitee is proper because the
Indemnitee has met the applicable standard of conduct set forth in Paragraph a.,
b. or e., as the case may be. Such determination shall be made in each instance
(i) by a majority vote of the directors of the Corporation consisting of persons
who are not at that time parties to the action, suit or proceeding in question
("Disinterested Directors"), whether or not a quorum, (ii) by a majority vote of
a committee of Disinterested Directors designated by majority vote of
Disinterested Directors, whether or not a quorum, (iii) if there are no
Disinterested
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<PAGE>
Directors, or if Disinterested Directors so direct, by independent legal counsel
(who may, to the extent permitted by law, be regular legal counsel to the
Corporation) in a written opinion or (iv) by the stockholders of the
Corporation.
g. Remedies. The right to indemnification or advances as granted by this
--------
Article Ninth shall be enforceable by the Indemnitee in any court of competent
jurisdiction. Neither the failure of the Corporation to have made a
determination prior to the commencement of such action that indemnification is
proper in the circumstances because the Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Corporation pursuant to
Paragraph f. above that the Indemnitee has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
Indemnitee has not met the applicable standard of conduct. The Indemnitee's
expenses (including attorneys' fees) incurred in connection with successfully
establishing the Indemnitee's right to indemnification, in whole or in part, in
any such proceeding also shall be indemnified by the Corporation.
h. Limitations. Notwithstanding anything to the contrary in this
-----------
Article Ninth, except as set forth in Paragraph g. above, the Corporation shall
not indemnify an Indemnitee in connection with a proceeding (or part thereof)
initiated by the Indemnitee unless the initiation thereof was approved by the
Board of Directors of the Corporation. Notwithstanding anything to the contrary
in this Article Ninth, the Corporation shall not indemnify an Indemnitee to the
extent the Indemnitee is reimbursed from the proceeds of insurance, and in the
event the Corporation makes any indemnification payments to an Indemnitee and
the Indemnitee is subsequently reimbursed from the proceeds of insurance, the
Indemnitee shall promptly refund such indemnification payments to the
Corporation to the extent of such insurance reimbursement.
i. Subsequent Amendment. No amendment, termination or repeal of this
--------------------
Article Ninth or of the relevant provisions of the DGCL or any other applicable
laws shall affect or diminish in any way the rights of any Indemnitee to
indemnification under the provisions hereof with respect to any action, suit,
proceeding or investigation arising out of or relating to any actions,
transactions or facts occurring prior to the final adoption of such amendment,
termination or repeal.
j. Other Rights. The indemnification and advancement of expenses
------------
provided by this Article Ninth shall not be deemed exclusive of any other rights
to which an Indemnitee seeking indemnification or advancement of expenses may be
8
<PAGE>
entitled under any law (common or statutory), agreement or vote of stockholders
or Disinterested Directors or otherwise, both as to action in the Indemnitee's
official capacity and as to action in any other capacity while holding office
for the Corporation, and shall continue as to an Indemnitee who has ceased to
be a director or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of the Indemnitee. Nothing contained in this
Article Ninth shall be deemed to prohibit, and the Corporation is specifically
authorized to enter into, agreements with officers and directors providing
indemnification rights and procedures different from those set forth in this
Article Ninth. In addition, the Corporation may, to the extent authorized from
time to time by the Board of Directors, grant indemnification rights to other
employees or agents of the Corporation or other persons serving the Corporation
and such rights may be equivalent to, or greater or less than, those set forth
in this Article Ninth.
k. Partial Indemnification. If an Indemnitee is entitled under any
-----------------------
provision of this Article Ninth to indemnification by the Corporation for some
or a portion of the expenses (including attorneys' fees), judgments, fines or
amounts paid in settlement actually and reasonably incurred by the Indemnitee or
on the Indemnitee's behalf in connection with any action, suit, proceeding or
investigation and any appeal therefrom but not, however, for the total amount
thereof, the Corporation shall nevertheless indemnify the Indemnitee for the
portion of such expenses (including attorneys' fees), judgments, fines or
amounts paid in settlement to which the Indemnitee is entitled.
l. Insurance. The Corporation may purchase and maintain insurance, at
---------
its expense, to protect itself and any director, officer, employee or agent of
the Corporation or another corporation, partnership, joint venture, trust or
other enterprise (including any employee benefit plan) against any expense,
liability or loss incurred by such person in any such capacity, or arising out
of his or her status as such, whether or not the Corporation would have the
power to indemnify such person against such expense, liability or loss under the
DGCL.
m. Savings Clause. If this Article Ninth or any portion hereof shall be
--------------
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with any action, suit, proceeding or investigation, whether civil,
criminal or administrative, including an action by or in the right of the
Corporation, to the fullest extent
9
<PAGE>
permitted by any applicable portion of this Article Ninth that shall not have
been invalidated and to the fullest extent permitted by applicable law.
n. Definitions. Terms used herein and defined in Section 145(h) and
-----------
Section 145(i) of the DGCL shall have the respective meanings assigned to such
terms in such Section 145(h) and Section 145(i).
TENTH. Except as otherwise provided herein, the Corporation reserves the
right to amend, alter, change or repeal any provision contained in this Amended
and Restated Certificate of Incorporation, in the manner now or hereafter
prescribed by statute and this Amended and Restated Certificate of
Incorporation, and all rights conferred upon stockholders herein are granted
subject to this reservation.
ELEVENTH: Special meetings of stockholders may be called at any time by
only the Chairman of the Board of Directors, the Chief Executive Officer, the
President, the Board of Directors or the holders of at least 40% of the votes
which all stockholders would be entitled to cast in any annual election of
directors. Business transacted at any special meeting of stockholders shall be
limited to matters relating to the purpose or purposes stated in the notice of
meeting.
TWELFTH: In furtherance and not in limitation of the powers conferred upon
it by the laws of the State of Delaware, the Board of Directors shall have the
power to adopt, amend, alter or repeal the Corporation's By-Laws. The
affirmative vote of a majority of the directors present at any regular or
special meeting of the Board of Directors at which a quorum is present shall be
required to adopt, amend, alter or repeal the Corporation's By-Laws. The
Corporation's By-Laws also may be adopted, amended, altered or repealed by the
affirmative vote of the holders of at least a majority of the votes which all of
the stockholders would be entitled to cast in any annual election of directors.
THIRTEENTH: The Corporation hereby elects not to be governed by Section
203 of the DGCL.
10
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Amended and Restated Certificate of Incorporation to be
signed by its Chief Executive Officer this 27th day of October, 1999.
NAVISITE, INC.
By: /s/ Joel B. Rosen
-------------------------------
Joel B. Rosen
Chief Executive Officer
11
<PAGE>
EXHIBIT 3.2
-----------
AMENDED AND RESTATED BY-LAWS
OF
NAVISITE, INC.
ARTICLE I. - Stockholders
-------------------------
1.1 Place of Meetings. All meetings of stockholders shall be held at such
-----------------
place within or without the State of Delaware as may be designated from time to
time by the Board of Directors, the Chairman of the Board, the Chief Executive
Officer or the President or, if not so designated, at the registered office of
the corporation.
1.2 Annual Meeting. The annual meeting of stockholders for the election
--------------
of directors and for the transaction of such other business as may properly be
brought before the meeting shall be held on a date to be fixed by the Board of
Directors, the Chairman of the Board, the Chief Executive Officer or the
President (which date shall not be a legal holiday in the place where the
meeting is to be held) at the time and place to be fixed by the Board of
Directors, the Chairman of the Board, the Chief Executive Officer or the
President and stated in the notice of the meeting. If no annual meeting is held
in accordance with the foregoing provisions, the Board of Directors shall cause
the meeting to be held as soon thereafter as is convenient. If no annual
meeting is held in accordance with the foregoing provisions, a special meeting
may be held in lieu of the annual meeting, and any action taken at that special
meeting shall have the same effect as if it had been taken at the annual
meeting, and in such case all references in these By-Laws to the annual meeting
of the stockholders shall be deemed to refer to such special meeting.
1.3 Special Meetings. Special meetings of stockholders may be called at
----------------
any time only by the Board of Directors, the Chairman of the Board, the Chief
Executive Officer, the President or the holders of at least 40% of the votes
which all stockholders would be entitled to cast in any annual election of
directors. Business transacted at any special meeting of stockholders shall be
limited to matters relating to the purpose or purposes stated in the notice of
meeting.
<PAGE>
1.4 Notice of Meetings. Except as otherwise provided by law, written
------------------
notice of each meeting of stockholders, whether annual or special, shall be
given not less than 10 nor more than 60 days before the date of the meeting to
each stockholder entitled to vote at such meeting. The notices of all meetings
shall state the place, date and hour of the meeting. The notice of a special
meeting shall state, in addition, the purpose or purposes for which the meeting
is called. If mailed, notice is given when deposited in the United States
mail, postage prepaid, directed to the stockholder at his address as it
appears on the records of the corporation.
1.5 Voting List. The officer who has charge of the stock ledger of the
-----------
corporation shall prepare and make, at least 10 days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 days prior to the meeting, at a place, specified in the notice of the
meeting, within the city where the meeting is to be held or, if not so specified
in the notice of meeting, at the place where the meeting is to be held. The
list also shall be produced and kept at the time and place of the meeting during
the whole time of the meeting and may be inspected by any stockholder who is
present.
1.6 Quorum. Except as otherwise provided by law, the Certificate of
------
Incorporation or these By-Laws, the holders of a majority of the shares of the
capital stock of the corporation issued and outstanding and entitled to vote at
the meeting, present in person or represented by proxy, shall constitute a
quorum for the transaction of business.
1.7 Adjournments. Any meeting of stockholders may be adjourned to any
------------
other time and to any other place at which a meeting of stockholders may be held
under these By-Laws by the stockholders present or represented at the meeting
and entitled to vote, although less than a quorum, or, if no stockholder is
present, by any officer entitled to preside at or to act as secretary of such
meeting. It shall not be necessary to notify any stockholder of any adjournment
of less than 30 days if the time and place of the adjourned meeting are
announced at the meeting at which adjournment is taken, unless after the
adjournment a new record date is fixed for the adjourned meeting. At the
adjourned meeting, the corporation may transact any business which might have
been transacted at the original meeting.
2
<PAGE>
1.8 Voting and Proxies. Each stockholder shall have one vote for each
------------------
share of stock entitled to vote held of record by such stockholder and a
proportionate vote for each fractional share so held, unless otherwise provided
by law, the Certificate of Incorporation or these By-Laws. Each stockholder
of record entitled to vote at a meeting of stockholders may vote in person or
may authorize another person or persons to vote or act for him by proxy executed
in writing (or in such other manner permitted by the General Corporation Law of
the State of Delaware) by the stockholder or his authorized agent and delivered
to the Secretary of the corporation. No such proxy shall be voted or acted upon
after three years from the date of its execution, unless the proxy expressly
provides for a longer period.
1.9 Action at Meeting. When a quorum is present at any meeting, the
-----------------
holders, present or represented and voting on a matter, of shares representing a
majority of the votes cast (or if there are two or more classes of stock
entitled to vote as separate classes, then in the case of each such class, the
holders, present or represented and voting on a matter, of shares representing a
majority of votes cast by that class) shall decide any matter to be voted upon
by the stockholders at such meeting, except when a different vote is required by
express provision of law, the Certificate of Incorporation or these By-Laws. Any
election by stockholders shall be determined by a plurality of the votes cast by
the stockholders entitled to vote at the election.
1.10 Nomination of Directors. Only persons who are nominated in accordance
-----------------------
with the following procedures shall be eligible for election as directors.
Nomination for election to the Board of Directors of the corporation at a
meeting of stockholders may be made (i) by or at the direction of the Board of
Directors or (ii) by any stockholder of the corporation entitled to vote for the
election of directors at such meeting who complies with the notice procedures
set forth in this Section 1.10.
To be timely, a stockholder's notice must be received by the Secretary of
the corporation at the principal executive offices of the corporation as
follows: (a) in the case of an election of directors at an annual meeting of
stockholders, not less than 45 days nor more than 60 days prior to the date on
which the corporation first mailed its proxy materials for the prior year's
annual meeting; provided, however, that in the event that the date of the annual
meeting is called for a date that is not within 30 days before or after the
first anniversary of the preceding year's annual meeting, to be timely, a
stockholder's notice must be so received not later than the 10th day follow-
3
<PAGE>
ing the day on which notice of the date of such annual meeting was mailed or
public disclosure of the date of such annual meeting was made.
The stockholder's notice to the Secretary of the corporation shall set
forth (a) as to each proposed nominee, (i) the name, age, business address and,
if known, residence address of each such nominee, (ii) the principal occupation
or employment of each such nominee, (iii) the number of shares of stock of the
corporation which are beneficially owned by each such nominee and (iv) any other
information concerning the nominee that must be disclosed as to nominees in
proxy solicitations (including such person's written consent to be named as a
nominee and to serve as a director if elected) pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
rules and regulations promulgated thereunder; (b) as to the stockholder giving
the notice, (i) the name and address, as they appear on the corporation's books,
of such stockholder and (ii) the class and number of shares of the corporation
which are beneficially owned by such stockholder; and (c) as to the beneficial
owner, if any, on whose behalf the nomination is being made, (i) the name and
address of such beneficial owner and (ii) the class and number of shares of the
corporation which are beneficially owned by such person. In addition, to be
effective, the stockholder's notice must be accompanied by the written consent
of the proposed nominee to serve as a director if elected. The corporation may
require any proposed nominee to furnish such other information as may
reasonably be required by the corporation to determine the eligibility of such
proposed nominee to serve as a director of the corporation.
The chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if chairman of the meeting should so determine, the
chairman of the meeting shall so declare to the meeting and the defective
nomination shall be disregarded.
1.11 Notice of Business at Annual Meetings. At any annual meeting of the
-------------------------------------
stockholders, only such business shall be conducted as shall have been properly
brought before the meeting. To be properly brought before an annual meeting,
business must be (a) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (b) otherwise
brought before the meeting by or at the direction of the Board of Directors or
(c) otherwise properly brought before an annual meeting by a stockholder. For
business to be properly brought before an annual meeting by a stockholder, (i)
if such business relates to the election of directors of the corporation, the
procedures in Section 1.10 must be
4
<PAGE>
complied with and (ii) if such business relates to any other matter, the
stockholder must have given timely notice thereof in writing to the Secretary of
the corporation in accordance with the procedures set forth in this Section
1.11.
To be timely, a stockholder's notice must be received by the Secretary of
the corporation at the principal executive offices of the corporation not less
than 45 days nor more than 60 days prior to the date on which the Corporation
first mailed its proxy materials for the prior year's annual meeting; provided,
however, that in the event that the date of the annual meeting is called for a
date that is not within 30 days before or after the first anniversary of the
preceding year's annual meeting, to be timely, a stockholder's notice must be so
received not later than the 10/th/ day following the day on which notice of the
date of such annual meeting was mailed or public disclosure of the date of such
annual meeting was made.
The stockholder's notice to the Secretary of the corporation shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting (a) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (b) the name and address, as they appear on the corporation's books, of
the stockholder proposing such business and the name and address of the
beneficial owner, if any, on whose behalf the proposal is made, (c) the class
and number of shares of the corporation which are beneficially owned by the
stockholder and beneficial owner, if any, and (d) any material interest of the
stockholder or such beneficial owner, if any, in such business. Notwithstanding
anything in these By-Laws to the contrary, no business shall be conducted at any
annual meeting of stockholders except in accordance with the procedures set
forth in this Section 1.11; provided that any stockholder proposal which
complies with Rule 14a-8 of the proxy rules (or any successor provision)
promulgated under the Exchange Act and is to be included in the corporation's
proxy statement for an annual meeting of stockholders shall be deemed to comply
with the requirements of this Section 1.11.
The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that business was not properly brought before the meeting
in accordance with the provisions of this Section 1.11, and if the chairman of
the meeting should so determine, the chairman of the meeting shall so declare to
the meeting that any such business not properly brought before the meeting shall
not be transacted.
1.12 Organization. The Chairman of the Board, or in his absence the Vice
------------
Chairman of the Board, the Chief Executive Officer or the President, in the
order
5
<PAGE>
named, shall call meetings of the stockholders to order, and shall act as
chairman of such meeting, provided, however, that the Board of Directors may
--------
appoint any officer or stockholder to act as chairman of any meeting in the
absence of the Chairman of the Board. The Secretary of the corporation shall
act as secretary at all meetings of the stockholders; but in the absence of the
Secretary of the corporation at any meeting of the stockholders, the presiding
officer may appoint any person to act as secretary of the meeting.
ARTICLE II. - Directors
-----------------------
2.1 General Powers. The business and affairs of the corporation shall be
--------------
managed by or under the direction of a Board of Directors, who may exercise all
of the powers of the corporation except as otherwise provided by law, the
Certificate of Incorporation or these By-Laws. In the event of a vacancy in the
Board of Directors, the remaining directors, except as otherwise provided by
law, may exercise the powers of the full Board of Directors until the vacancy is
filled.
2.2 Number; Election and Qualification. The number of directors which
----------------------------------
shall constitute the whole Board of Directors shall be determined by resolution
of the Board of Directors or by the holders of shares representing a majority of
the votes entitled to be cast by all stockholders in any annual election of
directors. The number of directors may be decreased at any time and from time
to time by a majority of the directors then in office or by the holders of
shares representing a majority of the votes entitled to be cast by all
stockholders in any annual election of directors, but only to eliminate
vacancies existing by reason of the death, resignation, removal or expiration of
the term of one or more directors. The directors shall be elected at the annual
meeting of stockholders by such stockholders as have the right to vote on such
election. Directors need not be stockholders of the corporation.
2.3 Enlargement of the Board. The number of directors may be increased at
------------------------
any time and from time to time by the stockholders or by a majority of the
directors then in office.
2.4 Tenure. Each director shall hold office until the next annual meeting
------
and until his successor is elected and qualified, or until his earlier death,
resignation or removal.
6
<PAGE>
2.5 Quorum; Action at Meeting. A majority of the directors at any time in
-------------------------
office shall constitute a quorum for the transaction of business. In the event
one or more of the directors shall be disqualified to vote at any meeting, then
the required quorum shall be reduced by one for each director so disqualified,
provided that in no case shall less than one-third of the number of directors
fixed pursuant to Section 2.2 above constitute a quorum. If at any meeting of
the Board of Directors there shall be less than such a quorum, a majority of
those present may adjourn the meeting from time to time. Every act or decision
done or made by a majority of the directors present at a meeting duly held at
which a quorum is present shall be regarded as the act of the Board of Directors
unless a greater number is required by law, by the Certificate of Incorporation
or these By-Laws.
2.6 Removal. Directors of the corporation may be removed, with or without
-------
cause, by the holders of at least a majority of the shares then entitled to vote
in any annual election of directors.
2.7 Vacancies. Any vacancy in the Board of Directors, however occurring,
---------
including a vacancy resulting from an enlargement of the Board, shall be filled
either by the holders of at least a majority of the votes which all of the
stockholders would be entitled to cast in any election of directors or by a vote
of a majority of the directors then in office, although less than a quorum, or
by the sole remaining director. A director elected to fill a vacancy shall hold
office until the next annual meeting of stockholders and until his or her
successor is elected and qualified or until his or her earlier death,
resignation or removal.
2.8 Resignation. Any director may resign by delivering his written
-----------
resignation to the corporation at its principal office or to the Chairman of the
Board or Secretary. Such resignation shall be effective upon receipt unless it
is specified to be effective at some other time or upon the happening of some
other event.
2.9 Regular Meetings. Regular meetings of the Board of Directors may be
----------------
held without notice at such time and place, either within or without the State
of Delaware, as shall be determined from time to time by the Board of Directors;
provided that any director who is absent when such a determination is made shall
be given notice of the determination. A regular meeting of the Board of
Directors may be held without notice immediately after and at the same place as
the annual meeting of stockholders.
7
<PAGE>
2.10 Special Meetings. Special meetings of the Board of Directors may be
----------------
held at any time and place, within or without the State of Delaware, designated
in a call by the Chairman of the Board, the Chief Executive Officer, the
President or two or more directors, or by one director in the event that there
is only a single director in office.
2.11 Notice of Special Meetings. Notice of any special meeting of
--------------------------
directors shall be given to each director by the Secretary or by the officer or
one of the directors calling the meeting. Notice shall be duly given to each
director (i) in person or by telephone at least 24 hours in advance of the
meeting, (ii) by sending a telegram, telecopy, telex or electronic mail, or
delivering written notice by hand, to his last known business, home or
electronic mail address at least 24 hours in advance of the meeting or (iii) by
mailing written notice to his last known business or home address at least 72
hours in advance of the meeting. A notice or waiver of notice of a meeting of
the Board of Directors need not specify the purposes of the meeting.
2.12 Meetings by Telephone Conference Calls. Directors or any members of
--------------------------------------
any committee designated by the directors may participate in a meeting of the
Board of Directors or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation by such means shall constitute
presence in person at such meeting.
2.13 Action by Consent. Any action required or permitted to be taken at
-----------------
any meeting of the Board of Directors or of any committee of the Board of
Directors may be taken without a meeting if all members of the Board of
Directors or committee, as the case may be, consent to the action in writing,
and the written consents are filed with the minutes of proceedings of the Board
of Directors or committee.
2.14 Committees. The Board of Directors may designate one or more
----------
committees, each committee to consist of one or more of the directors of the
corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of a
member of a committee, the member or members of the committee present at any
meeting and not disqualified from voting, whether or not a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board of Directors
and subject to the provisions of the General
8
<PAGE>
Corporation Law of the State of Delaware, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the corporation and may authorize the seal of the corporation to
be affixed to all papers which may require it. Each such committee shall keep
minutes and make such reports as the Board of Directors may from time to time
request. Except as the Board of Directors may otherwise determine, any committee
may make rules for the conduct of its business, but unless otherwise provided by
the directors or in such rules, its business shall be conducted as nearly as
possible in the same manner as is provided in these By-Laws for the Board of
Directors.
2.15 Compensation of Directors. Directors may be paid such compensation
-------------------------
for their services and such reimbursement for expenses of attendance at meetings
as the Board of Directors may from time to time determine. No such payment
shall preclude any director from serving the corporation or any of its parent or
subsidiary corporations in any other capacity and receiving compensation for
such service.
ARTICLE III. - Officers
-----------------------
3.1 Enumeration. The officers of the corporation shall consist of a Chief
-----------
Executive Officer, a President, a Secretary, a Treasurer and such other officers
with such other titles as the Board of Directors shall determine, including a
Chairman of the Board, a Vice Chairman of the Board, and one or more Vice
Presidents, Assistant Treasurers and Assistant Secretaries. The Board of
Directors may appoint such other officers as it may deem appropriate.
3.2 Election. The Chief Executive Officer, President, Treasurer and
--------
Secretary shall be elected annually by the Board of Directors at its first
meeting following the annual meeting of stockholders. Other officers may be
appointed by the Board of Directors at such meeting or at any other meeting.
3.3 Qualification. No officer need be a stockholder. Any two or more
-------------
offices may be held by the same person.
3.4 Tenure. Except as otherwise provided by law, by the Certificate of
------
Incorporation or by these By-Laws, each officer shall hold office until his
successor is elected and qualified, unless a different term is specified in the
vote choosing or appointing him, or until his earlier death, resignation or
removal.
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3.5 Resignation and Removal. Any officer may resign by delivering his or
-----------------------
her written resignation to the corporation at its principal office or to the
Chairman of the Board, Chief Executive Officer, President or Secretary. Such
resignation shall be effective upon receipt unless it is specified to be
effective at some other time or upon the happening of some other event.
Any officer may be removed at any time, with or without cause, by vote of a
majority of the entire number of directors then in office.
Except as the Board of Directors may otherwise determine, no officer who
resigns or is removed shall have any right to any compensation as an officer for
any period following his resignation or removal, whether his compensation be by
the month or by the year or otherwise, unless such compensation is expressly
provided in a duly authorized written agreement with the corporation.
3.6 Vacancies. The Board of Directors may fill any vacancy occurring in
---------
any office for any reason and may, in its discretion, leave unfilled for such
period as it may determine any offices other than those of President, Treasurer
and Secretary. Each such successor shall hold office for the unexpired term of
his predecessor and until his successor is elected and qualified, or until his
earlier death, resignation or removal.
3.7 Chairman of the Board, Vice Chairman of the Board and Chief Executive
---------------------------------------------------------------------
Officer. The Board of Directors may appoint a Chairman of the Board and may
- -------
designate the Chairman of the Board or, if not the Chairman of the Board,
someone else, as Chief Executive Officer. If the Board of Directors appoints a
Chairman of the Board, he shall perform such duties and possess such powers as
are assigned to him by the Board of Directors. Unless otherwise provided by the
Board of Directors, he shall preside at all meetings of the stockholders and, if
he is a director, at all meetings of the Board of Directors. If the Board of
Directors appoints a Vice Chairman of the Board, the Vice Chairman of the Board
shall, in the absence or disability of the Chairman of the Board, perform the
duties and exercise the powers of the Chairman of the Board and shall perform
such other duties and possess such other powers as may from time to time be
vested in the Vice Chairman of the Board by the Board of Directors. The person
designated as the Chief Executive Officer of the Company (whether or not the
Chairman of the Board) shall, subject to the direction of the Board of
Directors, have general charge and supervision of the business of the
corporation.
10
<PAGE>
3.8 President. Unless the Board of Directors has designated the Chairman
---------
of the Board or another officer as Chief Executive Officer, the President shall
be the Chief Executive Officer of the corporation. The President shall perform
such other duties and shall have such other powers as the Board of Directors,
Chairman of the Board or Chief Executive Officer may from time to time
prescribe.
3.9 Vice Presidents. Any Vice President shall perform such duties and
---------------
possess such powers as the Board of Directors, Chairman of the Board, Chief
Executive Officer or President may from time to time prescribe. In the event of
the absence, inability or refusal to act of the Chief Executive Officer, then,
in the order determined by the Board of Directors, the President (if he is not
the Chief Executive Officer) and the Vice President (or if there shall be more
than one, the Vice Presidents) shall perform the duties of the Chief Executive
Officer and when so performing shall have all the powers of and be subject to
all the restrictions upon the Chief Executive Officer. The Board of Directors
may assign to any Vice President the title of Executive Vice President, Senior
Vice President or any other title selected by the Board of Directors.
3.10 Secretary and Assistant Secretaries. The Secretary shall perform such
-----------------------------------
duties and shall have such powers as the Board of Directors, Chairman of the
Board or Chief Executive Officer may from time to time prescribe. In addition,
the Secretary shall perform such duties and have such powers as are incident to
the office of secretary, including without limitation the duty and power to give
notices of all meetings of stockholders and special meetings of the Board of
Directors, to attend all meetings of stockholders and the Board of Directors and
keep a record of the proceedings, to maintain a stock ledger and prepare lists
of stockholders and their addresses as required, to be custodian of corporate
records and the corporate seal and to affix and attest to the same on documents.
Any Assistant Secretary shall perform such duties and possess such powers
as the Board of Directors, Chairman of the Board, Chief Executive Officer or
Secretary may from time to time prescribe. In the event of the absence,
inability or refusal to act of the Secretary, the Assistant Secretary (or if
there shall be more than one, the Assistant Secretaries in the order determined
by the Board of Directors) shall perform the duties and exercise the powers of
the Secretary.
In the absence of the Secretary or any Assistant Secretary at any meeting
of stockholders or directors, the person presiding at the meeting shall
designate a temporary secretary to keep a record of the meeting.
11
<PAGE>
3.11 Treasurer and Assistant Treasurers. The Treasurer shall perform such
----------------------------------
duties and shall have such powers as may from time to time be assigned to him or
her by the Board of Directors, Chairman of the Board or the Chief Executive
Officer. In addition, the Treasurer shall perform such duties and have such
powers as are incident to the office of treasurer, including without limitation
the duty and power to keep and be responsible for all funds and securities of
the corporation, to deposit funds of the corporation in depositories selected in
accordance with these By-Laws, to disburse such funds as ordered by the Board of
Directors, to make proper accounts of such funds, and to render as required by
the Board of Directors statements of all such transactions and of the financial
condition of the corporation.
The Assistant Treasurers shall perform such duties and possess such powers
as the Board of Directors, the Chief Executive Officer or the Treasurer may from
time to time prescribe. In the event of the absence, inability or refusal to
act of the Treasurer, the Assistant Treasurer (or if there shall be more than
one, the Assistant Treasurers in the order determined by the Board of Directors)
shall perform the duties and exercise the powers of the Treasurer.
3.12 Salaries. Officers of the corporation shall be entitled to such
--------
salaries, compensation or reimbursement as shall be fixed or allowed from time
to time by the Board of Directors.
ARTICLE IV. - Capital Stock
---------------------------
4.1 Issuance of Stock. Unless otherwise voted by the stockholders and
-----------------
subject to the provisions of the Certificate of Incorporation, the whole or any
part of any unissued balance of the authorized capital stock of the corporation
or the whole or any part of any balance of the authorized capital stock of the
corporation held in its treasury may be issued, sold, transferred or otherwise
disposed of by vote of the Board of Directors in such manner, for such
consideration and on such terms as the Board of Directors may determine.
4.2 Certificates of Stock. Every holder of stock of the corporation shall
---------------------
be entitled to have a certificate, in such form as may be prescribed by law and
by the Board of Directors, certifying the number and class of shares owned by
him or her in the corporation. Each such certificate shall be signed by, or in
the name of the corporation by, the Chairman or Vice Chairman, if any, of the
Board of Directors, or the President or a Vice President, and the Treasurer or
any Assistant Treasurer, or the
12
<PAGE>
Secretary or an Assistant Secretary of the corporation. Any or all of the
signatures on the certificate may be a facsimile.
Each certificate for shares of stock that are subject to any restriction on
transfer pursuant to the Certificate of Incorporation, the By-Laws, applicable
securities laws or any agreement among any number of stockholders or among such
holders and the corporation shall have conspicuously noted on the face or back
of the certificate either the full text of the restriction or a statement of the
existence of such restriction.
4.3 Transfers. Except as otherwise established by rules and regulations
---------
adopted by the Board of Directors, and subject to applicable law, shares of
stock may be transferred on the books of the corporation by the surrender to the
corporation or its transfer agent of the certificate representing such shares
properly endorsed or accompanied by a written assignment or power of attorney
properly executed, and with such proof of authority or the authenticity of
signature as the corporation or its transfer agent may reasonably require.
Except as may be otherwise required by law, by the Certificate of Incorporation
or by these By-Laws, the corporation shall be entitled to treat the record
holder of stock as shown on its books as the owner of such stock for all
purposes, including the payment of dividends and the right to vote with respect
to such stock, regardless of any transfer, pledge or other disposition of such
stock until the shares have been transferred on the books of the corporation in
accordance with the requirements of these By-Laws.
4.4 Lost, Stolen or Destroyed Certificates. The corporation may issue a
--------------------------------------
new certificate of stock in place of any previously issued certificate alleged
to have been lost, stolen or destroyed, upon such terms and conditions as the
Board of Directors may prescribe, including the presentation of reasonable
evidence of such loss, theft or destruction and the giving of such indemnity as
the Board of Directors may require for the protection of the corporation or any
transfer agent or registrar.
4.5 Record Date. The Board of Directors may fix in advance a date as a
-----------
record date for the determination of the stockholders entitled to notice of or
to vote at any meeting of stockholders, or entitled to receive payment of any
dividend or other distribution or allotment of any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action. Such record date shall not be more than 60 nor less than 10 days before
the date of such meeting, nor more than 60 days prior to any other action to
which such record date relates.
13
<PAGE>
If no record date is fixed, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day before the day on which notice is given or, if
notice is waived, at the close of business on the day before the day on which
the meeting is held. The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating to such purpose.
A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
ARTICLE V. - General Provisions
-------------------------------
5.1 Fiscal Year. Except as from time to time otherwise designated by the
-----------
Board of Directors, the fiscal year of the corporation shall begin on the first
day of August of each year and end on the last day of July in each year.
5.2 Corporate Seal. The corporate seal shall be in such form as shall be
--------------
approved by the Board of Directors.
5.3 Waiver of Notice. Whenever any notice whatsoever is required to be
----------------
given by law, by the Certificate of Incorporation or by these By-Laws, a waiver
of such notice in writing signed by the person entitled to such notice or such
person's duly authorized attorney, delivered by telecopy or any other available
method, whether before, at or after the time stated in such waiver, or the
appearance of such person or persons at such meeting in person or by proxy,
shall be deemed equivalent to such notice.
5.4 Voting of Securities. Except as the directors may otherwise designate,
--------------------
the Chairman of the Board or Treasurer may waive notice of, and act as, or
appoint any person or persons to act as, proxy or attorney-in-fact for this
corporation (with or without power of substitution) at, any meeting of
stockholders or sharehold ers of any other corporation or organization, the
securities of which may be held by this corporation.
14
<PAGE>
5.5 Evidence of Authority. A certificate by the Secretary, or an
---------------------
Assistant Secretary, or a temporary Secretary, as to any action taken by the
stockholders, directors, a committee or any officer or representative of the
corporation shall as to all persons who rely on the certificate in good faith be
conclusive evidence of such action.
5.6 Certificate of Incorporation. All references in these By-Laws to the
----------------------------
Certificate of Incorporation shall be deemed to refer to the Amended and
Restated Certificate of Incorporation of the corporation, as amended and in
effect from time to time.
5.7 Transactions with Interested Parties. No contract or transaction
------------------------------------
between the corporation and one or more of the directors or officers, or between
the corporation and any other corporation, partnership, association or other
organization in which one or more of the directors or officers are directors or
officers or have a financial interest, shall be void or voidable solely for this
reason, or solely because the director or officer is present at or participates
in the meeting of the Board of Directors or a committee of the Board of
Directors at which the contract or transaction is authorized or solely because
his or their votes are counted for such purpose, if:
(a) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the Board of Directors
or the committee, and the Board or committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum;
(b) The material facts as to his relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or
(c) The contract or transaction is fair as to the corporation as of
the time it is authorized, approved or ratified by the Board of Directors, a
committee of the Board of Directors or the stockholders.
Common or interested directors may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or of a committee which
authorizes the contract or transaction.
15
<PAGE>
5.8 Severability. Any determination that any provision of these By-Laws
------------
is for any reason inapplicable, illegal or ineffective shall not affect or
invalidate any other provision of these By-Laws.
5.9 Pronouns. All pronouns used in these By-Laws shall be deemed to refer
--------
to the masculine, feminine or neuter, singular or plural, as the identity of the
person or persons may require.
ARTICLE VI. - Amendments
------------------------
These By-Laws may be altered, amended or repealed, in whole or in part, or
new By-Laws may be adopted by the Board of Directors or by the stockholders as
provided in the Certificate of Incorporation.
16
<PAGE>
EXHIBIT 4.4
-----------
NAVISITE, INC.
INVESTOR RIGHTS AGREEMENT
This Agreement dated as of October 27, 1999 is entered into by and among
NaviSite, Inc., a Delaware corporation (the "Company"), and CMGI, Inc., a
Delaware corporation (the "Investor").
Recitals
--------
WHEREAS, the Company desires to undertake an initial public offering of its
Common Stock; and
WHEREAS, in order to induce the Investor to approve such offering, the
Company has agreed to provide for certain arrangements with respect to (i) the
registration of shares of capital stock of the Company under the Securities Act
of 1933, as amended, and (ii) the Investor's right of first refusal with respect
to certain issuances of securities of the Company;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
I. - Certain Definitions.
-------------------
As used in this Agreement, the following terms shall have the following
respective meanings:
"Commission" means the Securities and Exchange Commission, or any other
----------
federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $.01 par value per share, of the
------------
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
------------
any successor federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
<PAGE>
"Initiating Holders" means the Stockholders initiating a request for
------------------
registration pursuant to Section 2.1(a) or 2.1(b), as the case may be.
"Initial Public Offering" means the initial underwritten public offering of
-----------------------
shares of Common Stock pursuant to an effective Registration Statement.
"Permitted Transferee" shall have the meaning set forth in Section 3.3.
--------------------
"Prospectus" means the prospectus included in any Registration Statement,
----------
as amended or supplemented by an amendment or prospectus supplement, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
"Registration Statement" means a registration statement filed by the
----------------------
Company with the Commission for a public offering and sale of securities of the
Company (other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"Registration Expenses" means the expenses described in Section 2.4.
---------------------
"Registrable Shares" means (a) the shares of Common Stock held by the
------------------
Investor upon the closing of the Initial Public Offering and (b) any other
shares of Common Stock issued in respect of such shares (because of stock
splits, stock dividends, reclassifications, recapitalizations or similar
events); provided, however, that shares of Common Stock which are Registrable
-------- -------
Shares shall cease to be Registrable Shares upon (i) any sale pursuant to a
Registration Statement or Rule 144 under the Securities Act or (ii) any sale in
any manner to a person or entity which, by virtue of Section 3.4 of this
Agreement, is not entitled to the rights provided by this Agreement.
"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
successor federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
2
<PAGE>
"Selling Stockholder" means any Stockholder owning Registrable Shares
-------------------
included in a Registration Statement.
"Stockholders" means the Investor and any persons or entities to whom the
------------
rights granted under this Agreement are transferred by the Investor, its
successors or assigns, pursuant to Section 3.4 hereof.
II. - Registration Rights.
-------------------
2.1 Required Registrations.
----------------------
(a) At any time following 180 days after the closing of the
Initial Public Offering, a Stockholder or Stockholders may request, in writing,
that the Company effect the registration on Form S-1 or Form S-2 (or any
successor form) of Registrable Shares owned by such Stockholder or Stockholders
having an aggregate value of at least $10,000,000 (based on the then current
public market price).
(b) At any time after the Company becomes eligible to file
a Registration Statement on Form S-3 (or any successor form relating to
secondary offerings), a Stockholder or Stockholders may request, in writing,
that the Company effect the registration on Form S-3 (or such successor form),
of Registrable Shares having an aggregate value of at least $2,500,000 (based on
the then current public market price).
(c) Upon receipt of any request for registration pursuant
to this Section 2.1, the Company shall promptly give written notice of such
proposed registration to all other Stockholders. Such Stockholders shall have
the right, by giving written notice to the Company within 15 days after the
Company provides its notice, to elect to have included in such registration such
of their Registrable Shares as such Stockholders may request in such notice of
election, subject in the case of an underwritten offering to the approval of the
managing underwriter as provided in Section 2.1(d) below. Thereupon, the Company
shall, as expeditiously as possible, use its best efforts to effect the
registration on an appropriate registration form of all Registrable Shares which
the Company has been requested to so register (provided, however, that in the
-------- -------
case of a registration requested under Section 2.1(b), the Company will only be
obligated to effect such registration on Form S-3 (or any successor form)).
3
<PAGE>
(d) If the Initiating Holders intend to distribute the
Registrable Shares covered by their request by means of an underwriting, they
shall so advise the Company as a part of their request made pursuant to Section
2.1(a) or (b), as the case may be, and the Company shall include such
information in its written notice referred to in Section 2.1(c). The right of
any other Stockholder to include its Registrable Shares in such registration
pursuant to Section 2.1(a) or (b), as the case may be, shall be conditioned upon
such other Stockholder's participation in such underwriting on the terms set
forth herein. If the managing underwriter determines that the marketing factors
require a limitation of the number of shares to be underwritten, the number of
Registrable Shares to be included in a Registration Statement filed pursuant to
this Section 2.1 shall be reduced pro rata among the requesting Stockholders
based on the quotient of (i) the total Registrable Shares to be included in the
Registration Statement, divided by (ii) the total number of Registrable Shares
that requested registration.
(e) The Initiating Holders shall have the right to select
the managing underwriter(s) for any underwritten offering requested pursuant to
Section 2.1(a) or (b), subject to the approval of the Company, which approval
will not be unreasonably withheld.
(f) The Company shall not be required to effect more than
two registrations pursuant to Section 2.1(a) or more than five registrations
pursuant to Section 2.1(b). In addition, the Company shall not be required to
effect any registration within 90 days after the effective date of any other
Registration Statement of the Company relating to an underwritten offering. For
purposes of this Section 2.1(f), a Registration Statement shall not be counted
until such time as such Registration Statement has been declared effective by
the Commission, unless the Initiating Holders withdraw their request for such
registration (other than as a result of information concerning the business or
if financial condition of the Company which is made known to the Stockholders
after the date on which such registration was requested) and elect not to pay
the Registration Expenses therefor pursuant to Section 2.4.
(g) If at the time of any request to register Registrable
Shares by Initiating Holders pursuant to this Section 2.1, the Company is
engaged or has plans to engage in a registered public offering or is engaged in
any other activity which, in the good faith determination of the Company's Board
of Directors, would be adversely affected by the requested registration or if
financial statements required for the requested registration are not then
available, then the Company may at its option direct that such request be
delayed for a period not in excess of 90 days from the date
4
<PAGE>
of such request, such right to delay a request to be exercised by the Company
not more than once in any 12-month period.
2.2 Incidental Registration.
-----------------------
(a) Whenever the Company proposes to file a Registration
Statement (other than a Registration Statement filed pursuant to Section 2.1) at
any time and from time to time, it will, prior to such filing, give written
notice to all Stockholders of its intention to do so; provided, that no such
--------
notice need be given if no Registrable Shares are to be included therein as a
result of a determination of the managing underwriter pursuant to Section
2.2(b). Upon the written request of a Stockholder or Stockholders given within
20 days after the Company provides such notice (which request shall state the
intended method of disposition of such Registrable Shares), the Company shall
use its best efforts to cause all Registrable Shares which the Company has been
requested by such Stockholder or Stockholders to register to be registered under
the Securities Act to the extent necessary to permit their sale or other
disposition in accordance with the intended methods of distribution specified in
the request of such Stockholder or Stockholders; provided, that the Company
--------
shall have the right to postpone or withdraw any registration effected pursuant
to this Section 2.2 without obligation to any Stockholder.
(b) If the registration for which the Company gives notice
pursuant to Section 2.2(a) involves an underwriting, the Company shall so advise
the Stockholders as a part of the written notice given pursuant to Section
2.2(a). In such event, the right of any Stockholder to include its Registrable
Shares in such registration pursuant to Section 2.2 shall be conditioned upon
such Stockholder's participation in such underwriting on the terms set forth
herein. All Stockholders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for the underwriting by the Company.
Notwithstanding any other provision of this Agreement, if the Company and the
managing underwriter(s) determine in good faith that marketing factors require a
limitation of the number of shares to be underwritten, then the Company and the
managing underwriter(s) may exclude shares from the registration and the
underwriting, and the number of shares that may be included in the registration
and the underwriting shall be allocated, first to the Company or the Company
-----
stockholder(s) for which the registration was initiated, and second to each of
------
the Stockholders requesting inclusion of their Registrable Shares in such
registration and each of the other holders of piggyback registration rights on a
parity with those Stockholders on a pro rata basis based on the total number of
Registrable Shares and other securities requested for inclusion in such
registration by each such Stockholder or other holder. If any holder of
Registrable Shares or any other Company stockholder requesting inclusions of
securities in the registration disapproves of the terms of any such
underwriting, such person may elect to withdraw therefrom by written notice to
the Company, and any Registrable Shares or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
5
<PAGE>
(c) Notwithstanding the foregoing, the Company shall not be
required, pursuant to this Section 2.2, to include any Registrable Shares in a
Registration Statement if such Registrable Shares can then be sold pursuant to
Rule 144(k) under the Securities Act and represent less than 1% of the then
outstanding shares of Common Stock.
2.3 Registration Procedures.
-----------------------
(a) If and whenever the Company is required by the
provisions of this Agreement to use its best efforts to effect the registration
of any Registrable Shares under the Securities Act, the Company shall:
(i) file with the Commission a Registration
Statement with respect to such Registrable Shares and use its best efforts
to cause that Registration Statement to become effective as soon as
possible;
(ii) as expeditiously as possible, prepare and
file with the Commission any amendments and supplements to the
Registration Statement and the prospectus included in the Registration
Statement as may be necessary to comply with the provisions of the
Securities Act (including the anti-fraud provisions thereof) and to keep
the Registration Statement effective for 12 months from the effective date
or such lesser period until all such Registrable Shares are sold;
6
<PAGE>
(iii) as expeditiously as possible, furnish to
each Selling Stockholder such reasonable numbers of copies of the
Prospectus, including any preliminary Prospectus, in conformity with the
requirements of the Securities Act, and such other documents as such
Selling Stockholder may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Shares owned by such
Selling Stockholder;
(iv) as expeditiously as possible, use its best
efforts to register or qualify the Registrable Shares covered by the
Registration Statement under the securities or Blue Sky laws of such states
as the Selling Stockholders shall reasonably request and do any and all
other acts and things that may be necessary or desirable to enable the
Selling Stockholders to consummate the public sale or other disposition in
such states of the Registrable Shares owned by the Selling Stockholder;
provided, however, that the Company shall not be required in connection
-------- -------
with this paragraph (iv) to qualify as a foreign corporation or execute a
general consent to service of process in any jurisdiction;
(v) as expeditiously as possible, cause all such
Registrable Shares to be listed on each securities ex change or automated
quotation system on which similar securities issued by the Company are then
listed; and
(vi) promptly make available for inspection by
the Selling Stockholders, any managing underwriter participating in any
disposition pursuant to such Registration Statement and any attorney or
accountant or other agent retained by any such underwriter or selected by
the Selling Stockholders, all financial and other records, pertinent
corporate documents and properties of the Company and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such Selling Stockholder,
underwriter, attorney, accountant or agent in connection with such
Registration Statement.
(b) If the Company has delivered a Prospectus to the
Selling Stockholders, and after having done so, the Prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the
7
<PAGE>
Selling Stockholders and, if requested, the Selling Stockholders shall
immediately cease making offers of Registrable Shares and return all
Prospectuses to the Company. The Company shall promptly provide the Selling
Stockholders with revised Prospectuses, and following receipt of the revised
Prospectuses, the Selling Stock holders shall be free to resume making offers of
the Registrable Shares.
(c) In the event that, in the judgment of the Company, it is
advisable to suspend use of a Prospectus included in a Registration Statement
due to pending material developments or other events that have not yet been
publicly disclosed and as to which the Company believes public disclosure would
be detrimental to the Company, the Company shall notify all Selling
Stockholders to such effect, and upon receipt of such notice, each such Selling
Stockholder shall immediately discontinue any sales of Registrable Shares
pursuant to such Registration Statement until such Selling Stockholder has
received copies of a supplemented or amended Prospectus or until such Selling
Stockholder is advised in writing by the Company that the then current
Prospectus may be used and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus. Notwithstanding anything to the contrary herein, the Company
shall not exercise its rights under this Section 2.3(c) to suspend sales of
Registrable Shares for a period in excess of 90 days in any 365-day period.
2.4 Allocation of Expenses. The Company will pay all Registration
----------------------
Expenses for all registrations under this Agreement; provided, however, that if
-------- -------
a registration under Section 2.1 is withdrawn at the request of the Initiating
Holders (other than as a result of information concerning the business or
financial condition of the Company which is made known to the Stockholders after
the date on which such registration was requested) and if the Initiating Holders
elect not to have such registration counted as a registration requested under
Section 2.1, the requesting Stockholders shall pay the Registration Expenses of
such registration pro rata in accordance with the number of their Registrable
Shares included in such registration. For purposes of this Section, the term
"Registration Expenses" shall mean all expenses incurred by the Company in
complying with this Agreement, including, without limitation, all registration
and filing fees, exchange listing fees, printing expenses, fees and expenses of
counsel for the Company and the fees and expenses of one counsel selected by the
Selling Stockholders to represent the Selling Stockhold ers, state Blue Sky
fees and expenses and the expense of any special audits incident to or required
by any such registration, but excluding underwriting discounts, selling
commissions and the fees and expenses of Selling Stockholders' own counsel
(other than the counsel selected to represent all Selling Stockholders).
8
<PAGE>
2.5 Indemnification and Contribution.
--------------------------------
(a) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless the Selling Stockholder, each underwriter of such
Registrable Shares and each other person, if any, who controls such Selling
Stockholder or underwriter within the meaning of the Securities Act or the
Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such Selling Stockholder, under writer or controlling person
may become subject under the Securities Act, the Exchange Act, state securities
or Blue Sky laws or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) (i) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement under which such Registrable Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement or any amendment or
supplement to such Registration Statement or (ii) arise out of or are based upon
the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Company will reimburse such Selling Stockholder, underwriter and controlling
person for any legal or any other expenses reasonably incurred by such Selling
Stockholder, underwriter or controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
--------
however, that the Company will not be liable in any such case to the extent that
- -------
any such loss, claim, damage or liability arises out of or is based upon any
untrue statement or omission made in such Registration Statement, preliminary
prospectus or prospectus, or any such amendment or supplement, in reliance upon
and in conformity with information furnished to the Company, in writing, by or
on behalf of such Selling Stockholder, underwriter or controlling person
specifically for use in the preparation thereof.
(b) In the event of any registration of any of the Registrable
Shares under the Securities Act pursuant to this Agreement, each Selling
Stockholder, severally and not jointly, will indemnify and hold harmless the
Company, each of its directors and officers and each underwriter (if any) and
each person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company, such directors
and officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) (i) arise out of or are based upon any untrue
9
<PAGE>
statement or alleged untrue statement of a material fact contained in any
Registration Statement under which such Registrable Shares were registered under
the Securities Act, any preliminary prospectus or final prospectus contained in
the Registration Statement or any amendment or supplement to the Registration
Statement or (ii) arise out of or are based upon any omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, if the statement or omission was
made in reliance upon and in conformity with information relating to such
Selling Stockholder furnished in writing to the Company by or on behalf of such
Selling Stockholder specifically for use in connection with the preparation of
such Registration Statement, prospectus, amendment or supplement; provided,
--------
however, that the obligations of a Selling Stockholder hereunder shall be
- -------
limited to an amount equal to the net proceeds to such Selling Stockholder of
Registrable Shares sold in connection with such registration.
(c) Each party entitled to indemnification under this Section
2.5 (the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
--------
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
-------- -------
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 2.5 except to the extent that the Indemnifying
Party is adversely affected by such failure. The Indemnified Party may
participate in such defense at such Indemnified Party's expense; provided,
--------
however, that the Indemnifying Party shall pay such expense if representation
- -------
of such Indemnified Party by the counsel retained by the Indemnifying Party
would be inappropriate due to actual or potential differing interests between
the Indemnified Party and any other party represented by such counsel in such
proceeding; provided further that in no event shall the Indemnifying Party be
-------- -------
required to pay the expenses of more than one law firm per jurisdiction as
counsel for the Indemnified Party. The Indemnifying Party also shall be
responsible for the expenses of such defense if the Indemnifying Party does not
elect to assume such defense. No Indemnifying Party, in the defense of any
such claim or litigation shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
of such claim or litigation, and no Indemnified Party shall consent to entry of
any
10
<PAGE>
judgment or settle such claim or litigation without the prior written consent of
the Indemnifying Party, which consent shall not be unreasonably withheld.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 2.5 is
due in accordance with its terms but for any reason is held to be unavailable to
an Indemnified Party in respect to any losses, claims, damages and liabilities
referred to herein, then the Indemnifying Party shall, in lieu of indemnifying
such Indemnified Party, contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities to
which such party may be subject in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the Selling Stockholders
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company and the Selling
Stockholders shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of material fact related to information
supplied by the Company or the Selling Stockholders and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Stockholders agree that it would
not be just and equitable if contribution pursuant to this Section 2.5 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this Section 2.5(d), (a) in no case shall any
one Selling Stockholder be liable or responsible for any amount in excess of the
net proceeds received by such Selling Stockholder from the offering of
Registrable Shares and (b) the Company shall be liable and responsible for any
amount in excess of such proceeds; provided, however, that no person guilty of
-------- -------
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 2.5(d), notify such
party or parties from whom contribution may be sought, but the omission so to
notify such party or parties from whom contribution may be sought shall not
relieve such party from any other obligation it may have thereunder or otherwise
under this Section 2.5(d). No party shall be liable for contribution with
respect to any action, suit, proceeding or claim settled without its prior
written consent, which consent shall not be unreasonably withheld.
11
<PAGE>
2.6 Other Matters with Respect to Underwritten Offerings. In the
----------------------------------------------------
event that Registrable Shares are sold pursuant to a Registration Statement in
an underwritten offering pursuant to Section 2.1, the Company agrees to enter
into an underwriting agreement containing customary representations and
warranties with respect to the business and operations of the Company and
customary covenants and agreements to be performed by the Company, including
without limitation customary provisions with respect to indemnification by the
Company of the underwriters of such offering.
2.7 Information by Holder. Each Selling Stockholder shall furnish
---------------------
to the Company such information regarding such Selling Stockholder and the
distribution proposed by such Selling Stockholder as the Company may reasonably
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
III. - Right Of First Refusal.
----------------------
3.1 Rights of Investor.
------------------
(a) Until the first date on which the Investor or any
Permitted Transferee (as defined below) owns less than a majority, by voting
power, of the outstanding shares of capital stock of the Company (assuming the
exercise and conversion of all outstanding options, warrants and convertible
securities), the Company shall not issue or sell (i) any shares of its Common
Stock, (ii) any other voting equity securities of the Company, including,
without limitation, shares of preferred stock, (iii) any option, warrant or
other right to subscribe for, purchase or otherwise acquire any voting equity
securities of the Company or (iv) any debt securities convertible into voting
capital stock of the Company (collectively, the "Offered Securities"), unless in
each such case the Company shall have first complied with this Section 3.1. The
Company shall deliver to the Investor a written notice of any proposed or
intended issuance or sale of Offered Securities (the "Offer"), which Offer shall
(A) identify and describe the Offered Securities, (B) describe the price and
other terms upon which they are to be issued or sold, and the number or amount
of the Offered Securities to be issued or sold, (C) identify the persons or
entities (if known) to which or with which the Offered Securities are to be
offered, issued or sold and (D) offer to issue and sell to the Investor a number
of the Offered Securities (the "Available Amount") such that, after the issuance
and sale of all of the Offered Securities, including the purchase of the
Available Amount by the Investor, the
12
<PAGE>
Investor would own at least a majority, by voting power, of the outstanding
capital stock of the Company (assuming the exercise and conversion of all
outstanding options, warrants and convertible securities). The Company shall not
be required to offer any Offered Securities to the Investor hereunder if, after
the issuance and sale thereof, the Investor (or the Permitted Transferee) would
continue to own at least a majority, by voting power, of the outstanding capital
stock of the Company (assuming the exercise and conversion of all outstanding
options, warrants and convertible securities).
(b) To accept an Offer, in whole or in part, the Investor must
deliver a written notice to the Company within 20 days after its receipt of the
Offer, setting forth the portion of the Available Amount that the Investor
elects to purchase (the "Notice of Acceptance").
(c) The Company shall have 180 days from the expiration of the
period set forth in Section 3.1(b) above to issue or sell all or any part of
such Offered Securities as to which a Notice of Acceptance has not been given by
the Investor, upon terms and conditions which are not more favorable, in the
aggregate, to the acquiring person or persons or less favorable to the Company
than those set forth in the Offer. If the consideration to be received by the
Company from the sale of Offered Securities consists of anything other than
cash, the Board of Directors of the Company shall in good faith determine the
cash equivalent of such non-cash consideration and the Investor may pay an
equivalent portion of its purchase price for the elected portion of the
Available Amount in cash.
(d) The purchase by the Investor of any Offered Securities is
subject in all cases to the preparation, execution and delivery by the Company
and the Investor of a purchase agreement relating to such Offered Securities
reasonably satisfactory in form and substance to the Investor.
(e) The rights of the Investor under this Section 3.1 shall not
apply to the grant of options to officers, directors, consultants and employees
of the Company or any subsidiary pursuant to any plan, agreement or arrangement
approved by a vote of not less than a majority of the members of the Board of
Directors of the Company, provided, however, that if the exercise of any such
-------- -------
options results in the reduction of the Investor's, or Permitted Transferee's,
ownership to less than a majority, by voting power, of the outstanding capital
stock of the Company, the Company shall so notify the Investor (or Permitted
Transferee), and the Investor or Permitted Transferee shall have the right,
within 30 days after such notice, to pur-
13
<PAGE>
chase from the Company, at a price equal to the then Fair Market Value (as
defined below) thereof, such number of shares of Common Stock as would increase
its ownership to a majority, by voting power, of the outstanding capital stock
of the Company. "Fair Market Value" shall mean the average closing price of the
Common Stock on the Nasdaq National Market (or other principal securities
exchange or other interdealer quotation system on which the Common Stock is
traded or quoted), during the 10-day period ending on the day prior to the date
of purchase.
3.2 Termination. This Article III shall terminate upon the earlier
-----------
of (i) the sale of all or substantially all of the assets or business of the
Company, by merger, sale of assets or otherwise, and (ii) the first date on
which the Investor (or Permitted Transferee) owns less than a majority, by
voting power, of the outstanding capital stock of the Company for 30 consecutive
days.
3.3 Permitted Transferee. For purposes hereof, a "Permitted
--------------------
Transferee" shall mean any person or entity that acquires directly from the
Investor shares of Common Stock representing at least a majority of the
outstanding shares of Common Stock of the Company and to which the Investor
assigns, in writing, its rights under Section 3.1. Upon such assignment, the
Permitted Transferee shall be considered the "Investor" for purposes of Section
3.1.
3.4 Transfers of Rights. The rights and obligations of the Investor
-------------------
under Section 2 may be assigned by Investor to any person or entity that
acquires shares of Common Stock having an aggregate value of at least $2,500,000
(as adjusted in stock splits and similar events) from the Investor. The rights
and obligations of the Investor under Section 3.1 may be assigned only to a
Permitted Transferee, and upon such assignment, the rights and obligations of
the Investor under Section 3.1 shall terminate. In the event of any such
assignment, the assignee must provide written notice of such assignment to the
Company and agree in writing to be bound by the applicable provisions of this
Agreement.
IV. - General.
-------
4.1 Severability. The invalidity or unenforceability of any
------------
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
4.2 Specific Performance. In addition to any and all other remedies
--------------------
that may be available at law in the event of any breach of this Agreement, each
14
<PAGE>
Investor shall be entitled to specific performance of the agreements and
obligations of the Company hereunder and to such other injunctive or other
equitable relief as may be granted by a court of competent jurisdiction.
4.3 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the internal laws of the Commonwealth of Massachusetts
(without reference to the conflicts of law provisions thereof).
4.4 Notices. All notices, requests, consents and other
-------
communications under this Agreement shall be in writing and shall be deemed
delivered (i) two business days after being sent by registered or certified
mail, return receipt requested, postage prepaid, or (ii) one business day after
being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery, in each case to the intended recipient as set forth
below:
If to the Company, at NaviSite, Inc., 100 Brickstone Square, Andover,
Massachusetts 01810, Attention: President, or at such other address or
addresses as may have been furnished in writing by the Company to the Investor;
or
If to the Investor, at CMGI, Inc., 100 Brickstone Square, Andover,
Massachusetts 01810, or at such other address or addresses as may have been
furnished to the Company in writing by such Investor.
Any party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
party for whom it is intended. Any party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other parties notice in the manner set forth in this
Section.
4.5 Complete Agreement. This Agreement constitutes the entire
------------------
agreement and understanding of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings relating to
such subject matter.
4.6 Amendments and Waivers. Any term of this Agreement may be
----------------------
amended or terminated and the observance of any term of this Agreement may be
15
<PAGE>
waived (either generally or in a particular instance and either retroactively or
prospectively) with the written consent of the Company and the Investor.
4.7 Pronouns. Whenever the context may require, any pronouns used in
--------
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.
4.8 Counterparts; Facsimile Signatures. This Agreement may be
----------------------------------
executed in two counterparts, each of which shall be deemed to be an original,
and both of which together shall constitute one and the same document. This
Agreement may be executed by facsimile signatures.
4.9 Section Headings. The section headings are for the convenience
----------------
of the parties and in no way alter, modify, amend, limit or restrict the
contractual obligations of the parties.
4.1 Effective Date. This Agreement shall become effective upon the
--------------
closing of the Company's initial public offering of Common Stock pursuant to an
effective registration statement and shall terminate if such offering does not
close prior to March 31, 2000.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
NAVISITE, INC.
By: /s/ Joel B. Rosen
----------------------------------
Name: Joel B. Rosen
Title: Chief Executive Officer
CMGI, INC.
By: /s/ Andrew J. Hajducky III
----------------------------------
Name: Andrew J. Hajducky III
Title: Chief Financial Officer
16
<PAGE>
EXHIBIT 10.1
------------
________________________________________
NAVISITE, INC.
AMENDED AND RESTATED
1998 EQUITY INCENTIVE PLAN
________________________________________
1. Purpose
The purpose of this NaviSite, Inc. Amended and Restated 1998 Equity
Incentive Plan (the "Plan") is to attract and retain key employees and
----
consultants of the Company and its Affiliates, to provide an incentive for them
to achieve long-range performance goals, and to enable them to participate in
the long-term growth of the Company by granting Awards with respect to the
Company's Common Stock. Certain capitalized terms used herein are defined in
Section 9 below.
2. Administration
The Plan shall be administered by the Committee. The Committee shall select
the Participants to receive Awards and shall determine the terms and conditions
of such Awards. The Committee shall have authority to adopt, alter and repeal
such administrative rules, guidelines and practices governing the operation of
the Plan as it shall from time to time consider advisable, and to interpret the
provisions of the Plan. The Committee's decisions shall be final and binding. To
the extent permitted by applicable law, the Committee may delegate to one or
more executive officers of the Company the power to make Awards to Participants
who are not Reporting Persons or Covered Employees and to make all
determinations under the Plan with respect thereto, provided that, subject to
Sections 4(a) and 4(c) hereof, the Committee shall fix the maximum amount of
such Awards for all such Participants and a maximum for any one Participant.
3. Eligibility
All employees and consultants of the Company or any Affiliate capable of
contributing significantly to the successful performance of the Company, other
than a person who has irrevocably elected not to be eligible, are eligible to be
Participants in the Plan. With respect to Awards issued in connection with the
reorganization of NaviSite Internet Services, Inc. into the Company and NaviNet,
Inc., a Delaware corporation ("NaviNet"), employees and consultants of NaviNet
-------
shall also be eligible to be Participants in the Plan and NaviNet shall be
deemed to be an Affiliate of the Company for purposes of interpreting the
provisions of the Plan applicable to such Awards. Incentive Stock Options (as
defined in Section 5(a) hereof) may be granted under the Plan only to persons
eligible to receive such options under the Code.
1
<PAGE>
4. Stock Available for Awards
(a) Amount. Subject to adjustment under Section 4(b) hereof, Awards may be
made under the Plan with respect to a maximum of 5,562,212 shares of Common
Stock. If any Award expires or is terminated unexercised or is forfeited or
settled without the issuance of shares of Common Stock, the shares subject to
such Award, to the extent of such expiration, termination, forfeiture or
settlement shall again be available under the Plan. Common Stock issued through
the assumption or substitution of outstanding grants from an acquired company
shall not reduce the shares available for Awards under the Plan. Shares issued
under the Plan may consist in whole or in part of authorized but unissued shares
or treasury shares.
(b) Adjustment. In the event that the Committee determines that any stock
dividend, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination, exchange of shares or other
transaction affects the Common Stock such that an adjustment is required in
order to preserve the benefits intended to be provided by the Plan, then the
Committee (subject in the case of Incentive Stock Options to any limitation
imposed by the Code) may in its sole discretion equitably adjust any or all of
(i) the number and kind of shares in respect of which Awards may be made under
the Plan, (ii) the number and kind of shares or other consideration subject to
outstanding Awards and (iii) the exercise price with respect to any of the
foregoing, provided that the number of shares or other consideration subject to
any Award shall always be a whole number, and if considered appropriate, the
Committee may make provision for a cash payment with respect to an outstanding
Award.
(c) Limit on Individual Grants. The maximum number of shares of Common
Stock subject to Options and Stock Appreciation Rights that may be granted to
any Participant in the aggregate in any calendar year shall not exceed 300,000
shares, subject to adjustment under Section 4(b) hereof.
5. Stock Options
(a) Grant of Options. Subject to the provisions of the Plan, the Committee
may grant options ("Options") to purchase shares of Common Stock (i) intended to
-------
comply with the requirements of Section 422 of the Code or any successor
provision and any regulations thereunder ("Incentive Stock Options") and (ii)
-----------------------
not intended to comply with such requirements ("Nonstatutory Stock Options").
--------------------------
The Committee shall determine the number of shares subject to each Option and
the exercise price therefor, which shall not be less than 100% of the Fair
Market Value of the Common Stock on the date of grant. No Incentive Stock Option
may be granted hereunder more than ten years after the effective date of the
Plan.
(b) Terms and Conditions. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Committee may specify in the
applicable grant or thereafter. The Committee may impose such conditions with
respect to the exercise of Options, including conditions relating to applicable
federal or state securities laws, as it considers necessary or advisable.
(c) Payment. No shares shall be delivered pursuant to any exercise of an
Option until payment in full of the exercise price therefor is received by the
Company. Such payment may be
2
<PAGE>
made in whole or in part in cash or, to the extent permitted by the Committee at
or after the grant of the Option, by delivery of a note or other commitment
satisfactory to the Committee or shares of Common Stock owned by the optionee,
including Restricted Stock, or by retaining shares otherwise issuable pursuant
to the Option, in each case valued at their Fair Market Value on the date of
delivery or retention, or such other lawful consideration, including a payment
commitment of a financial or brokerage institution, as the Committee may
determine. If the exercise price of an option is paid by delivery of Restricted
Stock (as defined below) owned by the optionee, shares so acquired will be
subject to the same restrictions as were applicable to such Restricted Stock.
6. Stock Appreciation Rights
(a) Grant of SARs. Subject to the provisions of the Plan, the Committee may
grant rights to receive any excess in value of shares of Common Stock over the
exercise price ("Stock Appreciation Rights" or "SARs") in tandem with an
------------------------- ----
Option (at or after the award of the Option), or alone and unrelated to an
Option. SARs in tandem with an Option shall terminate to the extent that the
related Option is exercised, and the related Option shall terminate to the
extent that the tandem SARs are exercised. The Committee shall determine at the
time of grant or thereafter whether SARs are settled in cash, Common Stock or
other securities of the Company, Awards or other property, and may define the
manner of determining the excess in value of the shares of Common Stock.
(b) Exercise Price. The Committee shall fix the exercise price of each SAR
or specify the manner in which the price shall be determined. An SAR granted in
tandem with an Option shall have an exercise price not less than the exercise
price of the related Option. An SAR granted alone and unrelated to an Option may
not have an exercise price less than 100% of the Fair Market Value of the Common
Stock on the date of grant.
(c) Limited SAR's. An SAR related to an Option, which SAR can only be
exercised upon or during limited periods following a change in control of the
Company, may entitle the Participant to receive an amount based upon the highest
price paid or offered for Common Stock in any transaction relating to the change
in control or paid during a specified period immediately preceding the
occurrence of the change in control in any transaction reported in the stock
market in which the Common Stock is normally traded.
7. Restricted Stock
(a) Grant of Restricted Stock. Subject to the provisions of the Plan, the
Committee may grant shares of Common Stock subject to forfeiture ("Restricted
----------
Stock") and determine the duration of the period (the "Restricted Period")
- ----- -----------------
during which, and the conditions under which, the shares may be forfeited to the
Company and the other terms and conditions of such Awards. Shares of Restricted
Stock may be issued for no cash consideration, such minimum consideration as may
be required by applicable law or such other consideration as the Committee may
determine.
(b) Restrictions. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered, except as permitted by the
Committee, during the Restricted Period. Shares of Restricted Stock shall be
evidenced in such manner as the Committee may determine. Any certificates issued
in respect of shares of Restricted Stock shall be registered in the
3
<PAGE>
name of the Participant and unless otherwise determined by the Committee,
deposited by the Participant, together with a stock power endorsed in blank,
with the Company. At the expiration of the Restricted Period, the Company shall
deliver such certificates to the Participant or if the Participant has died, to
the Participant's Designated Beneficiary.
8. General Provisions Applicable to Awards
(a) Documentation. Each Award under the Plan shall be evidenced by a
writing delivered to the Participant specifying the terms and conditions thereof
and containing such other terms and conditions not inconsistent with the
provisions of the Plan as the Committee considers necessary or advisable to
achieve the purposes of the Plan or to comply with applicable tax and regulatory
laws and accounting principles.
(b) Committee Discretion. Each type of Award may be made alone, in addition
to or in relation to any other Award. The terms of each type of Award need not
be identical, and the Committee need not treat Participants uniformly. Except as
otherwise provided by the Plan or a particular Award, any determination with
respect to an Award may be made by the Committee at the time of grant or at any
time thereafter.
(c) Dividends and Cash Awards. In the discretion of the Committee, any
Award under the Plan may provide the Participant with (i) dividends or dividend
equivalents payable (in cash or in the form of Awards under the Plan) currently
or deferred with or without interest and (ii) cash payments in lieu of or in
addition to an Award.
(d) Termination of Employment or Service on the Board. The Committee shall
determine the effect on an Award of the disability, death, retirement or other
termination of employment or service on the Board of a Participant and the
extent to which, and the period during which, the Participant's legal
representative, guardian or Designated Beneficiary may receive payment of an
Award or exercise rights thereunder.
(e) Change in Control. In order to preserve a Participant's rights under an
Award in the event of a change in control of the Company (as defined by the
Committee), the Committee in its discretion may, at the time an Award is made or
at any time thereafter, take one or more of the following actions: (i) provide
for the acceleration of any time period relating to the exercise or payment of
the Award, (ii) provide for payment to the Participant of cash or other property
with a Fair Market Value equal to the amount that would have been received upon
the exercise or payment of the Award had the Award been exercised or paid upon
the change in control, (iii) adjust the terms of the Award in a manner
determined by the Committee to reflect the change in control, (iv) cause the
Award to be assumed, or new rights substituted therefor, by another entity, or
(v) make such other provision as the Committee may consider equitable to
Participants and in the best interests of the Company.
(f) Transferability. In the discretion of the Committee, any Award may be
made transferable upon such terms and conditions and to such extent as the
Committee determines, provided that Incentive Stock Options may be transferable
only to the extent permitted by the Code. The Committee may in its discretion
waive any restriction on transferability. Any exercise by a
4
<PAGE>
transferee shall also be governed by the Plan. Under certain circumstances, the
Company may or may not permit the transfer of an Award, and such transferred
Award, or securities purchasable upon exercise of such transferred Award, may or
may not be registered under the Securities Act of 1933, as amended.
(g) Loans. The Committee may authorize the making of loans or cash payments
to Participants in connection with the grant or exercise of any Award under the
Plan, which loans may be secured by any security, including Common Stock,
underlying or related to such Award (provided that the loan shall not exceed the
Fair Market Value of the security subject to such Award at the time such loan is
made), and which may be forgiven upon such terms and conditions as the Committee
may establish at the time of such loan or at any time thereafter.
(h) Withholding Taxes. The Participant shall pay to the Company, or make
provision satisfactory to the Committee for payment of, any taxes required by
law to be withheld in respect of Awards under the Plan no later than the date of
the event creating the tax liability. The Company and its Affiliates may, to the
extent permitted by law, deduct any such tax obligations from any payment of any
kind otherwise due to the Participant. In the Committee's discretion, such tax
obligations may be paid in whole or in part in shares of Common Stock, including
shares retained from the Award creating the tax obligation, valued at their Fair
Market Value on the date of delivery.
(i) Foreign Nationals. Awards may be made to Participants who are foreign
nationals or employed outside the United States on such terms and conditions
different from those specified in the Plan as the Committee considers necessary
or advisable to achieve the purposes of the Plan or to comply with applicable
laws.
(j) Amendment of Award. The Committee may amend, modify or terminate any
outstanding Award, including substituting therefor another Award of the same or
a different type, changing the date of exercise or realization and converting an
Incentive Stock Option to a Nonstatutory Stock Option, provided that the
Participant's consent to such action shall be required unless the Committee
determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.
9. Certain Definitions
"Affiliate" means any business entity in which the Company owns directly or
---------
indirectly 50% or more of the total voting power or has a significant financial
interest as determined by the Committee.
"Award" means any Option, Stock Appreciation Right or Restricted Stock
-----
granted under the Plan.
"Board" means the Board of Directors of the Company.
-----
"Code" means the Internal Revenue Code of 1986, as amended from time to
----
time, or any successor law.
5
<PAGE>
"Committee" means one or more committees each comprised of not less than
---------
two members of the Board appointed by the Board to administer the Plan or a
specified portion thereof. Unless otherwise determined by the Board, if a
Committee is authorized to grant Awards to a Reporting Person or a Covered
Employee, each member shall be a "non-employee director" within the meaning of
applicable Rule 16b-3 under the Exchange Act or an "outside director" within the
meaning of Section 162(m) of the Code, respectively. In the event that the Board
does not appoint a Committee, references in the Plan to the Committee shall mean
the Board.
"Common Stock" or "Stock" means the Common Stock, $0.01 par value, of the
------------ -----
Company.
"Company" means NaviSite, Inc., a Delaware corporation.
-------
"Covered Employee" means a "covered employee" within the meaning of Section
----------------
162(m) of the Code.
"Designated Beneficiary" means the beneficiary designated by a Participant,
----------------------
in a manner determined by the Committee, to receive amounts due or exercise
rights of the Participant in the event of the Participant's death. In the
absence of an effective designation by a Participant, "Designated Beneficiary"
means the Participant's estate.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
------------
time to time, or any successor law.
"Fair Market Value" means, (i) with respect to property other than Common
-----------------
Stock, the fair market value of such property as determined by the Committee in
good faith or in the manner established by the Committee from time to time and
(ii) with respect to Common Stock, the value determined by the Board in good
faith, provided that if the Common Stock is then quoted on the Nasdaq National
Market ("Nasdaq") or traded on any national securities exchange or other
interdealer quotation system, then the Fair Market Value of a share of Common
Stock shall be the closing price for the Common Stock as reported by Nasdaq, or
the principal exchange on which the Common Stock is then traded, on the last
preceding trading day.
"Participant" means a person selected by the Committee to receive an Award
-----------
under the Plan.
"Reporting Person" means a person subject to Section 16 of the Exchange
----------------
Act.
10. Miscellaneous
(a) No Right To Employment or Service on the Board. No person shall have
any claim or right to be granted an Award. Neither the Plan nor any Award
hereunder shall be deemed to give any employee the right to continued employment
or to limit the right of the Company to discharge any employee at any time.
(b) No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed under
the Plan until he or she becomes the holder thereof.
6
<PAGE>
A Participant to whom Common Stock is awarded shall be considered the holder of
the Stock at the time of the Award except as otherwise provided in the
applicable Award.
(c) Effective Date. Subject to the approval of the stockholders of the
Company, the Plan shall be effective on December 28, 1998.
(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time, subject to such stockholder approval as the
Board determines to be necessary or advisable to comply with any tax or
regulatory requirement.
(e) Governing Law. The provisions of the Plan shall be governed by and
interpreted in accordance with the laws of the State of Delaware.
_________________________________________
This Plan was originally approved by the Board on December 28, 1998.
This Plan was originally approved by the stockholders on December 28, 1998.
This Plan was amended and restated by the Board as of October 8, 1999.
This Plan, as amended and restated by the Board, was approved by the
stockholders as of October 8, 1999.
7
<PAGE>
EXHIBIT 10.2
------------
NAVISITE, INC.
Amended and Restated
1998 Director Stock Option Plan
-------------------------------
1. Purpose.
-------
This Amended and Restated 1998 Director Stock Option Plan (the "Plan")
governs options to purchase Common Stock, $.01 par value per share (the "Common
Stock"), of NaviSite, Inc. (the "Company") granted by the Company to members of
the Board of Directors of the Company (the "Board") who are not also officers or
employees of the Company or any affiliate of the Company. The purpose of the
Plan is to attract and retain qualified persons to serve as Directors of the
Company and to encourage ownership of the Common Stock of the Company by such
Directors.
2. Administration.
--------------
Grants of stock options under the Plan shall be automatic as provided in
Section 8. All questions of interpretation of the Plan or of any options
granted hereunder shall be determined by the Board. Any and all powers of the
Board under the Plan may be exercised by a committee consisting of one or more
Directors appointed by the Board who are not participants in the Plan.
3. Eligibility.
-----------
Members of the Board who are not also officers or employees of the Company
or any affiliate of the Company shall be eligible to participate in the Plan.
4. Shares Subject to the Plan.
--------------------------
Options may be granted under the Plan in respect of a maximum of 125,000
shares of Common Stock, subject to adjustment as provided in Section 5 below.
Shares to be issued upon the exercise of options granted under the Plan may be
either authorized but unissued shares or shares held by the Company in its
treasury. Whenever options under the Plan lapse, terminate or otherwise become
unexercisable, the shares of Common Stock which were available for such options
shall again be available for the grant of options under the Plan. The Company
shall at all times during the term of the Plan and while options remain
outstanding hereunder reserve such number of shares of Common Stock as will be
sufficient to satisfy the requirements of the Plan.
5. Adjustment of Number of Option Shares.
-------------------------------------
In the event of a stock dividend, split-up, combination or reclassification
of shares, recapitalization or other similar capital change relating to the
Company's Common Stock, the maximum aggregate number and kind of shares or
securities of the Company as to which options may be granted under this Plan and
as to which options then outstanding shall be exercisable, the
1
<PAGE>
option price of such options and the consideration with respect to which the
options are exercisable may be appropriately adjusted (as determined by the
Board in its sole discretion) to reflect such change or distribution.
Except as otherwise provided in the Option Agreement (as defined below) in
the event of any reorganization, consolidation or merger to which the Company is
a party and in which the Company does not survive, or upon the dissolution or
liquidation of the Company, all outstanding options shall terminate; provided,
--------
however, that (i) in the event of the liquidation or dissolution of the Company,
- -------
or in the event of any such reorganization, consolidation or merger in which the
Company does not survive and with respect to which the resulting or surviving
corporation does not assume such outstanding option or issue a substitute option
therefor, such option shall be exercisable in full, without regard to any
installment restrictions on exercise imposed pursuant to this Plan or any Option
Agreement, during such period preceding the effective date of such liquidation,
dissolution, reorganization, consolidation or merger (unless such option is
terminated earlier by its terms) as may be specified by the Board; and (ii) in
the event of any such reorganization, consolidation or merger, the Board may, in
its good faith discretion, arrange to have the resulting or surviving
corporation assume such outstanding option or issue a substitute option
therefor.
No fraction of a share shall be purchasable or deliverable upon exercise of
an option, but, in the event any adjustment hereunder of the number of shares
covered by the option shall cause such number to include a fraction of a share,
such fraction shall be adjusted to the nearest smaller whole number of shares.
6. Non-Statutory Stock Options.
---------------------------
All options granted under the Plan shall be non-statutory options not
entitled to special tax treatment under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code").
7. Form of Option Agreements.
-------------------------
Options shall be granted hereunder pursuant to the terms of written
agreements ("Option Agreements") which shall be substantially in the form of the
attached Exhibit A or in such other form as the Board may from time to time
---------
determine.
8. Grant of Options and Option Terms.
---------------------------------
a. Automatic Grant of Options. Commencing on the date of the adoption of
this Plan by the stockholders, each non-employee director of the Company shall,
upon the date of his or her election (the "Date of Grant"), automatically be
granted an option to purchase 25,000 shares of Common Stock, with the exception
of Craig Goldman, who shall be granted an option to purchase 50,000 shares of
Common Stock on the date this Plan is adopted by the Board of Directors (the
"Craig Goldman option"). No options shall be granted hereunder (i) if, upon the
election of such a non-employee director, there are not sufficient shares
reserved for issuance under the Plan to make such an automatic grant and (ii)
after ten years from the date on which this Plan was initially approved and
adopted by the Board.
2
<PAGE>
b. Exercisability of Options. The options granted under this Plan shall
become exercisable with respect to 5,000 shares on the first anniversary of the
Date of Grant (except in the case of the Craig Goldman option, which option
shall be exercisable as to 10,000 shares on the Date of Grant), and shall become
exercisable as to an additional 5,000 shares (except in the case of the Craig
Goldman option, which option shall be exercisable as to an additional 10,000
shares) on the date of each annual meeting of the stockholders of the Company (a
"Stockholder Meeting") thereafter but in all cases if and only if the option
holder is a member of the Board at the opening of business on the next business
day following the date of such annual meeting. Directors holding exercisable
options under this Plan who cease to serve as members of the Board of the
Company for any reason other than death may, for a period of seven months
following the date of cessation of service, exercise the rights they had under
such options at the time they ceased being a Director. Any options and rights
that have not yet become exercisable shall terminate upon cessation of such
Director's membership on the Board. Upon the death of a Director, those
entitled to do so under the Director's will or the laws of descent and
distribution shall have the right, at any time within twelve months after the
date of death, to exercise in whole or in part any options which were
exercisable at the time of such Director's death. The rights of the option
holder may be exercised by the holder's guardian or legal representative in the
case of disability and by the beneficiary designated by the holder in writing
delivered to the Company or, if none has been designated, by the holder's estate
or his or her transferee on death in accordance with this Plan, in the case of
death. Options granted under the Plan shall terminate, and no rights thereunder
may be exercised, after the expiration of the applicable exercise period.
Notwithstanding the foregoing provisions, no rights under any options may be
exercised after the expiration of ten years from their Date of Grant.
c. Option Price; Fair Market Value. With the exception of the Craig
Goldman option, the per share option price for each option granted under this
Plan shall be the Fair Market Value per share of the Common Stock (as
hereinafter defined) on the Date of Grant. The "Fair Market Value" per share of
the Common Stock shall be the value determined by the Board in good faith,
provided that if the Common Stock is then quoted on the Nasdaq National Market
("Nasdaq") or traded on any other national securities exchange or other
interdealer quotation system, then the Fair Market Value of a share of Common
Stock shall be the closing price for the Common Stock as reported by Nasdaq, or
the principal exchange or quotation system on which the Common Stock is then
traded or quoted, on the last preceding trading day. The Craig Goldman option
shall be exercisable at $0.34 per share.
d. Term of Option. The term of each option granted under the Plan shall
be ten years from the Date of Grant, subject to earlier termination as provided
in Section 5 hereof or in this Section 8 or in the Option Agreement.
e. Method of Exercise and Payment. Each exercise of an option hereunder
may be effected only by giving written notice, in the manner provided in Section
12 hereof, of intent to exercise the option, specifying the number of shares as
to which the option is being exercised, and accompanied by full payment of the
option price for the number of shares then being acquired. Such payment shall
be made (i) in cash, (ii) by certified or bank check payable to the order of the
Company, (iii) credit to the Company's account at a financial or brokerage
institution on the date of exercise or a payment commitment of such an
institution acceptable to
3
<PAGE>
the Company, (iv) in shares of Common Stock having an aggregate Fair Market
Value, at the time of such payment, equal to the total option price for the
number of shares of Common Stock for which payment is then being made, or (v)
partly in cash or by certified or bank check payable to the order of the Company
and the balance in shares of Common Stock having an aggregate Fair Market Value,
at the time of such payment, equal to the difference between the total option
price for the number of shares of Common Stock for which payment is then being
made and the amount of the payment in cash or by certified or bank check. Shares
of Common Stock surrendered in payment of all or part of the option price must
have been held by the person exercising the option free of restrictions imposed
by the Company for at least six months unless otherwise permitted by the Board.
Receipt by the Company of such notice and payment shall, for purposes of
this Plan, constitute exercise of the option or a part thereof. Within twenty
(20) days thereafter, the Company shall deliver or cause to be delivered to the
optionee a certificate or certificates for the number of shares of Common Stock
then being purchased by the optionee. Such shares shall be fully paid and non-
assessable. Notwithstanding the foregoing, if any law or applicable regulation
of the Securities and Exchange Commission or other public regulatory authority
(including, but not limited to, a stock exchange) shall require the Company or
the optionee (i) to register or qualify, under the Securities Act of 1933, as
amended (the "Securities Act"), any similar federal statute then in force or any
state law regulating the sale of securities, any shares of Common Stock covered
by an option with respect to which notice of intent to exercise shall have been
delivered to the Company or (ii) to take any other action in connection with
such shares before issuance thereof may be effected, then the delivery of the
certificate or certificates for such shares shall be postponed until completion
of the necessary action. Nothing herein shall be deemed to require the Company
to take such action. Any such action shall be taken by the Company at its own
expense.
To the extent determined necessary by counsel to the Company to comply with
any applicable law, the Company may require an individual exercising an option
to represent that his purchase of shares of Common Stock pursuant to such
exercise is for his own account, for investment and without a view to resale or
distribution and that he will not sell or otherwise dispose of any such shares
except pursuant to (i) an effective registration statement covering such
transaction filed with the Securities and Exchange Commission and in compliance
with all of the applicable provisions of the Securities Act, and the rules and
regulations thereunder, or (ii) an opinion of Company counsel that such
registration is not required.
f. Non-transferability. Options granted under the Plan shall not be
transferable by the holder thereof otherwise than by will or the laws of descent
and distribution.
9. Limitation of Rights.
--------------------
No Right to Continue as a Director. Neither the Plan, nor the granting of
an option or any other action taken pursuant to the Plan, shall constitute an
agreement or understanding, express or implied, that the Company will retain an
optionee as a Director for any period of time or at any particular rate of
compensation.
4
<PAGE>
No Stockholders' Rights for Options. Directors shall have no rights as
stockholders with respect to the shares covered by their options until the date
they are issued such shares, and no adjustment will be made for dividends or
other rights for which the record date is prior to the date such option shares
are so issued.
10. Stockholder Approval.
--------------------
The Plan is subject to approval by the stockholders of the Company by the
affirmative vote of the holders of shares of voting capital stock present or
representing a majority of votes entitled to be cast at a meeting of the
Company's stockholders. In the event such approval is not obtained, all options
granted under this Plan shall be void and without effect.
11. Amendment or Termination.
------------------------
The Board may amend or terminate this Plan at any time subject to any
stockholder approval that the Board deems necessary. No such termination or
amendment shall adversely affect the rights of any option holder with respect to
outstanding options under the Plan without the prior written consent of such
option holder.
12. Notices.
-------
Any communication or notice required or permitted to be given under this
Plan shall be in writing and mailed by registered or certified mail or delivered
in hand, if to the Company, to its Chief Financial Officer at NaviSite, Inc.,
100 Brickstone Square, Andover, MA 01810 (or such other address as the Company
may from time to time prescribe) and, if to an optionee, to such address as the
optionee shall last have furnished to the Company.
13. Governing Law.
-------------
The Plan shall be governed by and construed in accordance with the laws of
the State of Delaware.
As adopted by the Board on
December 28, 1998
As approved by the Stockholders on
December 28, 1998
As amended and restated by the Board
as of October 8, 1999
As approved by the Stockholders,
as amended and restated, as
of October 8, 1999
5
<PAGE>
EXHIBIT A
---------
1998 DSO - _______ 25,000 Shares
NAVISITE, INC.
Amended and Restated
1998 Director Stock Option Plan
Non-statutory Stock Option Agreement
__________ __, 199_
NaviSite, Inc. (the "Company"), a Delaware corporation, hereby grants to
the person named below (the "Optionee") an option to purchase shares of Common
Stock, $.01 par value per share, of the Company (the "Option") under and subject
to the Company's Amended and Restated 1998 Director Stock Option Plan (the
"Plan"), subject to the following terms and conditions and those set forth in
the Plan:
Name of Optionee:
Address:
Social Security No.
Option Price:
Date of Grant:
Exercisability Schedule:
This option shall become exercisable as provided in Section 8 of the Plan.
By signing this Stock Option Agreement and returning on signed copy of to
the Company, the Optionee accepts the Option described herein on the terms and
conditions set forth herein or in the Plan.
NAVISITE, INC. Accepted and agreed to:
By: ____________________ _______________________
Title: Optionee
6
<PAGE>
EXHIBIT 10.3
------------
NAVISITE, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
The purpose of this 1999 Employee Stock Purchase Plan (the "Plan") is to
provide eligible employees of NaviSite, Inc. (the "Company") with opportunities
to purchase shares of the Company's common stock, $.01 par value (the "Common
Stock"). Fifty thousand (50,000) shares of Common Stock in the aggregate have
been approved for this purpose. This Plan is intended to qualify as an "employee
stock purchase plan" as defined in Section 423 of the Internal Revenue Code of
1986, as amended (the "Code"), and the regulations promulgated thereunder and
shall be interpreted consistent therewith.
1. Administration. The Plan will be administered by the Board of
--------------
Directors of the Company (the "Board) or by a Committee appointed by the Board
(the "Committee"). The Board or the Committee has authority to make rules and
regulations for the administration of the Plan and its interpretation and
decisions with regard thereto shall be final and conclusive.
2. Eligibility. All employees of the Company, including Directors who
-----------
are employees, and all employees of any subsidiary of the Company (as defined in
Section 424(f) of the Code) designated by the Board or the Committee from time
to time (a "Designated Subsidiary"), are eligible to participate in any one or
more of the offerings of Options (as defined in Section 9) to purchase Common
Stock under the Plan provided that:
(a) they are customarily employed by the Company or a Designated
Subsidiary for more than 20 hours a week and for more than five months in a
calendar year; and
(b) they have been employed by the Company or a Designated Subsidiary for
at least six months prior to enrolling in the Plan; and
(c) they are employees of the Company or a Designated Subsidiary on the
first day of the applicable Plan Period (as defined below).
<PAGE>
No employee may be granted an option hereunder if such employee,
immediately after the option is granted, owns, directly or indirectly, 5% or
more of the total combined voting power or value of the stock of the Company or
any subsidiary. For purposes of the preceding sentence, the attribution rules
of Section 424(d) of the Code shall apply in determining the stock ownership of
an employee, and all stock which the employee has a contractual right to
purchase shall be treated as stock owned by the employee.
3. Offerings. The Company will make one or more offerings ("Offerings")
---------
to employees to purchase stock under this Plan. Unless otherwise determined by
the Board or Committee, the first Offering will commence on the effective date
(the "Effective Date") of the Company's initial public offering of Common Stock
(or, if shares of Common Stock are not traded on a national securities exchange
or the Nasdaq National Market on the Effective Date, then on the next date on
which the Common Stock is so traded) and end on February 29, 2000. Unless
otherwise determined by the Board or the Committee, subsequent Offerings will
commence on the date after the end of the preceding Offering and will end on the
last day of the third full month thereafter. Each such period is referred to as
a Plan Period (a "Plan Period"). The Board or the Committee may, at its
discretion, choose a different Plan Period for any Offerings.
4. Participation. An employee eligible on the first day of any Offering
-------------
(an "Offering Commencement Date") may participate in such Offering by completing
and forwarding a payroll deduction authorization form to the employee's
appropriate payroll office prior to the enrollment deadline established by the
Board or Committee. The form will authorize a regular payroll deduction
from the Compensation received by the employee during the Plan Period. Unless an
employee files a new form or withdraws from the Plan, his or her deductions and
purchases will continue at the same rate for future Offerings under the Plan as
long as the Plan remains in effect. The term "Compensation" means the amount of
money reportable on the employee's Federal Income Tax Withholding Statement,
excluding overtime, shift premium, incentive or bonus awards, allowances and
reimbursements for expenses such as relocation allowances for travel expenses,
income or gains on the exercise of Company stock options or stock appreciation
rights, and similar items, whether or not shown on the employee's Federal Income
Tax Withholding Statement, but including, in the case of salespersons, sales
commissions to the extent determined by the Board or the Committee.
2
<PAGE>
5. Deductions. The Company will maintain payroll deduction accounts for
----------
all participating employees. With respect to any Offering made under this Plan,
an employee may authorize a payroll deduction in any whole percentage (not less
than 1% or more than 10%) or dollar amount not less than $10, or such lesser
amount as the Board or Committee shall determine before the start of each Plan
Period, of the Compensation he or she receives during the Plan Period or such
shorter period during which deductions from payroll are made, provided that such
percentage or amount may not result in total deductions of less than $100 for
any Plan Period for any employee.
No employee may be granted an Option which permits his rights to purchase
Common Stock under this Plan and any other employee stock purchase plan (as
defined in Section 423(b) of the Code) of the Company and any subsidiaries, to
accrue at a rate which exceeds $25,000 of fair market value of such Common Stock
(determined at the Offering Commencement Date of the Plan Period) for each
calendar year in which the Option is outstanding at any time.
6. Deduction Changes. An employee may decrease, increase or discontinue
-----------------
his payroll deduction once during any Plan Period, by filing a new payroll
deduction authorization form. If an employee elects to discontinue his payroll
deductions during a Plan Period, but does not elect to withdraw his funds
pursuant to Section 8 hereof, funds deducted prior to his or her election to
discontinue will be applied to the purchase of Common Stock on the Exercise Date
(as defined below).
7. Interest. Interest will not be paid on any employee accounts, except
--------
to the extent that the Board or the Committee, in its sole discretion, elects to
credit employee accounts with interest at such per annum rate as it may from
time to time determine.
8. Withdrawal of Funds. An employee may at any time prior to the close
-------------------
of business on the last business day in a Plan Period and for any reason
permanently draw out the balance accumulated in the employee's account and
thereby withdraw from participation in an Offering. Partial withdrawals are not
permitted. The employee may not begin participation again during the remainder
of the Plan Period. The employee may participate in any subsequent Offering in
accordance with terms and conditions established by the Board or the Committee.
9. Purchase of Shares. On the Offering Commencement Date of each Plan
------------------
Period, the Company will grant to each eligible employee who is then a
3
<PAGE>
participant in the Plan an option ("Option") to purchase on the last business
day of such Plan Period (the "Exercise Date"), at the Option Price hereinafter
provided for, the largest number of whole shares of Common Stock of the Company
as does not exceed the number of shares determined by multiplying $1,667 by the
number of full months in the Offering Period and dividing the result by the
closing price (as defined below) on the Offering Commencement Date of such Plan
Period.
Except as otherwise provided herein, the purchase price for each share
purchased will be 85% of the closing price of the Common Stock on (i) the first
business day of such Plan Period or (ii) the Exercise Date, whichever closing
price shall be less. Such closing price shall be (a) the closing price on any
national securities exchange on which the Common Stock is listed, (b) the
closing price on the Nasdaq National Market or (c) the average of the closing
bid and asked prices in the over-the-counter-market, whichever is applicable, as
published in The Wall Street Journal. If no sales of Common Stock were made on
-----------------------
such a day, the price of the Common Stock for purposes of clauses (a) and (b)
above shall be the reported price for the next preceding day on which sales were
made. Notwithstanding the foregoing, for purposes of the initial Plan Period,
the purchase price for each share will be (i) 85% of the price at which the
Common Stock is initially offered to the public or (ii) 85% of the closing price
of the Common Stock on the Exercise Date, whichever price shall be less.
Each employee who continues to be a participant in the Plan on the Exercise
Date shall be deemed to have exercised his or her Option at the Option Price on
such date and shall be deemed to have purchased from the Company the number of
full shares of Common Stock reserved for the purpose of the Plan that his
accumulated payroll deductions on such date will pay for, but not in excess of
the maximum number determined in the manner set forth above.
Any balance remaining in an employee's payroll deduction account at the end
of a Plan Period, other than amounts that would have otherwise been applied for
the payment of fractional shares, will be automatically refunded to the
employee.
10. Issuance of Certificates. Certificates representing shares of Common
------------------------
Stock purchased under the Plan may be issued only in the name of the employee,
in the name of the employee and another person of legal age as joint tenants
with rights of survivorship or (in the Company's sole discretion) in the name of
a brokerage firm, bank or other nominee holder designated by the employee. The
Company may, in its sole discretion and in compliance with applicable laws,
authorize the use of book entry registration of shares in lieu of issuing stock
certificates.
11. Rights on Retirement, Death or Termination of Employment. In the
--------------------------------------------------------
event of a participating employee's termination of employment prior to the last
business day of a Plan Period, no payroll deduction shall be taken from any pay
4
<PAGE>
due and owing to an employee and the balance in the employee's account shall be
paid to the employee or, in the event of the employee's death, (a) to a
beneficiary previously designated in a revocable notice signed by the employee
(with any spousal consent required under state law) or (b) in the absence of
such a designated beneficiary, to the executor or administrator of the
employee's estate or (c) if no such executor or administrator has been appointed
to the knowledge of the Company, to such other person(s) as the Company may, in
its discretion, designate. If, prior to the last business day of the Plan
Period, the Designated Subsidiary by which an employee is employed shall cease
to be a subsidiary of the Company, or if the employee is transferred to a
subsidiary of the Company that is not a Designated Subsidiary, the employee
shall be deemed to have terminated employment for the purposes of this Plan.
12. Optionees Not Stockholders. Neither the granting of an Option to an
--------------------------
employee nor the deductions from his pay shall constitute such employee a
stockholder of the shares of Common Stock covered by an Option under this Plan
until such shares have been purchased by and issued to him or her.
13. Rights Not Transferable. Rights under this Plan are not transferable
-----------------------
by a participating employee other than by will or the laws of descent and
distribution and are exercisable during the employee's lifetime only by the
employee.
14. Application of Funds. All funds received or held by the Company under
--------------------
this Plan may be combined with other corporate funds and may be used for any
corporate purpose.
15. Adjustment in Case of Changes Affecting Common Stock. In the event of
----------------------------------------------------
a subdivision of outstanding shares of Common Stock, or the payment of a
dividend in Common Stock, the number of shares approved for this Plan, and the
share limitation set forth in Section 9, shall be increased proportionately, and
such other adjustment shall be made as may be deemed equitable by the Board or
the Committee. In the event of any other change affecting the Common Stock, such
adjustment shall be made as may be deemed equitable by the Board or the
Committee to give proper effect to such event.
16. Merger. In the event of a merger or consolidation of the Company with
------
or into another corporation, or of a sale of all or substantially all of the
assets of the Company, while unexercised Options remain outstanding under the
Plan, (a) subject to the provisions of clauses (b) and (c), after the effective
date of such
5
<PAGE>
transaction, each holder of an outstanding Option shall be entitled, upon
exercise of such Option, to receive in lieu of shares of Common Stock, shares of
such stock or other securities as the holders of shares of Common Stock received
pursuant to the terms of such transaction; or (b) all outstanding Options may be
cancelled by the Board or the Committee as of a date prior to the effective date
of any such transaction and all payroll deductions shall be paid out to the
participating employees; or (c) all outstanding Options may be cancelled by the
Board or the Committee as of the effective date of any such transaction,
provided that notice of such cancellation shall be given to each holder of an
Option, and each holder of an Option shall have the right to exercise such
Option in full based on payroll deductions then credited to his account as of a
date determined by the Board or the Committee, which date shall not be less than
ten (10) days preceding the effective date of such transaction.
17. Amendment of the Plan. The Board may at any time, and from time to
---------------------
time, amend this Plan in any respect, except that (a) if the approval of any
such amendment by the stockholders of the Company is required by Section 423 of
the Code, such amendment shall not be effected without such approval, and (b) in
no event may any amendment be made which would cause the Plan to fail to comply
with Section 423 of the Code.
18. Insufficient Shares. In the event that the total number of shares of
-------------------
Common Stock specified in elections to be purchased under any Offering plus the
number of shares purchased under previous Offerings under this Plan exceeds the
maximum number of shares issuable under this Plan, the Board or the Committee
will allot the shares then available on a pro rata basis.
19. Termination of the Plan. This Plan may be terminated at any time by
-----------------------
the Board. Upon termination of this Plan all amounts in the accounts of
participating employees shall be promptly refunded.
20. Governmental Regulations. The Company's obligation to sell and
------------------------
deliver Common Stock under this Plan is subject to listing on a national stock
exchange or quotation on the Nasdaq National Market (to the extent the Common
Stock is then so listed or quoted) and the approval of all governmental
authorities required in connection with the authorization, issuance or sale of
such stock.
21. Governing Law. The Plan shall be governed by Delaware law except to
-------------
the extent that such law is preempted by federal law.
6
<PAGE>
22. Issuance of Shares. Shares may be issued upon exercise of an Option
------------------
from authorized but unissued Common Stock, from shares held in the treasury of
the Company or from any other proper source.
23. Notification upon Sale of Shares. Each employee agrees, by entering
--------------------------------
the Plan, to promptly give the Company notice of any disposition of shares
purchased under the Plan where such disposition occurs within two years after
the date of grant of the Option pursuant to which such shares were purchased.
24. Effective Date and Approval of Stockholders. The Plan shall take
-------------------------------------------
effect on October 27, 1999 subject to approval by the stockholders of the
Company as required by Section 423 of the Code, which approval must occur within
twelve months of the adoption of the Plan by the Board.
Adopted by the Board of Directors as of October 8, 1999
Approved by the Stockholders as of October 8, 1999
7
<PAGE>
EXHIBIT 10.4
NAVISITE, INC.
1999 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
1. Purpose.
-------
The purpose of this 1999 Stock Option Plan for Non-Employee Directors (the
"Plan") of NaviSite, Inc. (the "Company") is to encourage ownership in the Com
pany by non-employee directors of the Company whose continued services are
considered essential to the Company's future progress and to provide them with a
further incentive to remain as directors of the Company.
2. Administration.
--------------
The Board of Directors (the "Board") shall supervise and administer the
Plan. All questions concerning interpretation of the Plan or any options granted
under it shall be resolved by the Board of Directors and such resolution shall
be final and binding upon all persons having an interest in the Plan. The Board
of Directors may, to the full extent permitted by or consistent with applicable
laws or regulations, delegate any or all of its powers under the Plan to a
committee appointed by the Board of Directors, and if a committee is so
appointed, all references to the Board of Directors in the Plan shall mean and
relate to such committee.
3. Eligibility.
-----------
There shall be eligible to receive options under the Plan each director of
the Company who: (i) is not an employee of the Company or any of its
subsidiaries or affiliates, (ii) unless otherwise determined by the Board, is
not an affiliate (as such term is defined in Rule 144(a)(1) promulgated under
the Securities Act of 1993), employee or designee of an institutional or
corporate investor that owns, at the time of his or her initial election as a
director of the Company, more than 5% of the outstanding shares of Common Stock
of the Company (an "Affiliated Director").
4. Stock Subject to the Plan.
-------------------------
(a) A total of 250,000 shares of the Company's Common Stock, par value $.01
per share ("Common Stock") may be issued under the Plan, subject to adjust ment
as provided in Section 7.
<PAGE>
(b) All options granted under the Plan shall be non-statutory options not
entitled to special tax treatment under Section 422 of the Internal Revenue Code
of 1986, as amended.
5. Terms, Conditions and Form of Options.
-------------------------------------
Each option granted under the Plan shall be evidenced by a written
agreement in such form as the Board of Directors shall from time to time
approve, which agreements shall comply with and be subject to the following
terms and conditions:
(a) (i) Initial Grants. Each eligible director who is elected for the
--------------
first time to the Board of Directors of the Company after this Plan is adopted
by the Board of Directors shall be granted, upon the date of such initial
election, an option to acquire 25,000 shares of Common Stock under the Plan (the
"Initial Option"), provided that if such initial election occurs prior to the
approval of the Plan by the stockholders of the Company, such option may, at the
discretion of the Board, be granted on the date of such approval. Each
Affiliated Director who ceases to be an Affiliated Director and is not otherwise
an employee of the Company or any of its subsidiaries or affiliates shall be
granted, on the date such director ceases to be an Affiliated Director but
remains as a member of the Board or Directors, an Initial Option to acquire
25,000 shares of Common Stock under the Plan.
(ii) Annual Grants. On the first anniversary of the grant of the
-------------
Initial Option to an eligible director, and on each subsequent anniversary
thereof, the Company shall grant to such eligible director an option to purchase
6,250 shares of Common Stock (an "Annual Option"), provided that such eligible
director serves as a member of the Board on the applicable anniversary date.
(iii) Additional Shares. The Board may, in its discretion,
-----------------
increase to up to 100,000 the aggregate number of shares of Common Stock that
may be subject to an Initial Option and/or Additional Options covering any
vesting period of up to 48 months that may be granted to an eligible director
after the date of such increase.
(b) Option Exercise Price. The option exercise price per share for each
---------------------
option granted under the Plan shall equal (i) the closing price of the Common
Stock on any national securities exchange on which the Common Stock is listed,
(ii) the closing price of the Common Stock on the Nasdaq National Market or
2
<PAGE>
(iii) the average of the closing bid and asked prices of the Common Stock in the
over-the-counter market, whichever is applicable, on the date of grant, or if
none of clauses (i), (ii) or (iii) applies, the fair market value of the Common
Stock, as determined by the Board, on the date of grant. In the case of clauses
(i), (ii) and (iii), if no sales of Common Stock were made on the date of grant,
the price of the Common Stock shall be the reported price for the next preceding
day on which sales were made.
(c) Transferability of Options. Except as the Board may otherwise provide
--------------------------
in an option granted under the Plan, any option granted under the Plan to an
optionee shall not be transferable by the optionee other than (i) by will or the
laws of descent and distribution, (ii) pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder, or (iii) to any child, stepchild,
grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,
sister-in-law, niece, nephew or other person sharing the director's household
(other than a parent or employee) (a "Family Member"), or any trust in which
Family Members have more than 50% of the beneficial interest, any foundation in
which Family Members (or the optionee) control the management of assets, and any
other entity in which Family Members (or the optionee) have more than a 50%
aggregate voting interest. References to an optionee, to the extent relevant in
the context, shall include references to authorized transferees.
(d) Time and Manner of Exercise.
---------------------------
(i) Vesting.
-------
(a) Each Initial Option granted under the Plan shall vest and become
exercisable as to 1/48th of the number of shares originally subject to the
option on each monthly anniversary date of the date of grant, provided that the
optionee serves as a director on such monthly anniversary date.
(b) Each Additional Option shall vest and become exercis able as to
1/12th of the number of shares originally subject to the option on each monthly
anniversary date of the date of grant commencing on the 37th monthly anniversary
date, provided that the optionee serves as a director on such monthly
anniversary date.
3
<PAGE>
(ii) Termination. Except as otherwise provided in the applicable
-----------
option agreement, each option shall terminate, and may no longer be exercised,
on the earlier of (i) the date ten years after the date of grant of such option
or (ii) six months after the date on which the optionee ceases to serve as a
director of the Company (or 12 months if such cessation is due to the death of
such director). Each option may be exercised during the 6 or 12 month period
set forth in clause (ii) above only to the extent it was exercisable at the time
of the optionee's cessation of service as a director.
(iii) Change in Control. All outstanding options granted under
-----------------
the Plan shall immediately become exercisable in full upon a Change in Control
(as defined in Section 8).
(iv) Exercise Procedure. An option may be exercised in whole or in
------------------
part, to the extent it is then exercisable, only by written notice to the
Company at its principal office accompanied by (i) payment in cash or by check
of the full exercise price for the shares as to which it is exercised, (ii)
delivery of outstanding shares of Common Stock (which have been outstanding for
at least six months) having a fair market value on the last business day
preceding the date of exercise equal to the option exercise price, (iii) an
irrevocable undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price or delivery of irrevocable
instructions to a creditworthy broker to deliver promptly to the Company cash or
a check sufficient to pay the exercise price, (iv) payment by such other means
as may be approved by the Board, or (v) any combination of the foregoing.
(v) Exercise by Representative Following Death of Director. An
------------------------------------------------------
optionee, by written notice to the Company, may designate one or more persons
(and from time to time change such designation), including his or her legal
representative, who, by reason of the optionee's death, shall acquire the right
to exercise all or a portion of the option. If the person or persons so
designated wish to exercise any portion of the option, they must do so within
the term of the option as provided herein. Any exercise by a representative
shall be subject to the provisions of the Plan.
(vi) Withholding Taxes. An optionee shall pay to the Company, or make
-----------------
provisions satisfactory to the Company for payment of, any taxes required by law
to be withheld upon any exercise of an option granted under the Plan, no later
than the date of the event creating such tax liability. In the Board's
discretion, such tax obligation may be paid in whole or in part in shares of
Common Stock, including shares retained from the exercise of the option, valued
at the then fair market value.
4
<PAGE>
(e) Early Exercise Provisions. Notwithstanding anything to the contrary in
-------------------------
the Plan, an optionee may at any time exercise any Initial Option or Additional
Option in its entirety, as to both vested and unvested shares, provided that at
the time of and as a condition to such exercise, such optionee executes and
delivers to the Company a stock restriction agreement, in a form approved by the
Board, pursuant to which the Company (or its designee) shall have the right to
purchase from the optionee within 90 days of his or her termination of service
as a director for any reason (or, if later, within 90 days after his or her
exercise of the option), at the original option exercise price, all shares
acquired upon such exercise that would not, but for the provisions of this
Section 5(e), have otherwise been purchasable by the optionee under the
provisions of Section 5(d)(i) on the date of such termination of service.
6. Limitation of Rights.
--------------------
(a) No Right to Continue as a Director. Neither the Plan, nor the granting
----------------------------------
of an option nor any other action taken pursuant to the Plan, shall constitute
or be evidence of any agreement or understanding, express or implied, that the
Company will retain the optionee as a director for any period of time.
(b) No Stockholders' Rights for Options. An optionee shall have no rights
-----------------------------------
as a stockholder with respect to the shares covered by his or her option until
the date of the issuance to him or her of a stock certificate therefor, and no
adjust ment will be made for dividends or other rights (except as provided in
Section 7) for which the record date is prior to the date such certificate is
issued.
(c) Compliance with Securities Laws. Each option shall be subject to the
-------------------------------
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject to such option
upon any securities exchange or under any state or federal law, or the consent
or approval of any governmental or regulatory body, or the disclosure of non-
public information or the satisfaction of any other condition is necessary as a
condition of, or in connection with, the issuance or purchase of shares
thereunder, such option may not be exer cised, in whole or in part, unless such
listing, registration, qualification, consent or approval, or satisfaction of
such condition shall have been effected or obtained on conditions acceptable to
the Board of Directors. Nothing herein shall be deemed to require the Company
to apply for or to obtain such listing, registration or qualifica tion, or to
satisfy such condition.
5
<PAGE>
7. Adjustment Provisions for Mergers, Recapitalizations and Related
----------------------------------------------------------------
Transactions.
- ------------
If, through or as a result of any merger, consolidation, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, or other similar transaction, (i) the outstanding shares of Common Stock
are exchanged for a different number or kind of securities of the Company or of
another entity, or (ii) additional shares or new or different shares or other
securities of the Company are distributed with respect to such shares of Common
Stock, the Board of Directors shall make an appropriate and proportionate
adjustment in (x) the maximum number and kind of shares reserved for issuance
under the Plan, (y) the number and kind of shares or other securities subject to
then outstanding options under the Plan, and (z) the price for each share
subject to any then outstanding options under the Plan (without changing the
aggregate purchase price for such options), to the end that each option shall be
exercisable, for the same aggregate exercise price, for such securities as such
optionholder would have held immediately following such event if he had
exercised such option immediately prior to such event. No fractional shares
will be issued under the Plan on account of any such adjustments.
8. Change in Control.
-----------------
For purposes hereof, "Change in Control" means an event or occurrence set
forth in any one or more of subsections (a) through (d) below (including an
event or occurrence that constitutes a Change in Control under one of such
subsections but is specifically exempted from another such subsection):
(a) the acquisition by an individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership of any
capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) a majority or more of either (i) the then outstanding shares of
common stock of the Company (the "Out standing Company Common Stock") or (ii)
the combined voting power of the then outstanding securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change in
Control: (i) any acquisition directly from the Company (excluding an acquisition
pursuant to the exercise, conversion or exchange of any security exercisable
6
<PAGE>
for, convertible into or exchangeable for common stock or voting securities of
the Company, unless the Person exercising, converting or exchanging such
security acquired such security directly from the Company or an underwriter or
agent of the Company), (ii) any acquisition by the Company, (iii) any
acquisition by any em ployee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (iv)
any Business Combination (as defined below) excepted from subsection (c) of this
Section 8 by the proviso set forth therein; or
(b) such time as the Continuing Directors (as defined below) do not
constitute a majority of the Board (or, if applicable, the Board of Directors of
a successor corporation to the Company), where the term "Continuing Director"
means at any date a member of the Board (i) who was a member of the Board on
the date of adoption of this Plan or (ii) who was nominated or elected
subsequent to such date by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from this clause (ii)
any individual whose initial assumption of office occurred as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents, by
or on behalf of a person other than the Board; or
(c) the consummation of a merger, consolidation, reorganization, recapi
talization or statutory share exchange involving the Company or a sale or other
disposition of all or substantially all of the assets of the Company (a
"Business Combination"), provided, that no such Business Combination shall
constitute a Change in Control if, immediately following such Business
Combination, all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, at least a majority of the then
outstanding shares of common stock and the combined voting power of the then
outstanding securities entitled to vote generally in the election of directors,
respectively, of the resulting or acquiring corporation in such Business
Combination (which shall include, without limitation, a corporation which as a
result of such transaction owns the Company or substantially all of the
Company's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combi nation, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, respectively; or
7
<PAGE>
(d) approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.
9. Termination and Amendment of the Plan.
-------------------------------------
The Board of Directors may suspend or terminate the Plan or amend it in any
respect whatsoever. In addition, the Board may, in its discretion, accelerate
the vesting of any option or options granted under the Plan.
Adopted by the Board of Directors as of
October 8, 1999
Approved by the Stockholders as of
October 8, 1999
8
<PAGE>
EXHIBIT 10.5
NAVISITE, INC.
DEFERRED COMPENSATION PLAN
ARTICLE I
ESTABLISHMENT OF PLAN
1.1 Purpose. The NaviSite, Inc. Deferred Compensation Plan is hereby
-------
established by the Board of Directors of NaviSite, Inc. ("NaviSite"), a
Delaware corporation, to provide deferred compensation benefits to selected
executives of NaviSite and certain related subsidiaries as more fully provided
herein. The benefits provided under the Plan are intended to be in addition to
other employee benefits programs offered by the Participating Employers (as
defined in Section 2.18), including but not limited to tax-qualified employee
benefit plans.
1.2 Prior Plan. NaviSite has been a Participating Employer in the CMGI
----------
and Participating Subsidiaries Deferred Compensation Plan (the "Prior Plan").
In connection with the initial public offering of its common stock, NaviSite has
decided to continue providing such benefits to its employees under a separate
plan. Therefore, NaviSite hereby adopts this unfunded deferred compensation
plan, to be known as the NaviSite, Inc. Deferred Compensation Plan, hereinafter
referred to as the "Plan" as a continuation of the Prior Plan. All of
NaviSite's liabilities under the terms of the Prior Plan, with respect to
benefits accrued by its employees as well as new benefits for employees, will
henceforth be provided under the terms of this Plan.
1.3 Applicability of ERISA. This Plan is intended to be a "top-hat" plan.
----------------------
This is an unfunded plan maintained primarily for the purpose of providing
deferred compensation to a select group of management or highly compensated
employees within the meaning of ERISA.
ARTICLE II
DEFINITIONS
As used within this document, the following words and phrases have the
meanings described in this Article II unless a different meaning is required by
the context. Some of the words and phrases used in the Plan are not defined in
this Article II, but for convenience, are defined as they are introduced into
the text. Words in the masculine gender shall be deemed to include the feminine
gender. Any headings used are included for ease of reference only, and are not
to be construed so as to alter any of the terms of the Plan.
<PAGE>
2.1 Annual Deferral. The amount of Base Salary and/or Bonuses which the
---------------
Participant elects to defer in each Deferral Period pursuant to Article 4.1 of
the Plan document.
2.2 Basic Salary. A Participant's base annual salary for the applicable
------------
Plan Year.
2.3 Beneficiary. An individual or entity designated by a Participant in
-----------
accordance with Section 14.6.
2.4 Board or Board of Directors. The Board of Directors of NaviSite.
----- ------------------
2.5 Bonus. Earnings awarded to a Participant at the option of the
-----
Participating Employer which may or may not occur during each Plan Year.
2.6 Code. The Internal Revenue Code of 1986. Reference to a section of
----
the Code shall include that section and any comparable section or sections of
any future legislation that amends, supplements or supersedes such section.
2.7 Committee. A committee of one or more individuals appointed by the
---------
Board of Directors to administer the Plan, or, in the absence of such
appointment, the Board of Directors.
2.8 Deferral Account. The account established for a Participant pursuant
----------------
to Section 5.1 of the Plan document.
2.9 Deferral Election. The election made by the Participant pursuant to
-----------------
Section 4.1 of the Plan document.
2.10 Deferral Period. The Plan Year, or in the case of a newly hired or
---------------
promoted employee who becomes an Eligible Employee during a Plan Year, the
remaining portion of the Plan Year. In the case of the first Plan Year under
the Prior Plan, the Deferral Period commenced December 1, 1998 and ended
December 31, 1998.
2.11 Disability. A total and permanent disability, which qualifies the
----------
Participant for early payout of benefits, as described in Section 7.2. The
existence of a Disability shall be determined by the Committee on the advice
of a physician chosen by the Committee.
2
<PAGE>
2.12 Effective Date. The Prior Plan was effective December 1, 1998. The terms
--------------
of this Plan will be effective on the closing of the initial public offering of
NaviSite's common stock.
2.13 Eligible Employee. Any person who is employed by NaviSite on the
-----------------
Effective Date of the Plan and who was an Eligible Employee under the Prior
Plan, and any employee of the Participating Employer who is designated by the
Board of Directors.
2.14 ERISA. The Employee Retirement Income Security Act of 1974, as amended.
-----
2.15 IRS. The Internal Revenue Service.
---
2.16 Participant. Any individual who becomes eligible to participate in the
-----------
Plan pursuant to Article III of the Plan document.
2.17 Participant Agreement and Deferral Election Form. The written agreement
------------------------------------------------
made by Participant to defer his Basic Salary and/or Bonus. Such written
agreement shall be in a format designated by NaviSite.
2.18 Participating Employer. NaviSite and each related subsidiary of NaviSite
----------------------
which has adopted this Plan with the consent of NaviSite. For purposes of this
Plan, a "related subsidiary" is a subsidiary that together with NaviSite would
be treated as a single employer within the meaning of Code Section 414(b), (c),
(m) or (o) of the Code.
2.19 Plan. The NaviSite, Inc. Deferred Compensation Plan.
----
2.20 Plan Administrator. NaviSite, unless NaviSite designates another
------------------
individual or entity to hold the position of the Plan Administrator.
2.21 Plan Year. For the initial Plan Year under the Prior Plan, the period
---------
beginning December 1, 1998 and ending on December 31, 1998. Thereafter, "Plan
Year" means the 12-month period beginning each January 1 and ending on the
following December 31.
2.22 Rabbi Trust. The Rabbi Trust, which NaviSite may, in its discretion,
-----------
establish for the Plan, as amended from time to time.
3
<PAGE>
2.23 Specified Age. Age 65 or later age chosen by the Participant on his
-------------
Participation Agreement and Deferral Election Form.
2.24 Valuation Date. Each business day of the Plan Year.
--------------
2.25 Years of Service. Each consecutive twelve (12) month period during
----------------
which a Participant is continuously employed by the Participating Employer.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 Participation Eligibility. Participation in the Plan is open only to
-------------------------
Eligible Employees of a Participating Employer. Any Participant in the Prior
Plan who is an employee or former employee of NaviSite on the Effective Date of
the Plan will automatically cease to be a Participant under the Prior Plan and
immediately become a Participant under the Plan. An Eligible Employee may
become a Participant by submitting a properly executed Participation Agreement
and Deferral Election form prior to January 1 of the Plan Year for which it is
effective. Any employee becoming an Eligible Employee after January 1 of any
Plan Year (e.g., new hires or promoted employees or newly designated
participating subsidiaries), may become a Participant for the Deferral Period
commencing on or after he becomes an Eligible Employee if he submits a properly
completed Participation Agreement and Deferral Election Form within thirty (30)
days after becoming eligible for participation.
3.2 Subsequent Entry into Plan. An Eligible Employee who does not elect to
--------------------------
participate at the time of initial eligibility as set forth in Section 3.1 shall
remain eligible to become a Participant in subsequent Plan Years as long as he
continues his status as an Eligible Employee. In such event, the Eligible
Employee may become a Participant by submitting a properly executed
Participation Agreement and Deferral Election Form prior to January 1 of the
Plan Year for which it is effective.
ARTICLE IV
CONTRIBUTIONS
4.1 Deferral Election. Before the first day of each Plan Year, a
-----------------
Participant may file with the Committee a Participation Agreement and Deferral
Election Form indicating the amount of Basic Salary and/or Bonus deferrals that
Plan Year. A Participant shall not be obligated to make a Deferral Election in
each Plan Year. After a Plan Year commences, such Deferral Election shall
continue for the entire Plan Year except that it shall terminate upon
termination of employment. On the Effective Date of the Plan, any Participation
Agreement and Deferral Election Form filed under the Prior Plan for 1999 by an
Eligible Employee of NaviSite shall continue in full force and effect under the
terms of this Plan.
4
<PAGE>
4.2 Maximum Deferral Election. A Participant may elect to defer up to 25%
-------------------------
of Basic Salary and/or up to 100% of Bonus earned during the corresponding
Deferral Period. The amount of deferral must be stated as a percentage. A
Deferral Election may be automatically reduced if the Committee determines that
such action is necessary to meet Federal or state tax withholding obligations.
4.3 Minimum Deferral Election. A Participant must either (i) elect to
-------------------------
defer at least $2,000 during the Deferral Period from Basic Salary, Bonus, or a
combination of Basic Salary and Bonus or (ii) make no deferral during such
Deferral Period.
4.4 Employer Contributions. Participating Employer may, in its sole
----------------------
discretion, make a contribution to the Participants' Deferral Accounts.
ARTICLE V
ACCOUNTS
5.1 Deferral Accounts. Solely for recordkeeping purposes, the Plan
-----------------
Administrator shall establish a Deferral Account for each Participant. A
Participant's Deferral Account shall be credited with the contributions made by
him or on his behalf by the Participating Employer under Section 4.4 and shall
be credited (or charged, as the case may be) with the hypothetical or deemed
investment earnings and losses determined pursuant to Section 5.3, and charged
with distributions made to or with respect to him. Any deferral account under
the Prior Plan maintained for an employee or former employee of NaviSite shall
be governed solely by the terms of this Plan after its Effective Date.
5.2 Crediting of Deferral Accounts. Salary contributions under Section
------------------------------
4.1 shall be credited to a Participant's Deferral Account as of the date on
which such contributions were withheld from his Basic Salary. Bonus
contributions under Section 4.1 shall be credited to a Participant's Deferral
Account as of the date on which the contribution would have otherwise been paid
in cash. Contributions under Section 4.4 shall be credited to the Participant's
Deferral Account as of the date declared by the Participating Employer. Any
distribution with respect to a Deferral Account shall be charged to such
Deferral Account as of the date the distribution is made by the Participating
Employer or the trustee of any Rabbi Trust established for the Plan.
5
<PAGE>
5.3 Earning Credits or Losses. Amounts credited to a Deferral Account
-------------------------
shall be credited with deemed net income gain and loss, including the deemed net
unrealized gain and loss based on hypothetical investment directions made by the
Participant with respect to such Deferral Account on a form designated by
NaviSite, in accordance with investment options and procedures adopted by
NaviSite in its sole discretion, from time to time. Such earnings will continue
to accrue during any period in which installments are paid pursuant to Article
VII. Any such form executed with respect to the Prior Plan by an individual who
is an employee or former employee of NaviSite shall continue in effect until
modified in accordance with the terms of this Plan.
5.4 Hypothetical Nature of Accounts. The Plan constitutes a mere promise
-------------------------------
by the Participating Employer to make the benefit payments in the future. Any
Deferral Account established for a Participant under this Article V shall be
hypothetical in nature and shall be maintained for the Participating Employer's
recordkeeping purposes only, so that any contributions can be credited and so
that deemed investment earnings and losses on such amounts can be credited (or
charged, as the case may be). Neither the Plan nor any of the Deferral Accounts
(or subaccounts) shall hold any actual funds or assets. The right of any
individual or entity to receive one or more payments under the Plan shall be an
unsecured claim against the general assets of the Participating Employer. Any
liability of the Participating Employer to any Participant, former Participant
or Beneficiary with respect to a right to payment shall be based solely upon
contractual obligations created by the Plan. The Participating Employer, the
board of directors of any Participating Employer, the Committee and any
individual or entity shall not be deemed to be a trustee of any amounts to be
paid under the Plan. Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of
any kind, or a fiduciary relationship, between the Participating Employer and a
Participant, former Participant, Beneficiary or any other individual or entity.
NaviSite may, in its sole discretion, establish a Rabbi Trust as a vehicle in
which to place funds with respect to this Plan.
The Participating Employer does not in any way guarantee any Participant's
Deferral Account against loss or depreciation, whether caused by poor investment
performance, insolvency of a deemed investment or by any other event or
occurrence. In no event shall the employees, officers, directors or stockholders
of the Participating Employer be liable to any individual or entity on account
of any claim arising by reason of the Plan provisions or any instrument or
instruments implementing its provisions, or for the failure of any Participant,
Beneficiary or other individual or entity to be entitled to any particular tax
consequences with respect to the Plan or any credit or payment thereunder.
6
<PAGE>
5.5 Statement of Deferral Accounts. The Plan Administrator shall provide
------------------------------
to each Participant quarterly statements setting forth the value of the Deferral
Account maintained for such Participant.
ARTICLE VI
VESTING
6.1 Vesting. The Participating Employer's contributions credited to a
-------
Participant's Deferral Account under Section 4.4 and any deemed investment
earnings attributable to these contributions shall be one hundred percent (100%)
vested or nonforfeitable when the Participant has five Years of Service with the
Participating Employer. Prior to the time a Participant has five Years of
Service with the Participating Employer, the Participating Employer's
contributions to his account shall be zero percent (0%) vested. In addition, a
Participant shall be one hundred percent (100%) vested in the Participating
Employer's contributions, including any deemed investment earnings attributable
to these contributions, upon his death or Disability while he is actively
employed by the Participating Employer. All other amounts credited to a
Participant's Deferral Account shall be one hundred percent (100%) vested at all
times.
ARTICLE VII
BENEFITS
7.1 Attainment of Specified Age. Unless benefits have already commenced
---------------------------
pursuant to another section in this Article VII, a Participant shall be entitled
to begin receipt of the vested amount credited to his Deferral Account as of the
Valuation Date coinciding with his Specified Age chosen according to his
Participation Agreement and Deferral Election Form. Payment of any amount under
this Section shall commence within thirty (30) days of the Participant's
Specified Age and in accordance with the payment method elected by the
Participant on his Participation Agreement and Deferral Election Form. Payments
shall commence on or after that age even if the Participant is still then
employed.
7.2 Disability. If a Participant suffers a Disability while employed with
----------
the Participating Employer and before he is entitled to benefits under this
Article, he shall receive the amount credited to his Deferral Account as of the
Valuation Date coinciding with the Date on which the Participant is determined
to have suffered a
7
<PAGE>
Disability. Payment of any amount under this section shall commence within
thirty (30) days of when the Committee determines the existence of the
Participant's Disability and in accordance with the payment method elected by
the Participant on his Participation Agreement and Deferral Election Form.
7.3 Pre-Retirement Survivor Benefit. If a Participant dies before
-------------------------------
becoming entitled to benefits under this Article, the Beneficiary or
Beneficiaries designated under Section 14.6 shall receive in a single lump sum a
Pre-Retirement Survivor Benefit equal to two (2) times the Participant's Basic
Salary for the Plan Year in which he dies (such Pre-Retirement Survivor Benefit
not to exceed $500,000) in addition to the vested amount credited to the
Participant's Deferral Account as of the Valuation Date coinciding with the date
of the Participant's death. Payment of any amount under this section shall be
made within thirty (30) days of the Participant's death, or if later, within
thirty (30) days of when the Committee received notification of or otherwise
confirms the Participant's death.
7.4 Post-Retirement Survivor Benefit. If a Participant dies after
--------------------------------
benefits have commenced, but prior to receiving complete payment of benefits
under this Article, the Beneficiary or Beneficiaries designated under Section
14.6, shall receive in a single lump sum the vested amount credited to the
Participant's Deferral Account as of the Valuation Date coinciding with the date
of the Participant's death. Payment of any amount under this section shall be
made within thirty (30) days of the Participant's death, or if later, within
thirty (30) days of when the Committee received notification of or otherwise
confirms the Participant's death.
7.5 Termination. If a Participant's employment terminates with the
-----------
Participating Employer before he becomes entitled to receive benefits by reason
of any of the above Sections, he shall receive in a single lump sum the vested
amount credited to his Deferral Account as of the Valuation Date coinciding with
the date on which the Participant's employment terminates. Payment of any
amount under this Section shall be made within thirty (30) days of when the
Participant terminates his employment with the Participating Employer.
7.6 Change in Control. If a Change in Control occurs before a Participant
-----------------
becomes entitled to receive benefits by reason of any of the above sections or
before the Participant has received complete payment of his benefits under this
Article, he shall receive a lump sum payment of the amount credited to his
Deferral Account as of the Valuation Date immediately preceding the date on
which the Change in Control occurs. Payment of any amount under this section
shall be made within thirty (30) days of when the Change in Control occurs.
8
<PAGE>
For purposes of this Plan, a Change in Control shall mean a change in control of
the Participating Employer of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not
the Participating Employer is in fact required to comply therewith; provided
that, without limitation, a Change in Control for purposes of this Plan shall be
deemed to have occurred if on any future date:
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act), other than the Participating Employer, any trustee or other
fiduciary holding securities under an employee benefit plan of the Participating
Employer or a corporation owned, directly or indirectly, by the stockholders of
the Participating Employer in substantially the same proportions as their
ownership of stock of the Participating Employer for the first time becomes the
"beneficial owner" (as defined in the Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Participating Employer representing
thirty percent (30%) or more of the combined voting power of the Participating
Employer's then outstanding securities; or
(ii) during any period of twenty-four (24) consecutive months (not
including any period prior to the Effective Date of this Plan), individuals who
at the beginning of such period constitute the Participating Employer's board of
directors and any new director (other than a director designated by a person who
has entered into an agreement with the Participating Employer to effect a
transaction described in paragraphs (i), (ii) or (iii) of this Section) whose
election by the board of directors of the Participating Employer or nomination
for election by the stockholders of the Participating Employer was approved by a
vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of such period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or
(iii) the stockholders of the Participating Employer approve a merger
or consolidation of the Participating Employer with any other corporation, other
than (A) a merger or consolidation which would result in the voting securities
of the Participating Employer outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least fifty percent (50%) of the combined
voting securities of the Participating Employer or such surviving entity
outstanding immediately after such merger or consolidation or (B) a merger or
consolidation effected to implement a recapitalization of the Participating
Employer (or similar transaction) in which no "person" (as hereinabove defined)
acquires thirty percent (30%) or more of the combined voting power of the
Participating Employer's then outstanding securities; or
9
<PAGE>
(iv) the stockholders of the Participating Employer approve a plan of
complete liquidation of the Participating Employer or an agreement for the sale
or disposition by the Participating Employer of all or substantially all of the
Participat ing Employer's assets.
7.7 Payment Methods. Unless otherwise provided in this Article VII, a
---------------
Participant may elect to receive payment of the vested amount credited to his
Deferral Account in a single lump sum or in five (5) or (10) annual
installments. This election must be made on the Participation Agreement and
Deferral Election Form for the corresponding Plan Year. Any installment
payments shall be paid annually on the first practicable day after the
distributions are scheduled to commence. Each installment payment shall be
determined by multiplying the Deferral Account balance by a fraction, the
numerator of which is one and the denominator of which is the number of
remaining installment payments.
ARTICLE VIII
IN-SERVICE DISTRIBUTIONS
8.1 Election of In-Service Distributions. A Participant may elect in each
------------------------------------
Deferral Period, for that particular Deferral Election, to receive in the future
an In-Service Distribution from his Deferral Account. Such Deferral Election
shall state the percentage or flat dollar amount and date on which such In-
Service Distribution is to be paid, provided that such date is not earlier than
five (5) years from January 1st of the Plan Year following the year of said
election. For example: The earliest distribution date for the initial Plan
Year ending December 31, 1999 would be January 1, 2005. This is calculated
using January 1, 2000 as the "January 1/st/ of the Plan Year following" plus
five (5).
8.2 Payment of In-Service Distributions. All In-Service Distributions
-----------------------------------
shall be made within thirty (30) days of the date stated on the Election Form.
Distributions shall be in the form of a single lump sum payment.
8.3 Termination Prior to In-Service Distribution Date. Notwithstanding a
-------------------------------------------------
Participant's election of an In-Service Distribution, in the event a
Participant's employment terminates for any reason pursuant to Section 7.5 of
the Plan document and prior to such Participant receiving any In-Service
Distribution, the Participant shall receive his Deferral Account according to
the payment method designated in Article VII or as elected on his Participation
Agreement and Deferral Election Form.
10
<PAGE>
ARTICLE IX
HARDSHIP WITHDRAWALS
9.1 Hardship Withdrawals. If a Participant incurs an unforeseeable
--------------------
emergency, the Participant may make a written request to the Committee for a
hardship withdrawal ("Hardship Withdrawal") from his account. An
unforeseeable emergency is a severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident of the Participant or
the Participant's dependent (as defined in Section 152(e) of the Code), loss of
the Participant's property due to casualty or other similar extraordinary and
unforeseen circumstances beyond the control of the Participant. Withdrawals of
amounts because of unforeseeable emergencies are only permitted to the extent
reasonably necessary to satisfy the emergency needed. This section shall be
interpreted in a manner consistent with Sections 1.457-2(h)(4) and 1.457-2(h)(5)
of the Treasury Regulations. In the event of a Hardship Withdrawal, the
Participant's deferrals for the remainder of the Plan Year shall be suspended.
Deferrals may commence with the next following Plan Year provided the
Participant completes the appropriate Participation Agreement and Deferral
Election form prior to January 1 of the corresponding Plan Year.
ARTICLE X
ESTABLISHMENT OF TRUST
10.1 Establishment of Trust. NaviSite may establish a Rabbi Trust for the
----------------------
Plan. If established, all benefits payable under this Plan to a Participant
shall be paid directly by the Participating Employer from the Rabbi Trust. To
the extent that such benefits are not paid from the Rabbi Trust, the benefits
shall be paid from the general assets of the Participating Employer. The assets
of the Rabbi Trust are subject to the claims of the Participating Employer's
creditors in the event of its insolvency. Except as to any amounts paid or
payable to a Rabbi Trust, the Participating Employer shall not be obligated to
set aside, earmark or escrow any funds or other assets to satisfy its
obligations under this Plan, and the Participant and/or his designated
Beneficiaries shall not have any property interest in any specific assets of the
Participating Employer other than the unsecured right to receive payments from
the Participating Employer, as provided in this Plan.
11
<PAGE>
ARTICLE XI
PLAN ADMINISTRATION
11.1 Plan Administration. The Plan shall be administered by the Committee and
-------------------
such Committee may designate an agent to perform the recordkeeping duties. The
Committee shall construe and interpret the Plan, including disputed and doubtful
terms and provisions and, in its sole discretion, decide all questions of
eligibility and determine the amount, manner and time of payment of benefits
under the Plan. The determinations and interpretations of the Committee shall
be consistently and uniformly applied to all Participants and Beneficiaries,
including but not limited to interpretations and determinations of amounts due
under this Plan, and shall be final and binding on all parties. The Plan at all
times shall be interpreted and administered as an unfunded deferred compensation
plan, and no provision of the Plan shall be interpreted so as to give any
Participant or Beneficiary any right in any asset of the Participating Employer
which is a right greater than the right of a general unsecured creditor of the
Participating Employer.
ARTICLE XII
NON-ALIENATION OF BENEFITS
12.1 Non-alienation of Benefits. The interests of Participants and their
--------------------------
Beneficiaries under this Plan are not subject to the claims of their creditors
and may not be voluntarily or involuntarily sold, transferred, alienated,
assigned, pledged, anticipated, or encumbered, attached or garnished. Any
attempt by a Participant, his Beneficiary, or any other individual or entity to
sell, transfer, alienate, assign, pledge, anticipate, encumber, attach, garnish,
charge or otherwise dispose of any right to benefits payable shall be void. The
Participating Employer may cancel and refuse to pay any portion of a benefit
which is sold, transferred, alienated, assigned, pledged, anticipated,
encumbered, attached or garnished. The benefits which a Participant may accrue
under this Plan are not subject to the terms of any Qualified Domestic Relations
Order (as that term is defined in Section 414(p) of the Code) with respect to
any Participant, and the Plan Administrator, board of directors of any
Participating Employer, Committee and Participating Employer shall not be
required to comply with the terms of such order in connection with this Plan.
The withholding of taxes from Plan payments, the recovery of Plan overpayments
of benefits made to a Participant or Beneficiary, the transfer of Plan benefit
rights from the Plan to another plan, or the direct deposit of Plan Payments to
an account in a financial institution (if no actually a part of an arrangement
constituting an assignment or alienation) shall not be construed as assignment
or alienation under this Article XII.
12
<PAGE>
ARTICLE XIII
AMENDMENT AND TERMINATION
13.1 Amendment and Termination. NaviSite reserves the right to amend, alter or
-------------------------
discontinue this Plan at any time. Such action may be taken in writing by any
officer of NaviSite who has been duly authorized by NaviSite to perform acts of
such kind. However, no such amendment shall deprive any Participant or
Beneficiary of any portion of any benefit which would have been payable had the
Participant's employment with NaviSite terminated on the effective date of
such amendment or termination. Notwithstanding the provisions of this Article
XIII to the contrary, NaviSite may amend the Plan at any time, in any manner, if
NaviSite determines any such amendment is required to ensure that the Plan is
characterized as providing deferred compensation for a select group of
management or highly compensated employees and as described in ERISA Sections
201(2), 301(a)(3) and 401(a)(1) or to otherwise conform the Plan to the
provisions of any applicable law including, but not limited to, ERISA and the
Code.
ARTICLE XIV
GENERAL PROVISIONS
14.1 Good Faith Payment. Any payment made in good faith in accordance with
------------------
provisions of the Plan shall be a complete discharge of any liability for the
making of such payment under the provisions of this Plan.
14.2 No Right to Employment. This Plan does not constitute a contract of
----------------------
employment, and participation in the Plan shall not give any Participant the
right to be retained in the employment of the Participating Employer.
14.3 Binding Effect. The provisions of this Plan shall be binding upon the
--------------
Participating Employer and its successors and assigns and upon every Participant
and his heirs, Beneficiaries, estates and legal representatives.
14.4 Participant Change of Address. Each Participant entitled to benefits
-----------------------------
shall file with the Plan Administrator, in writing, any change of post office
address. Any check representing payment and any communication addressed to a
Participant or a former Participant at this last address filed with the Plan
Administrator, or if no such address has been filed, then at his last address as
indicated on the Participating Employer's records, shall be binding on such
Participant for all purposes of the Plan, and neither the Plan Administrator,
the Participating Employer nor any other payor shall be obligated to search for
or ascertain the location of any such Participant. If
13
<PAGE>
the Plan Administrator is in doubt as to the address of any Participant entitled
to benefits or as to whether benefit payments are being received by a
Participant, it shall, by registered mail addressed to such Participant at his
last known address, notify such Participant that:
(i) All unmailed and future Plan payments shall be withheld until
Participant provides the Plan Administrator with evidence of such Participant's
continued life and proper mailing address; and
(ii) Participant's right to any Plan payment shall, at the option of the
Committee, be canceled forever, if, at the expiration of five (5) years from the
date of such mailing, such Participant or his Beneficiary shall not have
provided the Committee with evidence of his continued life and proper mailing
address.
14.5 Notices. Each Participant shall furnish to the Plan Administrator any
-------
information the Plan Administrator deems necessary for purposes of administering
the Plan, and the payment provisions of the Plan are conditional upon the
Participant furnishing promptly such true and complete information as the Plan
Administrator may request. Each Participant shall submit proof of his age when
required by the Plan Administrator. The Plan Administrator shall, if such proof
of age is not submitted as required, use such information as is deemed by it to
be reliable, regard less of the lack of proof, or the misstatement of the age
of individuals entitled to benefits. Any notice or information which, according
to the terms of the Plan or requirements of the Plan Administrator, must be
filed with the Plan Administrator, shall be deemed so filed if addressed and
either delivered in person or mailed to and received by the Plan Administrator,
in care of NaviSite at:
NaviSite, Inc.
100 Brickstone Square
Andover, MA 01810
14.6 Designation of Beneficiary. Each Participant shall designate, by name, on
--------------------------
Beneficiary designation forms provided by the Plan Administrator, the
Beneficiary(ies) who shall receive any benefits which might be payable after
such Participant's death. A Beneficiary designation may be changed or revoked
without such Beneficiary's consent at any time or from time to time in the
manner as provided by the Plan Administrator, and the Plan Administrator shall
have no duty to notify any individual or entity designated as a Beneficiary of
any change in such designation which might affect such individual or entity's
present or future rights. If the designated Beneficiary does not survive the
Participant, all amounts which would have
14
<PAGE>
been paid to such deceased Beneficiary shall be paid to any remaining
Beneficiary in that class of beneficiaries, unless the Participant has
designated that such amounts go to the lineal descendants of the deceased
Beneficiary. If none of the designated primary Beneficiaries survive the
Participant, and the Participant did not designate that payments would be
payable to such Beneficiary's lineal descendants, amounts otherwise payable to
such Beneficiaries shall be paid to any successor Beneficiaries designated by
the Participant, or if none, to the Participant's spouse, or, if the Participant
was not married at the time of death, the Participant's estate.
No Participant shall designate more than five (5) simultaneous Beneficiaries,
and if more than one (1) Beneficiary is named, Participant shall designate the
share to be received by each Beneficiary. Despite the limitation on five (5)
Beneficiaries, a Participant may designate more than five (5) Beneficiaries
provided such beneficiaries are the surviving spouse and children of the
Participant. If a Participant designates alternative, successor, or
contingent Beneficiaries, such Participant shall specify the shares, terms and
conditions upon which amount shall be paid to such multiple, alternative,
successor or contingent beneficiaries. Any payment made under this Plan after
the death of a Participant shall be made only to the Beneficiary or
Beneficiaries designated pursuant to this Section. Any beneficiary designation
made in accordance with the Prior Plan shall be treated as if made under this
Plan.
14.7 Claims. Any claim for benefits must initially be submitted in writing to
------
the Plan Administrator. If such claim is denied (in whole or in part), the
claimant shall receive notice from the Plan Administrator, in writing, setting
forth the specific reasons for denial, with specific reference to applicable
provisions of this Plan. Such notice shall be provided within ninety (90) days
of the date the claim for benefits is received by the Plan Administrator, unless
special circumstances require an extension of time for processing the claim,
in which event notification of the extension shall be provided to the claimant
prior to the expiration of the initial 90 day period. The extension notification
shall indicate the special circumstances requiring the extension of time and the
date by which the Plan Administrator expects to render its decision. Any such
extension shall not exceed 90 days. Any disagreements about such
interpretations and construction may be appealed in writing by the claimant
within sixty (60) days to the Plan Administrator. The Plan Administrator shall
respond to such appeal within sixty (60) days, with a notice in writing fully
disclosing its decision and its reasons, unless special circumstances require
an extension of time for reviewing the claim, in which event notification of the
extension shall be provided to the claimant prior to the expiration of the
initial sixty (60) day period. Any such extension shall be provided to the
claimant prior to the commencement of the extension. Any such extension shall
not exceed 60 days. No employee of NaviSite or member of the Board of
Directors, or any committee thereof, shall be liable to any individual or entity
for any action taken hereunder, except those actions which are unreasonable and
undertaken with lack of good faith.
15
<PAGE>
14.8 Action by Board of Directors. Any action required to be taken by the
----------------------------
board of directors of the Participating Employer pursuant to the Plan provisions
may be performed by a committee of the board, to which the board of directors of
the Participating Employer delegates the authority to take actions of that kind.
14.9 Governing Law. To the extent not superseded by the laws of the United
-------------
States, the laws of the Commonwealth of Massachusetts shall be controlling in
all matters relating to this Plan.
14.10 Severability. In the event any provision of this Plan shall be held
------------
illegal or invalid for any reason, such illegality or invalidity shall not
affect the remaining provisions of the Plan, and the Plan shall be interpreted
and enforced as if such illegal and invalid provisions had never been set forth.
IT WITNESS WHEREOF, NaviSite, Inc. has adopted the foregoing instrument.
NAVISITE, INC.
By /s/ Joel Rosen
----------------------------
Name: Joel Rosen
Title: CEO
ATTEST CE Newton
-----------------------
16
<PAGE>
EXHIBIT 10.6
------------
DIRECTOR INDEMNIFICATION AGREEMENT
This Agreement is made as of the 27th day of October 1999, by and between
NaviSite, Inc., a Delaware corporation (the "Corporation), and _______________
("Indemnitee"), a director of the Corporation.
WHEREAS, it is essential to the Corporation to retain and attract as
directors the most capable persons available; and
WHEREAS, it is the express policy of the Corporation to indemnify its
directors so as to provide them with the maximum possible protection permitted
by law, and
WHEREAS, Indemnitee does not regard the protection available under the
Corporation's Amended and Restated Certificate of Incorporation and insurance as
adequate in the present circumstances, and may not be willing to serve or remain
as a director without adequate protection; and
WHEREAS, the Corporation desires Indemnitee to serve, or continue to serve,
as a director of the Corporation.
NOW THEREFORE, the Corporation and Indemnitee do hereby agree as follows:
1. Agreement to Serve. Indemnitee agrees to serve or continue to serve
------------------
as a director of the Corporation for so long as he is duly elected or appointed
or until such time as he tenders his resignation in writing.
2. Definitions. As used in this Agreement:
-----------
(a) The term "Proceeding" shall include any threatened, pending or
completed action, suit or proceeding, whether brought by or in the right of the
Corporation or otherwise and whether of a civil, criminal, administrative or
investigative nature, and any appeal therefrom.
<PAGE>
(b) The term "Corporate Status" shall mean the status of a person who
is or was a director of the Corporation, or is or was serving, or has agreed to
serve, at the request of the Corporation, as a director, officer, partner,
trustee, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise.
(c) The term "Expenses" shall include, without limitation, attorneys'
fees, retainers, court costs, transcript costs, fees of experts, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees and other disbursements or expenses of the types
customarily incurred in connection with investigations, judicial or
administrative proceedings or appeals, but shall not include the amount of
judgments, fines or penalties against Indemnitee or amounts paid in settlement
in connection with such matters.
(d) References to "other enterprise" shall include employee benefit
plans; references to "fines" shall include any excise tax assessed with respect
to any employee benefit plan; references to "serving at the request of the
Corporation" shall include any service as a director, officer, employee or agent
of the Corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit plan,
its participants or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interests of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the Corporation" as referred to in
this Agreement.
3. Indemnification in Third-Party Proceedings. The Corporation shall
------------------------------------------
indemnify Indemnitee in accordance with the provisions of this Paragraph 3 if
Indemnitee was or is a party to or threatened to be made a party to or otherwise
involved in any Proceeding (other than a Proceeding by or in the right of the
Corporation to procure a judgment in its favor) by reason of Indemnitee's
Corporate Status or by reason of any action alleged to have been taken or
omitted in connection therewith, against all Expenses, judgments, fines,
penalties and amounts paid in settlement actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection with such Proceeding, if
Indemnitee acted in good faith and in a manner which Indemnitee reasonably
believed to be in, or not opposed to, the best interests of the Corporation and,
with respect to any criminal Proceeding, had no reasonable cause to believe that
Indemnitee's conduct was unlawful. The termination of any Proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere, or
---------------
its equivalent, shall not, of itself, create a presumption that Indemnitee
2
<PAGE>
did not act in good faith and in a manner which Indemnitee reasonably believed
to be in, or not opposed to, the best interests of the Corporation and, with
respect to any criminal Proceeding, had reasonable cause to believe that
Indemnitee's conduct was unlawful.
4. Indemnification in Proceedings by or in the Right of the Corporation.
--------------------------------------------------------------------
The Corporation shall indemnify Indemnitee in accordance with the provisions of
this Paragraph 4 if Indemnitee is a party to or threatened to be made a party to
or otherwise involved in any Proceeding by or in the right of the Corporation to
procure a judgment in its favor by reason of Indemnitee's Corporate Status or by
reason of any action alleged to have been taken or omitted in connection
therewith, against all Expenses and, to the extent permitted by law, amounts
paid in settlement actually and reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection with such Proceeding, if Indemnitee acted in
good faith and in a manner which Indemnitee reasonably believed to be in, or not
opposed to, the best interests of the Corporation, except that no
indemnification shall be made under this Paragraph 4 in respect of any claim,
issue or matter as to which Indemnitee shall have been adjudged to be liable to
the Corporation, unless and only to the extent that the Court of Chancery of
Delaware shall determine upon application that, despite the adjudication of such
liability but in view of all the circumstances of the case, Indemnitee is fairly
and reasonably entitled to indemnity for such Expenses as the Court of Chancery
shall deem proper.
5. Exceptions to Right of Indemnification. Notwithstanding anything to
--------------------------------------
the contrary in this Agreement, except as set forth in Paragraph 10, the
Corporation shall not indemnify Indemnitee in connection with a Proceeding (or
part thereof) initiated by Indemnitee unless the initiation thereof was approved
by the Board of Directors of the Corporation. Notwithstanding anything to the
contrary in this Agreement, the Corporation shall not indemnify Indemnitee to
the extent Indemnitee is reimbursed from the proceeds of insurance, and in the
event the Corporation makes any indemnification payments to Indemnitee and
Indemnitee is subsequently reimbursed from the proceeds of insurance, Indemnitee
shall promptly refund such indemnification payments to the Corporation to the
extent of such insurance reimbursement.
6. Indemnification of Expenses of Successful Party. Notwithstanding any
-----------------------------------------------
other provision of this Agreement, to the extent that Indemnitee has been
successful, on the merits or otherwise, in defense of any Proceeding or in
defense of
3
<PAGE>
any claim, issue or matter therein, Indemnitee shall be indemnified against all
Expenses incurred by Indemnitee or on Indemnitee's behalf in connection
therewith. Without limiting the foregoing, if any Proceeding or any claim, issue
or matter therein is disposed of, on the merits or otherwise (including a
disposition without prejudice), without (i) the disposition being adverse to the
Indemnitee, (ii) an adjudication that the Indemnitee was liable to the
Corporation, (iii) a plea of guilty or nolo contendere by the Indemnitee, (iv)
an adjudication that the Indemnitee did not act in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and (v) with respect to any criminal proceeding, an adjudication
that the Indemnitee had reasonable cause to believe his conduct was unlawful,
Indemnitee shall be considered for the purposes hereof to have been wholly
successful with respect thereto.
7. Notification and Defense of Claim. As a condition precedent to
---------------------------------
Indemnitee's right to be indemnified, Indemnitee must notify the Corporation in
writing as soon as practicable of any Proceeding for which indemnity will or
could be sought by Indemnitee and provide the Corporation with a copy of any
summons, citation, subpoena, complaint, indictment, information or other
document relating to such Proceeding with which Indemnitee is served. With
respect to any Proceeding of which the Corporation is so notified, the
Corporation will be entitled to participate therein at its own expense and/or to
assume the defense thereof at its own expense, with legal counsel reasonably
acceptable to Indemnitee. After notice from the Corporation to Indemnitee of its
election so to assume such defense, the Corporation shall not be liable to the
Indemnitee for any legal or other expenses subsequently incurred by the
Indemnitee in connection with such Proceeding, other than as provided below in
this Paragraph 7. Indemnitee shall have the right to employ Indemnitee's own
counsel in connection with such Proceeding, but the fees and expenses of such
counsel incurred after notice from the Corporation of its assumption of the
defense thereof shall be at the expense of Indemnitee unless (i) the employment
of counsel by Indemnitee has been authorized by the Corporation, (ii) counsel to
Indemnitee shall have reasonably concluded that there may be a conflict of
interest or position on any significant issue between the Corporation and
Indemnitee in the conduct of the defense of such Proceeding or (iii) the
Corporation shall not in fact have employed counsel to assume the defense of
such Proceeding, in each of which cases the fees and expenses of counsel for
Indemnitee shall be at the expense of the Corporation, except as otherwise
expressly provided by this Agreement. The Corporation shall not be entitled,
without the consent of Indemnitee, to assume the defense of any claim brought by
or in the right of the Corporation or as to which counsel for Indemnitee shall
have reasonably made the conclusion provided for in clause (ii) above. The
Corporation shall not be required to indemnify Indemnitee under this Agreement
for any amounts paid in settlement of any Proceeding effected without its
written consent. The Corporation shall not settle any Proceeding in any manner
which would impose any penalty or limitation on Indemnitee without Indemnitee's
written consent. Neither the Corporation nor the Indemnitee will unreasonably
withhold its consent to any proposed settlement.
8. Advancement of Expenses. Any Expenses incurred by Indemnitee in
-----------------------
connection with any such Proceeding to which Indemnitee was or is a party or is
threatened to be a party by reason of his Corporate Status or by reason of any
action
4
<PAGE>
alleged to have been taken or omitted in connection therewith shall be paid by
the Corporation in advance of the final disposition of such matter; provided,
--------
however, that the payment of such Expenses incurred by the Indemnitee in
- -------
advance of the final disposition of such matter shall be made only upon receipt
of an undertaking by or on behalf of the Indemnitee to repay all amounts so
advanced in the event that it shall ultimately be determined that the Indemnitee
is not entitled to be indemnified by the Corporation as authorized in this
Agreement; and further provided that no such advancement of expenses shall
------- --------
be made if it is determined that (i) Indemnitee did not act in good faith and in
a manner Indemnitee reasonably believes to be in, or not opposed to, the best
interests of the Corporation, or (ii) with respect to any criminal action or
proceeding, the Indemnitee had reasonable cause to believe Indemnitee's conduct
was unlawful. Such undertaking shall be accepted without reference to the
financial ability of Indemnitee to make such repayment. Such Expenses shall be
paid immediately upon the written request of the Indemnitee to the Corporation.
9. Procedure for Indemnification. In order to obtain indemnification
-----------------------------
pursuant to Paragraphs 3, 4 or 6 of this Agreement, Indemnitee shall submit to
the Corporation a written request, including in such request such documentation
and information as is reasonably available to Indemnitee and is reasonably
necessary to determine whether and to what extent Indemnitee is entitled to
indemnification or advancement of Expenses. Any such indemnification or
advancement of expenses shall be made promptly, and in any event within 60 days
after receipt by the Corporation of the written request of the Indemnitee,
unless with respect to requests under Paragraphs 3 or 4 the Corporation
determines within such 60-day period that such Indemnitee did not meet the
applicable standard of conduct set forth in Paragraphs 3 or 4, as the case may
be. Such determination, and any determination pursuant to Section 8 that
advanced Expenses must be repaid to the Corporation, shall be made in each
instance (a) by a majority vote of the directors of the Corporation consisting
of persons who are not at that time parties to the Proceeding ("Disinterested
Directors"), whether or not a quorum, (b) by a committee of Disinterested
Directors designated by majority vote of Disinterested Directors, whether or not
a quorum, (c) if there are no Disinterested Directors, or if Disinterested
Directors so direct, by independent legal counsel (who may, to the extent
permitted by applicable law, be regular legal counsel to the Corporation) in a
written opinion or (d) by the stockholders.
10. Remedies. The right to indemnification and immediate advancement of
--------
Expenses as provided by this Agreement shall be enforceable by the Indemnitee in
any court of competent jurisdiction. Unless otherwise required by law, the
burden of
5
<PAGE>
proving that indemnification is not appropriate shall be on the Corporation.
Neither the failure of the Corporation to have made a determination prior to the
commencement of such action that indemnification is proper in the circumstances
because Indemnitee has met the applicable standard of conduct, nor an actual
determination by the Corporation pursuant to Paragraph 9 that Indemnitee has not
met such applicable standard of conduct, shall be a defense to the action or
create a presumption that Indemnitee has not met the applicable standard of
conduct. Indemnitee's expenses (of the type described in the definition of
"Expenses" in Paragraph 2(c)) reasonably incurred in connection with
successfully establishing Indemnitee's right to indemnification, in whole or in
part, in any such Proceeding also shall be indemnified by the Corporation.
11. Partial Indemnification. If Indemnitee is entitled under any
-----------------------
provision of this Agreement to indemnification by the Corporation for some or a
portion of the Expenses, judgments, fines, penalties or amounts paid in
settlement actually and reasonably incurred by Indemnitee or on Indemnitee's
behalf in connection with any Proceeding but not, however, for the total amount
thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion
of such Expenses, judgments, fines, penalties or amounts paid in settlement to
which Indemnitee is entitled.
12. Subrogation. In the event of any payment under this Agreement, the
-----------
Corporation shall be subrogated to the extent of such payment to all of the
rights of recovery of Indemnitee, who shall execute all papers required and take
all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce
such rights.
13. Term of Agreement. This Agreement shall continue until and terminate
-----------------
upon the later of (a) six years after the date that Indemnitee shall have ceased
to serve as a director of the Corporation or, at the request of the Corporation,
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise or (b) the final termination of all
Proceedings pending on the date set forth in clause (a) in respect of which
Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to Paragraph 10
of this Agreement relating thereto.
14. Indemnification Hereunder Not Exclusive. The indemnification and
---------------------------------------
advancement of Expenses provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may be entitled under the Certification
of
6
<PAGE>
Incorporation, the By-Laws, any agreement, any vote of stockholders or
disinterested directors, the General Corporation Law of the State of Delaware,
any other law (common or statutory) or otherwise, both as to action in
Indemnitee's official corporate capacity and as to action in another capacity
while holding office for the Corporation. Nothing contained in this Agreement
shall be deemed to prohibit the Corporation from purchasing and maintaining
insurance, at its expense, to protect itself or the Indemnitee against any
expense, liability or loss incurred by it or Indemnitee in any such capacity, or
arising out of Indemnitee's status as such, whether or not Indemnitee would be
indemnified against such expense, liability or loss under this Agreement;
provided that the Corporation shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise, including as provided in Section 5
hereof.
15. No Special Rights. Nothing herein shall confer upon Indemnitee any
-----------------
right to continue to serve as a director of the Corporation for any period of
time or at any particular rate of compensation.
16. Savings Clause. If this Agreement or any portion thereof shall be
--------------
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify Indemnitee as to Expenses, judgments,
fines, penalties and amounts paid in settlement with respect to any Proceeding
to the full extent permitted by any applicable portion of this Agreement that
shall not have been invalidated and to the fullest extent permitted by
applicable law.
17. Counterparts; Facsimile Signatures. This Agreement may be executed
----------------------------------
in two counterparts, both of which together shall constitute the original
instrument. This Agreement may be executed by facsimile signatures.
18. Successors and Assigns. This Agreement shall be binding upon the
----------------------
Corporation and its successors and assigns and shall inure to the benefit of the
estate, heirs, executors, administrators and personal representatives of
Indemnitee.
19. Headings. The headings of the paragraphs of this Agreement are
--------
inserted for convenience only and shall not be deemed to constitute part of this
Agreement or to affect the construction thereof.
7
<PAGE>
20. Modification and Waiver. This Agreement may be amended from time to
-----------------------
time to reflect changes in Delaware law or for other reasons. No supplement,
modification or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof nor shall any such waiver constitute a continuing waiver.
21. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be deemed to have been given (i) when
delivered by hand or (ii) if mailed by certified or registered mail with postage
prepaid, on the third day after the date on which it is so mailed:
(a) if to the Indemnitee, to:
________________________________
________________________________
________________________________
________________________________
(b) if to the Corporation, to:
NaviSite, Inc.
100 Brickstone Square
Andover, Massachusetts 01810
Attn: Joel B. Rosen, Chief Executive Officer
or to such other address as may have been furnished to Indemnitee by the
Corpora tion or to the Corporation by Indemnitee, as the case may be.
22. Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the State of Delaware.
23. Enforcement. The Corporation expressly confirms and agrees that it
-----------
has entered into this Agreement in order to induce Indemnitee to continue to
serve as a director of the Corporation and acknowledges that Indemnitee is
relying upon this Agreement in continuing in such capacity.
8
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
NAVISITE, INC.
By:______________________
Name:
Title:
___________________________
[name of Indemnitee]
9
<PAGE>
EXHIBIT 10.7
------------
FACILITIES AND ADMINISTRATIVE SUPPORT AGREEMENT
-----------------------------------------------
THIS FACILITIES AND ADMINISTRATIVE SUPPORT AGREEMENT dated as of
October 27, 1999 is made between CMGI, Inc. ("CMGI"), a Delaware corporation,
and NaviSite, Inc. ("NaviSite"), a Delaware corporation.
Preliminary Statement
---------------------
NaviSite desires to obtain administrative and other services from CMGI, and
CMGI is willing to furnish or make such services available to NaviSite.
By this Agreement, CMGI and NaviSite desire to set forth the basis for
CMGI's provision of services of the types referred to herein.
Agreements
----------
IT IS MUTUALLY agreed by CMGI and NaviSite (collectively, the "Parties")
as follows:
1. Provision of Services. Beginning on the date of this Agreement, CMGI will
---------------------
provide or otherwise make available to NaviSite those CMGI-supplied
services and third-party-supplied services paid for by CMGI on the bases
set forth on Schedule A and Schedule B attached hereto and consistent with
---------- ----------
the parties' practices as of the date hereof (collectively, the
"Services").
2. Billing and Payment. CMGI shall submit monthly invoices to NaviSite for
-------------------
the Services, and NaviSite shall make payment within 30 days after its
receipt of such invoices. Each invoice shall be itemized by the Service
provided.
3. Term and Termination. The initial term of this Agreement shall begin on the
--------------------
date of this Agreement and continue for a period of one year. This
Agreement shall automatically renew at the end of the initial term for
successive one-year periods unless terminated or modified in accordance
with the following provisions:
(a) Entire Agreement. Either party may elect not to renew this Agreement,
----------------
except for the Services set forth on Schedule A, upon 180 days'
----------
<PAGE>
written notice the other party prior to the expiration of the initial term
or any renewal period.
(b) Individual Services. Either party may terminate an individual Service
-------------------
or Services, except for the services set forth on Schedule A, upon 90
----------
days' written notice to the other party.
(c) Rent and Related Services. Either party may terminate those Services
-------------------------
set forth on Schedule A upon 30 days' written notice to the other
----------
party prior to the expiration of the end of the initial term or any
renewal period. In addition, those services set forth on Schedule A
----------
shall terminate effective upon the last day of the month in which
NaviSite notifies CMGI that either (i) NaviSite's new facility at 400
Minuteman Road, Andover, Massachusetts is ready to be occupied by
NaviSite or (ii) NaviSite has vacated completely CMGI's facility at
100 Brickstone Square, Andover, Massachusetts, whichever is later.
(d) Material Breach. Either party may terminate this Agreement in the
---------------
event of a material breach of this Agreement by the other party that
is not cured within 30 days of written notice thereof from the other
party.
(e) Automatic Termination. This Agreement, other than the services set
---------------------
forth on Schedule A, shall automatically terminate upon the date on
-----------
which the ownership by CMGI of the outstanding voting capital stock of
NaviSite shall first be less than 50% of the then outstanding voting
capital stock of NaviSite.
4. Limitation on Liability. Neither party shall be liable to the other for
-----------------------
any amount in excess of the amount invoiced to NaviSite for the 12-month
period preceding any event giving rise to liability. Neither party shall be
liable to the other for consequential damages except for those arising out
of intentional misconduct or gross negligence.
5. Force Majeure. CMGI shall be excused for failure to provide the Services
-------------
hereunder to the extent that such failure is directly or indirectly caused
by an occurrence commonly known as force majeure, including, without
-------------
limitation, delays arising out of acts of God, acts or orders of a
government, agency or instrumentality thereof (whether of fact or law),
acts of public enemy, riots,
2
<PAGE>
embargoes, strikes or other concerted acts of workers (whether of CMGI or
other persons), casualties or accidents, delivery of materials,
transportation or shortage of cars, trucks, fuel, power, labor or materials
or any other causes, circumstances or contingencies within or without the
United States of America that are beyond the control of CMGI; provided,
--------
however, that CMGI shall use its best efforts to resume provision of the
-------
Services as soon as possible. Notwithstanding any events operating to
excuse performance by CMGI, this Agreement shall continue in full force for
the remainder of its term and any renewals thereof.
6. Notices. All notices, billings, requests, demands, approvals, consents and
-------
other communications which are required or may be given under this
Agreement shall be in writing and will be deemed to have been duly given if
delivered person ally or sent by registered or certified mail, return
receipt requested, postage prepaid to the parties at their respective
addresses set forth below:
If to NaviSite: If to CMGI:
NaviSite, Inc. CMGI, Inc.
100 Brickstone Square 100 Brickstone Square
Andover, MA 01810 Andover, MA 01810
Attn: Chief Financial Officer Attn: Chief Financial Officer
7. No Assignment. This Agreement shall not be assignable except with the prior
-------------
written consent of the other party to this Agreement.
8. Applicable Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the Commonwealth of Massachusetts applicable to
contracts made and to be performed therein.
9. Amendments. This Agreement and all attachments hereto constitute the entire
-----------
agreement between the parties as to the subject matter hereof and supercede
all prior negotiations, undertakings, representations and agreements, if
any, of the parties hereto as to the subject matter hereof. This Agreement
may not be amended orally but may be amended only by a written instrument
signed by all of the parties hereto.
3
<PAGE>
10. Waivers. The failure of either party to require strict performance by the
-------
other party of any provision in this Agreement will not waive or diminish
that party's right to demand strict performance thereafter of that or any
other provision hereof.
11. Paragraph Titles. The paragraph titles used in this Agreement are for
----------------
convenience of reference only and will not be considered in the
interpretation or construction of any of the provisions thereof.
12. Counterparts; Facsimile Signatures. This Agreement may be executed in two
----------------------------------
counterparts, each of which shall be deemed to be an original and both of
which together shall constitute one and the same document. This Agreement
may be executed by facsimile signatures.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
CMGI, INC. NAVISITE, INC.
By: /s/ Andrew J. Hajducky III By: /s/ Joel B. Rosen
--------------------------- ----------------------------
Name: Andrew J. Hajducky III Name: Joel B. Rosen
------------------------- --------------------------
Title: Chief Financial Officer Title: Chief Executive Officer
------------------------ -------------------------
4
<PAGE>
Schedule A
----------
Rent and Related Services
-------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Services Provided by CMGI to NaviSite Allocation of Cost to NaviSite
- ---------------------------------------- --------------------------------------
- --------------------------------------------------------------------------------
<S> <C>
1. Brickstone Square Rent. Provision Allocated based on headcount for
of space located at the Andover NaviSite located at the Andover
Premises (approximately 17,800 Premises divided by headcount for
square feet). the CMGI Companies located at the
Andover Premises.
- --------------------------------------------------------------------------------
2. Facilities. Salary, fringe Allocated based on both: (a)
benefits, payroll taxes for the percentage of time that the
entire facility department. facilities department devotes to
the Federal Street Premises and
(b) headcount for NaviSite located
at the Andover Premises divided by
headcount for the CMGI Companies
located at the Andover Premises.
- --------------------------------------------------------------------------------
3. Mass Electric. Utilities provided Allocated based on headcount for
by Massachusetts Electric. NaviSite located at the Andover
Premises divided by headcount for
the CMGI Companies located at the
Andover Premises.
- --------------------------------------------------------------------------------
4. Office Cleaning/Plant Maintenance. Allocated based on headcount for
NaviSite located at the Andover
Premises divided by headcount for
the CMGI Companies located at the
Andover Premises.
- --------------------------------------------------------------------------------
</TABLE>
Defined Terms:
- ---------------
Andover Premises -- those premises located at 100 Brickstone Square,
Andover, MA 01810 leased by CMGI.
CMGI Companies -- the companies which are controlled by CMGI or in which
CMGI holds an equity interest.
Federal Street
Premises -- those premises located at 300 Federal Street, Andover,
MA 01810 occupied by NaviSite.
headcount -- the number of employees employed by a particular CMGI
Company on the last day of a given month.
<PAGE>
Schedule B
----------
Provision of Other Services
---------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Services Provided by CMGI to NaviSite Allocation of Cost to NaviSite
- ----------------------------------------- -------------------------------------
- --------------------------------------------------------------------------------
<S> <C>
1. CMG Europe. All overhead costs for NaviSite is charged 5% of all costs
CMGI's European office of Marcus associated with the European office.
Bicknell, his assistant and accountant.
- --------------------------------------------------------------------------------
2. Internet Marketing. Salary, fringe NaviSite is one of nine CMGI
benefits and payroll taxes for Bill Companies that benefits from these
White and his assistant (both at CMGI). services and absorbs 11% of total
costs.
- --------------------------------------------------------------------------------
3. Internet Development. Salary, NaviSite is one of nine CMGI
fringe benefits and payroll taxes for Companies that benefits from
Dave Andonian and his staff (all at these services and absorbs
CMGI). 11% of total costs.
- --------------------------------------------------------------------------------
4. Marketing Research. Access to NaviSite is charged $2,000 per
research agencies such as Forrester month for access to marketing
Research, Inc. and Jupiter. research information.
- --------------------------------------------------------------------------------
5. Enterprise Services. Desktop and Allocated based on headcount for
network services support. NaviSite located at the Andover
Premises and the Federal Street
Premises divided by the
headcount for the CMGI Companies
using desktop and network services
support located at the Andover
Premises and the Federal Street
Premises.
- --------------------------------------------------------------------------------
6. Trade show Booth Rental. NaviSite is charged $1,239.55 per
month for the amortization of the
trade show booth. The amortization
charge back started in October 1998
and will continue for 36 months
from that date. NaviSite may
continue to use the booth as long
as CMGI continues to own more than
50% of the outstanding voting
capital stock of NaviSite.
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Services Provided by CMGI to NaviSite Allocation of Cost to NaviSite
- ----------------------------------------- -------------------------------------
- --------------------------------------------------------------------------------
<S> <C>
7. Medical/Dental Life and Long-term CMGI will provide Medical, Dental
Disability and Life and Long-term disability
coverage to NaviSite employees
under CMGI's group plans. NaviSite
will be billed directly by the
insurance provider for all costs
associated with coverage for
NaviSite employees enrolled in the
medical or dental insurance plan or
covered by the life and long-term
disability policy.
- --------------------------------------------------------------------------------
8. Federal Express/United Parcel CMGI's Accounts Payable department
Service. codes each individual charge based
on the identity of the sender.
- --------------------------------------------------------------------------------
9. Postage Machine. Mailings from the NaviSite is charged actual postage
Andover Premises. costs for mail stamped by the CMGI
postage machine.
- --------------------------------------------------------------------------------
10. Pepsi/Poland Springs. Allocated based on headcount for
NaviSite located at the Andover
Premises divided by headcount for
the CMGI Companies located at the
Andover Premises.
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Services Provided by CMGI to NaviSite Allocation of Cost to NaviSite
- ----------------------------------------- -------------------------------------
- --------------------------------------------------------------------------------
<S> <C>
11. Telephone. Provision of common, Modem, fax and 800 lines are
modem, fax and 800 lines. charged to NaviSite or the
individual employee who is
designated to that particular line.
Common inbound and outbound lines
are allocated based on headcount
for NaviSite located at the Andover
Premises divided by headcount for
the CMGI Companies located at the
Andover Premises.
- --------------------------------------------------------------------------------
12. MobilComm/Pagenet/Skytel/ Cellular Charged back to the person or
One. department which is assigned that
particular pager or cell phone.
- --------------------------------------------------------------------------------
13. Maxout Fitness. Fitness club Allocated based on the number of
membership. employees at NaviSite who belong to
the fitness club. The cost is
offset by the fitness club dues
that are withheld from the paycheck
of each employee who is a member of
the fitness club.
- --------------------------------------------------------------------------------
14. Legal Services. To the extent that legal fees and
expenses of NaviSite are paid for
by CMGI, such fees and expenses
will be allocated based upon the
actual use of the legal services.
- --------------------------------------------------------------------------------
15. KPMG. Preparation of yearly income To the extent that legal fees and
tax returns. expenses of NaviSite are paid for
by CMGI, such fees and expenses
will be allocated based upon the
actual use of KPMG services.
- --------------------------------------------------------------------------------
16. Funding Flex Spending. Charged for amounts reimbursed to
an employee through the flexible
spending account on a person by
person basis.
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Services Provided by CMGI to NaviSite Allocation of Cost to NaviSite
- ----------------------------------------- -------------------------------------
- --------------------------------------------------------------------------------
<S> <C>
19. Benefit Administration. Salary, fringe Allocated based on number of
benefits and payroll taxes for one employees at NaviSite covered by
benefit administrator and 25% of the the life insurance policy
salary, fringe benefits and payroll divided by the number of employees
taxes for an assistant to the benefits at CMGI Companies covered by the
administrator. life insurance policy.
- --------------------------------------------------------------------------------
20. 401(k) and 401(k) Match Funding. NaviSite credits the 401(k)
contribution and 401(k) matching
contribution each month from its
payroll entry to a 401(k)
withholding account. Upon funding
the 401(k), CMGI charges back the
funds to NaviSite. NaviSite then
charges those funds to the 401(k)
withholdings account. There is
usually a lag time of 15 days to 30
days for funding the 401(k).
- --------------------------------------------------------------------------------
</TABLE>
Defined Terms
-------------
Andover Premises -- those premises located at 100 Brickstone Square,
Andover, MA 01810 leased by CMGI.
CMGI Companies -- those companies that are controlled by CMGI or in which
CMGI holds an equity interest.
Federal Street -- those premises located at 300 Federal Street, Andover,
Premises MA 01810 occupied by NaviSite.
headcount -- the number of employees employed by a particular CMGI
Company on the last day of a given month.
<PAGE>
EXHIBIT 10.8
TAX ALLOCATION AGREEMENT
TAX ALLOCATION AGREEMENT (the "Agreement") is made as of October 27, 1999
by and among CMGI, Inc., a Delaware corporation ("Parent"), and NaviSite, Inc.,
a Delaware corporation ("Sub").
WHEREAS, prior to the Closing Date (as defined below), Sub was a member of
the Parent Group (as defined below);
WHEREAS, Parent will cause to be sold to the public a portion of the common
stock of Sub in a Public Offering (as defined below);
WHEREAS, the parties desire to provide for the allocation of
responsibilities, liabilities and benefits in respect of Taxes (as defined
below).
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
"Closing Date" means the close of business on the date on which Sub ceases
to be a member of the Parent Group.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consolidated Returns" means any consolidated, combined or unitary Tax
Returns required to be filed by Parent with respect to United States federal,
state or local Taxes imposed or based on net income, net worth or gross
receipts.
"Parent Group" means an affiliated group (within the meaning of Section
1504(a) of the Code and any corresponding provisions of state, local or foreign
tax law) having Parent as its common parent.
"Parent Subsidiary" or "Parent Subsidiaries" mean each corporation of which
Parent owns, directly or indirectly, capital stock representing more than 50% of
the outstanding voting stock. Parent Subsidiary or Parent Subsidiaries shall not
include Sub or any Sub Subsidiary.
"Public Offering" means either the sale to the public by Parent or the
issuance to the public by Sub of common stock of Sub.
"Returns" means all returns, reports and information statements (including
all exhibits and schedules thereto) required to be filed with a taxing authority
with respect to any Taxes.
<PAGE>
"Sub Subsidiary" or "Sub Subsidiaries" means each corporation of which Sub
owns on the Closing Date or thereafter, directly or indirectly, capital stock
representing more than 50% of the outstanding voting stock.
"Sub Taxes" means United States federal, state and local Taxes imposed or
based on net income, net worth or gross receipts (including interest and
penalties relating thereto) attributable to the operations of Sub and Sub
Subsidiaries.
"Taxes" means all federal, state, local and foreign income, profits,
franchise, sales, use, occupation, property, severance, excise, payroll,
withholding and any other taxes (including interest and penalties thereon).
ARTICLE II
REPRESENTATIONS
Section 2.1 Parent represents and warrants to the Sub that all
Consolidated Returns for any taxable year or Tax period ending on or before the
Closing Date have been or shall be timely filed in accordance with all
applicable laws, and all Taxes shown as due on such Consolidated Returns have
been or shall be paid, and any proposed deficiency asserted by any taxing
authority with respect thereto has been paid or properly protested.
Section 2.2 Sub represents and warrants to Parent that all Tax Returns for
any taxable year or Tax period ending on or before the Closing Date with respect
to Sub and Sub Subsidiaries, excluding any Consolidated Returns, have been or
shall be timely filed in accordance with all applicable laws, and all Taxes
shown as due on such Returns have been or shall be paid, and any proposed
deficiency asserted by any taxing authority with respect thereto has been paid
or properly protested.
ARTICLE III
TAX MATTERS
Section 3.1 Parent shall include (to the extent required by law) in
Consolidated Returns the taxable income or loss and all other Tax items of Sub
for the taxable years or Tax periods ending on or before the Closing Date. For
the period commencing on August 1 immediately preceding the Closing Date and
ending on the Closing Date, the following arrangement shall apply to ensure that
the correct amount of Sub Taxes due in respect of the Consolidated Returns is
billed to and paid by Sub:
(a) An estimate of the amount of such Sub Taxes due, which estimate shall
be determined in good faith and shall reflect amounts, if any, previously paid
by Sub with respect to Sub Taxes through the Closing Date, shall be billed to
Sub and paid to Parent prior to the Closing Date.
(b) Upon filing of the Consolidated Returns for the taxable year which
shall include the period commencing on August 1 and ending on the Closing Date,
either
(i) the unpaid amount, if any, of Sub Taxes due in respect of such
Consolidated Returns shall be billed to Sub, and Sub or its designee shall pay
such amount to Parent within 30 days after receiving written notice from Parent
of such amount, or
2
<PAGE>
(ii) if the amount of such Sub Taxes paid to Parent, if any, exceeds
the amount of the Sub Taxes due in respect of such Consolidated Returns, Parent
or its designee shall pay such excess to Sub or its designee within 30 days
after filing the Consolidated Returns for the taxable year which includes the
Closing Date.
(c) Sub Taxes due in respect of Consolidated Returns shall be determined in
accordance with (i) the method set forth in Section 1552(a)(1) of the Code and
U.S. Federal Income Tax Regulation Sections 1.1552-1(a)(1) and 1.1552-1(b), (ii)
one of the three methods of allocation under Section 1.1502-33(d) (sometimes
referred to as the three "Complementary Methods") and (iii) the practices of the
parties for Tax periods ended prior to the Closing Date.
(d) Except as provided in Section 3.7 and the last sentence of this
subsection (d), no party shall have any obligation to make any payments to
another party for the use of such other party's Tax attributes pursuant to U.S.
Federal Income Tax Regulation Section 1.1502-33(d) or otherwise.
Section 3.2 Subject to the provisions of Section 3.1, Parent shall be
liable for any and all Sub Taxes in respect of all Consolidated Returns due or
payable by Parent for any taxable year or Tax period ending on or before the
Closing Date.
Section 3.3 Subject to the provisions of Section 3.1, Sub and Sub
Subsidiaries shall be liable for (i) any and all Sub Taxes in respect of
Consolidated Returns due or payable to Parent by Sub under Section 3.1 and (ii)
any and all Taxes (other than Sub Taxes in respect of Consolidated Returns) due
or payable by Sub or Sub Subsidiaries for any taxable year or Tax period
(whether ending before, on or after the Closing Date).
Section 3.4 Any Taxes (other than ad valorem, personal property and real
property Taxes) for any Tax period beginning before the Closing Date and ending
after the Closing Date shall be apportioned between Sub as a member of the
Parent Group and Sub as a separate company which is not a member of the Parent
Group, respectively, based on the actual operations of Sub and/or Sub
Subsidiaries, as the case may be, during the portion of such period ending on
the Closing Date, and the portion of such period beginning on the day following
the Closing Date, and each portion of such period shall be deemed to be a Tax
period subject to the provisions of Sections 3.2 and 3.3. In the case of ad
valorem, personal property and real property Taxes, such apportionment shall be
on a per diem basis.
Section 3.5 Sub shall file or cause to be filed all required state, local
and foreign non-Consolidated Returns with respect to Sub and Sub Subsidiaries
for the Tax period beginning before the Closing Date and ending after the
Closing Date, and any such unfiled Tax Returns for periods ending on or before
the Closing Date, and Sub shall pay or cause its Subsidiaries to pay all Taxes
shown as due on any such Tax Returns.
Section 3.6 Any refunds or credits of Sub Taxes in respect of Consolidated
Returns for any taxable year or Tax period ending on or before the Closing Date
shall be for the account of Parent and Parent Subsidiaries. Any refunds or
credits of Taxes (other than Sub Taxes in respect of Consolidated Returns) paid
by Sub or Sub Subsidiaries for any taxable year or Tax period (whether ending
before, on or after the Closing Date) shall be for the account of Sub and its
Subsidiaries.
3
<PAGE>
Section 3.7
(a) Parent shall promptly pay to Sub the amount of any incremental Tax
savings generated by (i) a deduction, credit or exclusion that (A) is actually
realized by the Parent Group with respect to Taxes for a taxable period ending
on or before the Closing Date and (B) relates to or is based on an item that is
the basis for a similar deduction, credit or exclusion taken on a Return with
respect to Taxes of Sub or Sub Subsidiaries for a taxable period ending after
the Closing Date that is denied, disallowed, forfeited or accelerated prior to
the Closing Date or (ii) a reduction in the amount of any gross income or
revenue that (A) is actually realized by the Parent Group with respect to Taxes
for a taxable period ending on or before the Closing Date and (B) relates to, or
is based on, a similar item of gross income or revenue that Sub or Sub
Subsidiaries are required to include on a Return or otherwise required to
include in its computation of taxable income as a result of an audit, other
administrative proceeding or otherwise with respect to Taxes for a taxable
period ending after the Closing Date.
(b) Sub shall promptly pay to Parent the amount of any incremental Tax
savings generated by (i) a deduction, credit or exclusion that (A) is actually
realized by the Sub or Sub Subsidiaries with respect to Taxes for a taxable
period ending after the Closing Date and (B) relates to or is based on an item
that is the basis for a similar deduction, credit or exclusion taken on a
Consolidated Return with respect to Taxes for a taxable period ending on or
before the Closing Date that is denied, disallowed, forfeited or deferred until
after the Closing Date or (ii) a reduction in the amount of any gross income or
revenue that (A) is actually realized by Sub or Sub Subsidiaries with respect to
Taxes for a taxable period ending after the Closing Date and (B) relates to, or
is based on, a similar item of gross income or revenue that the Parent Group is
required to include on a Consolidated Return or otherwise required to include
in its computation of taxable income as a result of an audit, other
administrative proceeding or otherwise.
Section 3.8 Parent or Parent designee shall exercise, at Parent's expense,
complete control of the audit, appeal, litigation and/or settlement of any
issues raised in any official inquiry, examination or proceeding that could
result in an official determination with respect to Taxes due or payable by the
Parent Group, Parent Subsidiaries, Sub or Sub Subsidiaries for any taxable year
or Tax period (including a period deemed to be a Tax period under Section 3.4)
ending on or before the Closing Date, except in respect of Taxes for which Sub
or Sub Subsidiaries are responsible in connection with non-Consolidated Returns
required to be filed by Sub or Sub Subsidiaries, in which case Sub shall
exercise, at Sub's expense, complete control of the audit, appeal, litigation
and/or settlement. The parties shall cooperate in any such inquiry, examination
or proceeding.
Section 3.9 Sub irrevocably designates Parent (and shall cause each Sub
Subsidiary to irrevocably designate Parent) as its agent and attorney-in-fact
(and shall execute any necessary powers of attorney) for the purpose of taking
any and all actions necessary or incidental to the filing of Consolidated Tax
Returns. Parent and Sub will each furnish to the other any and all information
which the other may reasonably request in order to carry out the provisions of
this Agreement to determine the amount of any Tax liability.
4
<PAGE>
ARTICLE IV
INDEMNIFICATION
Section 4.1
(a) Except to the extent of any due and unpaid obligations of Sub with
respect to its payment obligations under Article III, Parent (i) shall indemnify
and hold harmless Sub against the amount of any and all liability, loss, expense
or damage Sub or such Sub Subsidiary may suffer or incur as a result of any or
all claims, demands, costs or expenses (including, without limitation,
attorneys' and accountants' fees), interest, penalties or judgments made against
it arising from or incurred in relation to all Taxes in respect of all
Consolidated Returns and (ii) shall make any payment, remove any lien and take
any action reasonably necessary to prevent Sub or such Sub Subsidiary from
incurring such liabilities, losses, expenses or damages.
(b) Except to the extent of any due and unpaid obligations of Parent with
respect to its payment obligations under Article III, Sub shall indemnify and
hold harmless Parent and each Parent Subsidiary against the amount of any and
all liability, loss, expense or damage any such company may suffer or incur as a
result of any or all claims, demands, costs or expenses (including, without
limitation, attorneys' and accountants' fees), interest, penalties or judgments
made against it arising from or incurred in relation to (i) any failure of Sub
to pay any amount to Parent with respect to Sub's obligations under Article III
and (ii) any and all Taxes (other than Taxes in respect of Consolidated Returns)
due or payable by Sub or Sub Subsidiaries for any taxable year or Tax period
beginning before, on or after the Closing Date.
Section 4.2 Payments under this Agreement shall be due no later than 30
days after the date written demand therefor, with a reasonably detailed
explanation for the basis of the claim, is actually received by Parent or Sub.
Section 4.3 In the event that any party fails to pay any amount owed
pursuant to this Agreement within 10 days after the date when such amount is
due, interest shall accrue on the unpaid amount at the rate applicable to
underpayments of the Tax with respect to which such amount relates from the due
date until such amounts are fully paid.
ARTICLE V
MISCELLANEOUS
Section 5.1 For all purposes of this Agreement, Sub shall be the agent for
each Sub Subsidiary, with full power to give any consent and/or exercise any
right provided for herein on behalf of such Sub Subsidiary.
Section 5.2 Any dispute concerning the calculation or basis of
determination of any payment provided for hereunder shall be resolved by a law
firm or "big five" accounting firm, selected jointly by Parent and Sub, whose
judgment shall be conclusive and binding upon the parties in the absence of
manifest error. The fees and other expenses of such law or accounting firm
shall be paid 50% by Parent and 50% by Sub.
5
<PAGE>
Section 5.3 This Agreement shall be binding upon the parties hereto and
shall inure to the benefit of and be binding upon any of their successors or
assigns; provided, however, that none of Parent, Sub or any of the Sub
Subsidiaries may assign or delegate any of its obligations hereunder without the
consent of Sub (in the case of a proposed assignment or delegation by Parent) or
Parent (in the case of a proposed assignment or delegation by Sub or any of the
Sub Subsidiaries).
Section 5.4 This Agreement embodies the entire understanding between the
parties relating to its subject matter and supersedes and terminates all prior
agreements and understandings among the parties with respect to such subject
matter. Any and all prior correspondence, conversations and memoranda with
respect to such subject matter are merged herein and shall be without effect
hereon. No promises, covenants or representations of any kind, other than those
expressly stated herein, have been made to induce any party to enter into this
Agreement. This Agreement shall not be modified or terminated except by a
writing duly signed by each of the parties (or, in the case of a Sub Subsidiary,
by Sub acting as its agent on its behalf), and no waiver of any provisions of
this Agreement shall be effective unless in a writing duly signed by the party
sought to be bound (or, in the case of a Sub Subsidiary, by Sub acting as its
agent on its behalf).
Section 5.5 Any payment, notice or communication required or permitted to
be given under this Agreement shall be in writing and may be delivered by hand,
first-class mail, facsimile (if confirmed) or overnight courier:
If to Parent, to:
100 Brickstone Square
Andover, Massachusetts 01810
Attention: Mr. Don Combs, Vice President for Finance
If to Sub on its own behalf, or as agent for the Sub Subsidiaries, to:
100 Brickstone Square
Andover, Massachusetts 01810
Attention: Mr. Kenneth W. Hale, Chief Financial Officer
or to such other person or address as a party shall furnish in writing to all
the other parties. All such notices and communications shall be effective (i)
when received, if delivered by hand, first-class mail or overnight courier, or
(ii) when transmission is confirmed, if delivered by facsimile.
Section 5.6 This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument. This Agreement may be executed by
facsimile signatures.
Section 5.7 This Agreement shall be governed by the laws applicable to
contracts entered into and to be fully performed within the State of Delaware by
residents thereof.
Section 5.8 Each of Parent, Sub and any of the Sub Subsidiaries agree
that, in the event of any legal suit or proceeding arising in connection with
this Agreement and the obligations of the parties hereunder, it shall submit to
the jurisdiction of the United States District Court of Delaware and further
agrees to venue in such court.
6
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by its respective duly authorized officer as of the date first set
forth above.
CMGI, INC.
By: /s/ Andrew J. Hajducky III
-------------------------------
Name: Andrew J. Hajducky III
-----------------------------
Title: Chief Financial Officer
----------------------------
NAVISITE, INC.
By: /s/ Joel B. Rosen
-------------------------------
Name: Joel B. Rosen
-----------------------------
Title: Chief Executive Officer
----------------------------
7
<PAGE>
EXHIBIT 10.9
GENERAL CONDITIONS OF THE CONTRACT FOR CONSTRUCTION
AIA Document A201-1997
1997 Edition - Electronic Format
This document has important legal consequences. Consultation with an attorney
is encouraged with respect to its completion or modification. AUTHENTICATION OF
THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.
This document has been approved and endorsed by The Associated General
Contractors of America.
Copyright 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966, 1967,
1970, 1976, 1987, 1997 by The American Institute of Architects. Fifteenth
Edition. Reproduction of the material herein or substantial quotation of its
provisions without written permission of the AIA violates the copyright laws of
the United States and will subject the violator to legal prosecution.
TABLE OF ARTICLES
1. GENERAL PROVISIONS
2. OWNER
3. CONTRACTOR
4. ADMINISTRATION OF THE CONTRACT
5. SUBCONTRACTORS
6. CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS
7. CHANGES IN THE WORK
8. TIME
9. PAYMENTS AND COMPLETION
AIA DOCUMENT A201-GENERAL CONDITIONS OF THE CONTRACT FOR CONSTRUCTION - 1997
EDITION - AIA - COPYRIGHT 1997 - THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW
YORK AVENUE N.W., WASHINGTON, D.C. 20006-5292. WARNING: Unlicenced photocopying
violates U.S. copyright laws and will subject the violator to legal prosecution.
This document was electronically produced with permission of the AIA and can be
reproduced without violation until the date of expiration as noted below.
Electronic Format A201-1997
User Document: 2031A201.DOC -- 6/6/1999.
AIA License Number 109286, which expires
on 6/30/1999
<PAGE>
10. PROTECTION OF PERSONS AND PROPERTY
11. INSURANCE AND BONDS
12. UNCOVERING AND CORRECTION OF WORK
13. MISCELLANEOUS PROVISIONS
14. TERMINATION OR SUSPENSION OF THE CONTRACT
<PAGE>
INDEX
Acceptance of Nonconforming Work
9.6.6, 9.9.3, 12.3
Acceptance of Work
9.6.6, 9.8.2, 9.9.3, 9.10.1, 9.10.3, 12.3
Access to Work
3.16, 6.2.1, 12.1
Accident Prevention
4.2.3, 10
Acts and Omissions
3.2, 3.3.2, 3.12.8, 3.18, 4.2.3, 4.3.8, 4.4.1, 8.3.1, 9.5.1, 10.2.5,
13.4.2, 13.7, 14.1
Addenda
1.1.1, 3.11
Additional Cost, Claims for
4.3.4, 4.3.5, 4.3.6, 6.1.1, 10.3
Additional Inspections and Testing
9.8.3, 12.2.1, 13.5
Additional time, Claims for
4.3.4, 4.3.7, 8.3.2
ADMINISTRATION OF THE CONTRACT
3.1.3, 4, 9.4, 9.5
Advertisement or Invitation to Bid
1.1.1
Aesthetic Effect
4.2.13, 4.5.1
Allowances
3.8
All-risk Insurance
11.4.1.1
Applications for Payment
4.2.5, 7.3.8, 9.2, 9.3, 9.4, 9.5.1, 9.6.3, 9.7.1, 9.8.5, 9.10, 11.3,
14.2.4, 14.4.3
Approvals
2.4, 3.1.3, 3.5, 3.10.2, 3.12, 4.2.7, 9.3.2, 13.4.2, 13.5
<PAGE>
Arbitration
4.3.3, 4.4, 4.5.1, 4.5.2, 4.6, 8.3.1, 9.7.1, 11.4.9, 11.4.10
Architect
4.1
Architect, Definition of
4.1.1
Architect, Extent of Authority
2.4, 3.12.7, 4.2, 4.3.6, 4.4, 5.2, 6.3, 7.1.2, 7.3.6, 7.4, 9.2, 9.3.1, 9.4,
9.5, 9.8.3, 9.10.12, 9.10.3, 12.1, 12.2.1, 13.5.1, 13.5.2, 14.2.2, 14.2.4
Architect, Limitations of Authority and Responsibility
2.1.1, 3.3.3, 3.12.4, 3.12.8, 3.12.10, 4.1.2, 4.2.1, 4.2.2, 4.2.3, 4.2.6,
4.2.7, 4.2.10, 4.2.12, 4.2.13, 4.4, 5.2.1, 7.4, 9.4.2, 9.6.4, 9.6.6
Architect's Additional Services and Expenses
2.4, 11.4.101, 12.2.1, 13.5.2, 13.5.3, 14.2.4
Architect's Administration of the Contract
3.1.3, 4.2, 4.3.4, 4.4, 9.4, 9.5
Architect's Approvals
2.4, 3.1.3, 3.5.1, 3.10.2, 4.2.7
Architect's Authority to Reject Work
3.5.1, 4.2.6, 12.1.2, 12.2.1
Architect's Copyright
1.6
Architect's Decisions
4.2.6, 4.2.7, 4.2.11, 4.2.12, 4.2.13, 4.3.4, 4.4.1, 4.4.5, 4.4.6, 4.5, 6.3,
7.3.6, 7.3.8, 8.1.3, 8.3.1, 9.2, 9.4, 9.5.1, 9.8.4, 9.9.1, 13.5.2, 14.2.2,
14.2.4
Architect's Inspections
4.2.2, 4.2.9, 4.3.4, 9.4.2, 9.8.3, 9.9.2, 9.10.1, 13.5
Architect's Instructions
3.2.3, 3.3.1, 4.2.6, 4.2.7, 4.2.8, 7.4.1, 12.1, 13.5.2
Architect's Interpretations
4.2.11, 4.2.12, 4.3.6
Architect's Project Representative
4.2.10
<PAGE>
Architect's Relationship with Contractor
1.1.2, 1.6, 3.1.3, 3.2.1, 3.2.2, 3.2.3, 3.3.1, 3.4.2, 3.5.1, 3.7.3, 3.10,
3.11, 3.12, 3.16, 3.18, 4.1.2, 4.1.3, 4.2, 4.3.4, 4.4.1, 4.4.7, 5.2, 6.2.2,
7, 8.3.1, 9.2, 9.3, 9.4, 9.5, 9.7, 9.8, 9.9, 10.2.6, 10.3, 11.3, 11.4.7,
12, 13.4.2, 13.5
Architect's Relationship with Subcontractors
1.1.2, 4.2.3, 4.2.4, 4.2.6, 9.6.3, 9.6.4, 11.4.7
Architect's Representations
9.4.2, 9.5.1, 9.10.1
Architect's Site Visits
4.2.2, 4.2.5, 4.2.9, 4.3.4, 9.4.2, 9.5.1, 9.9.2, 9.10.1, 13.5
Asbestos
10.3.1
Attorneys' Fees
3.18.1, 9.10.2, 10.3.3
Award of Separate Contracts
6.1.1, 6.1.2
Award of Subcontracts and Other Contracts for Portions of the Work
5.2
Basic Definitions
1.1
Bidding Requirements
1.1.1, 1.1.7, 5.2.1, 11.5.1
Boiler and Machinery Insurance
11.4.2
Bonds, Liens
9.10.2
Bonds, Performance, and Payment
7.3.6.4, 9.6.7, 9.10.3, 11.4.9, 11.5
Building Permit
3.7.1
Capitalization
1.3
Certificate of Substantial Completion
9.8.3, 9.8.4, 9.8.5
<PAGE>
Certificates for Payment
4.2.5, 4.2.9, 9.3.3, 9.4, 9.5, 9.6.1, 9.6.6, 9.7.1, 9.10.1, 9.10.3, 13.7,
14.1.1.3, 14.2.4
Certificates of Inspection, Testing or Approval
13.5.4
Certificates of Insurance
9.10.2, 11.1.3
Change Orders
1.1.1, 2.4.1, 3.4.2, 3.8.2.3, 3.11.1, 3.12.8, 4.2.8, 4.3.4, 4.3.9, 5.2.3,
7.1, 7.2, 7.3, 8.3.1, 9.3.1.1, 9.10.3, 11.4.1.2, 11.4.4, 11.4.9, 12.1.2
Change Orders, Definition of
7.2.1
CHANGES IN THE WORK
3.11, 4.2.8, 7, 8.3.1, 9.3.1.1, 11.4.9
Claim, Definition of
4.3.1
Claims and Disputes
3.2.3, 4.3, 4.4, 4.5, 4.6, 6.1.1, 6.3, 7.3.8, 9.3.3, 9.10.4, 10.3.3
Claims and Timely Assertion of Claims
4.6.5
Claims for Additional Cost
3.2.3, 4.3.4, 4.3.5, 4.3.6, 6.1.1, 7.3.8, 10.3.2
Claims for Additional Time
3.2.3, 4.3.4, 4.3.7, 6.1.1, 7.3.8, 10.3.2
Claims for Concealed or Unknown Conditions
4.3.4
Claims for Damages
3.2.3, 3.18, 4.3.10, 6.1.1, 8.3.3, 9.5.1, 9.6.7, 10.3.3, 11.1.1, 11.4.5,
11.4.7, 14.1.3, 14.2.4
Claims Subject to Arbitration
4.4.1, 4.5.1, 4.6.1
Cleaning Up
3.15, 6.3
Commencement of Statutory Limitation Period
13.7
<PAGE>
Commencement of the Work, Conditions Relating to
2.2.1, 3.2.1, 3.4.1, 3.7.1, 3.12.6, 4.3.5, 5.2.1, 5.2.3, 6.2.2, 8.1.2,
8.2.2, 8.3.1, 11.1, 11.41, or 11.46, 11.5.1
Commencement of the Work definition of
8.1.2
Communications of the Facilitating Contract Administration
3.9, 4.2.4
Completion, Conditions Relating to
1.6.1, 3.4.1, 3.11, 3.15, 4.2.2, 4.2.9, 8.2, 9.4.2, 9.8, 9.9.1, 9.10, 12.2,
13.7, 14.12
COMPLETION, PAYMENTS AND
9
Completion, Substantial
4.2.9, 8.1.1, 813., 8.2.3, 9.4.2, 9.8, 9.9.1, 9.10.3, 9.10.4.2, 12.2, 13.7
Compliance With Laws
1.6.1, 3.2.2, 3.6, 3.7, 3.12.10, 3.13, 4.1.1, 4.4.8, 4.6.4, 4.6.6, 9.6.4,
10.2.2, 11.1, 11.4, 13.1, 13.4, 13.5.1, 13.5.2, 13.6, 14.1.1, 14.2.1.3
Concealed or Unknown Conditions
4.3.4, 8.3.1, 10.3
Conditions of the Contract
1.1.1, 1.1.7, 6.1.1, 6.1.4
Consent, Written
1.6, 3.4.2, 3.12.8, 3.14.2, 4.1.2, 4.3.4, 4.6.4, 9.3.2, 9.8.5, 9.9.1,
9.10.2, 9.10.3, 11.4.1, 13.2, 13.4.2
CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS
1.1.4, 6
Construction change Directive, Definition of
7.3.1
Construction change Directives
1.1.1, 3.12.8, 4.2.8, 4.3.9, 7.1, 7.3, 9.3.1.1
Construction Schedules, Contractor's
1.4.1.2, 3.10, 3.12.1, 3.12.2, 4.3.7.2, 6.1.3
Contingent Assignment of Subcontracts
5.4, 14.2.2.2
<PAGE>
Continuing Contract Performance
4.3.3
Contract, Definition of
1.1.2
CONTRACT, TERMINATION OR SUSPENSION OF THE
5.4.1.1, 11.4.9, 14
Contract Administration
3.1.3, 4, 9.4, 9.5
Contract Award and Execution, Conditions Relating to
3.7.1, 3.10, 5.2, 6.1, 11.1.3, 11.4.6, 11.5.1
Contract Documents, The
1.1, 1.2
Contract Documents, Copies Furnished and Use of
1.6, 2.2.5, 5.3
Contract Documents, Definition of
1.1.1
Contract Sum
3.8, 4.3.4, 4.3.5, 4.4.5, 5.2.3, 7.2, 7.3, 7.4, 9.1, 9.4.2, 9.5.1.4, 9.6.7,
9.7, 10.3.2, 11.4.1, 14.2.4, 14.3.2
Contract Sum, Definition of
9.1
Contract Time
4.3.4, 4.3.7, 4.4.5, 5.2.3, 7.2.1.3, 7.3, 7.4, 8.1.1, 8.2, 8.3.1, 9.5.1,
9.7, 10.3.2, 12.1.1, 14.3.2
Contract Time, Definition of
8.1.1
CONTRACTOR
3
Contractor, Definition of
3.1., 6.1.2
Contractor's Construction Schedules
1.4.1.2, 3.10, 3.12.1, 3.12.2, 4.3.7.2, 6.1.3
Contractor's Employees
3.2.2, 3.4.3, 3.8.1, 3.9, 3.18.2, 4.2.3, 4.2.6, 10.2, 10.3, 11.1.1, 11.4.7,
14.1, 14.2.1.1,
<PAGE>
Contractor's Liability Insurance
11.1
Contractor's Relationship with Separate Contractors and Owners
Forces
3.12.5, 3.14.2, 4.2.4, 6, 11.4.7, 12.1.2, 12.2.4
Contractor's Relationship with Subcontractors
1.2.2, 3.3.2, 3.18.1, 3.18.2, 5, 9.6.2, 9.6.7, 9.10.2, 11.4.1.2, 11.4.7,
11.4.8
Contractor's Relationship with the Architect
1.1.2, 1.6, 3.1.3, 3.2.1, 3.2.2, 3.2.3, 3.3.1, 3.4.2, 3.5.1, 3.7.3, 3.10,
3.11, 3.12, 3.16, 3.18, 4.1.2, 4.1.3, 4.2, 4.3.4, 4.4.1, 4.4.7, 5.2, 6.2.2,
7, 8.3.1, 9.2, 9.3, 9.4, 5, 9.7, 9.8, 9.9, 10.2.6, 10.3, 11.3, 11.4.7, 12,
13.4.2, 13.5
Contractor's Representations
1.5.2, 3.5.1, 3.12.6, 6.2.2, 8.2.1, 9.3.3, 9.8.2
Contractor's Responsibility for Those Performing the Work
3.3.2, 3.18, 4.2.3, 4.3.8, 5.3.1, 6.1.3, 6.2, 6.3, 9.5.1, 10
Contractor's Review of Contract Documents
1.5.2, 3.2, 3.7.3
Contractor's Right to Stop the Work
9.7
Contractor's Right to Terminate the Contract
4.3.10, 14.1
Contractor's Submittals
3.10, 3.11, 3.12, 4.2.7, 5.2.1, 5.2.3, 7.3.6, 9.2, 9.3, 9.8.2, 9.8.3,
9.9.1, 9.10.2, 9.10.3, 11.1.3, 11.5.2
Contractor's Superintendent
3.9, 10.2.6
Contractor's Supervision and Construction Procedures
1.2.2, 3.3, 3.4, 3.12.10, 4.2.2, 4.2.7, 4.3.3, 6.1.3, 6.2.4, 7.1.3, 7.3.4,
7.3.6, 8.2, 10, 12, 14
Contractual Liability Insurance
11.1.1.8, 11.2, 11.3
Coordination and Correlation
1.2, 1.5.2, 3.3.1, 3.10, 3.12.6, 6.1.3, 6.2.1
Copies Furnished of Drawings and Specifications
1.6, 2.2.5, 3.11
<PAGE>
Copyrights
1.6, 3.17
Correction of Work
2.3, 2.4, 3.7.4, 4.2.1, 9.4.2, 9.8.2, 9.8.3, 9.9.1, 12.1.2, 12.2, 13.7.1.3
Correlation and Intent of the Contract Documents
1.2
Cost, Definition of
7.3.6
Costs
2.4, 3.2.3, 3.7.4, 3.8.2, 3.15.2, 4.3, 5.4.2, 6.1.1, 6.2.3, 7.3.3.3, 7.3.6,
7.3.7, 7.3.8, 9.10.2, 10.3.2, 10.5, 11.3, 11.4, 12.1, 12.2.1, 12.2.4, 13.5,
14
Cutting and Patching
[Numbers are cut off]
Damage to Construction of Owner or Separate Contractors
3.14.2, 6.2.4, 9.2.1.5, 10.2.1.2, 10.2.5, 10.6, 11.1, 11.4, 12.2.4
Damage to the Work
3.14.2, 9.9.1, 10.2.1.2, 10.2.5, 10.6, 11.4, 12.2.4
Damages, Claims for
3.2.3, 3.18, 4.3.10, 6.1.1, 8.3.3, 9.5.1, 9.6.7, 10.3.3, 11.1.1, 11.4.5,
11.4.7, 14.1.3, 14.2.4
Damages for Delay
6.1.1, 8.3.3, 9.5.1.6, 9.7, 10.3.2
Date of Commencement of the Work, Definition of
8.1.2
Date of Substantial Completion, Definition of
8.1.3
Day, Definition of
3.1.4
Decisions of the Architect
4.2.6, 4.2.7, 4.2.11, 4.2.12, 4.2.13, 4.3.4, 4.4.1, 4.4.5, 4.4.6, 4.5, 6.3,
7.3.6, 7.3.8, 8.1.3, 8.3.1, 9.2, 9.4, 9.5.1, 9.8.4, 9.9.1, 13.5.2, 14.2.2,
14.2.4
Decisions to Withhold Certification
9.4.1, 9.5, 9.7, 14.1.1.3
<PAGE>
Defective or Nonconforming Work, Acceptance, Rejection and Correction of
2.3, 2.4, 3.5.1, 4.2.6, 6.2.5, 9.5.1, 9.5.2, 9.6.6, 9.8.2, 9.9.3, 9.10.4,
12.2.1, 13.7.1.3
Defective Work, Definition of
3.5.1
Definitions
1.1, 2.1.1, 3.1, 3.5.1, 3.12.1, 3.12.2, 3.12.3, 4.1.1, 4.3.1, 5.1, 6.1.2,
7.2.1, 7.3.1, 7.3.6, 8.1, 9.1, 9.81
Delays and Extensions of Time
3.2.3, 4.3.1, 4.3.4, 4.3.7, 4.4.5, 5.2.3, 7.2.1, 7.3.1, 7.4.1, 7.5.1, 8.3,
9.5.1, 9.7.1, 10.3.2, 10.6.1, 14.3.2
Disputes
4.1.4, 4.3, 4.4, 4.5, 4.6, 6.3, 7.3.8
Documents and Samples at the Site
3.11
Drawings, Definition of
1.1.5
Drawings and Specifications, Use and Ownership of
1.1.1, 1.3, 2.2.5, 3.11, 5.3
Effective Date of Insurance
8.2.2, 11.1.2
Emergencies
4.3.5, 10.6, 14.1.1.2
Employees, Contractor's
3.3.2, 3.4.3, 3.8.1, 3.9, 3.18.2, 4.2.3, 4.2.6, 10.2, 10.3, 11.1.1, 11.4.7,
14.1, 14.2.1.1
Equipment, Labor, Materials and
1.1.3, 1.1.6, 3.4, 3.5.1, 3.8.2, 3.8.3, 3.12, 3.13, 3.15.1, 4.2.6, 4.2.7,
5.2.1, 6.2.1, 7.3.6, 9.3.2, 9.3.3, 9.5.1.3, 9.10.2, 10.2.1, 10.2.4,
14.2.1.2
Execution and Progress of the Work
1.1.3, 1.2.1, 1.2.2, 2.2.3, 2.2.5, 3.1, 3.3, 3.4, 3.5, 3.7, 3.10, 3.12,
3.14, 4.2.2, 4.2.3, 4.3.3, 6.2.2, 7.1.3, 7.3.4, 8.2, 9.5, 9.9.1, 10.2,
10.3, 12.2, 14.2, 14.3
Extensions of Time
3.2.3, 4.3.1, 4.3.4, 4.3.7, 4.4.5, 5.2.3, 7.2.1, 7.3, 7.4.1, 9.5.1, 9.7.1,
10.3.2, 10.6.1, 14.3.2
<PAGE>
Failure of Payment
4.3.6, 9.5.1.3, 9.7, 9.10.2, 14.1.1.3, 14.2.1.2, 13.6
Faulty Work
(See Defective or Nonconforming Work)
Final Completion and final Payment
4.2.1, 4.2.9, 4.3.2, 9.8.2, 9.10, 11.1.2, 11.13, 11.4.1, 11.4.5, 12.3.1,
13.7, 14.2.4, 14.4.3
Financial Arrangements, Owner's
2.2.1, 13.2.2, 14.1.1.5
Fire and Extended coverage Insurance
11.4
GENERAL PROVISIONS
1
Governing Law
13.1
Guarantees (See Warranty)
Hazardous Materials
10.2.4, 10.3, 10.5
Identification of Contract Documents
1.5.1
Identification of Subcontractors and Suppliers
5.2.1
Indemnification
3.17, 3.18, 9.10.2, 10.3.3, 10.5, 11.4.1.2, 11.4.7
Information and Services Required of the Owner
2.1.2, 2.2, 3.2.1, 3.12.4, 3.12.10, 4.2.7, 4.3.3, 6.1.3, 6.1.4, 6.2.5,
9.3.2, 9.6.1, 9.6.4, 9.9.2, 9.10.3, 10.3.3, 11.2, 11.4, 13.5.1, 13.5.2,
14.1.1.4, 14.1.4
Injury or Damage to Person or Property
4.3.8, 10.2, 10.6
Inspections
3.1.3, 3.3.3, 3.7.1, 4.2.2, 4.2.6, 4.2.9, 9.4.2, 9.8.2, 9.8.3, 9.9.2,
9.10.1, 12.2.1, 13.5
Instructions to bidders
1.1.1
<PAGE>
Instructions to the Contractor
3.2.3, 3.3.1, 3.8.1, 4.2.8, 5.2.1, 7, 12, 8.2.2, 13.5.2
Insurance
3.18.1, 6.1.1, 7.3.6, 8.2.1, 9.3.2, 9.8.4, 9.9.1, 9.10.2, 9.10.5, 11
Insurance, Boiler and Machinery
11.4.2
Insurance, Contractor's Liability
11.1
Insurance, Effective Date of
8.2.2, 11.1.2
Insurance, Loss of Use
11.4.3
Insurance, Owner's Liability
11.2
Insurance, Project Management Protective Liability
11.3
Insurance, Property
10.2.5., 11.4
Insurance, Store Materials
9.3.2, 11.4.1.4
INSURANCE AND BONDS
11
Insurance Companies, Consent to Partial Occupancy
9.9.1, 11.4.1.5
Insurance Companies, Settlement with
11.4.10
Intent of the Contract documents
1.2.1, 4.2.7, 4.2.12, 4.2.13, 7.4
Interest
13.6
Interpretation
1.2.3, 1.4, 4.1.1, 4.3.1, 5.1, 6.1.2, 8.1.4
Interpretations, Written
4.2.11, 4.2.12, 4.3.6
<PAGE>
Joinder and Consolidation of Claims Required
4.6.4
Judgment on Final Award
4.6.6
Labor and Materials, Equipment
1.1.3, 1.1.6, 3.4, 3.5.1, 3.8.2, 3.8.3, 3.12, 3.13, 3.15.1, 42.6, 4.2.7,
5.2.1, 6.2.1, 7.3.6, 9.3.2, 9.3.3, 9.5.1.3, 9.10.2, 10.2.1, 10.2.4,
14.2.1.2
Labor Disputes
8.3.1
Laws and Regulations
1.6, 3.2.2, 3.6, 3.7, 3.12.10, 3.13, 4.1.1, 4.4.8, 4.6, 9.6.4, 9.9.1,
10.2.2, 11.1, 11.4, 13.1, 13.4, 13.5.1, 13.5.2, 13.6, 14
Liens
2.1.2, 4.4.8, 8.2.2, 9.3.3, 9.10
Limitation on consolidation or Joinder
4.6.4
Limitations, Statutes of
4.6.3., 12.2.6, 13.7
Limitations of Liability
2.3, 3.2.1, 3.5.1, 3.7.3, 3.12.8, 3.12.10, 3.17, 3.18, 4.2.6, 4.2.7,
4.2.12, 6.2.2, 9.4.2, 9.6.4, 9.6.7, 9.10.4, 10.3.3, 10.2.5, 11.1.2, 11.2.1,
11.4.7, 12.2.5, 13.4.2
Limitations of Time
2.1.2, 2.2, 2.4, 3.2.1, 3.7.3, 3.10, 3.11, 3.12.5, 3.15.1, 4.2.7, 4.3, 4.4,
4.5, 4.6, 5.2, 5.3, 5.4, 6.2.4, 7.3, 7.4, 8.2, 9.2, 9.3.1, 9.3.3, 9.4.1,
9.5, 9.6, 9.7, 9.8, 9.9, 9.10, 11.1.3, 11.4.1.5, 11.4.6, 11.4.10, 12.2,
13.5, 13.7, 14
Loss of Use Insurance
11.4.3
Material Suppliers
1.6, 3.12.1, 4.2.4, 4.2.6, 5.2.1, 9.3, 9.4.2, 9.6, 9.10.5
Materials Hazardous
10.2.4, 10.3, 10.5
Materials, Labor, Equipment and
1.1.3, 1.1.6, 1.6.1, 3.4, 3.5.1, 3.8.2, 3.8.23, 3.12, 3.13, 3.15.1, 4.2.6,
4.2.7, 5.2.1, 6.2.1, 7.3.6, 9.3.2, 9.3.3, 9.5.1.3, 9.10.2, 10.2.1., 10.2.4,
14.2.1.2
<PAGE>
Means, Methods, Techniques, Sequences and Procedures of Construction
3.3.1, 3.12.10, 4.2.2, 4.2.7, 9.4.2
Mechanic's Lien
4.4.8
Mediation
4.4.1, 4.4.5, 4.4.6, 4.4.8, 4.5, 4.6.1, 4.6.2, 8.3.1, 10.5
Minor Changes in the Work
1.1.1, 3.12.8, 4.2.8, 4.3.6, 7.1, 7.4
MISCELLANEOUS PROVISIONS
13
Modifications, Definition of
1.1.1
Modifications to the Contract
1.1.1, 1.1.2, 3.7.3, 3.11, 4.1.2, 4.2.1, 5.2.3, 7, 8.3.1, 9.7, 10.3.2,
11.4.1
Mutual Responsibility
6.2
Nonconforming Work, Acceptance of
9.6.6, 9.9.3, 12.3
Nonconforming Work, Rejection and Correction of
2.3, 2.4, 3.5.1, 4.2.6, 6.2.5, 9.5.1, 9.8.2, 9.9.3, 9.10.4, 12.2.1,
13.7.1.3
Notice
2.2.1, 2.3, 2.4, 3.2.3, 3.3.1, 3.7.2, 3.7.4, 3.12.9, 4.3, 4.4.8, 4.6.5,
5.2.1, 8.2.2, 9.7, 9.10, 10.2.2, 11.1.3, 11.4.6, 12.2.2, 12.2.4, 13.3,
13.5.1, 13.5.2, 14.1, 14.2
Notice, Written
2.3, 2.4, 3.3.1, 3.9, 3.12.9, 3.12.10, 4.3, 4.4.8, 4.6.5, 5.2.1, 8.2.2,
9.7, 9.10, 10.2.2, 10.3, 11.1.3, 11.4.6, 12.2.2, 12.2.4, 13.3.4
Notice of Testing and Inspections
13.5.1, 13.5.2
Notice to Proceed
8.2.2
Notices, Permits, Fees and
2.2.2, 3.7, 3.13, 7.3.6.4, 10.2.2
Observations, Contractor's
1.5.2, 3.2, 3.7.3, 4.3.4
<PAGE>
Occupancy
2.2.2, 9.6.6., 9.8, 11.4.1.5
Orders Written
1.1.1, 2.3, 3.9, 4.3.6, 7, 8.2.2, 11.4.9, 12.1, 12.2, 13.5.2, 14.3.1
OWNER
2
Owner, Definition of
2.1
Owner, Information and Services Required of the
2.1.2, 2.2, 3.2.1, 3.12.4, 3.12.10, 4.2.7, 4.3.3, 6.1.3, 6.1.4, 6.2.5,
9.3.2, 9.6.1, 9.6.4, 9.9.2, 9.10.3, 10.3.3, 11.2, 11.4, 13.5.1, 13.5.2,
14.1.1.4, 14.1.4
Owner's Authority
1.6, 2.1.1, 2.3, 2.4, 3.4.2, 3.8.1, 3.12.10, 3.14.2, 4.1.2, 4.1.3, 4.2.4,
4.2.9, 4.3.6, 4.4.7, 5.2.1, 5.2.4, 5.4.1, 6.1, 6.3, 7.2.1, 7.3.1, 8.2.2,
8.3.1, 9.3.1, 9.3.2, 9.5.1, 9.9.1, 9.10.2, 10.3.2, 11.1.3, 11.3.1, 11.4.3,
11.4.10, 12.2.2, 12.3.1, 13.2.2, 14.3, 14.4
Owner's Financial Capability
2.2.1, 13.2.2, 14.1.1.5
Owner's Liability Insurance
11.2
Owner's Loss of Use Insurance
11.4.3
Owner's Relationship with Subcontractors
1.1.2, 5.2, 5.3, 5.4, 9.6.4, 9.10.2, 14.2.2
Owner's Right to Carry Out the Work
2.4, 12.2.4, 14.2.2.2
Owner's Right to Clean Up
6.3
Owner's Right to Perform Construction and to Award Separate Contracts
6.1
Owner's Right to Stop the Work
2.3
Owner's Right to Suspend the Work
14.3
<PAGE>
Owner's Right to Terminate the Contract
14.2
Ownership and Use of Drawings, Specifications and Other
Instruments of Service
1.1.1, 1.6, 2.2.5, 3.2.1, 3.11.1, 3.17.1, 4.2.12, 5.3
Partial Occupancy or Use
9.6.6, 9.9, 11.4.1.5
Patching, Cutting and
3.14, 6.2.5
Patents
3.17
Payment, Applications for
4.2.5, 7.3.8, 9.2, 9.3, 9.4, 9.5.1, 9.6.3, 9.7.1, 9.8.5, 9.10.1, 9.10.3,
9.10.5, 11.13, 14.2.4, 14.4.3
Payment, Certificates for
4.2.5, 7.3.8, 9.2, 9.3, 9.4, 9.5.1, 9.6.3, 9.7.1, 9.8.5, 9.10.1, 9.10.3,
9.10.5, 11.13, 14.2.4, 14.4.3
Payment Certificates for
4.2.5, 4.2.9, 9.3.3, 9.4, 9.5, 9.6.1, 9.6.6, 9.7.1, 9.10.1, 9.10.3, 13.7,
14.1.1.3, 14.2.4
Payment, Failure of
4.3.6, 9.5.1.3, 9.7, 9.10.2, 14.1.1.3, 14.2.1.2, 13.6
Payment Final
4.2.1, 4.2.9, 4.3.2, 9.8.2, 9.10, 11.1.2, 11.1.3, 11.4.1, 11.4.5, 12.3.1,
13.7, 14.2.4, 14.4.3
Payment Bond, Performance Bond and
7.3.6.4, 9.6.7, 9.10.3, 11.4.9, 11.5
Payments, Progress
4.3.3, 9.3, 9.6, 9.8.5, 9.10.3, 13.6, 14.2.3
PAYMENTS AND COMPLETION
9
Payments to Subcontractors
5.4.2, 9.5.1.3, 9.6.2, 9.6.3, 9.6.4, 9.6.7, 11.4.8, 14.2.1.2
PCB
10.3.1
<PAGE>
Performance bond and Payment Bond
7.3.6.4, 9.6.7, 9.10.3, 11.4.9, 11.5
Permits, Fees and Notices
2.2.2, 3.7, 3.13, 7.3.6.4, 10.2.2
PERSONS AND PROPERTY, PROTECTION OF
10
Polychlorinated Biphenyl
10.3.1
Product Data, Definition of
3.12.2
Product Data and Samples, Shop Drawings
3.11, 3.12, 4.2.7
Progress and Completion
4.2.2, 4.3.3, 8.2, 9.8, 9.9.1, 14.1.4
Progress Payments
4.3.3, 9.3, 9.6, 9.8.5, 9.10.3, 13.6, 14.2.3
Project, Definition of the
1.1.4
Project Management Protective Liability Insurance
11.3
Project Manual, Definition of the
1.1.7
Project Manuals
2.2.5
Project Representatives
4.2.10
Property Insurance
10.2.5, 11.4
PROTECTION OF PERSONS AND PROPERTY
10
Regulations and Laws
1.6, 3.2.2, 3.6, 3.7, 3.12.10, 3.13, 4.1.1, 4.4.8, 4.6, 9.6.4, 9.9.1,
10.2.2, 11.1, 11.4, 13.1, 13.4, 13.5.1, 13.5.2, 13.6, 14
Rejection of Work
3.5.1, 4.2.6, 12.2.1
<PAGE>
Releases and Waivers of Liens
9.10.2
Representations
1.5.2, 3.5.1, 3.12.6, 6.2.2, 8.2.1, 9.3.3, 9.4.2, 9.5.1, 9.8.2, 9.10.1
Representatives
2.1.1, 3.1.1, 3.9, 4.1.1, 4.2.1, 4.2.10, 5.1.1, 5.1.2, 13.2.1
Resolution of Claims and Disputes
4.4, 4.5, 4.6
Responsibility for Those Performing the Work
3.3.2, 3.18, 4.2.3, 4.3.8, 5.3.1, 6.1.3, 6.2, 6.3, 9.5.1, 10
Retainage
9.3.1, 9.6.2, 9..5, 9.9.1, 9.10.2, 9.10.3
Review of contract Documents and field Conditions by
Contractor
1.5.2, 3.2, 3.7.3, 3.12.7, 6.13
Review of Contractor's Submittals by Owner and Architect
3.10.1, 3.10.2, 3.11, 3.12, 4.2, 5.2, 6.1.3, 9.2, 9.8.2
Review of Shop Drawings Product Data and Samples by
Contractor
3.12
Rights and Remedies
1.1.2, 2.3, 2.4, 3.5.1, 3.15.2, 4.2.6, 4.3.4, 4.5, 4.6, 5.3, 5.4, 6.1, 6.3,
7.3.1, 8.3, 9.5.1, 9.7, 10.2.5, 10.3, 12.2.2, 12.2.4, 13.4, 14
Royalties Patents and Copyrights
3.17
Rules and Notices for Arbitration
4.6.2
Safety of Persons and Property
10.2, 10.6
Safety precautions and Programs
3.3.1, 4.2.2, 4.2.7, 5.3.1, 10.1, 10.2, 10.6
Samples, Definition of
3.12.3
Samples, Shop Drawings, product Data and
3.11, 3.12, 4.2.7
<PAGE>
Samples at the Site, Documents and
3.11
Schedule of Values
9.2, 9.3.1
Schedules Construction
1.4.1.2, 3.10, 3.12.1, 3.12.2, 4.3.7.2, 6.13
Separate Contracts and Contractors
1.1.4, 3.12.5, 3.14.2, 4.2.4, 4.2.7, 4.6.4, 6, 8.3.1, 11.4.7, 12.1.2,
12.2.5
Shop Drawings, Definition of
3.12.1
Shop Drawings, Product Data and Samples
3.11, 3.12, 4.2.7
Site, Use of
3.13.6.1.1, 6.2.1
Site Inspections
1.2.2, 3.2.1, 3.3.3, 3.7.1, 4.2, 4.3.4, 9.4.2, 9.10.1, 13.5
Site Visits Architect's
4.2.2, 4.2.9, 4.3.4, 9.4.2, 9.5.1, 9.9.2, 9.10.1, 13.5
Special Inspections and Testing
4.2.6, 12.2.1, 13.5
Specifications, Definitions of the
1.1.6
Specifications, The
1.1.1, 1.1.6, 1.1.7, 1.2.2, 1.6, 3.11, 3.12.10, 3.17
Statute of Limitations
4.6.3, 12.2.6, 13.7
Stopping the Work
2.3, 4.3.6, 9.7, 10.3, 14.1
Stored Materials
6.2.1, 9.3.2, 10.2.1.2, 10.2.4, 11.4.4
Subcontractor, Definition of
5.1.1
SUBCONTRACTORS
5
<PAGE>
Subcontractors, Work by
1.2.2, 3.3.2, 3.12.1, 4.2.3, 5.2.3, 5.3, 5.4, 9.3.1.2, 9.6.7
Subcontractual Relations
5.3, 5.4, 9.3.1.2, 9.6, 9.10, 10.2.1, 11.4.7, 11.4.8, 14.1, 14.2.1, 14.3.2
Submittals
1.6, 3.10, 3.11, 3.12, 4.2.7, 5.2.1, 5.2.3, 7.3.6, 9.2, 9.3, 9.8, 9.9.1,
9.10.2, 9.10.3, 11.1.3
Subrogation, Waivers of
6.1.1, 11.4.5, 11.4.7
Substantial Completion
4.2.9, 8.1.1, 8.1.3, 8.2.3, 9.4.2, 9.8, 9.9.1, 9.10.3, 9.10.4.2, 12.2, 13.7
Substantial Completion, Definition of
9.8.1
Substitution of Subcontractors
5.2.3, 5.2.4
Substitution of Architect
4.1.3
Substitutions of Materials
3.4.2, 3.5.1, 7.3.7
Sub-subcontractor, Definition of
5.1.2
Subsurface Conditions
4.3.4
Successors and Assigns
13.2
Superintendent
3.9, 10.2.6
Supervision and Construction Procedures
1.2.2, 3.3, 3.4, 3.12.10, 4.2.2, 4.2.7, 4.3.3, 6.1.3, 6.2.4, 7.1.3, 7.3.6,
8.2, 8.3.1, 9.4.2, 10, 12, 14
Surety
4.4.7, 5.4.1.2, 9.8.5, 9.10.2, 9.10.3, 14.2.2
Surety, Consent of
9.10.2, 9.10.3
<PAGE>
Surveys
2.2.3
Suspension by the Owner for Convenience
14.4
Suspension of the Work
5.4.2, 14.3
Suspension or Termination of the Contract
4.3.6, 5.4.1.1, 11.4.9, 14
Taxes
3.6, 3.8, 2.1, 7.3, 6.4
Termination by the Contractor
4.3.10, 14.1
Termination by the Owner for Cause
4.3.10, 5.4.1.1, 14.2
Termination of the Architect
4.1.3
Termination of the Contractor
14.2.2
TERMINATION OR SUSPENSION OF THE CONTRACT
14
Tests and Inspections
3.1.3, 3.3.3, 4.2.2, 4.2.6, 4.2.9, 9.4.2, 9.8.3, 9.9.2, 9.10.1, 10.3.2,
11.4.1.1, 12.2.1, 13.5
TIME
8
Time, Delays and Extensions of
3.2.3, 4.3.1, 4.3.4, 4.3.7, 4.4.5, 5.2.3, 7.2.1, 7.3.1, 7.4.1, 7.5.1, 8.3,
9.5.1, 9.7.1, 10.3.2, 10.6.1, 14.3.2
Time Limits
2.1.2, 2.2, 2.4, 3.2.1, 3.7.3, 3.10, 3.11, 3.12.5, 3.15.1, 4.2, 4.3, 4.4,
4.5, 4.6, 5.2, 5.3, 5.4, 6.2.4, 7.3, 7.4, 8.2, 9.2, 9.3.1, 9.3.3, 9.4.1,
9.5, 9.6, 9.7, 9.8, 9.9, 9.10, 11.13, 11.4.1.5, 11.4.6, 11.4.10, 12.2,
13.5, 13.7, 14
Time Limits on Claims
4.3.2, 4.3.4, 4.3.8, 4.4, 4.5, 4.6
<PAGE>
Title to Work
9.3.2, 9.3.3
UNCOVERING AND CORRECTION OF WORK
12
Uncovering of Work
12.1
Unforeseen Conditions
4.3.4, 8.3.1, 10.3
Unit Prices
4.3.9, 7.3.3.2
Use of Document
1.1.1, 1.6, 2.2.5, 3.12.6, 5.3
Use of Site
3.13, 6.1.1, 6.2.1
Values, Schedule of
9.2, 9.3.1
Waiver of Claims by the Architect
13.4.2
Waiver of Claims by the Contractor
4.3.10, 9.10.5, 11.4.7, 13.4.2
Waiver of Claims by the Owner
4.3.10, 9.9.3, 9.10.3, 9.10.4, 11.4.3, 11.4.5, 11.4.7, 12.2.2.1, 13.4.2,
14.2.4
Waiver of Consequential Damages
4.3.10, 14.2.4
Waiver of Liens
9.10.2, 9.10.4
Waivers of Subrogation
6.1.1, 11.4.5, 11.4.7
Warranty
3.5, 4.2.9, 4.3.5.3, 9.3.3, 9.8.4, 9.9.1, 9.10.4, 12.2.2, 13.7.1.3
Weather Delays
4.3.7.2
Work, Definition of
1.1.3
<PAGE>
Written Consent
1.6, 3.4.2, 3.12.8, 3.14.2, 4.1.2, 4.3.4, 4.6.4, 9.3.2, 9.8.5, 9.9.1,
9.10.2, 9.10.3, 11.4.1, 13.2, 13.4.2
Written Interpretations
4.2.11, 4.2.12, 4.3.6
Written Notice
2.3, 2.4, 3.3.1, 3.9, 3.12.9, 3.12.10, 4.3, 4.4.8, 4.6.5, 5.2.1, 8.2.2,
9.7, 9.10, 10.2.2, 10.3, 11.1.3, 11.4.6, 12.2.2, 12.2.4, 13.3, 14
Written Orders
1.1.1, 2.3, 3.9, 4.3.6, 7, 8.2.2, 11.4.9, 12.1, 12.2, 13.5.2, 14.3.1
<PAGE>
1. ARTICLE 1 GENERAL PROVISIONS
1.1 BASIC DEFINITIONS
1.1.1 THE CONTRACT DOCUMENTS
The Contract Documents consist of the Agreement between Owner and Contractor
(hereinafter the Agreement), Conditions of the Contract (General, Supplementary
and other Conditions), Drawings, Specifications, Addenda issued prior to
execution of the Contract, other documents listed in the Agreement and
modifications issued after execution of the Contract. A Modification is (1) a
written amendment to the Contract signed by both parties, (2) a Change Order,
(3) a Construction Change Directive or (4) a written order for a minor change in
the Work issued by the Architect. Unless specifically enumerated in the
Agreement, the Contract Documents do not include other documents such as bidding
requirements (advertisement or invitation to bid, Instructions to Bidders,
sample forms, the Contractor's bid or portions of Addenda relating to bidding
requirements).
1.1.2 THE CONTRACT
The Contract Documents form the Contract for Construction. The Contract
represents the entire and integrated agreement between the parties hereto and
supersedes prior negotiations, representations or agreements, either written or
oral. The Contract may be amended or modified only by a Modification. The
Contract Documents shall not be construed to create a contractual relationship
of any kind (1) [TEXT DELETED] (2) between the Owner and a Subcontractor or Sub-
subcontractor, (3) between the Owner and Architect or (4) between any persons or
entities other than the Owner and Contractor. [TEXT DELETED].
1.1.3 THE WORK
The term "Work" means the construction and services required by the Contract
Documents, whether completed or partially completed, and includes all other
labor, materials, equipment and services provided or to be provided by the
Contractor to fulfill the Contractor's obligations. The Work may constitute the
whole or a part of the Project.
<PAGE>
1.1.4 THE PROJECT
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.
1.1.5 THE DRAWINGS
The Drawings are the graphic and pictorial portions of the Contract Documents
showing the design, location and dimensions of the Work, generally including
plans, elevations, sections, details, schedules and diagrams.
1.1.6 THE SPECIFICATIONS
The Specifications are that portion of the Contract Documents consisting of the
written requirements for materials, equipment, systems, standards and
workmanship for the Work, and performance of related services.
1.1.7 THE PROJECT MANUAL
The Project Manual is a volume assembled for the Work which may include the
bidding requirements, sample forms, Conditions of the Contract and
Specifications.
1.2 CORRELATION AND INTENT OF THE CONTRACT DOCUMENTS
1.2.1 The intent of the Contract Documents is to include all
items necessary for the proper execution and completion of the Work by the
Contractor. The Contract Documents are complementary, and what is required by
one shall be as binding as if required by all; performance by the Contractor
shall be required only to the extent consistent with the Contract Documents and
reasonably inerrable from them as being necessary to produce the indicated
results.
1.2.2 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.
<PAGE>
1.2.3 Unless otherwise stated in the Contract Documents, words
which have well-known technical or construction industry meanings are used in
the Contract Documents in accordance with such recognized meanings.
1.3 CAPITALIZATION
1.3.1 Terms capitalized in these General Conditions include
those which are (1) specifically defined, (1) specifically defined, (2) the
titles of numbered articles and identified references to Paragraphs,
subparagraphs and Clauses in the document or (3) the titles of other document
published by the American Institute Architects.
1.4 INTERPRETATION
1.4.1 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.
1.5 EXECUTION OF CONTRACT DOCUMENTS
1.5.1 The contract Documents shall be signed by the Owner and
Contractor. [TEXT DELETED]
1.5.2 Execution of the Contract by the Contractor is a
representation that the Contractor has visited the site, become generally
familiar with local conditions under which the Work is to be performed and
correlated personal observations with requirements of the Contract Documents.
1.6 OWNERSHIP AND USE OF DRAWINGS, SPECIFICATIONS AND OTHER
INSTRUMENTS OF SERVICE
1.6.1 [TEXT DELETED]
<PAGE>
2. ARTICLE 2 OWNER
2.1 GENERAL
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. The Owner shall designate in writing representative who
shall have express authority to bind the Owner with respect to all matters
requiring the Owner's approval or authorization. Except as otherwise provided in
Subparagraph 4.2.1, the Architect does not have such authority. The term "Owner"
means the Owner or the Owner's authorized representative.
2.1.2 The Owner shall furnish to the Contractor within fifteen
days after receipt of a written request, information necessary and relevant for
the Contractor to evaluate, give notice of or enforce mechanic's lien rights.
Such information shall include a correct statement of the record legal title to
the property on which the Project is located, usually referred to as the site,
and the owner's interest therein.
2.2 INFORMATION AND SERVICES REQUIRED OF THE OWNER
2.2.1 The Owner shall, at the written request of the contractor,
prior to commencement of the Work and thereafter, furnish to the Contractor
reasonable evidence that financial arrangements have been made to fulfill the
Owner's obligations under the Contract. Furnishing of such evidence shall be a
condition precedent to commencement or continuation of the Work. After such
evidence has been furnished, the Owner shall not materially vary such financial
arrangements without prior notice to the Contractor.
2.2.2 [TEXT DELETED]
2.2.3 [TEXT DELETED]
<PAGE>
2.2.4 Information or services required of the Owner by the
Contract Documents shall be furnished by the Owner with reasonable promptness.
Any other information or services relevant to the Contractor's performance of
the Work under the Owner's control shall be furnished by the Owner after receipt
from the Contractor of a written request for such information or services.
2.2.5 [TEXT DELETED]
2.3 OWNER'S RIGHT TO STOP THE WORK
2.3.1 If the Contractor fails to correct Work which is not in
accordance with the requirements of the Contract Documents as required by
Paragraph 12.2 or persistently fails to carry out Work in accordance with the
Contract Documents, the Owner may issue a written order to the Contractor to
stop the Work, or any portion thereof, until the cause for such order 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
Subparagraph 6.1.3.
2.4 OWNER'S RIGHT TO CARRY OUT THE WORK
2.4.1 If the Contractor defaults or neglects to carry out the
Work in accordance with the Contract Documents and fails within a seven-day
period after receipt of written notice from the Owner to commence and continue
correction of such default or neglect with diligence and promptness, the Owner
may after such seven-day period give the Contractor a second written notice to
correct such deficiencies with a three-day period. If the Contractor within such
three-day period after receipt of such second notice fails to commence and
continue to correct any deficiencies, the Owner may, without prejudice to other
remedies the Owner may have, correct such deficiencies. In such case an
appropriate. Change Order shall be issued deducting from payments then or
thereafter due the Contractor the reasonable cost of correcting such
deficiencies, including Owner's expenses and compensation for the Architect'
additional services made necessary by such default, neglect or failure. [TEXT
DELETED] If payments then or thereafter due the contractor are not
<PAGE>
sufficient to cover such amounts, the Contractor shall pay the difference to the
Owner.
3. ARTICLE 3 CONTRACTOR
3.1 GENERAL
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 term "contractor" means the Contractor or the
contractor's authorized representative.
3.1.2 The Contractor shall perform the Work in accordance with
the Contract Documents.
3.1.3 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, inspections or approvals required or performed by persons other than
the Contractor.
3.2 REVIEW OF CONTRACT DOCUMENTS AND FIELD CONDITIONS BY CONTRACTOR
3.2.1 Since the Contract Documents [eligible] carefully study
and compare the various Drawings and other Contract Documents relative to that
portion of the Work, as well as the information furnished by the Owner pursuant
to Subparagraph 2.2.3, shall take field measurements of any existing conditions
related to that portion of the Work and shall observe any conditions at the site
affecting it. These obligations are for the purpose of facilitating construction
by the Contractor and are not for the purpose of discovering errors, omissions,
or inconsistencies in the Contract Documents; however, any errors
inconsistencies or omissions discovered by the Contractor shall be reported
promptly to the [TEXT DELETED] Owner. [TEXT DELETED]
<PAGE>
3.2.2 Any design errors or omissions noted by the Contractor
during this review shall be reported promptly to the [TEXT DELETED] Owner, but
it is recognized that the Contractor's review is made in the Contractor's
capacity as a contractor and not as a licensed design professional unless
otherwise specifically provided in the Contract Documents. [TEXT DELETED]
3.2.3 [TEXT DELETED]
3.3 SUPERVISION AND CONSTRUCTION PROCEDURES
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
Contract, unless the Contract Documents give other specific instructions
concerning these matters. If the Contract Documents give specific instructions
concerning construction means, methods, techniques, sequences or procedures, the
contractor shall evaluate the jobsite safety thereof and, except as stated
below, shall be fully and solely responsible for the jobsite safety of such
means, methods, techniques, sequences or procedures. If the Contractor
determines that such means, methods, techniques, sequences or procedures may not
be safe, the Contractor shall give timely written notice to the Owner [TEXT
DELETED] and shall not proceed with that portion of the Work without further
written instructions from the [TEXT DELETED] Owner. If the Contractor is then
instructed to proceed with the required means, methods, techniques, sequences or
procedures without acceptance of changes proposed by the Contractor, the Owner
shall be solely responsible for any resulting loss or damage.
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 or entities performing portions of the Work for or
on behalf of the Contractor or any of its Subcontractors.
3.3.3 The Contractor shall be responsible for inspection of
portions of Work already performed to determine that such portions are in proper
conditions to receive subsequent Work.
<PAGE>
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, [TEXT DELETED] 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.
3.4.2 The contractor may make substitutions only with the
consent of the owner, [TEXT DELETED] and in accordance with a Change Order.
3.4.3 The Contractor shall enforce strict discipline and good
order among the Contractors employees and other persons carrying out the
Contract. The Contractor shall not permit employment of unfit persons or persons
not skilled in tasks assigned to them.
3.5 WARRANTY
3.5.1 The Contractor warrants to the Owner [TEXT DELETED] that
materials and equipment furnished under the Contract will be of good quality and
new unless otherwise required or permitted by the Contract Documents, that the
Work will be free from defects not inherent in the quality required or
permitted, and that the Work will conform to the requirements of the Contract
Documents. Work not conforming to these requirements, including substitutions
not properly approved and authorized, may be considered defective. The
Contractor's warranty excludes remedy for damage or defect caused by abuse,
modifications not executed by the Contractor, improper or insufficient
maintenance, improper operation, or normal wear and tear and normal usage. If
required by the [TEXT DELETED] Owner, the Contractor shall furnish satisfactory
evidence as to the kind and quality of materials and equipment.
<PAGE>
3.6 TAXES
3.6.1 The Contractor shall pay sales, consumer, use and similar
taxes for the Work 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.
3.7 PERMITS, FEES AND NOTICES
3.7.1 Unless otherwise provided in the Contract Documents, the
Contractor shall secure and pay for the building permit and other permits and
governmental fees, licenses and inspections necessary for proper execution and
completion of the Work which are customarily secured after execution of the
Contract and which are legally required when bids are received or negotiations
concluded.
3.7.2 The Contractor shall comply with and give notices required
by laws, ordinances, rules, regulations and lawful orders of public authorities
applicable to performance of the Work.
3.7.3 [TEXT DELETED]
3.7.4 If the Contractor performs Work knowing it to be contrary
to laws, statutes, ordinances, building codes, and rules and regulations without
such notice to the [TEXT DELETED] Owner, the Contractor shall assume appropriate
responsibility for such Work and shall bear the costs attributable to
correction.
3.8 ALLOWANCES
3.8.1 [TEXT DELETED]
3.8.2 [TEXT DELETED]
3.8.2.1 [TEXT DELETED]
<PAGE>
3.8.2.2 [TEXT DELETED]
3.8.2.3 [TEXT DELETED]
3.8.3 [TEXT DELETED]
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 if given to
the Contractor. Important communications shall be confirmed in writing. Other
communications shall be similarly confirmed on written request in each case.
3.10 CONTRACTOR'S CONSTRUCTION SCHEDULES
3.10.1 The Contractor, promptly after being awarded the Contract,
shall prepare and submit for the Owner's [TEXT DELETED] information a
Contractor's construction schedule for the Work. The schedule shall not exceed
time limits current under the Contract Documents, shall be revised at
appropriate intervals as required by the conditions of the Work and Project,
shall be related to the entire Project to the extent required by the Contract
Documents, and shall provide for expeditions and practicable execution of the
Work.
3.10.2 The Contractor shall prepare and keep current, for the
Architect's approval, a schedule of Submittals which 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 general
accordance with the most recent schedules submitted to the Owner [TEXT DELETED].
<PAGE>
3.11 DOCUMENTS AND SAMPLES AT THE SITE
3.11.1 The Contractor shall maintain at the site for the Owner
one record copy of the Drawings, Specifications, Addenda, Change Order 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. [TEXT DELETED].
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 submittals is to
demonstrate for those portions of the Work for which submittals are required by
the Contract Documents the way by which the Contractor proposes to conform to
the information given and the design concept expressed in the Contract
Documents. [TEXT DELETED].
3.12.5 The Contractor shall review for compliance with the
Contract Documents, approve and submit to the [TEXT DELETED] Owner 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
<PAGE>
the Work or in the activities of the Owner or of separate contractors. [TEXT
DELETED].
3.12.6 By approving and submitting Shop Drawings, Product Data,
Samples and similar submittals, the Contractor represents that the Contractor
has 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 submittals with the requirements of the Work
and of the Contract Documents.
3.12.7 The Contractor shall perform no portion of the Work for
which the Contract Documents require submittals and review of the Shop Drawings,
Project Data, Samples or similar submittals until the respective submittals has
been approved by the [TEXT DELETED] Owner.
3.12.8 The Work shall be in accordance with approved submittals
except that the contractor shall not be relieved of responsibility for
deviations from requirements of the contract Documents by the [TEXT DELETED]
Owner's approval of Shop Drawings, Product Data, Samples or similar submittals
unless the Contractor has specifically informed the [TEXT DELETED] Owner in
writing of such deviation oat the time of submittals and (1) the [TEXT DELETED]
Owner has given written approval to the specific deviation as a minor change in
the Work, or (2) a Change Order or Construction Change Directive has been issued
authorizing the deviation. The Contractor shall not be relieved of
responsibility for errors or omissions in Shop Drawings, Product Data, Samples
or similar submittals by the [TEXT DELETED] Owner's approval thereof.
3.12.9 The Contract 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 [TEXT DELETED] Owner on previous
submittals. In the absence of such written notice the [TEXT DELETED] Owner's
approval of a resubmission shall not apply to such revisions.
3.12.10 [TEXT DELETED]. The Contractor shall not be
required to provide professional services in violation of applicable law. If
profes-
<PAGE>
sional design services or certifications by a design professional related to
systems, materials or equipment are specifically required of the Contractor by
the Contract Documents, the Owner [TEXT DELETED] will specify all performance
and design criteria that such services must satisfy. The Contractor shall cause
such services or certifications to be provided by a properly licensed design
professional, whose signature and seal shall appear on all drawings,
calculations, specifications, certifications, Shop Drawings and other submittals
prepared by such professional. Shop Drawings and other submittals related to the
Work designed or certified by such professional, if prepared by others, shall
bear such professional's written approval when submitted to the [TEXT DELETED]
Owner. The Owner [TEXT DELETED] shall be entitled to rely upon the adequacy,
accuracy and completeness of the services, certifications or approvals performed
by such design professionals, provided the Owner [TEXT DELETED] have specified
to the Contractor all performance and design criteria that such services must
satisfy. Pursuant to this Subparagraph 3.12.10, the [TEXT DELETED] Owner will
promptly review, approve or take other appropriate action on submittals only for
the limited purpose of checking for conformance with information given and the
design concept expressed in the Contract Documents. the Contractor shall not be
responsible for the adequacy of the performance or design criteria required by
the Contract Documents.
3.13 USE OF SITE
3.13.1 The Contractor shall confine operations at the site to
areas permitted by law, ordinances, permits and the Contract Documents and shall
not unreasonably encumber the site with materials or equipment.
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.
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
<PAGE>
Owner or a separate contractor except with 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 premises and surrounding
area free from accumulation of waste materials or rubbish caused by operations
under the Contract. At completion of the Work, the Contractor shall remove from
and about the Project waste materials, rubbish, the Contractor's tools,
construction equipment, machinery and surplus materials.
3.16 ACCESS TO WORK
3.16.1 The Contractor shall provide the Owner [TEXT DELETED]
access to the Work in preparation and progress wherever located.
3.17 ROYALTIES, PATENTS AND COPYRIGHTS
3.17.1 The Contractor shall pay all royalties and license fees.
The Contractor shall defend suits or claims for infringement of copyrights and
patent rights and shall hold the Owner [TEXT DELETED] harmless from loss on
account thereof, but shall not be responsible for such defense or loss when a
particular design, process or product of a particular manufacturer or
manufacturers is required by the Contract Documents or where the copyright
violations are contained in Drawings, Specifications or other documents prepared
by the Owner or Architect. However, if the Contractor has reason to believe that
the required design, process or product is an infringement of a copyright or a
patent, the Contractor shall be responsible for such loss unless such
information is promptly furnished to the [TEXT DELETED] Owner.
3.18 INDEMNIFICATION
<PAGE>
3.18.1 To the fullest extent permitted by law and to the extent
claims, damages, losses or expenses are not covered by Project Management
Protective liability insurance purchased by the contractor in accordance with
Paragraph 11.3, the Contractor shall indemnify and hold harmless the Owner,
[TEXT DELETED] and agents and employees of any of them from and against claims,
damages, losses and expenses, including but not limited to attorneys' fees,
arising out of or resulting from performance of the Work, provided that such
claim, damage, loss or expense is attributable to bodily injury, sickness,
disease or death, or to injury to or destruction of tangible property (other
than the Work itself), but only to the extent caused by the [TEXT DELETED] acts
or omissions of the contractor, a Subcontractor, anyone directly or indirectly
employed by them or anyone for whose acts they may be liable, regardless of
whether or not such claim, damage, loss or expense is caused in part by a party
indemnified hereunder. Such obligations shall not be construed to negate,
abridge, or reduce other rights or obligations of indemnity which would
otherwise exist as to a party or person described in this Paragraph 3.18.
3.18.2 In claims against any person or entity indemnified under
this paragraph 3.18 by an employee of the Contractor, a Subcontractor, anyone
directly or indirectly employed by them or anyone for whose acts they may be
liable, the indemnification obligation under Subparagraph 3.18.1 shall not be
limited by a limitation on amount or type of damages, compensation or benefits
payable by or for the Contractor or a Subcontractor under workers' compensation
acts, disability benefit acts or other employee benefit acts.
4. ADMINISTRATION OF THE CONTRACT
4.1 ARCHITECT
4.1.1 [TEXT DELETED]
4.1.2 [TEXT DELETED]
4.1.3 [TEXT DELETED]
4.2 ARCHITECT'S ADMINISTRATION OF THE CONTRACT
<PAGE>
4.2.1 [TEXT DELETED]
4.2.2 [TEXT DELETED]
4.2.3 [TEXT DELETED]
4.2.4 [TEXT DELETED]
4.2.5 [TEXT DELETED]
4.2.6 [TEXT DELETED]
4.2.7 [TEXT DELETED]
4.2.8 [TEXT DELETED]
4.2.9 [TEXT DELETED]
4.2.10 [TEXT DELETED]
4.2.11 [TEXT DELETED]
4.2.12 [TEXT DELETED]
4.2.13 [TEXT DELETED]
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 or interpretation of
Contract terms, payment of money, extension of time or other relief with respect
to the terms of the Contract. The term "Claim" also includes other disputes and
matters in question between the Owner and Contractor arising out of or relating
to the Contract.
<PAGE>
Claims must be initiated by written notice. The responsibility to substantiate
Claims shall rest with the party making the Claim.
4.3.2 Time Limits on Claims. Claims by either party must be
initiated within 21 days after occurrence of the event giving rise to such Claim
or within 21 days after the claimant first recognizes the condition giving rise
to the Claim, whichever is later. Claims must be initiated by written notice to
[TEXT DELETED] the other party.
4.3.3 Continuing Contract Performance. Pending final resolution
of a Claim except as otherwise agreed in writing or as provided in Subparagraph
9.7.1 and Article 14, the Contractor shall proceed diligently with performance
of the Contract and the Owner shall continue to make payments in accordance with
the Contract Documents.
4.3.4 [TEXT DELETED]
4.3.5 Claims for Additional Cost. If the 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 Paragraph 10.6.
4.3.6 If the Contractor believes additional cost is involved for
reasons including but not limited to [TEXT DELETED] (1) an order by the Owner to
stop the work where the Contractor was not at fault (2) a written order for a
minor change in the Work issued by the [TEXT DELETED] Owner] (3) failure of
payment by the Owner, (4) termination of the Contract by the Owner, (5) Owner's
suspension or (6) other reasonable grounds, Claims shall be filed in accordance
with this Paragraph 4.3.
4.3.7 Claims for Additional Time
4.3.7.1 If the Contractor wishes to make Claim for an
increase in the Contract Time, written notice as provided herein shall be given.
The
<PAGE>
Contractor's Claim shall include an estimate of cost and of probable effect of
delay on progress of the Work. In the case of a continuing delay only one Claim
is necessary.
4.3.7.2 If adverse weather conditions are the basis for a
Claim for additional time, such Claim shall be documented by data substantiating
that weather conditions were abnormal for the period of time, could not have
been reasonably anticipated and had an adverse effect on the scheduled
construction.
4.3.8 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, or of others for whose acts such party is legally
responsible, written notice of such injury or damage, whether or not insured,
shall be given to the other party within a reasonable time not exceeding 21 days
after discovery. The notice shall provide sufficient detail to enable the other
party to investigate the matter.
4.3.9 If unit prices are stated in the Contract Documents or
subsequently agreed upon, and if quantities originally contemplated are
materially changed in a proposed Change Order or Construction Change Directive
so 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.
4.3.10 Claims for Consequential Damages. The Contractor and Owner
waive Claims against each other for consequential damages arising out of or
relating to this Contract. This mutual waiver includes:
4.3.10.1 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
4.3.10.2 damages incurred by the Contractor for principal
office expenses including the compensation of personnel stationed there,
<PAGE>
for losses of financing, business and reputation, and for loss of profit except
anticipated profit arising directly from the Work.
This mutual waiver is applicable, without limitation, to all consequential
damages due to either party's termination in accordance with Article 14. Nothing
contained in this Subparagraph 4.3.10 shall be deemed to preclude an award of
liquidated direct damages, when applicable, in accordance with the requirements
of the Contract Documents.
4.4 RESOLUTION OF CLAIMS AND DISPUTES
4.4.1 [TEXT DELETED]
4.4.2 [TEXT DELETED]
4.4.3 [TEXT DELETED]
4.4.4 [TEXT DELETED]
4.4.5 [TEXT DELETED]
4.4.6 [TEXT DELETED]
4.4.7 [TEXT DELETED]
4.4.8 If a Claim relates to or is the subject of a mechanic's
lien, the party asserting such Claim may proceed in accordance with applicable
law to comply with the lien notice or filing deadlines prior to resolution of
the Claim. [TEXT DELETED]
4.5 MEDIATION
4.5.1 [TEXT DELETED]
<PAGE>
4.5.2 [TEXT DELETED]
4.5.3 [TEXT DELETED]
4.6 ARBITRATION
4.6.1 [TEXT DELETED]
4.6.2 Claims not resolved by mediation shall be decided by
arbitration which, unless the parties mutually agree otherwise, shall be in
accordance with the Construction Industry Arbitration Rules of the American
Arbitration Association currently in effect. The demand for arbitration shall be
filed in writing with the other party to the Contract and with the American
Arbitration Association. [TEXT DELETED]
4.6.3 A demand for arbitration shall be made within the time
limits specified in Subparagraphs 4.4.6 and 4.6.1 as applicable, and in other
cases 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 as
determined pursuant to Paragraph 13.7.
4.6.4 Limitation on Consolidation or Joinder. [TEXT DELETED]. No
arbitration shall include, by consolidation or joinder or in any other manner,
parties other than the Owner, Contractor, a separate contractor as described in
Article 6 and other persons substantially involved in a common question of fact
or law whose presence is required if complete relief is to be accorded in
arbitration. No person or entity other than the Owner, Contractor or a separate
contractor as described in Article 6 shall be included as an original third
party or additional third party to an arbitration whose interest or
responsibility is insubstantial. Consent to arbitration involving an additional
person or entity shall not constitute consent to arbitration of a Claim not
described therein or with a person or entity not named or described therein. The
foregoing agreement to arbitrate and other agreements to arbitrate with an
additional person or entity duly consented to by parties to the
<PAGE>
Agreement shall be specifically enforceable under applicable law in any court
having jurisdiction thereof.
4.6.5 Claims and Timely Assertion of Claims. The party filing a
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.
4.6.6 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.
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 [TEXT DELETED]. The Contractor, as soon as practicable
after award of the Contract, shall furnish in writing to the Owner [TEXT
DELETED] the names of persons or entities (including those who are to furnish
materials or equipment fabricated to a special design) proposed for each
principal
<PAGE>
portion of the Work. The [TEXT DELETED] Owner will promptly reply to the
Contractor in writing stating whether or not the Owner [TEXT DELETED], after due
investigation, has reasonable objection to any such proposed person or entity.
[TEXT DELETED]
5.2.2 The Contractor shall not contract with a proposed person
or entity to whom the Owner [TEXT DELETED] has made reasonable and timely
objection. The Contractor shall not be required to contract with anyone to whom
the Contractor has made reasonable objection.
5.2.3 If the Owner [TEXT DELETED ] has reasonable objection to a
person or entity proposed by the Contractor, the Contractor shall propose
another to whom the Owner [TEXT DELETED] has no reasonable objection. If the
proposed but rejected Subcontractor was reasonably capable of performing the
Work, the Contract Sum and Contract Time shall be increased or decreased by the
difference, if any, occasioned by such change, and an appropriate Change Order
shall be issued before commencement of the substitute Subcontractor's work.
However, no increase in the Contract Sum or Contract Time shall be allowed for
such change unless the Contractor has acted promptly and responsively in
submitting names as required.
5.3 SUBCONTRACTUAL RELATIONS
5.3.1 By appropriate written agreement, [TEXT DELETED] 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, including the responsibility for safety of the Subcontractor's
Work, which the Contractor, by these Documents, assumes toward the Owner [TEXT
DELETED]. Each subcontract agreement shall preserve and protect the rights of
the Owner [TEXT DELETED] 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
<PAGE>
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 the 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
will 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 Each subcontract agreement for a portion of the Work is
assigned by the Contractor to the Owner provided that:
5.4.1.1 assignment is effective only after termination of
the Contract by the Owner for cause pursuant to Paragraph 14.2 and only for
those subcontract agreements which the Owner accepts by notifying the
Subcontractor and Contractor in writing; and
5.4.1.2 assignment is subject to the prior rights of the
surety, if any, obligated under bond relating to the Contract.
5.4.2 Upon such assignment, if the Work has been suspended for
more than 30 days, the Subcontractor's compensation shall be equitably adjusted
for increases in cost resulting from the suspension.
6. CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS
6.1 OWNER'S RIGHT TO PERFORM CONSTRUCTION AND TO 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
<PAGE>
operations on the site under Conditions of the Contract identical or
substantially similar to these including those portions related to insurance and
waiver of subrogation. If the Contractor claims that delay or additional cost is
involved because of such action by the Owner, the Contractor shall make such
Claim as provided in Paragraph 4.3.
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 Owner-Contractor Agreement.
6.1.3 [TEXT DELETED]. The Contractor shall make any revisions to
the construction schedule deemed necessary after a joint review and mutual
agreement. The construction schedules shall then constitute the schedules to be
used by the Contractor, separate contractors and the Other until subsequently
revised.
6.1.4 Unless otherwise provided in the Contract Documents, when
the Owner performs construction or operations related to the Project and the
Owner's own forces, the Owner shall be deemed to be subject to the same
obligations and to have the same rights which apply to the Contractor under the
Conditions of the Contract, including, without excluding others, those stated in
Article 3, this Article 6 and Articles 10, 11 and 12.
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 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,
<PAGE>
promptly report to the [TEXT DELETED] 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 contractor's completed or partially
completed construction is fit and proper to receive the Contractor's Work,
except as to defects not then reasonably discoverable.
6.2.3 The Owner shall be reimbursed by the Contractor for costs
incurred by the Owner which are payable to a separate contractor because of
delays, improperly timed activities or defective construction of the Contractor.
The Owner shall be responsible to the Contractor for costs incurred by the
Contractor because of delays, improperly timed activities, damage to the Work or
defective construction of a separate contractor.
6.2.4 The Contractor shall 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 Subparagraph 10.2.5.
6.2.5 The Owner and each separate contractor shall have the same
responsibilities for cutting and patching as are described for the Contractor in
Subparagraph 3.14.
6.3 OWNER'S RIGHT TO CLEAN UP
6.3.1 If a dispute arises among the Contractor, separate
contractors and the Owner as to the responsibility under their respective
contracts for maintaining the premises and surrounding area free from waste
materials and rubbish, the Owner may clean up and [TEXT DELETED] allocate the
cost among those responsible.
7. CHANGES IN THE WORK
7.1 GENERAL
<PAGE>
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, and Contractor [TEXT DELETED] a Construction Change Directive requires
agreement by the Owner [TEXT DELETED] 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 [TEXT
DELETED] Owner alone.
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.
7.2 CHANGE ORDERS
7.2.1 [TEXT DELETED]
7.2.2 Methods used in determining adjustments to the Contract
Sum may include those listed in Subparagraph 7.3.3.
7.3 CONSTRUCTION CHANGE DIRECTIVES
7.3.1 A Construction Change Directive is a written order [TEXT
DELETED] signed by the Owner [TEXT DELETED], directing a change in the Work
prior to the agreement on 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.
<PAGE>
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 acceptable fixed or percentage fee; or
.4 as provided in Subparagraph 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 [TEXT DELETED] Owner 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.
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 the case of an increase in the Contract Sum, a reasonable
allowance for overhead and profit. In such case, and also under Clause 7.3.3.3,
the Contractor shall keep and present, in such form as the Architect may
prescribe, an itemized accounting together with appropriate supporting data.
Unless otherwise provided in the Contract Docu-
<PAGE>
ments, costs for the purposes of this Subparagraph 7.3.6 shall be limited to the
following:
.1 costs of labor, including social security, old age and
unemployment insurance, fringe benefits required by agreement or
custom, and workers' compensation insurance;
.2 costs of materials, supplies and equipment, including cost of
transportation, whether incorporated or consumed;
.3 rental costs of machinery and equipment, exclusive of hand tools,
whether rented from the Contractor or others;
.4 costs of premiums for all bonds and insurance, permit fees, and
sales, use of similar taxes related to the Work; and
.5 additional costs of supervision and field office personnel
directly attributable to the change.
7.3.7 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 [TEXT DELETED]. 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.
7.3.8 Pending final determination of the total cost of a
Construction Change Directive to the Owner, amounts not in dispute for such
changes in the Work shall be included in Applications for Payment accompanied by
a Change Order indicating the parties' agreement with part or all of such costs.
[TEXT DELETED]
7.3.9 When the Owner and Contractor agree with [TEXT DELETED]
the adjustments in the Contract Sum and Contract Time, or otherwise reach
agreement upon the adjustments, such agreement shall be effective immedi-
<PAGE>
ately and shall be recorded by preparation and execution of an appropriate
Change Order.
7.4 MINOR CHANGES IN THE WORK
7.4.1 [TEXT DELETED]
8. TIME
8.1 DEFINITIONS
8.1.1 Unless otherwise provided, Contract Time is the period of
time, including authorized adjustments, allotted in the Contract Documents for
Substantial Completion of the Work.
8.1.2 The date of commencement of the Work is the date
established in the Agreement.
8.1.3 [TEXT DELETED]
8.1.4 The term "day" as used in the Contract Documents shall
mean calendar day unless otherwise specifically defined.
8.2 PROGRESS AND COMPLETION
8.2.1 Time limits stated in the Contract Documents are of the
essence of the Contract. By executing the Agreement the Contractor confirms that
the Contract Time is a reasonable period for performing the Work.
8.2.2 The Contractor shall not knowingly, except by agreement or
instruction of the Owner in writing, prematurely commence operations on the site
or elsewhere prior to the effective date of insurance required by Article 11 to
be furnished by the Contractor and Owner. The date of commencement of the Work
shall not be changed by the effective date of such insurance. Unless the date of
<PAGE>
commencement is established by the Contract Documents or a notice to proceed
given by the Owner, the Contractor shall notify the Owner in writing not less
than five days or other agreed period before commencing the Work to permit the
timely filing of mortgages, mechanic's liens and other security interests.
8.2.3 The Contractor shall proceed expeditiously with adequate
forces and shall achieve Substantial Completion within the Contract Time.
8.3 DELAYS AND EXTENSIONS OF TIME
8.3.1 If the Contractor is delayed at any time in the
commencement or progress of the Work by an act or neglect of the Owner, [TEXT
DELETED] or of an employee [TEXT DELETED], or of a separate contractor employed
by the Owner, or by changes ordered in the Work, or by labor disputes, fires,
unusual delay in deliveries, unavoidable casualties or other causes beyond the
Contractor's control, and are not reasonably foreseeable [TEXT DELETED] then the
Contract Time shall be extended by the Change Order for such reasonable time as
the [TEXT DELETED] Owner and Contractor may mutually determine.
8.3.2 Claims relating to time shall be made in accordance with
applicable provisions of Paragraph 4.3.
8.3.3 This Paragraph 8.3 does not preclude recovery of damages
for delay by either party under other provisions of the Contract Documents.
9. PAYMENTS AND COMPLETION
9.1 CONTRACT SUM
9.1.1 The Contract Time is stated in the Agreement and,
including authorized adjustments, is the total amount payable by the Owner to
the Contractor for performance of the Work under the Contract Documents.
<PAGE>
9.2 SCHEDULE OF VALUES
9.2.1 Before the first Application for Payment, the Contractor
shall submit to the [TEXT DELETED] Owner 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 [TEXT DELETED] Owner may require. This
schedule, unless objected to by the [TEXT DELETED] Owner, shall be used as a
basis for reviewing the Contractor's Applications for Payment.
9.3 APPLICATIONS FOR PAYMENT
9.3.1 At least ten days before the date established for each
progress payment, the Contractor shall submit to the [TEXT DELETED] Owner an
itemized Application for Payment for operations completed in accordance with the
schedule of values. Such application shall be [TEXT DELETED] supported by such
data substantiating the Contractor's right to payment as the Owner [TEXT
DELETED] may require, such as copies of requisitions from Subcontractors and
material suppliers, and reflecting retainage if provided for in the Contract
Documents.
9.3.1.1 As provided in Subparagraph 7.3.8, such
applications may include requests for payment on account of changes in the Work
which have been properly authorized by Construction Change Directives, [TEXT
DELETED] but not yet included in Change Orders.
9.3.1.2 Such applications may not include requests for
payment for portions of the Work for which the Contractor does not intend to pay
to a Subcontractor or material supplier, unless such Work has been performed by
others whom the Contractor intends to pay.
9.3.2 Unless otherwise provided in the Contract Documents,
payments shall be made on account of materials and equipment delivered and
suitably stored at the site for subsequent incorporation in the Work. If
approved in advance by the Owner, payment may similarly be made for materials
and equipment suitably stored off site at a location agreed upon in writing.
Payment for materials
<PAGE>
and equipment stored on or off site shall be conditioned upon compliance by the
Contractor with procedures satisfactory to the Owner to establish the Owner's
title to such materials and equipment or otherwise protect the Owner's interest,
and shall include the costs of applicable insurance, storage and transportation
to the site for such materials and equipment stored off the site.
9.3.3 The Contractor warrants that title to all Work covered by
an Application for Payment will pass to the Owner no later than the time of
payment. The Contractor further warrants that upon submittals of an Application
for Payment all Work for which [TEXT DELETED] payments received from the Owner
shall, to the best of the Contractor's knowledge, information and belief, be
free and clear of liens, claims, security interests or encumbrances in favor of
the Contractor, Subcontractors, material suppliers, or other persons or entities
making a claim by reason of having provided labor, materials and equipment
relating to the Work.
9.4 CERTIFICATES FOR PAYMENT
9.4.1 [TEXT DELETED]
9.4.2 [TEXT DELETED]
9.5 DECISIONS TO WITHHOLD CERTIFICATION
9.5.1 [TEXT DELETED]
.1 defective Work not remedied;
.2 third party claims filed or reasonable evidence indicating
probable filing of such claims unless security acceptable to the
Owner is provided by the Contractor;
.3 failure of the Contractor to make payments properly to
Subcontractors or for labor, materials or equipment;
<PAGE>
.4 reasonable evidence that the Work cannot be completed for the
unpaid balance of the Contract Sum;
.5 damage to the Owner or another contractor;
.6 [TEXT DELETED]
.7 persistent failure to carry out the Work in accordance with the
Contract Documents.
.8 [TEXT DELETED]
9.6 PROGRESS PAYMENTS
9.6.1 The Owner shall make payment in the manner and within the
time provided in the Contract Documents [TEXT DELETED].
9.6.2 The Contractor shall promptly pay each Subcontractor, upon
receipt of payment from the Owner, out of the amount paid to the Contractor on
account of such Subcontractor's portion of the Work, the amount to which said
Subcontractor is entitled, reflecting percentages actually retained from the
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 a similar
manner.
9.6.3 [TEXT DELETED]
9.6.4 [TEXT DELETED] The Owner [TEXT DELETED] shall not have an
obligation to pay or to 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 Subparagraphs 9.6.2, 9.6.3 and 9.6.4.
<PAGE>
9.6.6 [TEXT DELETED] 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.
9.6.7 Unless the Contractor provides the Owner with a payment
bond in the full penal sum of the Contract Sum, payments received by the
Contractor for Work properly performed by Subcontractors and suppliers shall be
held by the Contractor for those Subcontractors or suppliers who performed Work
or furnished materials, or both, under contract with the Contractor for which
payment was made by the Owner. Nothing contained herein shall require money to
be placed in a separate account and not commingled with money of the Contractor,
shall create any fiduciary liability or tort liability on the part of the
Contractor for breach of trust or shall entitle any person or entity to an award
of punitive damages against the Contractor for breach of the requirements of
this provision.
9.7 FAILURE OF PAYMENT
9.7.1 [TEXT DELETED]
9.8 SUBSTANTIAL COMPLETION
9.8.1 [TEXT DELETED]
9.8.2 When the Contractor considers that the Work, or a portion
thereof which the Owner agrees to accept separately, is substantially complete,
the Contractor shall prepare and submit to the Owner [TEXT DELETED] a
comprehensive list of items to be completed or corrected prior to final payment.
Failure to include an item on such list does not alter the responsibility of the
Contractor to complete all Work in accordance with the Contract Documents.
9.8.3 Upon receipt of the Contractor's list, the [TEXT DELETED]
Owner will make an inspection to determine whether the Work or designated
portion thereof is substantially complete. If the [TEXT DELETED] Owner's
inspection discloses any item, whether or not included on the Contractor's list,
which is not sufficiently complete in accordance with the Contract Documents so
that the
<PAGE>
Owner can occupy or utilize the Work or designated portion thereof for its
intended use, the Contractor shall, before insurance of the Certificate of
Substantial Completion, complete or correct such item upon notification by the
[TEXT DELETED] Owner. In such case, the Contractor shall then submit a request
for another inspection by the [TEXT DELETED] Owner to determine Substantial
Completion.
9.8.4 When the Work or designated portion thereof is
substantially complete, the [TEXT DELETED] Owner will prepare a Certificate of
Substantial Completion which shall establish the date of Substantial Completion,
shall establish responsibilities of the Owner and Contractor for security,
maintenance, heat, utilities, damage to the Work and insurance, and shall fix
the time within which the Contractor shall finish all items on the list
accompanying the Certificate. Warranties required by the Contract Documents
shall commence on the date of Substantial Completion of the Work or designated
portion thereof, unless otherwise provided in the Certificate of Substantial
Completion.
9.8.5 The Certificate of Substantial Completion shall be
submitted to the [TEXT DELETED] Contractor for [TEXT DELETED] its written
acceptance of responsibilities assigned to them in such Certificate. Upon such
acceptance and consent of surety, if any Upon Substantial Completion of the Work
, the Owner shall make payment of retainage applying to such Work or designated
portion thereof. such payment shall be adjusted for Work that is incomplete or
not in accordance with the requirements of the Contract Documents.
9.9 PARTIAL OCCUPANCY OR USE
9.9.1 The 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 the Contractor, provided such occupancy or use is
consented to by the insurer as required under Clause 11.4.1.5 and 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
the 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
<PAGE>
of the Work and commencement of warranties required by the Contract Documents.
When the Contractor considers a portion substantially complete, the Contractor
shall prepare and submit a list to the [TEXT DELETED] Owner [TEXT DELETED].
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 the Owner and Contractor. [TEXT DELETED]
9.9.2 Immediately prior to such partial occupancy or use, the
own, and Contractor [TEXT DELETED] shall jointly inspect the area to be occupied
or portion of the Work to be used in order to determine and record the condition
of the Work.
9.9.3 Unless otherwise agreed upon, partial occupancy or use of
a portion or portions of the Work shall not constitute acceptance of Work not
complying with the requirements of the Contract Documents.
9.10 FINAL COMPLETION AND FINAL PAYMENT
9.10.1 [TEXT DELETED]
9.10.2 neither final payment nor any remaining retained
percentage shall become due until the Contractor submits to the [TEXT DELETED]
Owner (1) an affidavit that payrolls, bills for materials and equipment, and
other indebtedness connected with the Work for which the Owner or the 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 canceled or allowed to expire
until at lease 30 days' prior written notice has been given to the Owner, (3) a
written statement that the 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 and (5), if required
by the 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 the Owner. If a Subcontractor refuses to furnish a release or
waiver
<PAGE>
required by the Owner, the Contractor may furnish a bond satisfactory to the
Owner to indemnify the Owner against such lien. If such lien remains unsatisfied
after payments are made, the Contractor shall refund to the Owner all money that
the Owner may be compelled to pay in discharging such lien, including all costs
and reasonable attorneys' fees.
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, [TEXT DELETED] the
Owner shall, upon application by the Contractor [TEXT DELETED], 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 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 [TEXT DELETED] Contractor to the [TEXT
DELETED] Owner prior to [DELETE- certification of] such payment. Such payment
shall be made under terms and conditions governing final payment, except that it
shall not constitute a waiver of claims.
9.10.4 The making of final payment shall constitute a waiver of
Claims by the Owner except those arising from:
.1 liens, Claims, security interests or encumbrances arising out of
the Contract and unsettled;
.2 failure of the Work to comply with the requirements of the
Contract Documents; or
.3 terms of special warranties required by the Contract Documents.
<PAGE>
.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.
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 Contract.
10.2 SAFETY OF PERSONS AND PROPERTY
10.2.1 The Contractor shall take reasonable precautions for
safety of, and shall provide reasonable protection to prevent damage, injury or
loss to:
10.2.1.1 employees on the Work and other persons who may
be affected thereby;
10.2.1.2 the Work and materials and equipment to be
incorporated therein, whether in storage on or off the site, under care, custody
or control of the Contractor or the Contractor's Subcontractors or
Sub-Subcontractors; and
10.2.1.3 other property at the site or adjacent thereto,
such as trees, shrubs, lawns, pavements, roadways, structures and utilities not
designated for removal, relocation or replacement in the course of construction.
10.2.2 The Contractor shall give notices and comply with
applicable laws, ordinances, rules, regulations and lawful orders of public
authorities
<PAGE>
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 Contract, 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 damage and loss
(other than damage or loss insured under property insurance required by the
Contract Documents ) to property referred to in Clauses 10.2.1.2 and 10.2.1.3
caused in whole or in part by the Contractor, a Subcontractor, a
Sub-Subcontractor, or anyone directly or indirectly employed by any of them, or
by anyone for whose acts they may be liable and for which the Contractor is
responsible under Clauses 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 Paragraph 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 [TEXT DELETED] writing to the Owner [TEXT
DELETED].
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.
<PAGE>
10.3 HAZARDOUS MATERIALS
10.3.1 If reasonable precautions will be inadequate to prevent
foreseeable bodily injury or death to persons resulting from a material or
substance, including but not limited to asbestos or polychlorinated biphenyl
(PCB), encountered on the site by the Contractor, the Contractor shall, upon
recognizing the condition, immediately stop Work in the affected area and report
the condition to the Owner [TEXT DELETED] in writing.
10.3.2 [TEXT DELETED]
10.3.3 [TEXT DELETED]
10.4 The Owner shall not be responsible [TEXT DELETED] for materials
and substances brought to the site by the Contractor unless such materials or
substances were required by the Contract Documents.
10.5 If, without negligence on the part of the Contractor, the
Contractor is held liable for the cost of remediation of a hazardous material or
substance solely by reason of performing Work as required by the Contract
Documents, the Owner shall indemnify the Contractor for all cost and expense
thereby incurred.
10.6 EMERGENCIES
10.6.1 In an 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 an emergency shall be determined as provided in
Paragraph 4.3 and Article 7.
11. INSURANCE AND BONDS
11.1 CONTRACTOR'S LIABILITY INSURANCE
<PAGE>
11.1.1 The Contractor shall purchase from and maintain in a
company or companies lawfully authorized to do business in the jurisdiction in
which the Project is located such insurance as will protect the Contractor and
Owner from claims set forth below which may arise out of or result from the
Contractor's operations under the Contract and for which the Contractor may be
legally liable, whether such operations be by the Contractor or by a
Subcontractor or by anyone directly or indirectly employed by any of them, or by
anyone for whose acts any of them may be liable:
.1 claims under workers' compensation, disability benefit and other
similar employee benefit acts which are applicable to the Work to
be performed;
.2 claims for damages because of bodily injury, occupational
sickness or disease, or death of the Contractor's employees;
.3 claims for damages because of bodily injury, sickness or disease,
death of any person other than the Contractor's employees;
.4 claims for damages insured by usual personal injury liability
coverage;
.5 claims for damages, other than to the Work itself, because of
injury to or destruction of tangible property, including loss of
use resulting therefrom;
.6 claims for damages because of bodily injury, death of a person or
property damage arising out of ownership, maintenance or use of a
motor vehicle;
.7 claims for bodily injury or property damage arising out of
completed operations; and
.8 claims involving contractual liability insurance applicable to
the Contractor's obligations under Paragraph 3.18.
<PAGE>
11.1.2 The insurance required by Subparagraph 11.1.1 shall be
written for not less than limits of liability specified in the Contract
Documents or required by law, whichever coverage is greater. Coverages, whether
written on an occurrence or claims-made basis, shall be maintained without
interruption from date of commencement of the Work until date of final payment
and termination of any coverage required to be maintained after final payment.
11.1.3 Certificates of insurance acceptable to the Owner shall
be filed with the Owner prior to commencement of the Work. These certificates
and the insurance policies required by this Paragraph 11.1 shall contain a
provision that coverages afforded under the policies will not be canceled or
allowed to expire until at least 30 days' prior written notice has been given to
the Owner. If any of the foregoing insurance coverages are required to remain in
force after final payment and are reasonably available, an additional
certificate evidencing continuation of such coverage shall be submitted with the
final Application for Payment as required by Subparagraph 9.10.2. Information
concerning reduction of coverage on account of revised limits or claims paid
under the General Aggregate, or both, shall be furnished by the Contractor with
reasonable promptness in accordance with the Contractor's information and
belief.
11.2 OWNER'S LIABILITY INSURANCE
11.2.1 The Owner shall be responsible for purchasing and
maintaining the Owner's usual liability insurance.
11.3 PROJECT MANAGEMENT PROTECTIVE LIABILITY INSURANCE
11.3.1 Optionally, the Owner may require the Contractor to
purchase and maintain Project Management Protective Liability insurance from the
Contractor's usual sources as primary coverage for the Owner's, Contractor's and
Architect's vicarious liability for construction operations under the Contract.
Unless otherwise required by the Contract Documents, the Owner shall reimburse
the Contractor by increasing the Contract Sum to pay the cost of purchasing and
maintaining such optional insurance coverage, and the Contractor shall not be
responsible
<PAGE>
for purchasing any other liability insurance on behalf of the Owner.
The minimum limits of liability purchased with such coverage shall be equal to
the aggregate of the limits required for Contractor's Liability Insurance under
Clauses 11.1.1.2 through 11.1.1.5.
11.3.2 To the extent damages are covered by Project management
Protective Liability insurance, the Owner, Contractor and Architect waive all
rights against each other for damages, except such rights as they may have to
the proceeds of such insurance. The policy shall provide for such waivers of
subrogation by endorsement or otherwise.
11.3.3 The Owner shall not require the Contractor to include the
Owner, Architect or other persons or entities as additional insureds on the
Contractor's Liability Insurance coverage under Paragraph 11.1.
11.4 PROPERTY INSURANCE
11.4.1 Unless otherwise provided, the Owner shall purchase and
maintain, in a company or companies lawfully authorized to do business in the
jurisdiction in which the Project is located, property insurance written on a
builder's risk "all-risk" or equivalent policy form in the amount of the initial
Contract Sum, plus value of subsequent Contract modifications and cost of
materials supplied or installed by others, comprising total value for the entire
Project at the site on a replacement cost basis without optical deductibles.
Such property insurance shall be maintained, unless otherwise provided in the
Contract Documents or otherwise agreed in writing by all persons and entities
who are beneficiaries of such insurance, until final payment has been made as
provided in Paragraph 9.10 or until no person or entity other than the Owner has
an insurable interest in the property required by this Paragraph 11.4 to be
covered, whichever is later. This insurance shall include interests of the
Owner, the Contractor, Subcontractors, and Sub-subcontractors in the Project.
11.4.1.1 Property insurance shall be on an "all-risk" or
equivalent policy form and shall include, without limitation, insurance against
the perils of fire (with extended coverage) and physical loss or damage
including,
<PAGE>
without duplication of coverage, theft, vandalism, malicious mischief, collapse,
earthquake, flood, windstorm, falsework, testing and startup, temporary
buildings and debris removal including demolition occasioned by enforcement of
any applicable legal requirements, and shall cover reasonable compensation for
Architect's and Contractor's services and expenses required as a result of such
insured loss.
11.4.1.2 If the Owner does not intend to purchase such
property insurance required by the Contract and with all of the coverages in the
amount described above, the Owner shall so inform the Contractor in writing
prior to commencement of the Work. The Contractor may then effect insurance
which will protect the interests of the contractor, Subcontractors and Sub-
subcontractors in the Work, and by appropriate Change Order the cost thereof
shall be charged to the Owner. If the Contractor is damaged by the failure or
neglect of the Owner to purchase or maintain insurance as described above,
without so notifying the Contractor in writing, then the Owner shall bear all
reasonable costs properly attributable thereto.
11.4.1.3 If the property insurance requires deductibles,
the Owner shall pay costs not covered because of such deductibles.
11.4.1.4 This property insurance shall cover portions of
the Work stored off the site, and also portions of the Work in transit.
11.4.1.5 Partial occupancy or use in accordance with
Paragraph 9.9 shall not commence until the insurance company or companies
providing property insurance have consented to such partial occupancy or use by
endorsement or otherwise. The Owner and the 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.
11.4.2 Boiler and Machinery Insurance. The Owner shall purchase
and maintain boiler and machinery insurance required by the Contract Document or
by law, which shall specifically cover such insured objects during installation
and until final acceptance by the Owner, this insurance shall include
<PAGE>
interests of the Owner, Contractor, Subcontractors and Sub-subcontractors in the
Work, and the Owner and Contractor shall be named insureds.
11.4.3 Loss of Insurance. The Owner, at the Owner's option, may
purchase and maintain such insurance as will insure the Owner against loss of
use of the Owner's property due to fire or other hazards, however caused. The
Owner waives all rights of action against the Contractor for loss of use of the
Owner's property, including consequential losses due to fire or other hazards
however caused.
11.4.4 If the Contractor requests in writing that insurance for
risks other than those described herein or other special causes of loss be
included in the property insurance policy, the Owner shall, if possible, include
such insurance, and the cost thereof shall be charged to the Contractor by
appropriate Change Order.
11.4.5 If during the Project construction period the Owner
insures properties, real or personal or both, at 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, the Owner shall waive all rights in accordance
with the terms of Subparagraph 11.4.7 for damages caused by fire or other causes
of loss covered by this separate property insurance. All separate policies shall
provide this waiver of subrogation by endorsement or otherwise.
11.4.6 Before an exposure to loss may occur, the Owner shall
file with the Contractor a copy of each policy that includes insurance coverages
required by this Paragraph 11.4. Each policy shall contain all generally
applicable conditions, definitions, exclusions and endorsements related to this
Project. Each policy shall contain a provision that the policy will not be
canceled or allowed to expire, and that its limits will not be reduced, until at
least 30 days' prior written notice has been given to the Contractor.
11.4.7 Waivers of Subrogation. The Owner and Contractor waive
all rights against (1) each other and any of their subcontractors, sub-subcon-
<PAGE>
tractors, agents and employees, each of the other, and (2) the Architect,
Architect's consultants, separate contractors described in Article 6, if any,
and any of their subcontractors, sub-subcontractors, agents and employees, for
damages caused by fire or other causes of loss to the extent covered by property
insurance obtained pursuant to this Paragraph 11.4 or other property insurance
applicable to the Work, except such rights as they have to proceeds of such
insurance held by the Owner as fiduciary. The Owner or Contractor, as
appropriate, shall required of the Architect, Architect's consultants, separate
contractors described in Article 6, if any, and the subcontractors, sub-
subcontractors, agents and employees of any of them, by appropriate agreements,
written where legally required for validity, similar waivers each in favor of
other parties enumerated herein. the policies shall provide such waivers of
subrogation by endorsement or otherwise. A waiver of subrogation shall be
effective as to a person or entity even though that person or entity would
otherwise have a duty of indemnification, contractual or otherwise, did not pay
the insurance premium directly or indirectly, and whether or not the person or
entity had an insurable interest in the property damaged.
11.4.8 A loss insured under Owner's property insurance shall be
adjusted by the Owner as fiduciary and made payable to the Owner as fiduciary
for the insureds, as their interests may appear, subject to requirements of any
applicable mortgagee clause and of Subparagraph 11.4.10. The Contractor shall
pay Subcontractors their just shares of insurance proceeds received by the
Contractor, and by appropriate agreements, written where legally required for
validity, shall require Subcontractors to make payments to their Sub-
subcontractors in similar manner.
11.4.9 If required in writing by a party in interest, the Owner
as fiduciary shall, upon occurrence of an insured loss, give bond for proper
performance of the Owner's duties. The cost of required bonds shall be charged
against proceeds received as fiduciary. The Owner shall deposit in a separate
account proceeds so received, which the Owner shall distribute in accordance
with such agreement as the parties in interest may reach, or in accordance with
an arbitration award in which case the procedure shall be as provided in
Paragraph 4.6. If after such loss not other special agreement is made and unless
the Owner terminates the Contract for conve-
<PAGE>
nience, replacement of damaged property shall be performed by the Contractor
after notification of a Change in the Work in accordance with Article 7.
11.4.10 The Owner as fiduciary shall have power to adjust and
settle a loss with insurers unless one of the parties in interest shall object
in writing within five days after occurrence of loss to the Owner's exercise of
this power, if such objection is made, the dispute shall be resolved as provided
in Paragraphs 4.5 and 4.6. The Owner as fiduciary shall, in the case of
arbitration, make settlement with insurers in accordance with directions of the
arbitrators. If distribution of insurance proceeds by arbitration is required,
the arbitrators will direct such distribution.
11.5 PERFORMANCE BOND AND PAYMENT BOND
11.5.1 The Owner shall have the right to require the Contractor
to furnish bonds covering faithful performance of the Contract and payment of
obligations arising thereunder as stipulated in bidding requirements or
specifically required in the Contract Documents on the date of execution of the
Contract.
11.5.2 Upon the request of any person or entity appearing to be
a potential beneficiary of bonds covering payment of obligations arising under
the Contract, the Contractor shall promptly furnish a copy of the bonds or shall
permit a copy to be made.
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 [TEXT
DELETED] requirements specifically expressed in the Contract Documents, it must,
if required in writing by the [TEXT DELETED] requirements specifically expressed
in the Contract Documents, it must, if required in writing by the [TEXT DELETED]
Owner be uncovered for the [TEXT DELETED] Owner's examination and be replaced at
the Contractor's expense without change in the Contract Time.
<PAGE>
12.1.2 If a portion of the Work has been covered with the [TEXT
DELETED] Owner has not specifically requested to examine prior to its being
covered, the [TEXT DELETED] Owner 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 at the Owner's expense. if such Work is not in accordance with the
Contract Documents, correction shall be at the Contractor's expense 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 BEFORE OR AFTER SUBSTANTIAL COMPLETION
12.2.1.1 The Contractor shall promptly correct Work
reject by the [TEXT DELETED] Owner or failing to conform to the requirements of
the contract Documents, whether discovered before or after Substantial
Completion and whether or not fabricated, installed or completed. Costs of
correcting such rejected Work, including additional testing and inspections and
[TEXT DELETED] expenses made necessary thereby, shall be at the Contractor's
expense.
12.2.2 AFTER SUBSTANTIAL COMPLETION
12.2.2.1 In addition to the contractor's obligations
under Paragraph 3.5, if, within one year after the date of Substantial
Completion of the Work or designated portion thereof or after the date for
commencement of warranties established under Subparagraph 9.9.1, or by terms of
an applicable special warranty required by the Contract Documents, any of the
Work is found to be not in accordance with the requirements of the Contract
Documents, the Contractor shall correct it promptly after receipt of written
notice from the Owner to do so unless the Owner has previously given the
Contractor a written acceptance of such condition. The Owner shall give such
notice promptly after discovery of the condition. During the one-year period for
correction of Work, if the Owner fails to notify the contractor and give the
Contractor an opportunity to make the correction, the Owner waives the rights to
require correction by the Contractor and to make a claim for breach of
<PAGE>
warranty. If the Contractor fails to correct nonconforming Work within a
reasonable time during that period after receipt of notice from the Owner [TEXT
DELETED], the Owner may correct it in accordance with Paragraph 2.4.
12.2.2.2 The one-year period for correction of Work
shall be extended with respect to portions of Work first performed after
Substantial Completion by the period of time between Substantial Completion and
the actual performance of the Work.
12.2.2.3 [TEXT DELETED]
12.2.3 The Contractor shall remove from the site portions of the
Work which are not in accordance with the requirements of the Contract Documents
and are neither corrected by the Contractor nor accepted by the Owner.
12.2.4 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.
12.2.5 Nothing contained in this Paragraph 12.2 shall be
construed to establish a period of limitation with respect to other obligations
which the contractor might have under the Contract Documents. Establishment of
the one-year period for correction of Work as described in Subparagraph 12.2.2
relates only to the specific obligation of the contractor to correct the Work,
and has no relationship to the time within which the obligation to comply with
the Contract Documents may be sought to be enforced, nor to the time within
which proceedings may be commenced to establish the Contractor's liability with
respect to the Contractor's obligations other than specifically to correct the
Work.
12.3 ACCEPTANCE OF NONCONFORMING WORK
12.3.1 If the Owner prefers to accept Work which is not in
accordance with the requirements of the Contract Documents, the Owner may do so
instead of requiring its removal and correction, in which case the Contract Sum
will
<PAGE>
be reduced as appropriate and equitable. Such adjustment shall be effected
whether or not final payment has been made.
13. MISCELLANEOUS PROVISIONS
13.1 GOVERNING LAW
13.1.1 The Contract shall be governed by the law of the place
where the Project is located.
13.2 SUCCESSORS AND ASSIGNS
13.2.1 The Owner and Contractor respectively bind themselves,
their partners, successors, assigns and legal representatives to the other party
hereto and to partners, successors, assigns and legal representatives of such
other party in respect to covenants, agreements and obligations contained in the
Contract Documents. Except as provided in Subparagraph 13.2.2, neither party to
the Contract shall assign the Contract as a whole without written consent of the
other. If either party attempts to make such an assignment without such consent,
that party shall nevertheless remain legally responsible for all obligations
under the Contract.
13.2.2 The Owner may, without consent of the Contractor, assign
the Contract to an institutional lender providing construction financing for the
Project. In such event, the lender shall assume the Owner's rights and
obligations under the Contract Documents. The Contractor shall execute all
consents reasonably required to facilitate such assignment.
13.3 WRITTEN NOTICE
13.3.1 [TEXT DELETED]
13.4 RIGHTS AND REMEDIES
13.4.1 Duties and obligations imposed by the Contract Documents
and rights and remedies available thereunder shall be in addition to and not a
<PAGE>
limitation of duties, obligations, rights and remedies otherwise imposed or
available by law.
13.4.2 No action or failure to act by the Owner, [TEXT DELETED]
or Contractor shall constitute a waiver of a right or duty afforded them under
the Contract, nor shall such action or failure to act constitute approval of or
acquiescence in a breach thereunder, except as may be specifically agreed in
writing.
13.5 TESTS AND INSPECTIONS
13.5.1 Test, inspections and approvals of portions of the Work
required by the Contract Documents or by laws, ordinances, rules, regulations or
orders of public authorities having jurisdiction shall be made at an appropriate
time. Unless otherwise provided, the Contractor shall make arrangements of such
tests, inspections and approvals with an independent testing laboratory or
entity acceptable to the Owner, or with the appropriate public authority, and
shall bear all related costs of tests, inspections and approvals. The Contractor
shall give the [TEXT DELETED] Owner timely notice of when and where tests and
inspections are to be made so that the [TEXT DELETED] Owner may be present for
such procedures. The Owner shall bear costs of tests, inspections or approvals
which do not become requirements until after bids are received or negotiations
concluded.
13.5.2 If the [TEXT DELETED] Owner or public authorities having
jurisdiction determine that portions of the Work require additional testing,
inspection or approval not included under Subparagraph 13.5.1, the [TEXT
DELETED] Owner will, [TEXT DELETED] 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 [TEXT DELETED]
Owner of when and where tests and inspections are to be made so that the [TEXT
DELETED] Owner may be present for such procedures. Such costs, except as
provided in Subparagraph 13.5.3, shall be at the Owner's expense.
13.5.3 If such procedures for testing, inspection or approval
under Subparagraphs 13.5.1 and 13.5.2 reveal failure of the portions of the Work
to comply with requirements established by the Contract Documents, all costs
made
<PAGE>
necessary by such failure including those of repeated procedures [TEXT DELETED]
shall be at the Contractor's expense.
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 [TEXT DELETED] Owner.
13.5.5 If the [TEXT DELETED] Owner is to observe tests,
inspections or approvals required by the Contract Documents, the [TEXT DELETED]
Owner 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.
13.6 INTEREST
13.6.1 [TEXT DELETED]
13.7 COMMENCEMENT OF STATUTORY LIMITATION PERIOD
13.7.1 As between the Owner and Contractor:
.1 Before Substantial Completion. As to acts or failures to act
occurring prior to the relevant date of Substantial Completion,
any applicable statute of limitations shall commence to run and
any alleged cause of action shall be deemed to have accrued in
any and all events not later than such date of Substantial
Completion;
.2 Between Substantial Completion and Final Certificate for Payment.
As to acts or failures to act occurring subsequent to the
relevant date of Substantial Completion and prior to issuance of
the final Certificate for Payment, any applicable statute of
<PAGE>
limitations shall commence to run and any alleged cause of action
shall be deemed to have accrued in any and all events not later
than the date of issuance of the final Certificate for Payment;
and
.3 After Final Certificate of Payment. As to acts or failures to act
occurring after the relevant date of issuance of the final
Certificate for Payment, any applicable statute of limitations
shall commence to run and any alleged cause of action shall be
deemed to have accrued in any and all events not later than the
date of any act or failure to act by the Contractor pursuant to
any Warranty provided under Paragraph 3.5, the date of any
correction of the Work or any failure to correct the Work by the
Contractor under Paragraph 12.2, or the date of actual commission
of any other act or failure to perform any duty or obligation by
the Contractor or Owner, whichever occurs last.
14. TERMINATION OR SUSPENSION OF THE CONTRACT
14.1 TERMINATION BY THE CONTRACTOR
14.1.1 The Contractor may terminate the Contract if he Work is
stopped for a period of 30 consecutive days through no act or fault of the
Contractor or a Subcontractor, Sub-subcontractor or their agents or employees or
any other persons or entities performing portions of the Work under direct or
indirect contract with the Contractor, for any of the following reasons:
.1 issuance of an order of a court or other public authority having
jurisdiction which requires all Work to be stopped;
.2 an act of government, such as a declaration of national emergency
which requires all Work to be stopped;
.3 [TEXT DELETED]
<PAGE>
.4 [TEXT DELETED]
14.1.2 The Contractor may terminate the Contract if, through no
act or fault of the Contractor or a Subcontractor, Sub-subcontractor or their
agents or employees or any other persons or entities performing portions of the
Work under direct or indirect contract with the contractor, repeated
suspensions, delays or interruptions of the entire Work by the Owner as
described in Paragraph 14.3 constitute in the aggregate more that 100 percent of
the total number of days scheduled for completion, or 120 days in any 365-day
period, whichever is less.
14.1.3 If one of the reasons described in Subparagraph 14.1.1 or
14.1.2 exists, the Contractor may, upon seven days' written notice to the Owner
and Architect, terminate the Contract and recover from the Owner payment for
Work executed and for proven loss with respect to materials, equipment, tools,
and construction equipment and machinery, including reasonable overhead, profit
and damages.
14.1.4 If [TEXT DELETED] the Work is stopped for a period of 60
consecutive days through no act or fault of the Contractor or a Subcontractor or
their agents or employees or any other persons performing portions of the Work
under contract with the Contractor because the Owner has persistently failed to
fulfill the Owner's obligations under the Contract Documents with respect to
matters important to the progress of the Work, the Contractor may, upon seven
additional day's written notice of the Owner [TEXT DELETED], terminate the
Contract and recover from the Owner as provided in Subparagraph 14.1.3.
14.1.5 See ARTICLE 15.2.
14.2 TERMINATION BY THE OWNER FOR CAUSE
14.2.1 [TEXT DELETED]
.1 [TEXT DELETED]
.2 [TEXT DELETED]
<PAGE>
.3 [TEXT DELETED]
.4 [TEXT DELETED]
14.2.2 When any of the above reasons exist, the Owner, [TEXT
DELETED] may without prejudice to any other rights or remedies of the Owner and
after giving the contractor and the Contractor's surety, if any, seven days'
written notice, terminate employment of the Contractor and may, subject to any
prior right of the surety:
.1 [TEXT DELETED] take possession of the site and of all materials,
equipment, tools, and construction equipment and machinery
thereon owned by the Contractor;
.2 accept assignment of subcontracts pursuant to Paragraph 5.4; and
.3 finish the Work by whatever reasonable method the Owner may deem
expedient. Upon request of the Contractor, the Owner shall
furnish to the contractor a detailed accounting of the costs
incurred by the Owner in finishing the Work.
14.2.3 When the Owner terminates the Contract for one of the
reasons stated in Subparagraph 14.2.1, the Contractor shall not be entitled to
receive further payment until the Work is finished.
14.2.4 If the unpaid balance of the contract sum exceeds costs
of finishing the work, [TEXT DELETED] and other damages incurred by the Owner
and not expressly waived, such excess shall be paid to the Contractor. If such
costs and damages exceed the unpaid balance, the Contractor shall pay the
difference to the Owner. [TEXT DELETED]
<PAGE>
14.3 SUSPENSION BY THE OWNER FOR CONVENIENCE
14.3.1 The Owner may, without cause, order the Contractor in
writing to suspend, delay or interrupt the Work in whole or in part for such
period of time as the Owner may determine.
14.3.2 The Contract Sum and Contract time shall be adjusted for
increases in the cost and time caused by suspension, delay or interruption as
described in Subparagraph 14.3.1. Adjustment of the Contract Sum shall include
profit. 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 the Contractor is
responsible; or
.2 that an equitable adjustment is made or denied under another
provision of the Contract.
14.4 TERMINATION BY THE OWNER FOR CONVENIENCE
14.4.1 The Owner may, at any time, terminate the Contractor for
the Owner's convenience and without cause.
14.4.2 Upon receipt of written notice from the Owner of such
termination for the Owner's convenience, the Contractor shall:
.1 cease 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
subcontracts and purchase orders and enter into no further
subcontracts and purchase orders.
<PAGE>
14.4.3 In case of such termination for the Owner's convenience,
the Contractor shall be entitled to receive payment for Work executed, and costs
incurred by reason of such termination, along with reasonable overhead and
profit on the Work not executed.
15. MISCELLANEOUS PROVISIONS
15.1 [TEXT DELETED] Article 4.6 relating to Arbitration shall only
apply to Claims involving a sum of less than $100,000. Any Claim involving a sum
of $100,000 or more may be subject to mediation and/or binding or non-binding
arbitration, but only upon the separate written agreement of Contractor and
Owner agreeing to such mediation or arbitration.
15.2 [TEXT DELETED]
15.3 Progress Payments under this Contract which are not paid within
thirty (30) days following the date on which such payments are due, are subject
to and will be charged a late fee of two percent (2%) per month on the unpaid
amount. See California Civil Code Section 3260.
15.4 If the Final Payment under this Contract is not paid within
forty-five (45) days following the date of completion, the unpaid amount will be
subject to a late fee of two percent (2%) per month on the unpaid amount. See
California Civil Code Section 3260.
15.5 Should any litigation be commenced by any party hereto with
respect to this Contract, the prevailing party shall be entitled to recover its
reasonable attorney's fees and all costs of suit.
<PAGE>
STANDARD FORM OF AGREEMENTS BETWEEN
OWNER AND DESIGN/BUILDER
AIA Document A191- Electronic Format
This document has important legal consequences: consultation with an attorney is
encouraged with respect to its completion or modification. Authentication of
this electronically drafted AIA document may be made by using AIA document D401.
Copyright 1985, (C) 1996 The American Institute of Architects, 1735 New York
Avenue, NW, Washington, DC 20006-5292. Reproduction of the material herein or
substantial quotation of its provisions without the written permission of the
AIA violates the copyright laws of the United States and will subject the
violator to legal prosecution.
1996 EDITION
TABLE OF ARTICLES
PART 1 AGREEMENT
1. Design/Builder 6. Dispute Resolution - Mediation and Arbitration
2. Owner 7. Miscellaneous Provisions
3. Ownership and Use of 8. Termination of the Agreement
Documents and 9. Basis of Compensation
Electronic Data 10. Other Conditions and Services
4. Time
5. Payments
PART 2 AGREEMENT
1. General Provisions 8. Changes in the Work
2. Owner 9. Correction of Work
3. Design/Builder 10. Dispute Resolution - Mediation and Arbitration
4. Time 11. Miscellaneous Provisions
5. Payments 12. Termination of the Agreement
6. Protection of Persons 13. Basis of Compensation
and Property 14. Other Conditions and Services
7. Insurance and Bonds
<PAGE>
STANDARD FORM OF AGREEMENTS BETWEEN
OWNER AND DESIGN/BUILDER
AIA Document A191 - Electronic Format
This document comprises two separate Agreements: Part 1 Agreement and Part 2
Agreement. Before executing the Part 1 Agreement, the parties should reach
substantial agreement on the Part 2 Agreement. To the extent referenced in these
Agreements, subordinate parallel agreements to A191 consist of AIA Document
A491, Standard Form of Agreements Between Design/Builder and Contractor, and AIA
Document B901, Standard Form of Agreements Between Design/Builder and Architect.
PART 1 AGREEMENT
1996 EDITION
AGREEMENT
made as of the 14 day of June in the year of 1999
(In words, indicate day, month and year.)
BETWEEN the Owner:
(Name and Address)
NaviSite, Inc.
100 Brickstone Square
Andover, MA 01810
The Owner is a Delaware corporation.
The Owner hereby represents and warrants to Design/Builder that Owner is a
lessee of the real property at which the Work is to be performed and that the
name and address of the fee simple is: Carr America Realty Corporation, 1810
Gateway Drive, Suite 150, San Mateo, CA 94404
and the Design/Builder:
(Name and Address)
XL CONSTRUCTION, a California Corporation
<PAGE>
1500 Berger Drive
San Jose, CA 95112-2703
License No. 64780
For the following Project:
(Include Project name, location and a summary description.)
NaviSite Zanker Road Data Center, a 66,000 s.f. Design/Builder Internet data
center
2720 Zanker Road
San Jose, CA 95134
The architectural services described in Article I will be provided by the
following person or entity who is lawfully licensed to practice architecture:
<TABLE>
<CAPTION>
(Name and address) (Registration Number) (Relationship to Design/Builder)
<S> <C> <C>
Dowler Gruman Associates,
550 Ellis St., Mountain View, CA 94043 Architect
</TABLE>
Normal structural, mechanical and electrical engineering services will be
provided contractually through the Architect except as indicated below:
<TABLE>
<CAPTION>
(Name, address and discipline) (Relationship to Design/Builder)
<S> <C>
Structural Engineers, Inc., 4970 El Camino Real #100,
Los Altos, CA 94022-1461 Structural Engineer
</TABLE>
The name and address of the Construction Lender is:
None
The Owner and the Design/Builder agree as set forth below.
<PAGE>
TERMS AND CONDITIONS - PART 1 AGREEMENT
ARTICLE 1
DESIGN/BUILDER
1.1 SERVICES
1.1.1 Preliminary design, budget, and schedule comprise the services required
to accomplish the preparation and submission of the Design/Builder's Proposal as
well as the preparation and submission of the Design/Builder's Proposal as well
as the preparation and submission of any modifications to the Proposal prior to
execution of the Part 2 Agreement.
1.2 RESPONSIBILITIES
1.2.1 Design services required by this Part 1 Agreement shall be performed by
qualified architects and other design professionals. The contractual obligations
of such professional persons or entities are undertaken and performed in the
interest of the Design/Builder.
1.2.2 The agreements between the Design/Builder and the persons or entities
identified in this Part 1 Agreement, and any subsequent modifications, shall be
in writing. These agreements, including financial agreements with respect to
this Project, shall be promptly and fully disclosed to the Owner upon request.
1.2.3 Construction budgets shall be prepared by qualified professionals, cost
estimators or contractors employed, or, retained by and acting in the interest
of the Design/Builder.
1.2.4 The Design/Builder shall be responsible to the Owner for acts and
omissions of the Design/Builder's employees, subcontractors and their agents and
employees, and other persons, including the Architect and other design
professionals, performing any portion of the Design/Builder's obligations under
this Part 1 Agreement.
1.2.5 If the Design/Builder believes or is advised by the Architect or by
another design professional retained to provide services on the Project that
implementation of
<PAGE>
any instruction received from the Owner would cause a violation of any
applicable law, the Design/Builder shall notify the Owner in writing. Neither
the Design/Builder nor the Architect shall be obligated to perform any act which
either believes will violate any applicable law.
1.2.6 Nothing contained in this Part 1 Agreement shall create a contractual
relationship between the Owner and any person or entity other than the
Design/Builder.
1.3 BASIC SERVICES
1.3.1 The Design/Builder shall provide a preliminary evaluation of the Owner's
program and project budget requirements, each in terms of the other.
1.3.2 The Design/Builder shall visit the site, become familiar with the local
conditions, and correlate observable conditions with the requirements of the
Owner's program, schedule and budget.
1.3.3 The Design/Builder shall review laws applicable to design and
construction of the Project; correlate such laws with the Owner's program
requirements; and advise the Owner if any program requirement may cause a
violation of such laws. Necessary changes to the Owner's program shall be
accomplished by appropriate written modification or disclosed as described in
Paragraph 1.3.5.
1.3.4 The Design/Builder shall review with the Owner alternative approaches to
design and construction of the Project.
1.3.5 The Design/Builder shall submit to the Owner a Proposal, including the
completed Preliminary Design Documents, a statement of the proposed contract
sum, and a proposed schedule for completion of the Project. Preliminary Design
Documents shall consist of preliminary design drawings, outline specifications
or other documents sufficient to establish the size, quality and character of
the entire Project, its architectural, structural, mechanical and electrical
systems and the materials and such other elements of the Project as may be
appropriate. Deviations from the
<PAGE>
Owner's program shall be disclosed in the Proposal. If the Proposal is accepted
by the Owner, the parties shall then execute the Part 2 Agreement. A
modification to the Proposal before execution of the Part 2 Agreement shall be
recorded in writing as an addendum and shall be identified in the Contract
Documents of the Part 2 Agreement.
1.4 ADDITIONAL SERVICES
1.4.1 The Additional Services described under this Paragraph 1.4 shall be
provided by the Design/Builder and paid for by the Owner if authorized or
confirmed in writing by the Owner.
1.4.2 Making revisions in the Preliminary Design Documents, budget or other
documents when such revisions are:
.1 inconsistent with approvals or instructions previously given by the
Owner, including revisions made necessary by adjustments in the
Owner's program or Project budget;
.2 required by the enactment or revision of codes, laws or regulations
subsequent to the preparation of such documents; or
.3 due to changes required as a result of the Owner's failure to render
decisions in a timely manner.
1.4.3 [TEXT DELETED] When authorized, the Design/Builder shall provide
professional services to assist the Owner in the preparation of the program.
Programming services may consist of:
.1 consulting with the Owner and other persons or entities not
designated in this Part 1 Agreement to define the program
requirements of the Project and to review the understanding of such
requirements with the Owner;
<PAGE>
.2 documentation of the applicable requirements necessary for the
various Project functions or operations;
.3 providing a review and analysis of the functional and organizational
relationships, requirements, and objectives for the Project;
.4 setting forth a written program of requirements for the Owner's
approval which summarizes the Owner's objectives, schedule,
constraints, and criteria.
1.4.4 Providing financial feasibility or other special studies.
1.4.5 Providing planning surveys, site evaluations, or comparative studies of
prospective sites.
1.4.6 Providing special surveys, environmental studies, and submissions
required for approvals of governmental authorities or others having jurisdiction
over the Project.
1.4.7 Providing services relative to future facilities, systems, and
equipment.
1.4.8 Providing services at the Owner's specific request to perform detailed
investigations of existing conditions or facilities or to make measured drawings
thereof.
1.4.9 Providing services at the Owner's specific request to verify the
accuracy of drawings or other information furnished by the Owner.
1.4.10 Coordinating services in connection with the work of separate persons
or entities retained by the Owner, subsequent to the execution of this Part 1
Agreement.
1.4.11 Providing analyses of owning and operating costs.
<PAGE>
1.4.12 Providing interior design and other similar services required for or in
connection with the selection, procurement or installation of furniture,
furnishings, and related equipment.
1.4.13 Providing services for planning tenant or rental spaces.
1.4.14 Making investigations, inventories of materials or equipment, or
valuations and detailed appraisals of existing facilities.
ARTICLE 2
OWNER
2.1 RESPONSIBILITIES
2.1 The Owner shall provide full information in a timely manner regarding
requirements for the Project, including a written program which shall set forth
the Owner's objectives, schedule, constraints and criteria.
2.1.2 The Owner shall establish and update an overall budget for the Project,
including reasonable contingencies. This budget shall not constitute the
contract sum.
2.1.3 The Owner shall designate a representative authorized to act on the
Owner's behalf with respect to the Project. The Owner or such authorized
representative shall render decisions in a timely manner pertaining to documents
submitted by the Design/Builder in order to avoid unreasonable delay in the
orderly and sequential progress of the Design/Builder's services. The Owner may
obtain independent review of the documents by a separate architect, engineer,
contractor, or cost estimator under contract to or employed by the Owner. Such
independent review shall be undertaken at the Owner's expense in a timely manner
and shall not delay the orderly progress of the Design/Builder's services.
2.1.4 [TEXT DELETED]
<PAGE>
2.1.5 [TEXT DELETED]
2.1.6 [TEXT DELETED]
2.1.7 [TEXT DELETED]
2.1.8 [TEXT DELETED]
2.1.9 [TEXT DELETED]
2.1.10 If the Owner requires the Design/Builder to maintain any special
insurance coverage, policy, amendment, or rider, the Owner shall pay the
additional cost thereof, except as otherwise stipulated in this Part 1
Agreement.
2.1.11 The Owner shall communicate with persons or entities employed or
retained by the Design/Builder through the Design/Builder, unless otherwise
directed by the Design/Builder.
ARTICLE 3
OWNERSHIP AND USE OF DOCUMENTS
AND ELECTRONIC DATA
3.1 [TEXT DELETED]
3.2 [TEXT DELETED]
3.3 [TEXT DELETED]
3.4 [TEXT DELETED]
ARTICLE 4
TIME
4.1 Upon the request of the Owner, the Design/Builder shall prepare a
schedule for the performance of the Basic and Additional Services which shall
not exceed the
<PAGE>
time limits contained in Paragraph 10.1 and shall include allowances for periods
of time required for the Owner's review and for approval of submissions by
authorities having jurisdiction over the Project.
4.2 If the Design/Builder is delayed in the performance of services under
this Part 1 Agreement through no fault of the Design/Builder, any applicable
schedule shall be equitably adjusted.
ARTICLE 5
PAYMENTS
5.1 [TEXT DELETED]
5.2 [TEXT DELETED] Payments for Basic Services, Additional Services, and
Reimbursable Expenses provided for in this Part 1 Agreement shall be made
monthly on the basis set forth in Article 9.
5.3 Within thirty [TEXT DELETED] (30) days of the Owner's receipt of a
properly submitted and correct Application for Payment, the Owner shall make
payment to the Design/Builder.
5.4 [TEXT DELETED] Amended. See 10.5.
ARTICLE 6
DISPUTE RESOLUTION - MEDIATION
AND ARBITRATION
6.1 Subject to Article 10.6, claims, disputes or other matters in question
between the parties to this Part 1 Agreement arising out of or relating to this
Part 1 Agreement or breach thereof shall be subject to and decided by [TEXT
DELETED] binding arbitration [TEXT DELETED]. Such arbitration shall be conducted
in accordance with the Construction Industry Arbitration Rules of the American
Arbitration Association currently in effect.
<PAGE>
6.2 [TEXT DELETED]
6.3 Demand for arbitration shall be filed in writing with the other party to
this Part 1 Agreement and with the American Arbitration Association. A demand
for arbitration shall be made within a reasonable time after the claim, dispute
or other matter in question has arisen. In no event shall the demand for
arbitration be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in question would be
barred by the applicable statutes of repose or limitations.
6.4 An arbitration pursuant to this Paragraph may be joined with an
arbitration involving common issues of law or fact between the Design/Builder
and any person or entity with whom the Design/Builder has a contractual
obligation to arbitrate disputes. No other arbitration arising out of or
relating to this Part 1 Agreement shall include, by consolidation, joinder or in
any other manner, an additional person or entity not a party to this Part 1
Agreement or not a party to an agreement with the Design/Builder, except by
written consent containing a specific reference to this Part 1 Agreement signed
by the Owner, the Design/Builder and all other persons or entities sought to be
joined. Consent to arbitration involving an additional person or entity shall
not constitute consent to arbitration of any claim, dispute or other matter in
question not described in written consent or with a person or entity not named
or described therein. The foregoing agreement to arbitrate and other agreements
to arbitrate with an additional person or entity duly consented to by the
parties to this Part 1 Agreement shall be specifically enforceable in accordance
with applicable law in any court having jurisdiction thereof.
6.5 The award rendered by the arbitrator or arbitrators shall be final, and
judgment may be entered upon it in accordance with applicable law in any court
having jurisdiction thereof. Amended by Article 10.6.
ARTICLE 7
MISCELLANEOUS PROVISIONS
7.1 Unless otherwise provided, this Part 1 Agreement shall be governed by the
law of the place where the Project is located.
<PAGE>
7.2 The Owner and the Design/Builder, respectively, bind themselves, their
partners, successors, assigns and legal representatives to the other party to
this Part 1 Agreement and to the partners, successors and assigns of such other
party with respect to all covenants of this Part 1 Agreement. [TEXT DELETED]
Design/Builder shall not assign this Part 1 Agreement without the written
consent of the other. Design/Builder acknowledges that execution by CMGI, Inc.
of the form of Guaranty attached here to satisfies the requirements that proper
financial arrangements are in place with respect to the owner regarding this
agreement.
7.3 Unless otherwise provided, neither the design for nor the cost of
remediation of hazardous materials shall be the responsibility of the
Design/Builder.
7.4 This Part 1 Agreement represents the entire and integrated agreement
between the Owner and the Design/Builder and supersedes all prior negotiations,
representations or agreements, either written or oral. This Part 1 Agreement
may be amended only by written instrument signed by both the Owner and the
Design/Builder.
7.5 Prior to the termination of the services of the Architect or any other
design professional designated in this Part 1 Agreement, the Design/Agreement
shall identify to the Owner in writing another architect or design professional
with respect to whom the Owner has no reasonable objection, who will provide the
services originally to have been provided by the Architect or other design
professional whose services are being terminated.
ARTICLE 8
TERMINATION OF THE AGREEMENT
8.1 This Part 1 Agreement may be terminated by either party upon seven (7)
days' written notice should the other party fail to perform substantially in
accordance with its terms through no fault of the party initiating the
termination.
8.2 This Part 1 Agreement may be terminated by the Owner without cause upon at
least seven (7) days' written notice to the Design/Builder.
<PAGE>
8.3 In the event of termination not the fault of the Design/Builder, the
Design/Builder shall be compensated for services performed to the termination
date, together with Reimbursable Expenses the due and Termination Expenses.
Termination Expenses are expenses directly attributable to termination,
including a reasonable amount for overhead and profit, for which the
Design/Builder is not otherwise compensated under this Part 1 Agreement.
ARTICLE 9
BASIC OF COMPENSATION
9.1 COMPENSATION FOR BASIC SERVICES
9.1.1 [TEXT DELETED]
9.1.2 [TEXT DELETED]
9.1.3 [TEXT DELETED]
9.2 COMPENSATION FOR ADDITIONAL SERVICES
9.2.1 [TEXT DELETED]
9.3 REIMBURSABLE EXPENSES
9.3.1 [TEXT DELETED]
9.3.2 [TEXT DELETED]
9.4 [TEXT DELETED]
9.5 INTEREST PAYMENTS
9.5.1 [TEXT DELETED] See Article 10.5
<PAGE>
(Usury laws and requirements under the Federal truth in Lending Act, similar
state and local consumer credit laws and other regulations at the Owner's and
Design/Builder's principal places of business at the location of the Project and
elsewhere may affect the validity of this provision. Specific legal advice
should be obtained with respect to deletion, modification or other requirements,
such as written disclosures or waivers)
9.6 [TEXT DELETED]
9.7 [TEXT DELETED]
ARTICLE 10
OTHER CONDITIONS AND SERVICES
10.1 The Basic Services to be performed shall be commenced on and, subject to
authorized adjustments and to delays not caused by the Design/Builder, shall be
completed, in accordance with the Project Schedule, Exhibit "C" dated 6/22/99.
The Design/Builder's Basic Services consist of those described in Paragraph 1.3
as part of Basic Services, and include normal professional engineering and
preliminary design services, unless otherwise indicated.
10.2 Services beyond those described in Paragraph 1.4 are as follows:
(insert descriptions of other services, identify Additional Services indicated
within Basic Compensation and modifications to the payment and compensation
terms included in this Agreement)
10.3 The Owner's preliminary program, budget, and other documents, if any, are
enumerated as follows:
Title: Date:
10.4 Should any litigation be connected by any party hereto with respect to
this Agreement, the prevailing party shall be entitled to recover its reasonable
attorneys' fees and all cost of suit.
10.5 Article 5.4 shall read as follows: Payments due the Design/Builder under
this Part 1 Agreement which are not paid with in thirty (30) days following the
date on which such payments are due, are subject to and will be charged a late
fee of two percent (2%) per month on the unpaid amount. See California Civil
Code 3260.1.
<PAGE>
10.6 Article 6 relating to arbitration shall only apply to claims or disputes
involving a sum of less than $50,000. Any claim or dispute involving a sum of
$50,000 or more may be subject to arbitration, binding or non-binding, but only
upon the separate written agreement of Owner and Design/Builder agreeing to such
arbitration.
10.7 Contractors are required by law to be licensed and regulated by the
Contractors' State License Board which has jurisdiction to investigate
complaints against contractors if a complaint regarding a patent act or omission
is filed within four years of the date of the alleged violation. A complaint
regarding a latent act or omission pertaining to structural defects must be
filed within 10 years of the date of the alleged violation. Any question
concerning a contractor may be referred to the Registrar, Contractors' State
License Board, P.O. Box 2600, Sacramento, California 95826.
This Agreement entered into as of the day and year first written above.
OWNER DESIGN/BUILDER
/s/ Kenneth W. Hale /s/ Eric Raff
- ----------------------------------------- -----------------------------------
(Signature) (Signature)
Kenneth W. Hale CFO Date: 11/11/99 Eric Raff, President Date: 9/27/99
- ----------------------------------------- -----------------------------------
(Printed name and title) (Printed name and title)
<PAGE>
Standard Form of Agreements Between
Owner and Design/Builder
AIA Document A191 - Electronic Format
This document comprises two separate Agreements Part I Agreement and Part 2
Agreement. Before executing the Part I Agreement, the parties should reach
substantial agreement on the Part 2 Agreements. To the extent referenced in
these Agreements, subordinate parallel agreements to A191 consists of AIA
Documents A491, Standard Form of Agreement Between Design/Builder and
Contractor, and AIA Documents B901, Standard Form of Agreement Between
Design/Builder and Architect.
PART 2 AGREEMENT
1996 EDITION
- --------------------------------------------------------------------------------
AGREEMENT
made as of the 14th day of July in the year of 1999
(In words, indicate day, month and year.)
BETWEEN the Owner:
(Name and address)
NaviSite, Inc.
300 Federal St.
Andover, MA 01810
The Owner is a Delaware Corporation.
The Owner hereby represents and warrants to Design/Builder that Owner is a
lessee of the real property at which the Work is to be performed and that the
name and address of the owner of the fee simple is:
<PAGE>
Carr America Realty Corporation
1819 Gateway Drive, Suite 150
San Mateo, CA 94404
and the Design/Builder:
(Name and address)
XL CONSTRUCTION, a California corporation
1500 Berger Drive
San Jose, CA 95112-2703
License No. 647480
For the following Project:
(Include Project name, location and a summary description)
NaviSite Zanker Road Data Center, a 66,000 s.f. Design/build internet data
center
2720 Zanker Road
San Jose, CA 95134
The architectural services described in Article 3 will be provided by the
following person or entity who is lawfully licensed to practice architecture:
(Name and address) (Registration Number) (Relationship to Design/Builder)
Dowler Gruman Associates
550 Ellis St.
Mountain View, CA 94043 Architect
Normal structural, mechanical and electrical engineering services will be
provided contractually through the Architect except as indicated below:
(Name, address and discipline)
Structural Engineers, Inc., 4970 El Camino Real #100, Los Altos, CA 94022-1461
The Owner and the Design/Builder agree as set forth below.
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TERMS AND CONDITIONS -- PART 2 AGREEMENT
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ARTICLE 1
GENERAL PROVISIONS
1.1 BASIC DEFINITIONS
1.1.1 The Contract Documents consist of the Part I Agreement to the extent not
modified by this Part 2 Agreement, this Part 2 Agreement, the Design/Builder's
Proposal and written addenda to the Proposal identified in Article 14, the
Construction Documents approved by the Owner in accordance with Subparagraph
3.2.3 and Modifications issued after execution of this Part 2 Agreement. A
Modification is a Change Order or a written amendment to this Part 2 Agreement
signed by both parties, or a Construction Change Directive issued by the Owner
in accordance with Paragraph 8.3.
1.1.2 The term "Work" means the construction and services provided by the
Design/Builder to fulfill the Design/Builder's obligations.
1.2 EXECUTION, CORRELATION AND INTENT
1.2.1 It is the intent of the Owner and Design/Builder that the Contract
Documents include all items necessary for proper execution and completion of the
Work. The Contract Documents are complementary, and what is required by one
shall be as binding as if required by all; performance by the Design/Builder
shall be required only to the extent consistent with and reasonably inferable
from the Contract Documents as being necessary to produce the intended results.
Words that have well-known technical or construction industry meanings are used
in the Contract Documents in accordance with such recognized meanings.
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1.2.2 If the Design/Builder believes or is advised by the Architect or by
another design professional retained to provide services on the Project that
implementation of any Instruction received from the Owner would cause a
violation of any applicable law, the Design/Builder, shall notify the Owner in
writing. Neither the Design/Builder nor the Architect shall be obligated to
perform any act which either believes will violate any applicable law.
1.2.3 Nothing contained in this Part 2 Agreement shall create a contractual
relationship between the Owner and any person or entity other than the
Design/Builder.
1.3 OWNERSHIP AND USE OF DOCUMENTS
1.3.1 [TEXT DELETED]
1.3.2 [TEXT DELETED]
1.3.3 [TEXT DELETED]
1.3.4 [TEXT DELETED]
ARTICLE 2
OWNER
2.1 The Owner shall designate a representative authorized to act on the
Owner's behalf with respect to the Project. The Owner or such authorized
representative shall examine documents submitted by the Design/Builder and shall
render decisions in a timely manner and in accordance with the schedule accepted
by the Owner. The Owner may obtain independent review of the Contract Documents
by a separate architect, engineer, contractor, or cost estimator under contract
to or employed by the Owner. Such independent review shall be undertaken at the
Owner's expense in a timely manner and shall not delay the orderly progress of
the Work.
2.2 The Owner may appoint an on-site project representative to observe the
Work and to have such other responsibilities as the Owner and Design/Builder
agree in writing.
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2.3 The Owner shall cooperate with the Design/Builder in securing building and
other permits, licenses and inspections. The Owner shall not be required to pay
the fees for such permits, licenses and inspections unless the cost of such fees
is excluded from the Design/Builder's Proposal.
2.4 [TEXT DELETED]
2.5 [TEXT DELETED]
2.6 [TEXT DELETED]
2.7 [TEXT DELETED]
2.8 [TEXT DELETED]
2.9 If the Owner observes or otherwise becomes aware of a fault or defect in
the Work or noncomformity with the Design/Builder's Proposal or the Construction
Documents, the Owner shall give prompt written notice thereof to the
Design/Builder.
2.10 [TEXT DELETED] The Owner shall at the request of the Design/Builder upon
execution of this Part 2 Agreement furnish to the Design/Builder the form of
guaranty attached hereto excecuted by CMGI, Inc.
2.11 The Owner shall communicate with persons or entities employed or retained
by the Design/Builder through the Design/Builder, unless otherwise directed by
the Design/Builder.
ARTICLE 3
DESIGN/BUILDER
3.1 SERVICES AND RESPONSIBILTIES
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3.1.1 Design services required by this Part 2 Agreement shall be performed by
qualified architects and other design professionals. The contractual
obligations of such professional persons or entities are undertaken and
performed in the interest of the Design/Builder.
3.1.2 The agreements between the Design/Builder and the persons or entities
identified in this Part 2 Agreement, and any subsequent modifications, shall be
in writing. These agreements, including financial arrangements with respect to
this Project, shall be promptly and fully disclosed to the Owner upon request.
3.1.3 The Design/Builder shall be responsible to the Owner for wilful
misconduct and negligent acts and omissions of the Design/Builder's employees,
subcontractors and their agents and employees, and other persons, including the
Architect and other design professionals performing any portion of the
Design/Builder's obligations under this Part 2 Agreement.
13.2 BASIC SERVICES
3.2.1 The Design/Builder's Basic Services are described below and in Article
14.
3.2.2 The Design/Builder shall designate a representative authorized to act on
the Design/Builder's behalf with respect to the Project.
3.2.3 The Design/Builder shall submit Construction Documents for review and
approval by the Owner. Construction Documents may include drawings,
specifications, and other documents and electronic data setting forth in detail
the requirements for construction of the Work, and shall:
.1 be consistent with the intent of the Design/Builder's Proposal;
.2 provide information for the use of those in the building trades; and
.3 include documents customarily required for regulatory agency
approvals.
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3.2.4 The Design/Builder, with the assistance of the Owner, shall file
documents required to obtain necessary approvals of governmental authorities
having jurisdiction over the Project.
3.2.5 Unless otherwise provided in the Contract Documents, the Design/Builder
shall provide or cause to be provided and shall pay for design services, labor,
materials, equipment, tools, construction equipment and machinery, [TEXT
DELETED] 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.
3.2.6 The Design/Builder shall be responsible for all construction, means,
methods, techniques, sequences and procedures, and for coordinating all portions
of the Work under this Part 2 Agreement.
3.2.7 The Design/Builder shall keep the Owner informed of the progress and
quality of the Work.
3.2.8 The Design/Builder shall be responsible for correcting Work which does
not conform to the Contract Documents.
3.2.9 The Design/Builder warrants to the Owner that materials and equipment
furnished under the Contract will be of good quality and new [TEXT DELETED] that
the construction will be free from faults and defects, and that the construction
will conform with the requirements of the Contract Documents. Construction not
conforming to these requirements, including substitutions not properly approved
by the Owner, shall be corrected in accordance with Article 9.
3.2.10 The Design/Builder shall pay all sales, consumer, use and similar taxes
which had been legally enacted at the time the Design/Builder's Proposal was
first submitted to the Owner, and shall secure and pay for building and other
permits and governmental fees, licenses and inspections necessary for the proper
execution and completion of the Work which are either customarily secured after
execution of a contract for construction or are legally required at the time the
Design/Builder's Proposal was first submitted to the Owner.
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3.2.11 The Design/Builder shall comply with and give notices required by laws,
ordinances, rules, regulations and lawful orders of public authorities relating
to the Project.
3.2.12 The Design/Builder shall pay royalties and license fees for patented
designs, processes or products. The Design/Builder shall defend suits or claims
for infringement of patent rights and shall hold the Owner harmless from loss on
account thereof, but shall not be responsible for such defense or loss when a
particular design, process or product of a particular manufacturer is required
by the Owner. However, if the Design/Builder has reason to believe the use of a
required design, process or product is an infringement of a patent, the
Design/Builder shall be responsible for such loss unless such information is
promptly furnished to the Owner.
3.2.13 The Design/Builder shall keep the premises and surrounding area free
from accumulation of waste materials or rubbish caused by operations under this
Part 2 Agreement. At the completion of the Work, the Design/Builder shall
remove from the site waste materials, rubbish, the Design/Builder's tools,
construction equipment, machinery, and surplus materials.
3.2.14 [TEXT DELETED]
3.2.15 The Design/Builder shall maintain at the site for the Owner one record
copy of the drawings, specifications, product data, samples, shop drawings,
Change Orders and other modifications, in good order and regularly updated to
record the completed construction. These shall be delivered to the Owner upon
completion of construction and prior to final payment.
3.3 ADDITIONAL SERVICES
3.3.1 The services described in this Paragraph 3.3 are not included in Basic
Services unless so identified in Article 14, and they shall be paid for by the
owner as provided in this Part 2 Agreement, in addition to the compensation for
Basic Ser-
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vices. The services described in this Paragraph 3.3 shall be provided only if
authorized or confirmed in writing by the Owner.
3.3.2 Making revisions in drawings, specifications, and other documents or
electronic data when such revisions are required by the enactment or revision of
codes, laws or regulations subsequent to the preparation of such documents or
electronic data.
3.3.3 Providing consultation, concerning replacement of Work damaged by fire
or other cause during construction, and furnishing services required in
connection with the replacement of such Work.
3.3.4 Providing services in connection with a public hearing, arbitration
proceeding or legal proceeding, except where the Design/Builder is a party
thereto.
3.3.5 Providing coordination of construction performed by the Owner's own
forces or separate contractors employed by the Owner, and coordination of
services required in connection with construction performed and equipment
supplied by the Owner.
3.3.6 Preparing a set of reproducible record documents or electronic data
showing significant changes in the Work made during construction.
3.3.7 Providing assistance in the utilization or equipment or systems such as
preparation of operation and maintenance manuals, training personnel for
operation and maintenance, and consultation during operation.
ARTICLE 4
TIME
4.1 Unless otherwise indicated, the Owner and the Design/Builder shall
perform their respective obligations as expeditiously as is consistent with
reasonable skill and care and the orderly progress of the Project.
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4.2 Time limits stated in the Contract Documents are of the essence. The
Work to be performed under this Part 2 Agreement has [TEXT DELETED] commenced
[TEXT DELETED] and, subject to authorized Modifications, Substantial Completion
shall be achieved on or before the date established in Article 14.
4.3 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 the Owner can occupy [TEXT DELETED] and utilize the
work for its intended use.
4.4 Based on the Design/Builder's Proposal, a construction schedule shall be
provided consistent with Paragraph 4.2 above.
4.5 If the Design/Builder is delayed at any time in the progress of the Work
by an act or neglect of the Owner, Owner's employees, or separate contractors
employed by the Owner, or by changes ordered in the Work, or by labor disputes,
fire unusual delay in deliveries, adverse weather conditions not reasonably
anticipatable, unavoidable casualties or other causes beyond the
Design/Builder's control, or by delay authorized by the Owner pending
arbitration, or by other causes which the Owner and Design/Builder agree may
justify delay, then the Contract Time shall be reasonably extended by Change
Order.
ARTICLE 5
PAYMENTS
5.1 PROGRESS PAYMENTS
5.1.1 The Design/Builder shall deliver to the Owner itemized Applications for
Payment in such detail as indicated in Article 14.
5.1.2 Within [TEXT DELETED] thirty (30) days of the Owner's receipt of a
properly submitted and correct Application for Payment, the Owner shall make
payment to the Design/Builder.
5.1.3 The Application for Payment shall constitute a representation by the
Design/Builder to the Owner that the design and construction have progressed to
the
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point indicated; the quality of the Work covered by the application is in
accordance with the Contract Documents; and the Design/Builder is entitled to
payment in the amount requested.
5.1.4 Upon receipt of payment from the Owner, the Design/Builder shall promptly
pay the Architect, other design professionals and each contractor the amount to
which each is entitled in accordance with the terms of their respective
contracts.
5.1.5 The Owner shall have no obligation under this Part 2 Agreement to pay or
to be responsible in any way for payment to the Architect, another design
professional, or a contractor performing portions of the Work.
5.1.6 Neither progress payment nor partial or entire use or occupancy of the
Project by the Owner shall constitute an acceptance of Work not in accordance
with the Contract Documents.
5.1.7 The Design/Builder warrants that title to all construction covered by an
Application for Payment will pass to the Owner no later than the time of
payment. The Design/Builder further warrants that upon submittal of an
Application for Payment all construction for which payments have been received
from the Owner shall be free and clear of liens, claims, security interests or
encumbrances in favor of the Design/Builder or any other person or entity
performing construction at the site or furnishing materials or equipment
relating to the construction.
5.1.8 At the time of Substantial Completion, the Owner shall pay the
Design/Builder the retainage, if any, less 200% of the reasonable cost to
correct or complete incorrect or incomplete Work. Final payment of such
withheld sum shall be made upon correction or completion of such Work.
5.2 FINAL PAYMENT
5.2.1 Neither final payment nor amounts retained, if any, shall become due
until the Design/Builder submits to the Owner (1) an affidavit that payrolls,
bills for materials and equipment, and other indebtedness connected with the
Work for which the Owner of Owner's property might be responsible or encumbered
(less amounts
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withheld by the 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 canceled or allowed
to expire until at least 30 days' prior written notice has been given to the
Owner; (3) a written statement that the Design/ Builder 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; and (5)
if required by the Owner, other data establishing payment or satisfaction or
obligations, such as receipts, releases and waivers of liens, claims, security
interests or encumbrances arising out f the Contract, to the extent and in such
form as may be designated by the Owner. If a contractor or other person or
entity entitled to assert a lien against the Owner's property refuses to furnish
a release or waiver required by the Owner, the Design/Builder may furnish a bond
satisfactory to the Owner to indemnify the Owner against such lien. If such lien
remains unsatisfied after payments are made, the Design/Builder shall indemnify
the Owner for all loss and cost, including reasonable attorneys' fees incurred
as a result of such lien.
5.2.2 When the Work has been completed and the contract fully performed, the
Design/Builder shall submit a final application for payment to the Owner, who
shall make final payment within 30 days of receipt.
5.2.3 The making of final payment shall constitute a waiver of claims by the
Owner except those arising from:
.1 liens, claims, security interests or encumbrances arising out of the
Contract and unsettled.
.2 failure of the Work to comply with the requirements of the Contract
Documents; or
.3 terms of special warranties required by the Contract Documents.;
.4 Faulty or Defective Work;
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.5 Errors or Omissions in the Architectural or Engineering services
performed in connection with the work.
5.2.4 Acceptance of final payment shall constitute a waiver of all claims by
the Design/Builder except those previously made in writing and identified by the
Design/Builder as unsettled at the time of final Application for Payment.
5.2.5 See Article 14.8.
5.3 INTEREST PAYMENTS
5.3.1 [TEXT DELETED]
ARTICLE 6
PROTECTION OF PERSONS AND PROPERTY
6.1 The Design/Builder shall be responsible for initiating, maintaining and
providing supervision of all safety precautions and programs in connection with
the performance of this Part 2 Agreement.
6.2 The Design/Builder shall take reasonable precautions for the safety of,
and shall provide reasonable protection to prevent damage, injury or loss to:
(a) employees n the Work and other persons who may be affected thereby; (2) the
Work and materials and equipment to be incorporated therein, whether in storage
on or off the site, under care, custody, or control of the Design/Builder or the
Design/Builder's contractors; and (3) other property at or adjacent thereto,
such as trees, shrubs, lawns, walks, pavements, roadways, structures and
utilities not designated for removal relocation, or replacement in the course of
construction.
6.3 The Design/Builder shall give notices and comply with applicable laws,
ordinances, rules regulations and lawful orders of public authorities bearing on
the safety or persons or property or their protection from damage, injury or
loss.
6.4 The Design/Builder shall promptly remedy damage and loss (other than
damage or loss insured under property insurance provided or required by the
Con-
<PAGE>
tract Documents) to property at the site caused in whole or in part by the
Design/Builder, a contractor of the Design/Builder or anyone directly or
indirectly employed by any of them, or by anyone for whose acts they may be
liable.
ARTICLE 7
INSURANCE AND BONDS
7.1 DESIGN/BUILDER'S LIABILITY INSURANCE
7.1.1 The Design/Builder shall purchase from and maintain, in a company or
companies lawfully authorized to do business in the jurisdiction in which the
Project is located, such insurance as will protect the Design/Builder from
claims set forth below which may arise out of or result from operations under
this Part 2 Agreement by the Design/Builder or by a contractor of the
Design/Builder, or by anyone directly or indirectly employed by any of them, or
by anyone for whose acts any of them may be liable:
.1 claims under workers' compensation, disability benefit and other
similar employee benefit laws that are applicable to the Work to be
performed;
.2 claims for damages because of bodily injury, occupational sickness or
disease, or death of the Design/Builder's employees;
.3 claims for damages because of bodily injury, sickness or disease, or
death of persons other than the Design/Builder;'s employees;
.4 claims for damages covered by usual personal injury liability
coverage which are sustained (1) by a person as a result of an
offense directly or indirectly related to employment of such person
by the Design/Builder or (2) by another person;
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.5 claims for damages, other than to the Work itself, because of injury
to or destruction of tangible property, including loss of use
resulting therefrom;
.6 claims for damages because of bodily injury, death of a person or
property damage arising out of ownership, maintenance or use of a
motor vehicle; and
.7 claims involving contractual liability insurance applicable to the
Design/Builder's obligations under paragraph 11.5.
7.1.2 The insurance required by Subparagraph 7.1.1 shall be written for not
less than limits of liability specified in this Part 2 Agreement or required by
law, whichever coverage is greater. coverages, whether written on an occurrence
or claims-made basis, shall be maintained without interruption from date of
commencement of the Work until date of final payment [TEXT DELETED] and
termination of any coverage required to be maintained after final payment.
[TEXT DELETED].
7.1.3 Certificates of Insurance acceptable to the Owner shall be delivered to
the Owner immediately after execution of this Part 2 Agreement. These
Certificates and the insurance policies required by this Paragraph 7.1 shall
contain a provision that coverages afforded under the policies will not be
canceled or allowed to expire until at least 30 days' prior written notice has
been given to the Owner. If any of the foregoing insurance coverages are
required to remain in force after final payment, an additional certificate
evidencing continuation of such coverage shall be submitted with the application
for final payment. Information concerning reduction of coverage shall be
furnished by the Design/Builder with reasonable promptness in accordance with
the Design/Builder's information and belief.
7.2 OWNER'S LIABILITY INSURANCE
7.2.1 The Owner shall be responsible for purchasing and maintaining the Owner's
usual liability insurance. Optionally, the Owner may purchase and maintain
other insurance for self-protection against claims which may arise from
operations under this Part 2 Agreement. The Design/Builder shall not be
responsible for purchasing
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and maintaining this optional Owner's liability insurance unless specifically
required by the Contract Documents.
7.3 PROPERTY INSURANCE
7.3.1 Unless otherwise provided under this Part 2 Agreement, the Owner shall
purchase and maintain, in a company or companies authorized to do business in
the jurisdiction in which the principal improvements are to be located, property
insurance upon the Work to the full insurable value thereof, on a replacement
costs basis without optional deductibles. Such property insurance shall be
maintained, unless otherwise provided in the Contract Documents or otherwise
agreed in writing by all persons and entities who are beneficiaries of such
insurance, until final payment has been made or until no person or entity other
than the Owner has an insurable interest in the property required by this
Paragraph 7.3 to be insured, whichever is earlier. This insurance shall include
interests of the Owner, the Design/Builder, and their respective contractors and
subcontractors in the Work.
7.3.2 Property insurance shall be on an all-risk policy form and shall insure
against the perils of fire and extended coverage and physical loss or damage
including, without duplication of coverage, theft, vandalism, malicious
mischief, collapse, false work, temporary buildings and debris removal including
demolition occasioned by enforcement of any applicable legal requirements, and
shall cover reasonable compensation for the services and expenses of the
Design/Builder's Architect and other professionals required as a result of such
insured loss. Coverage for other perils shall not be required unless otherwise
provided in the Contract Documents.
7.3.3 If the Owner does not intend to purchase such property insurance
required by this Part 2 Agreement and with all of the coverages in the amounts
described above, the Owner shall so inform the Design/Builder prior to
commencement of the construction. The Design/Builder may then effect insurance
which will protect the interests of the Design/Builder and the Design/Builder's
contractors in the construction, and by appropriate Change Order the cost
thereof shall be charged to the Owner. If the Design/Builder is damaged by the
failure or neglect of the Owner to purchase or maintain insurance as described
above, then the Owner shall bear all reasonable costs properly attributable
thereto.
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7.3.4 Unless otherwise provided, the Owner shall purchase and maintain such
boiler and machinery insurance required by this Part 2 Agreement or by law,
which shall specifically cover such insured objects during installation and
until final acceptance by the Owner. This insurance shall include interests of
the Owner, the Design/Builder, the Design/Builder's Architect and other design
professionals. The Owner and the Design/Builder shall be named insureds.
7.3.5 A loss insured under the Owner's property insurance shall be adjusted by
the Owner as trustee and made payable to the Owner as trustee for the insureds,
as their interests may appear, subject to requirements of any applicable
mortgagee clause and of Subparagraph 7.3.10. The Design/Builder shall pay
contractors their shares of insurance proceeds received by the Design/Builder,
and by appropriate agreement, written where legally required for validity, shall
require contractors to make payments to their subcontractors in similar manner.
7.3.6 Before an exposure to loss may occur, the Owner shall file with the
Design/Builder a copy of each policy that includes insurance coverages required
by this Paragraph 7.3. Each policy shall contain all generally applicable
conditions, definitions, exclusions and endorsements related to this Project.
Each policy shall contain a provision that the policy will not be canceled or
allowed to expire until at least 30 days' prior written notice has been given to
the Design/Builder.
7.3.7 If the Design/Builder requests in writing that insurance for risks other
than those described herein or for other special hazards be included in the
property insurance policy, the Owner shall, if possible, obtain such insurance,
and the cost thereof shall be charged to the Design/Builder by appropriate
Change Order.
7.3.8 The Owner and the Design/Builder waive all rights against each other and
the Architect and other design professionals, contractors, subcontractors,
agents and employees; each of the other, for damages caused by fire or other
perils to the extent covered by property insurance obtained pursuant to this
Paragraph 7.3 or other property insurance applicable to the Work, except such
rights as they may have to proceeds of such insurance held by the Owner as
trustee. The Owner or Design/Builder, as appropriate, shall require from
contractors and subcontractors by
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appropriate agreements, written where legally required for validity, similar
waivers each in favor of other parties enumerated in this Paragraph 7.3. The
policies shall provide such waivers of subrogation shall be effective as to a
person or entity even though that person or entity would otherwise have a duty
of indemnification, contractual or otherwise, did not pay the insurance premium
directly or indirectly, and whether or not the person or entity had an insurable
interest in the property damaged.
7.3.9 [TEXT DELETED]
7.3.10 The Owner as trustee shall have power to adjust and settle a loss with
insurers unless one of the parties in interest shall object in writing, within
five (5) days after occurrence or loss to the Owner's exercise of this power, if
such objection be made, the parties shall enter into dispute resolution under
procedures provided in Article 10. If distribution of insurance proceeds by
arbitration is required, the arbitrators will direct such distribution.
7.3.11 Partial occupancy or use prior to Substantial Completion shall not
commence until the insurance company or companies providing property insurance
have consented to such partial occupancy or use by endorsement or otherwise.
The Owner and the Design/Builder shall take reasonable steps to obtain consent
of the insurance company or companies and shall not, without mutual written
consent, take any action with respect to partial occupancy or use that would
cause cancellation, lapse or reduction of coverage.
7.4 LOSS OF USE INSURANCE
7.4.1 The Owner, at the Owner's option, may purchase and maintain such
insurance as will insure the Owner against loss of use of the Owner's property
due to fire or other hazards, however caused. The Owner waives all rights of
action against the Design/Builder for loss of use of the Owner's property,
including consequential losses due to fire or other hazards, however caused.
<PAGE>
ARTICLE 8
CHANGES IN THE WORK
8.1 CHANGES
8.1.1 Changes in the Work may be accomplished after execution of this Part 2
Agreement, without invalidating this Part 2 Agreement by Change Order,
Construction Change Directive, or order for a minor change in the Work, subject
to the limitations stated in the Contract Documents.
8.1.2 A Change Order shall be based upon agreement between the Owner and the
Design/Builder, a Construction Change Directive may be issued by the Owner
without the agreement of the Design/Builder, an order for a minor change in the
Work may be issued by the Design/Builder alone.
8.1.3 Changes in the Work shall be performed under applicable provisions of the
Contract Documents, and the Design/Builder shall proceed promptly, unless
otherwise provided in the Change Order, Construction Change Directive, or order
for a minor change in the Work.
8.1.4 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 that application of such
unit prices to quantities of Work proposed will cause substantial inequity to
the Owner or the Design/Builder, the applicable unit prices shall be equitably
adjusted.
8.2 CHANGE ORDERS
8.2.1 A Change Order is a written instrument prepared by the Design/Builder and
signed by the Owner and the Design/Builder, stating their agreement upon all of
the following:
.1 a change in the Work;
.2 the amount of the adjustment, if any, in the Contract Sum; and
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.3 the extent of the adjustment, if any, in the contract Time.
8.2.2 If the owner requests a proposal for a change in the Work from the
Design/Builder and subsequently elects not to proceed with the change, a Change
Order shall be issued to reimburse the Design/Builder for any costs incurred for
estimating services, design services or preparation of proposed revisions to the
Contract Documents.
8.3 CONSTRUCTION CHANGE DIRECTIVES
8.3.1 A Construction Change Directive is a written order prepared and signed by
the Owner, directing a change in the Work prior to agreement on adjustment, if
any, in the Contract Sum or Contract Time, or both.
8.3.2 Except as otherwise agreed by the Owner and the Design/Builder, the
adjustment to the Contract Sum shall be determined on the basis of reasonable
expenditures and savings of those performing the Work attributable to the
change, including the expenditures for design services and revisions to the
Contract Documents. In case of an increase in the Contract Sum, the cost shall
include a reasonable allowance for overhead and profit. In such case, the
Design/Builder shall keep and present an itemized accounting together with
appropriate supporting date for inclusion in a Change Order. Unless otherwise
provided in the Contract Documents, costs for these purposes shall be limited to
the following:
.1 costs of lab or, including social security, old age and unemployment
insurance, fringe benefits required by agreement or custom, and
workers' compensation insurance;
.2 costs of materials, supplies and equipment, including cost of
transportation, whether incorporated or consumed;
.3 rental costs of machinery and equipment exclusive of hand tools,
whether rented from the Design/Builder or others;
.4 costs of premiums for all bonds and insurance permit fees, and
sales, use or similar taxes;
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.5 additional costs of supervision and field office personnel directly
attributable to the change; and fees paid to the Architect,
engineers and other professionals.
8.3.3 Pending final determination of cost to the Owner amounts not in dispute
may be included in Applications for Payment. The amount of credit to be allowed
by the Design/Builder to the Owner for deletion or change which results in a net
decrease in the Contract Sum will be actual net cost. 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 the net
increase, if any, with respect to that change.
8.3.4 When the Owner and the Design/Builder agree upon the adjustments in the
Contract Sum and Contract Sum and Contract Time, such agreement shall be
effective immediately and shall be recorded by preparation and execution of an
appropriate Change Order.
8.4 MINOR CHANGES IN THE WORK
8.4.1 The Design/Builder shall have authority to make minor changes in the
Construction Documents and construction consistent with the intent of the
Contract Documents when such minor changes to not involve adjustment in the
Contract Sum or extension of the Contract Time. The Design/Builder shall
promptly inform the Owner, in writing, of minor changes in the Construction
Documents and construction. [TEXT DELETED]
8.5 CONCEALED CONDITIONS
8.5.1 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 the observing party shall
be given to the other party promptly before conditions are disturbed and in no
event later than 21 days after first observance of the conditions. The Contract
Sum shall be equitably adjusted for such
<PAGE>
concealed or unknown conditions by Change Order upon claim by either party made
within 21 days after the claimant becomes aware of the conditions. Any
information on the design drawings for the building in which the site is located
shall not be deemed a "concealed condition."
8.6 REGULATORY CHANGES
8.6.1 The Design/Builder shall be compensated for changes in the construction
necessitated by the enactment or revision of codes, laws or regulations
subsequent to the [TEXT DELETED] execution of this Agreement.
ARTICLE 9
CORRECTION OF WORK
9.1 The Design/Builder shall promptly correct Work rejected by the Owner or
known by the Design/Builder to be defective or failing to conform to the
requirements of the Contract Documents, whether observed before or after
Substantial Completion and whether or not fabricated, installed or completed.
The Design/Builder shall bear costs of correcting such rejected Work, including
testing and inspections.
9.2 If, within one (1) year after the date of Substantial Completion of the
Work or, after the date for commencement of warranties established in a written
agreement between the Owner and the Design/Builder, or by terms of an applicable
special warranty required by the Contract Documents, any of the Work is found to
be not in accordance with the requirements of the Contract Documents, the
Design/Builder shall correct it promptly after receipt of a written notice from
the Owner to do so unless the Owner has previously given the Design/Builder a
written acceptance of such condition.
9.3 Nothing contained in this Article 9 shall be construed to establish a
period of limitation with respect to other obligations which the Design/Builder
might have under the Contract Documents. Establishment of the time period of
one (1) year as described in Subparagraph 9.2 relates only to the specific
obligation of the Design/Builder to correct the Work, and has no relationship to
the time within which
<PAGE>
the obligation to comply with the Contract Documents may be sought to be
enforced, nor to the time within which proceedings may be commenced to establish
the Design/Builder's liability with respect to the Design/Builder's obligations
other than specifically to correct the Work.
9.4 If the Design/Builder fails to correct nonconforming Work as required or
fails to carry out Work in accordance with the Contract Documents, the Owner, by
written order signed personally or by an agent specifically so empowered by the
Owner in writing, may order the Design/Builder to stop the Work, or any portion
thereof, until the cause for such order has been eliminated; however, the
Owner's right to stop the Work shall not give rise to a duty on the part of the
Owner to exercise the right for benefit of the Design/Builder or other persons
or entities.
9.5 If the Design/Builder defaults or neglects to carry out the Work in
accordance with the Contract Documents and fails within seven (7) days after the
receipt of written notice from the Owner to commence and continue correction of
such default or neglect with diligence and promptness, the Owner may give a
second written notice to the Design/Builder and seven (7) days following receipt
by the Design/Builder of that second written notice and without prejudice to
other remedies, the Owner may have, correct such deficiencies. In such case an
appropriate Change Order shall be issued deducting from payments then or
thereafter due the Design Builder, the costs of correcting such deficiencies.
If the payments then or thereafter due the Design/Builder are not sufficient to
cover the amount of the deduction, the Design/Builder shall pay the difference
to the Owner. Such action by the Owner shall be subject to dispute resolution
procedures as provided in Article 10.
ARTICLE 10
10.1 Subject to Article 14.9 Claims, disputes or other matters in question
arising out of or relating to this Part 2 Agreement or breach thereof shall be
subject to and decided by [TEXT DELETED] or binding arbitration. Such [TEXT
DELETED] or arbitration shall be conducted in accordance with the Construction
Industry [TEXT DELETED] or Arbitration Rules of the American Arbitration
Association currently in effect.
<PAGE>
10.2 [TEXT DELETED]
10.3 Demand for arbitration shall be filed in writing with the other party to
this Part 2 Agreement and with the American Arbitration Association. A demand
for arbitration shall be made within a reasonable time after the claim, dispute
or other matter in question has arisen. In no event shall the demand for
arbitration be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in question would be
barred by the applicable statutes of repose or limitations.
10.4 An arbitration pursuant to this Article may be joined with an arbitration
involving common issues of law or fact between the Design/Builder and any person
or entity with whom the Design/Builder has a contractual obligation to arbitrate
disputes. No other arbitration arising out of or relating to this Part 2
Agreement shall include, by consolidation, joinder or in any other manner, an
additional person or entity not a party to this Part 2 Agreement or not a party
to an agreement with the Design/Builder, except by written consent containing a
specific reference to this Part 2 Agreement signed by the Owner, the
Design/Builder and any other person or entities sought to be joined. Consent to
arbitration involving an additional person or entity shall not constitute
consent to arbitration of any claim, dispute or other matter in question not
described in the written consent or with a person or entity not named or
described therein. The foregoing agreement to arbitrate and other agreements to
arbitrate with an additional person or entity duly consented to by the parties
to this Part 2 Agreement shall be specifically enforceable in accordance with
applicable law in any court having jurisdiction thereof.
10.5 The award rendered by the arbitrator or arbitrators shall be final, and
judgment may be entered upon it in accordance with applicable law in any court
having jurisdiction thereof.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1 Unless otherwise provided, this Part 2 Agreement, shall be governed by
the law of the place where the Project is located.
<PAGE>
11.2 SUBCONTRACTS
11.2.1 If requested by Owner. The Design/Builder, as soon as practicable after
execution of this Part 2 Agreement, shall furnish to the Owner in writing the
names of the persons or entities the Design/Builder will engage as contractors
for the Project.
11.3 WORK BY OWNER OR OWNER'S CONTRACTORS
11.3.1 The Owner reserves the right to perform construction of 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 insurance and waiver of
subrogation identical to the provisions of this Part 2 Agreement. If the
Design/Builder claims that delay or additional cost is involved because of such
action by the Owner, the Design/Builder shall assert such claims as provided in
Subparagraph 11.4.
11.3.2 The Design/Builder shall afford the Owner's separate contractors
reasonable opportunity for introduction and storage of their materials and
equipment and performance of their activities and shall connect and coordinate
the Design/Builder's construction and operations with theirs as required by the
Contract Documents.
11.3.3 Costs caused by delays or by improperly timed activities or defective
construction shall be borne by the party responsible therefor.
11.4 CLAIMS FOR DAMAGES
11.4.1 If either party to this Part 2 Agreement 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 exceeding 21 days
after first observance. The notice shall provide sufficient detail to enable the
other party to investigate the
<PAGE>
matter. If a claim of additional cost or time related to this claim is to be
asserted, ti shall be filed in writing.
11.5 INDEMNIFICATION
11.5.1 To the fullest extent permitted by law, the Design/Builder shall
indemnify and hold harmless the Owner, Owner's consultants, and agents and
employees of any of them from and against claims, damages, losses and expenses,
including, but not limited to, attorneys' fees arising out of or resulting from
performance of the Work, provided that such claim, damage, loss or expense is
attributable to bodily injury, sickness, disease or death, or to injury to or
destruction of tangible property (other than the Work itself) including loss of
use resulting therefrom, but only to the extent caused by Design/Builder's
performance or non-performance of work, its obligations hereunder or in whole or
in party by negligent acts or omissions of the Design/Builder, anyone directly
or indirectly employed by the Design/Builder or anyone for whose acts the
Design/Builder may be liable, regardless of whether or not such claim, damage,
loss or expense is caused in part by a party indemnified hereunder. Such
obligation shall not be construed to negate, abridge, or reduce other rights or
obligations of indemnity which would otherwise exist as to a party or person
described in this Paragraph 11.5.
11.5.2 In claims against any person or entity indemnified under this Paragraph
11.5 by an employee of the Design/Builder, anyone directly or indirectly
employed by the Design/Builder or anyone for whose acts the Design/Builder may
be liable, the indemnification obligation under this Paragraph 11.5 shall not be
limited by a limitation on amount or type of damage, compensation or benefits
payable by or for the Design/Builder under workers' compensation acts,
disability benefit acts or other employee benefit acts.
11.6 SUCCESSORS AND ASSIGNS
11.6.1 The Owner and Design/Builder, respectively, bind themselves, their
partners, successors, assigns and legal representatives to the other party to
this Part 2 Agreement and to the partners, successors and assigns of such other
party with respect to all covenants of this Part 2 Agreement. [TEXT DELETED] The
Design/Builder
<PAGE>
shall not assign this Part 2 Agreement without the written consent of [TEXT
DELETED] Owner. The Owner may assign this Part 2 Agreement to any entity or to
any institutional lender providing construction financing, and the
Design/Builder agrees to execute all consents reasonably required to facilitate
such an assignment. If either party makes such an assignment, that party shall
nevertheless remain legally responsible for all obligations under this Part 2
Agreement, unless otherwise agreed by the other party.
11.7 TERMINATION OF PROFESSIONAL DESIGN SERVICES
11.7.1 Prior to termination of the services of the Architect or any other
design professional designated in this Part 2 Agreement, the Design/Builder
shall identify to the Owner in writing another architect or other design
professional with respect to whom the Owner has no reasonable objection, who
will provide the services originally to have been provided by the Architect or
other design professional whose services are being terminated.
11.8 EXTENT OF AGREEMENT
11.8.1 This Part 2 Agreement represents the entire agreement between the Owner
and the Design/Builder and supersedes prior negotiations, representations or
agreements, either written or oral. This Part 2 Agreement may be amended only by
written instrument and signed by both the Owner and the Design/Builder.
ARTICLE 12
TERMINATION OF THE AGREEMENT
12.1 TERMINATION BY THE OWNER
12.1.1 This Part 2 Agreement may be terminated by the Owner upon 14 days'
written notice to the Design/Builder in the event that the Project is abandoned.
If such termination occurs, the Owner shall pay the Design/Builder for Work
completed and for proven loss sustained upon materials, equipment, tools, and
construction equipment and machinery including reasonable profit and applicable
damages.
<PAGE>
12.1.2 If the Design/Builder defaults or persistently fails or neglects to
carry out the Work in accordance with the Contract Documents or fails to perform
the provisions of this Part 2 Agreement, the Owner may give written notice that
the Owner intends to terminate this Part 2 Agreement. If the Design/Builder
fails to correct other defaults, failure or neglect within seven (7) days after
being given notice, the Owner may then give a second written notice and, after
an additional seven (7) days, the Owner may without prejudice to any other
remedy terminate the employment of the Design/Builder and take possession of the
site and of all materials, equipment, tools and construction equipment and
machinery thereon owned by the Design/Builder and finish the Work by whatever
method the Owner may deem expedient. If the unpaid balance of the Contract Sum
exceeds the expense of finishing the Work and all damages incurred by the Owner,
such excess shall be paid to the Design/Builder. If the expense of completing
the Work and all damages incurred by the Owner exceeds the unpaid balance, the
Design/Builder shall pay the difference to the Owner. This obligation for
payment shall survive termination of this Part 2 Agreement.
<PAGE>
12.2 TERMINATION BY THE DESIGN/BUILDER
12.2.1 If the Owner fails more than once to make payment within 10 days of when
due, the Design/Builder may give written notice of the Design/Builder's
intention to terminate this Part 2 Agreement. If the Design/Builder fails to
receive payment within [TEXT DELETED] ten (10) days after receipt of such notice
by the Owner, the Design/Builder may give a second written notice and, [TEXT
DELETED] ten (10) days after receipt of such second written notice by the Owner,
may terminate this Part 2 Agreement and recover from the Owner payment for Work
executed and for proven losses sustained upon materials, equipment, tools, and
construction equipment and machinery, including reasonable profit and applicable
damages.
12.3 TERMINATION FOR CONVENIENCE
12.3.1 Owner has the right to terminate this Agreement for convenience at any
time. Owner will provide seven (7) days' written notice to the Contractor and
will pay all costs incurred to that point of time subject to the terms of this
Agreement, together with a portion of Contractor's fee which shall be the
quantity of months involved multiplied by $37,500.00 per month which shall be
prorated for any partial month.
ARTICLE 13
BASIS OF COMPENSATION
[TEXT DELETED]
13.1 COMPENSATION
13.1.1 [TEXT DELETED]
13.1.2 [TEXT DELETED]
13.2 REIMBURSABLE EXPENSES
<PAGE>
13.2.1 [TEXT DELETED]
13.2.2 [TEXT DELETED]
13.3 INTEREST PAYMENTS
13.3.1 [TEXT DELETED]
(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations at the Owner's and
Design/Builder's principal places of business, at the location of the Project
and elsewhere, may affect the validity of this provision. Specific legal advice
should be obtained with respect to deletion, modification or other requirements,
such as written disclosures or waivers.)
ARTICLE 14
OTHER CONDITIONS AND SERVICES
14.1 The Basic Services to be performed shall be commenced on and, subject to
authorized adjustments and to delays not caused by the Design/Builder,
Substantial Completion shall be achieved in the Contract Time of on November 1,
1999 ( ) calendar days.
14.2 The Basic Services beyond those described in Article 3 are as follows:
14.3 Additional Services beyond those described in Article 3 are as follows:
14.4 The Design/Builder shall submit an Application for Payment on the [TEXT
DELETED] the first Wednesday of the month [TEXT DELETED].
14.5 The Design/Builder's Proposal includes the following documents:
(List the documents by specific title and date, include any required performance
and payment bonds)
Title: Date:
<PAGE>
[TEXT DELETED]
14.6 Should any litigation be commenced by any party hereto with respect to
this Agreement, the prevailing party shall be entitled to recover its reasonable
attorney's fees and all costs of the suit.
14.7 Article 5.1.9 shall read as follows: Progress payments which are not
paid within thirty (30) days following the date on which such payments are due,
are subject to and will be charged a late fee of two percent (2%) per month on
the unpaid amount. See California Civil Code Section 3260.1.
14.8 Article 5.2.5 shall read as follows: If the Final Payment under this
Agreement is not paid within forty-five (45) days following the date of
completion, the unpaid amount will be subject to a late fee of (2%) per month on
the unpaid amount See California Civil Code Section 3260.
14.9 Article 10 relating to arbitration shall only apply to claims or
disputes involving a sum of less than 500,000. Any claim or dispute involving a
sum of $50,000 or more may be subject to arbitration, binding or non-binding,
but only upon the separate written agreement of Owner and Design/Builder
agreeing to such arbitration.
14.10 Contractors are required by law to be licensed and regulated by the
Contractors' State License Board which has jurisdiction to investigate
complaints against contractors if a complaint regarding a patent act or omission
is filed with four years of the date of the alleged violation. A complaint
regarding a latent act or omission pertaining to structural defects must be
filed within 10 years of the alleged violation. Any question concerning a
contractor may be referred to the Registrar, Contractor's State License Board,
P.O. Box 26000, Sacramento, California 95826.
This Agreement entered into as of the day and year first written above.
<PAGE>
OWNER DESIGN/BUILDER
/s/ Kenneth W. Hale /s/ Eric Raff
- ----------------------------------- -----------------------------------
(Signature) (Signature)
Kenneth W. Hale CFO Date: 11/11/99 Eric Raff, President Date: 9/27/99
- ----------------------------------- -----------------------------------
(Printed name and title) (Printed name and title)
<PAGE>
SUPPLEMENTARY CONDITIONS
SUPPLEMENTARY CONDITIONS DATED AS OF JUNE 14, 1999
- --------------------------------------------------
The following supplements modify, change, delete from or add to the General
Conditions (as modified in the form attached) of the Contract for Construction
AIA Document A201, 1997 ("General Conditions"). Where any Article of the
General Conditions is modified or any paragraph, subparagraph or clause thereof
is modified or deleted by these supplements, the unaltered provisions of that
article, paragraph, subparagraph or clause shall remain in effect.
Numerical designations herein have the same, or are a sequential development of
the same, designations as the General Conditions.
ARTICLE 1 - GENERAL PROVISIONS
Delete the last sentence of Subparagraph 1.1.2.
Add the following Subparagraph 1.1.1.1:
1. Where discrepancies or conflicts occur:
(a) Written amendments or modifications to the Agreement shall take
precedence over the original Agreement;
(b) The Agreement shall take precedence over the General and
Supplementary Conditions;
(c) The Supplementary Conditions shall take precedence over the
General Conditions;
(d) The General Conditions shall take precedence over Drawings or
Specifications;
(e) Specifications shall take precedence over Drawings;
(f) Stated dimensions shall take precedence over dimensions obtained
by scaling;
(g) Large scale detail drawings shall take precedence over small
scale drawings.
provided, however, to the extent one provision is more restrictive, the more
restrictive provision shall govern.
Add the following to the end of Subparagraph 1.1.4
The project is described on Exhibit A attached hereto (the "Project") and
---------
includes without limitation, the following: fit up of [first floor] data
center and MEP support space and with associated infrastructure (rooftop
equipment, generators located at concrete pads on grade, etc.) at 2720
Zanker Road, San Jose, CA 95134, a building of approximately 66,000 square
feet currently under construction, owned by CARRAMERICA REALTY CORPORATION.
Exhibit A represents the complete listing of NaviSite plans as of July 15,
---------
1999. These plans evidence the entirety of the fit-out of the data center
as of such date.
Delete Subparagraph 1.6.1 and add the following:
1.6.1 Title to all work accomplished by Contractor or its subcontractors,
or the employees or agents of any of them, in connection with this Contract
and to all data, information, drawings, plans, specifications and other
documentation of whatsoever nature furnished to Owner by Contractor or such
subcontractors, or the employees or agents of any of them, shall be and
remain Owner's whether completed or partially completed. Without
limitation of the foregoing,
<PAGE>
Owner shall have the unrestricted right to copy and utilize the data,
information, drawings, plans, specifications, and other documentation
performed or delivered by Contractor or its agents or employees, in any
manner that Owner may direct; provided, however, that Contractor shall not
be liable for any losses, damages, claims or liability arising in
connection with any use of such data, information, drawings, plans,
specifications or other work for the design, procurement, construction or
maintenance of any project other than the Project and Owner shall indemnify
and hold harmless Contractor in connection with Owner's use of such
documentation for any project other than the Project.
ARTICLE 2 - OWNER
Delete Subparagraph 2.2.1, which Contractor acknowledges has been satisfied.
Delete Subparagraph 2.2.2 and insert the following: Except for permits and
fees, including those required under Subparagraph 3.7.1 which are the
responsibility of the Contractor, Contractor shall secure (but Owner will pay
for) all necessary approvals, covenants, assessments and charges required for
construction, use or occupancy of the Project or for permanent changes in
existing facilities.
ARTICLE 3 - CONTRACTOR
Insert the following:
3.2.3 Contractor has received and carefully reviewed all of the Contract
Documents, including, without limitation, the Drawings and Specifications,
and (i) Contractor has not observed any error, omission or inconsistency in
the Contract Documents, or any violation thereof with any applicable law,
statute, ordinance, building code, rule or regulation and has confirmed
that the Contract Documents are in accordance with applicable laws, and
(ii) Contractor has approved the Contract Documents and determined that the
Contract Documents are complete and adequate for construction of the Work
in accordance with the terms hereof.
Add the following Subparagraphs to 3.3:
3.3.4 Contractor shall verify all measurements at the Project and shall be
responsible for their accuracy. No increase in the Contract Sum will be
allowed for additional work required due to differences between field
dimensions and Drawing Documents or stated approximate quantities.
3.3.5 Contractor shall consult with representatives of all subcontractors
to avoid interferences. Contractor shall rearrange any work that may cause
interference with work of other trades, without increase in Contract Sum.
Add to the end of Subparagraph 3.4.1 "Owner will provide water and utilities and
Contractor shall use the same, and cause subcontractors to use, the same
prudently."
Add the following Subparagraph to 3.4:
3.4.4 Wherever the terms "or equal," "or approved equal" are used in the
Contract Documents, products other than those specified will be considered
for approval, provided that such products are substantially equal in
quality, durability, design and performance characteristics to the specific
materials. Approval of such "equal" products shall be at the sole
discretion of Owner and shall be in writing to be effective.
2
<PAGE>
Insert the following at the end of Subparagraph 3.5.1:
Contractor shall secure and deliver to Owner written warranties and
guarantees from its Subcontractors, Sub-subcontractors and Suppliers
bearing the date of Substantial Completion (or such later date as may be
agreed to by Owner and Contractor in writing) and stating the period of
warranty or guarantee as required by the Contract Documents. Contractor
shall be responsible for the warranty and guarantee of all Work whether
performed by it or by its Subcontractors at any tier.
Insert the following:
3.7.3 Contractor shall ascertain that the Contract Documents are in
accordance with applicable laws, statutes, ordinances, building codes, and
rules and regulations. The Contractor shall promptly notify Owner in
writing and shall make necessary changes to ensure compliance with such
applicable laws.
Add the following subparagraphs to 3.9:
3.9.2 The Project Superintendent shall be reasonably approved by Owner.
Once assigned and reasonably approved by Owner, the Project Superintendent
may not be changed without the approval of Owner.
3.9.3 The Project Superintendent must attend all Project Meetings.
Insert the following at the end of Subparagraph 3.11.1:
Within thirty (30) days after Substantial Completion, Contractor shall
submit to Owner for approval three (3) complete sets of as-built drawings
and specifications. Contractor shall also prepare three (3) complete,
bound sets of operation and maintenance manuals, which shall include,
without limitation, a vendor and Subcontractor directory, warranty
information and all material cut sheets that were installed in connection
with the Work, manufacturer's catalogs, instructions, and other similar
data, including all necessary photographic cuts, diagrams, valve charts,
and the like, covering all mechanically and manually operated devices
furnished and/or installed in the Work. At Owner's request, Contractor
shall also include in such manuals Owner furnished materials, equipment and
furnishings. Delivery of such as-builts and manuals is intended to serve
to instruct and assist maintenance personnel in the care, operation,
maintenance and repair of all such devices.
Insert the following at the beginning of Subparagraph 3.12.10: Contractor shall
provide architectural and engineering services as required for the design and
construction of the Project.
Insert after "shall" in the second line of Subparagraph 13.18.1: "defend (with
counsel acceptable to Owner) and"
Add the following subparagraph to 3.18:
3.18.3 Unless otherwise stated in the Contract, each respective
Contractor, shall, before commencing work, secure and pay for such
insurance as may be required to comply with the indemnification and hold
harmless provisions outlined under Articles 3.18.1 and 3.18.2. Such
insurance shall be with such companies as may be satisfactory to Owner.
Insurance shall be so written as to prohibit cancellation without at least
thirty (30) days written notice to Owner and Contractor.
3
<PAGE>
ARTICLE 5 - SUBCONTRACTORS
Add the following sentence to the end of Subparagraph 5.1.1:
All portions of the Work that Contractor does not perform with its own
force shall be performed by Subcontractors.
Add the following sentence to the end of Subparagraph 5.2.4:
Owner may require Subcontractor to change any Subcontractor or Subcontractor
previously approved and, if at such time Contractor is not in default hereunder,
the Contract Sum shall be increased or decreased by the difference in cost
occasioned by such change.
Add the following new Subparagraphs at the end of Paragraph 5.3.1:
5.3.2 Contractor shall procure materials from such sources and shall
manage its own forces and the forces of its Subcontractors and Sub-
subcontractors in such a manner as will result in harmonious relations on
the job site. Contractor shall employ, and shall require its
Subcontractors to employ, workers on the Work who will at all times work in
harmony with others engaged in the Work. Should the Work for any reason be
stopped or materially delayed due to a labor dispute involving the
employees of, or directed at, any Subcontractor or any of its Sub-
subcontractors, Owner shall have the right to require Contractor to
substitute a Subcontractor acceptable to Owner.
5.3.3 If applicable, Contractor shall require that each Subcontractor
agree in its Subcontract to be joined in arbitration proceedings involving
Owner or Contractor, or either of them, relating to any Work covered by its
Subcontract, at the election of either Owner or Contractor. Contractor
shall require each Subcontractor to include a similar provision in its
Subcontracts.
If union and non-union workers are employed to perform any part of the
Work, Contractor shall establish and maintain separate entrances to the
Project site for the use of union and non-union workers.
Owner shall have the right (but not the obligation) to review and approve
all Subcontracts to ensure compliance with the provisions of this
Subparagraph and the other provisions of the Contract Documents before
execution thereof. Nothing in this Subparagraph shall create any third-
party beneficiary relationship between Owner and any Subcontractor.
ARTICLE 6 - CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS
Insert the following at the beginning of Subparagraph 6.1.3:
Contractor shall coordinate the activities of Owner's separate contractors
with the Work of this Contract and shall cooperate with them. Contractor
shall plan and review the construction schedule with other separate
contractors and with Owner so as to ensure timely completion of the Work of
the Contract and the work of Owner's separate contractors, without increase
to the Contract Sum.
4
<PAGE>
ARTICLE 7 - CHANGES IN THE WORK
Add the following at the end of Subparagraph 7.1.1:
The parties hereby acknowledge the Project is being designed and built on a
so-called "fast track" basis. As such, the Drawings and Specifications are
not complete as of the date hereof. The development of the Drawings and
Specifications may require multiple rounds of drafting, review, comments,
changes and modifications. The Project Construction Budget, and the
Project Schedule (including the date of Substantial Completion) shall be
subject to adjustment in connection with such changes and modifications to
the Drawings and Specifications. However, subject to the provisions of
Section 7.2.1, no such change or modification to the Drawings and
Specifications shall constitute (or require) a "Change Order" or entitle
Contractor to any claim for an adjustment to Contractor's cost and fee,
notwithstanding whether any such change or modification requires
alteration, removal, replacement or reperformance of Work that has been
completed, provided the Work requested can be completed by the date of
11/1/99. Should the "Change Order" cause an extension of Contractor
service beyond the date of 11/1/99, the Contractor will provide a revised
Exhibit B for the cost of the administration of the change with a fee
calculation as per the terms of Article 17.2.1.
Add the following at the end of Subparagraph 7.1.2:
No Change Order involving an adjustment in the Contract Sum or an extension
of the Contract Time shall in any event be issued except with the written
approval of Owner.
Add the following at the end of Paragraph 7.1:
7.1.4 Refinements and detailing will be accomplished from time to time
with respect to the Drawings and Specifications, including the addition of
items or materials that may have been omitted from the Drawings or
Specifications but that are necessary to complete a detail shown, specified
or reasonably inferable therefrom. If any item or material shown on the
Drawings is omitted from or excepted in the Specifications, or vice versa,
or if any omitted item or material is inferable to complete the detail
shown or specified, Contractor shall, without any increase in the Contract
Sum or extension of the Contract Time, furnish and install such item or
material of type and quality as established by the balance of the detail
shown and specified.
7.1.5 Contractor represents and warrants that, to the extent reasonable
under the circumstances, it has studied and familiarized itself with the
Contract Documents and the site and the utility services provided thereto.
Any change in the Work required because Contractor failed to anticipate or
discover a condition at the site or failed to anticipate or discover that
the utility services to the site or the Contract Documents are insufficient
to complete the Work, which change could have been avoided had Contractor
properly studied and familiarized itself with the Contract Documents and
the site and the utility services provided thereto, shall not result in any
increase in the Contract Sum or extension of the Contract Time.
7.1.6 If the adjustment to the Contract Sum resulting from a change in the
Work is determined under Paragraph 7.3.6, the following shall apply:
.1 The cost of the Work shall include an allowance for Contractor's
overhead or profit in the form of an adjustment in Contractor's
Fee (but only in accordance with Article 17 hereof) pursuant to
the terms of the Contract, subject to Owner's approval in all
cases.
.2 On Work performed by Subcontractors (excluding the Contractor's
architect and engineer), but not by Sub-subcontractors, the
Subcontractors' allowance for overhead and profit shall not
exceed 15% of direct costs.
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.3 On Work performed by Sub-subcontractors, the subcontractors'
allowance for overhead and profit shall not exceed 10% of total
direct costs.
Delete Subparagraph 7.2.1 and insert the following:
A "Change Order" is a written order to the Contractor signed by the Owner
or its authorized agent issued after the execution of this Agreement and
the finalization of any applicable Drawings and Specifications, authorizing
a Change in the Project or the method or manner of performance and/or an
adjustment in the Project Construction Budget or the Substantial Completion
Date. Subcontractors shall be entitled to adjustment of their fees and
costs for Change Order work in accordance with the terms of their
respective Subcontracts. The Contractor shall be entitled to compensation
for all Costs of the Project incurred by Contractor in connection with the
applicable Change Order work as per the parameters outlined in Section
7.1.1 above.
In the second and fifth lines of Subparagraph 7.3.6 change "Architect" to
"Owner."
Add the following new Subparagraph at the end of Paragraph 7.3:
7.3.10 Contractor shall submit to Owner, within seven (7) days after a
written request therefor from Owner or within seven (7) days after an order
to proceed with a change in the Work pending issuance of a Change Order, an
accurate written estimate of any increase or decrease in costs and of any
delay in the time of completion that will result from the proposed change.
The estimate shall indicate the quantity and unit price of each item of
materials and the number of hours of work and hourly rate for each class of
labor, as well as the description and amounts of all other costs and
sources of delay.
ARTICLE 8 - TIME
Insert the following:
8.1.3 The date of Substantial Completion is the date established in
accordance with Paragraph 9.8.
ARTICLE 9 - PAYMENTS AND COMPLETION
Add the following to 9.3.1:
The form of application for payment shall be AIA Document G702,
"Application and Certification for Payment", supported by AIA Document G73,
"Continuation Sheet". Two copies of the Application for Payment shall be
submitted and sworn before a notary public.
Without limitation of the foregoing, each Application for Payment shall be
accompanied by:
(i) a certificate from Contractor itemizing all claims for
extras for which no Change Order has been processed, and
listing all Change Orders that have been processed that
affect the Contract Sum;
(ii) Such other certifications or evidence supporting
Contractor's right to payment as the Owner's landlord may
require;
(iii) an affidavit of Contractor that all amounts owed to
Subcontractors, to suppliers of materials, and to laborers
for work and materials, furnished for the purpose of the
performance of the Work or otherwise related to
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such Work for which payment is made have been paid in full,
and waiving any claim for a mechanics or materialman's lien
on the Work;
(iv) a waiver and subordination of lien in form and substance
satisfactory to the Owner in accordance with California lien
law from each Subcontractor performing any portion of the
Work;
(v) if required by Owner or by its lender, other data and
evidence establishing payment or satisfaction of all such
obligations, such as receipts, releases, certificates,
affidavits and subordinations and/or waivers of liens
arising out of the Contract or the Work.
Payment by the Owner to the Contractor less retainage as hereinafter
provided, shall be made in accordance with the terms of this Agreement.
The Owner shall withhold from each monthly payment an amount equal to ten
percent (10%) on account of each Subcontractor's payment. At such time as
each Subcontractor's Work is fifty percent (50%) complete, no further
retainage will be withheld, provided, in the Owner's and Contractor's
opinions, the Subcontractor is performing satisfactorily. The Contractor
will be paid one hundred percent (100%) of its direct costs and fee earned
to the billing date. There will be no retainage, however, on the Design
Phase.
Add the following subparagraph to 9.3.3:
The submission of any Application for Payment shall, upon receipt of such
payment and to the fullest extent permitted by law, be conclusively deemed
to waive all liens with respect to such work, materials and labor to which
Contractor then may be entitled; provided, however, that in no event shall
such waiver of lien rights waive right to payment for such work, materials
and labor.
If a lien or notice of contract is filed or claimed against the Work by any
Subcontractor, Sub-Subcontractor, laborer or supplier of materials,
Contractor shall immediately bond such lien or cause such lien to be
discharged. Any payment due Contractor under the Contract Documents shall
be reduced by an amount up to two hundred percent (200%) of the amount of
any lien until such lien is removed as of record and/or bonded.
Insert the following:
9.4.2 An Application for Payment will constitute a representation by
Contractor to Owner that the Work has progressed to the point indicated and
that the quality of the Work is in accordance with the Contract Documents.
Insert the following at the beginning of Subparagraph 9.5.1:
"Owner may withhold payment in whole or in part, to the extent reasonably
necessary to protect Owner, if the representations in Subparagraph 9.4.2
cannot be made. The Owner may also withhold payment or, because of
subsequently discovered evidence, may nullify the whole or a part of a
payment previously issued, to such extent as necessary to protect the Owner
from loss for which the Contractor is responsible, including loss resulting
from acts and omissions described in Subparagraph 3.3.2 because of:"
Delete Subparagraph 9.7.1. Section 12.2 as revised in A191, Part 2 to govern
failure of payment.
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Insert the following:
9.8.1 The Date of Substantial Completion of the Work or any designated
portion thereof is the date when (i) the Project is available for occupancy
by Owner such that Owner can operate with a minimum of interference by
Contractor and is complete with the exception of punch list items of a
minor nature, and (ii) Contractor has supplied Owner with a certificate of
occupancy or an equivalent use or occupancy permit acceptable to Owner
issued by the building inspector within the municipality where the Project
is being constructed.
Add the following to the end of Subparagraph 9.8.5.
After the release of retainage, Owner shall retain 200% of the cost
necessary to complete any punch list items.
Add the following Subparagraph 9.9.4:
All trade discounts (unless resulting from Contractor's advance payment
before being compensated therefor by Owner), rebates and refunds, and all
returns from sale of surplus materials and equipment, shall be credited to
the Cost of the Project. In the event of a discount offered by a
subcontractor at the time of bid, Contractor shall inform and discuss with
Owner such discount opportunity.
Insert the following:
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, the Owner will promptly make such inspection and when the Owner
finds the Work acceptable under the Contract Documents and the Contract
fully performed, the following Subparagraphs of this Paragraph 9.10.1 shall
apply.
ARTICLE 10
Insert the following:
10.3.2 If any hazardous substances, oils, asbestos or the like, as defined
by statute or otherwise, ("Hazardous Materials") are released in, on or
about the Project site by Contractor or any of its contractors, or their
respective employees, agents or representatives (without any fault on the
part of Owner, its separate contractors or their respective employees,
agents or representatives) in connection with Contractor's performance of
the Work hereunder, Contractor shall immediately take all steps necessary
to deal with the Hazardous Materials in accordance with all applicable laws
it being understood that Owner will have no obligation or liability
whatsoever with respect to the same. To the extent permitted by law,
Contractor shall indemnify and hold Owner harmless from and against all
costs, including, without limitation, reasonable attorneys' fees,
remediation costs and liability arising by virtue of such a release of
Hazardous Materials in any form on or about the Project site as a result of
the act, omission or neglect of Contractor or any of its contractors, or
their respective employees, agents and representatives (and without any
fault on the part of Owner, its separate contractors or their respective
employees, agents and representatives as aforesaid), which indemnity
obligations shall survive final payment and termination of this Contract.
In the 5th line of Subparagraph 10.2.5 delete "or Architect." In the 5th and
6th lines thereof, delete "either of them" and substitute "Owner" in both
places.
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ARTICLE 11 - INSURANCE AND BONDS
Add the following clause to 11.1:
11.1.1.9 Liability Insurance shall include all major divisions of coverage
and be on a comprehensive basis including:
1. Premises Operation (including X, C and U coverage as applicable).
2. Independent Contractor's Protective.
3. Products and Completed Operations.
4. Personal Injury Liability with Employment Exclusion deleted.
5. Contractual, including specified provision for Contractors.
6. Owned, Non-owned and Hired Motor Vehicles
7. Broad Form Property Damage including Completed Operations.
11.1.2.1 If the General Liability coverage is provided by a Commercial
General Liability Policy on a "claims-made" basis, the policy date shall
predate the Contract termination date of the policy or applicable extended
reporting period shall be no earlier than the termination date of coverage
required to be maintained after final payment certified in accordance with
Subparagraph 9.10..2.
11.1.2.2 The insurance required by Subparagraph 11.1.1 shall be written
for not less than the following, or greater if required by law:
1. Worker's Compensation:
a) State: Statutory
b) Applicable Federal: Statutory
c) Employer's Liability: $100,000.00
2. Comprehensive General Liability (including Premises-Operations, Protective,
Products and Completed Operations; Broad Form Property Damage):
a) Bodily Injury:
$1,000,000.00 Each Occurrence
$1,000,000.00 Annual Aggregate
b) Property Damage:
$1,000,000.00 Each Occurrence
$1,000,000.00 Annual Aggregate
c) Other Insurance: Owned, Non-owned and Hired Motor
Vehicles: $1,000,000.00 Single Limit
d) Additionally-named Insureds:
NaviSite, Inc.
CMGI, Inc.
CARRAMERICA REALTY CORPORATION
including employees, Consultants and agents of the
above parties.
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3. Contractual Liability:
a) Bodily Injury:
$1,000,000.00 Each Occurrence
$1,000,000.00 Annual Aggregate
b) Property Damage:
$1,000,000.00 Each Occurrence
$1,000,000.00 Annual Aggregate
4. Personal Injury with Employment Exclusion deleted:
$1,000,000.00 Each Person
$1,000,000.00 Annual Aggregate
5. Comprehensive Automobile Liability:
a) Bodily Injury:
$ 500,000.00 Each Person
$1,000,000.00 Annual Aggregate
b) Property Damage:
$1,000,000.00 Each Occurrence
6. Excess Umbrella Liability: $9,000,000.00 Annual Aggregate
7. Contractor shall provide adequate Fire and Extended Coverage Insurance to
cover equipment, tools, etc. owned or rented by it, its subcontractors; the
capital value of which is not included in the Work, and those materials
stored on the site for which payment by Owner has not been approved. Such
coverage shall include an endorsement to the effect that the underwriter
waive its rights of subrogation against Owner.
8. Contractor shall secure and protect itself, and shall secure and indemnify
Owner and its representatives or employees from any claim of liability,
expense, cause of action, loss or damage whatsoever for any injury,
including death, to any person or property in the performance of this
Contract; it being the intent of this Contract to protect and indemnify
Owner and such representatives and employees from any and all loss arising
out of or in connection with the Work performed under this Contract.
11.1.4 Contractor's liability insurance must be maintained until final
certificate of payment is issued pursuant to Paragraph 9.10.2 and completed
Operators Insurance is in effect.
11.1.5 Certificates of insurance must be submitted on AIA Document G715
Certificate of Insurance, or such other form as acceptable to Owner.
Delete Subparagraph 11.3.3.
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Insert the following at the end of Subparagraph 11.4.1.3:
except to the extent that the applicable loss arises from the negligence or
intentional misconduct of Contractor or any of its Subcontractors of any
tier, or the employees or agents of any of them, in which event Contractor
shall be liable for such deductible amounts.
ARTICLE 12 - UNCOVERING AND CORRECTION OF WORK
Add the following to the end of Subparagraph 12.1.2:
and any cost, loss or damage suffered by Owner as a result of such defect
or failure shall be borne by Contractor. This obligation shall survive
termination of the Contract.
Add to Subparagraph 12.2.1.1 in the first line after the word "promptly" the
words "but in all events within thirty (30) days".
Insert the following:
12.2.2.3 The one year period for correction of Work shall be extended by
corrective Work performed by Contractor pursuant to this Paragraph 12.2 for
a period of one year after the date of completion of such corrective Work,
but only with respect to the item or portion of Work so corrected. In no
event shall the period of correction for any portion of the Work be
extended to a date beyond the date that is two (2) years after the date of
Substantial Completion.
ARTICLE 13 - MISCELLANEOUS PROVISIONS
Add the following to Paragraph 13.2.2:
Owner shall have the right, at any time, to assign its rights under this
Contract to any person or entity, without consent of Contractor and shall
have the further right to assign any moneys due or to become due hereunder
upon written notice to Contractor.
Insert the following:
13.3.1 Written notice shall be delivered by hand or shall be mailed by
registered or certified mail, return receipt requested, or sent by a
recognized overnight mail courier (e.g. Federal Express, DHL) addressed to
the party for whom it was intended at its address appearing on the Owner-
Contractor Agreement or to any other address that any such party may
designate by like notice to the others. Any such notice shall be deemed
duly given when so hand delivered or when deposited with the U.S. Postal
Service or with such overnight courier service. Copies of all notices to
Owner must also be sent to: Mr. Joel Rosen, Chief Executive Officer,
NaviSite, Inc., 100 Brickstone Square, Andover, MA 01810.
Add the following new Subparagraph 13.7.2:
13.7.2 Notwithstanding any provision of Subparagraph 13.7.1 to the
contrary, no applicable statute of limitations shall be deemed to have
commenced with respect to any portion of the Work that is not in accordance
with the requirements of the Contract Documents, that would not be visible
or apparent upon conducting a reasonable investigation, and that is not
discovered by the Owner until after the date that, but for this
Subparagraph 13.7.2, would be the date of commencement of the applicable
statute of limitations. The applicable statute of limitations instead
shall be deemed to have commenced on the date of such discovery by the
Owner.
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Add the following new Paragraph 13.8:
13.8 Notwithstanding any provision of this Contract to the contrary,
neither Owner nor any member, partner, officer, director, shareholder,
employee, or agent of Owner, or any of their respective successors or
assigns shall have any personal liability for the payment or performance of
any obligation of Owner hereunder.
Add the following new Subparagraph 13.9:
13.9 Each party shall deliver to the other, within ten days after written
request, a certificate as to (i) the date through which payments due to
Contractor hereunder have been made, (ii) the remaining balance of the
Contract Sum due to Contractor hereunder, (iii) whether there have been any
amendments or modifications to the Contract, (iv) whether the certifying
party is in default of any obligation of the certifying party under the
Contract, (v) whether to the best of the certifying party's knowledge, the
requesting party is in default of any obligation of the requesting party
under the Contract, (vi) such other matters as to which the requesting
party may reasonably request certification.
Add the following new Subparagraph 13.10
The employees of Contractor listed on Schedule 13.10 attached hereto shall
be dedicated to the Work and shall not be removed or replaced from the Work
without Owner's prior written consent.
The Project Manager identified on Schedule 13.10 shall be Contractor's
representative under the Contract Documents (the "Contractor's
Representative"), and shall be authorized to take all actions and make all
decisions to be made or taken by Contractor under the Contract Documents,
and all such actions and decisions of Contractor's Representative shall be
binding upon Contractor under the Contract Documents.
ARTICLE 14 - TERMINATION OR SUSPENSION OF CONTRACT
Insert the following:
14.2.1: Owner may terminate the Contract if Contractor:
.1 refuses or fails to supply enough properly skilled workers or
proper materials and such refusal or failure is not cured
within seven (7) days after notice from Owner;
.2 fails to make payment to Subcontractors for materials or labor
in accordance with the respective agreements between
Contractor and such Subcontractors;
.3 violates any applicable law, code, rule, regulation or order
of a public authority having jurisdiction, which violation is
not cured within the grace period, if any, provided under such
law, code, rule, regulation or order;
.4 breaches any other provision of the Contract Documents and
such breach is not cured within seven (7) days after notice
from Owner;
.5 files a petition or consents to the filing of a petition,
under any federal or state law concerning bankruptcy,
reorganization, insolvency or relief from creditors;
.6 has filed against without its consent, a petition under any
federal or state law concerning bankruptcy, reorganization,
insolvency or relief from creditors which is not dismissed
within sixty (60) days:
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.7 becomes insolvent;
.8 consents to the appointment of a receiver, trustee,
liquidator, custodian or the like of all or any substantial
portion of its assets;
.9 without its consent, has a receiver, trustee, liquidator,
custodian or the like appointed with respect to it or any
receiver, trustee, liquidator, or the like take possession of
all or any substantial portion of its assets and such
appointment or possession is not terminated within sixty (60)
days; or
.10 makes an assignment for the benefit of creditors.
Insert the following new Paragraph 14.4 after Paragraph 14.3:
14.4.1 Owner may, at its option, terminate the Contract without cause
upon ten (10) days' notice to Contractor, upon which termination
Owner shall: (i) pay Contractor for the portion of the
Contractor's Fee earned as of the date of termination, (ii) pay
for all Costs of the Work properly incurred as of the date of
termination, and (iii) reimburse Contractor for any proven loss or
damages from any supplier or Subcontractor engaged on the Work
(with Owner's approval) arising from such termination.
ADD THE FOLLOWING ARTICLES
ARTICLE 15 - CERTIFIED GUARANTEE AND WARRANTY TO OWNER
15.6 Contractor shall provide a project Guarantee/Warranty, on its
letterhead, in the general format shown on the following page.
ARTICLE 16 - MISCELLANEOUS
16.1 If a dispute or claim arises out of or relates to this Contract or its
breach, except for claims that have been waived by the making or acceptance of
final payment, the parties will endeavor to settle the dispute first through
direct discussions.
16.2 Contractor hereby represents that any computer software, hardware,
documentation, data, services, and other related items ("Procured Products")
provided by Contractor pursuant to this Agreement, or any component part
thereof, shall not with respect to any date data that the Procured Products uses
in any manner and any system date that the Procured Product uses as its current
date, malfunction, cease to function, generate incorrect data, or produce
incorrect results. Contractor further represents that, in connection with
providing date data to and accepting date data from other automated,
computerized, and/or software systems and users via user interfaces, electronic
interfaces, and data storage, the Procured Product represents dates without
ambiguity as to century. If the Procured Product is century noncompliant in any
respect, Contractor shall, at no cost to Owner, within thirty (30) days, correct
the noncompliance and provide the corrected compliant Procured Product to Owner.
With respect to all obligations of Contractor set forth in this subparagraph
("Y2000 Obligations"), Contractor shall contractually impose all such Y2000
Obligations on Subcontractors and suppliers.
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ARTICLE 17
The following provisions are inserted in lieu of Article 9 of AIA Document A191
Part 1 and Article 13 of AIA Document A191 Part 2:
Contractor's Fee
- ----------------
17.1 In consideration of the performance of the Contract, the Owner shall pay
the Contractor in current funds as compensation for his services a Contractor's
Fee as set forth in Subparagraphs 17.1.1 and 17.1.2. The Contractor's Fee is
part of the Contract Sum.
17.1.1 For the performance of the Design Phase services, the Contractor's Fee
shall be $75,000.00.
17.1.2 For the performance of Construction Phase services, the Contractor's Fee
shall be $150,000, which shall be paid proportionately to the ratio that the
monthly payment for the Cost of the Project bears to the estimated cost of the
Project, as set forth in the Project Budget, as the same may be adjusted from
time to time upon approval by Owner. Any balance of this fee shall be paid at
the time of final payment.
17.2 Adjustments in fee shall be made as per Article 17.2.1 only if the
parameters of the scope of the Work expand beyond that which is outlined in
Exhibit A and/or if circumstances beyond the control of the Contractor require
an extension of Contractor service beyond the date of November 1, 1999.
17.2.1 For changes in the Project Schedule as provided for in Article 7, the
Contractor's Fee shall be adjusted by an amount equal to $1.55 per each $1.00 of
Contractor direct labor cost of project manager and superintendent only.
17.2.2 For delays in the Project not the responsibility of the Contractor as
defined in the Agreement there will be an equitable adjustment in the fee and
general conditions costs to compensate the Contractor for its increased
expenses, if any.
17.3 Included in the Contractor's Fee are the following:
17.3.1 Salaries or other compensation of the Contractor's employees at the
principal office except the time of Mario Wijtman dedicated to the Project as
set froth in Exhibit B.
17.3.2 General operating expenses of the Contractor's principal and branch
offices other than the field office.
17.3.3 Any part of the Contractor's capital expenses, including interest on the
Contractor's capital employed for the Project.
17.3.4 Overhead or general expenses of any kind, except as may be expressly
included in Article 18.
ARTICLE 18
Cost of the Project
- -------------------
18. The term Cost of the Project shall mean charges for services provided by
the Contractor and costs necessarily incurred in the Project during either the
Design or Construction Phase, and paid by the Contractor. The Cost of the
Project is part of the Contract Sum.
18.1 The Owner shall pay the Contractor for the Cost of the Project as defined
in this Article 18. Such payment shall be in addition to the Contractor's Fee
stipulated in Article 17.
18.2 Cost Items
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18.2.1 Charges for services provided by the Contractor's employees based on:
18.2.1.1 Direct Personnel Expense (as defined in 18.2.1.2) of those employees
stationed at the field office, in whatever capacity employed, as per Exhibit B.
18.2.1.2 Direct Personnel Expense is defined as the direct salaries of the
Contractor's employees engaged in performing the services under this Agreement
as described in Subparagraph 18.2.1.1 and the cost of all employee fringe
benefits, including, without limitation, medical and workers' compensation
insurance, allowed absences, vacations, pension and/or profit sharing, all in
accordance with the Contractor's standard personnel policy, and taxes for such
items as unemployment compensation and social security, as per Exhibit B.
18.2.2 Reasonable transportation, traveling, moving, temporary subsistence and
hotel expenses of the Contractor or of its officers or employees incurred in
discharge of duties connected with the Project, all in accordance with the
Contractor's standard personnel policy; provided that such expenses are approved
in advance by Owner.
18.2.3 Cost of all materials, supplies and equipment incorporated in the
Project, including costs of transportation and storage thereof.
18.2.4 Payments made by the Contractor to Subcontractors for their Work
performed pursuant to contract under this Agreement, including the cost of any
Subcontractor payment and performance bonds required by Owner or any applicable
government authority.
18.2.5 Cost, including transportation and maintenance, of all materials,
supplies, equipment, vehicles, and temporary facilities, that are employed and
consumed in the performance of the Work, and cost less salvage value on such
items used but not consumed that remain the property of the Contractor.
18.2.6 Rental charges of all necessary machinery and equipment, exclusive of
hand tools, used at the site of the Project, whether rented from the Contractor
or others, including installation, repairs and replacements, dismantling,
removal, costs of lubrication, transportation and delivery costs thereof, at
rental charges consistent with those prevailing in the area.
18.2.7 Cost of the premiums for all insurance and bonds which the Contractor is
required to procure by this Agreement or is deemed necessary by the Contractor
and approved by Owner.
18.2.8 Sales, use, gross receipts or similar taxes related to the Project
imposed by any governmental authority, and for which the Contractor is liable.
18.2.9 The Contractor shall not indemnify for patent infringement as may be
caused by the design documents of the Architect/Engineer, except to the extent
that Contractor knew that the applicable material, equipment or technique
infringed upon the patent rights of any third party and failed to notify Owner
and Architect/Engineer prior to the installation or procurement thereof.
18.2.10 Losses, expenses or damages to the extent not compensated by insurance
or otherwise, including settlement of trade contractor claims or suits with
prior Owner approval. written approval.
18.2.11 Project expenses such as telegrams, long-distance telephone calls,
telephone service at the site, expressage, printing, reproduction and similar
items, as per Exhibit B.
18.2.12 Cost of removal of all debris.
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18.2.13 Cost incurred due to an emergency affecting the safety of persons and
property except to the extent such emergency is caused by the negligence of the
Contractor.
18.2.14 Cost of supplies for job site computer.
18.2.15 Legal costs reasonably and properly incurred by the Contractor in the
discharge of its duties under this Agreement with prior Owner written approval.
18.2.16 All costs directly incurred in the performance of the Project and not
included in the Contractor's Fee as set forth in Paragraph 17.3, subject to
Owner's prior written approval, which shall not be unreasonably withheld.
18.2.17 Fines, penalties, sanctions or impositions assessed or imposed by any
governmental body, instrumentality or tribunal to the extent arising as a result
of Contractor proceeding with the Work at the specific direction of Owner
provided that (a) Contractor has informed Owner in writing that proceeding
without a specified permit or other authorization could result in the imposition
of fines, penalties, sanctions or impositions (collectively, "Fines"), (b)
Contractor informs Owner in writing as to the magnitude and scope of such Fines
and other possible ramifications, and (c) Owner directs Contractor to proceed
with the Work so affected.
18.2.18 The Cost of the Project shall not include:
.1 Cost due to the negligence of Contractor or to the failure of
Contractor to fulfill a specific responsibility to Owner set forth in the
Contract Documents.
.2 Except as provided in Subparagraph 18.2.17 above, fines, penalties,
sanctions or impositions assessed or imposed by any governmental body,
instrumentality or tribunal to the extent arising from any act or omission of
Contractor or any Subcontractor.
.3 Costs of accelerating the Work to the extent caused by the negligence
or default of Contractor.
.4 Costs resulting from the failure of Contractor or any Subcontractor to
procure and maintain insurance as required by the Contract Documents.
.5 Overtime required to the extent caused by the negligence or fault of
Contractor.
.6 Project incentive bonuses, except as approved in advance by Owner in
writing.
.7 Cost of bonding or securing liens or defending claims filed by any
Subcontractor or supplier arising from any default by Contractor in making any
payment due to any such Subcontractor or supplier, unless such default by
Contractor is due to a default by Owner in making progress payments to
Contractor hereunder.
.8 Losses or expenses for which Contractor is compensated by insurance.
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18.3 All costs directly or indirectly incurred in the performance of the
Project and not included in the Contractor's Fee as set forth in Article 17 are
subject to Owner's prior written approval.
[RFA]
OWNER: CONTRACTOR:
NAVISITE, INC. XL CONSTRUCTION
By: /s/ Kenneth W. Hale By: /s/ Mario P. Wijtman
-------------------------------- -------------------------------
Name: Kenneth W. Hale Name: Mario P. Wijtman
------------------------- -----------------------
Title: CFO Title: Vice President
------------------------- -----------------------
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(CONTRACTOR'S LETTERHEAD)
NAME AND ADDRESS OF OWNER Date:
----------------------------
Re:
----------------------------
(Name of Project)
Gentlemen:
The undersigned guarantees Owner that it will be responsible for faulty
materials, equipment and workmanship and that it will remedy all defects due
thereto and pay for all damages to other work resulting therefrom that shall
appear within a period of one (1) year from the date at which Substantial
Completion of the work is acknowledged in writing by Owner.
During this period, upon written notice, the undersigned will proceed with due
diligence at the undersigned's expense to replace properly all defective
materials and equipment and perform all labor necessary to correct all defects
in the work.
In case the undersigned fails upon reasonable notice to remedy such defects,
Owner may, in addition to and without limitation of any other rights or remedies
Owner may have, furnish such materials or labor as are necessary to do so, and
the undersigned shall reimburse Owner fully and promptly upon demand.
Guarantees from Contractor shall be supported by individual guarantees from each
trade or subcontractor and manufacturer or supplier covering work performed and
material and equipment.
All materials, fixtures, appliances, equipment and other items requiring
excessive servicing during the guarantee period will be considered defective and
shall be made good, replaced and/or corrected to the satisfaction of Owner,
under the terms of this letter.
Owner shall have the right to assign its rights and remedies under this
guarantee to any successor owner of the Project.
The furnishing of the above guarantee and all other special guarantees required
by the Contract Documents shall be a condition precedent to payment of
retainage.
-----------------------------------
Signature of Contractor
-----------------------------------
(Notarized)
18
<PAGE>
GUARANTY
--------
CMGI, Inc. hereby guarantees the payment and performance by Tenant of its
obligations under the foregoing Contract, subject to, and in accordance with,
the terms and provisions thereof.
Notwithstanding anything to the contrary contained herein, this Guaranty and all
of Guarantor's obligations and agreements hereunder shall terminate and be of no
further force or effect immediately upon the closing of the sale of shares of
common stock of NaviSite, Inc. in a public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended.
CMGI, INC.
By:
----------------------------------
Name:
Title:
19
<PAGE>
Schedule 13.10
Dedicated employees of Contractor:
Project Manager: Craig DeBrine
Project Superintendent: Kevin Brittner
Project Executive: Mario Wijtman
General Superintendent: Jeffe Fyffe
Project Engineer: Neil Netzer
20
<PAGE>
GUARANTY
--------
Reference is hereby made to that certain Construction Agreement dated as of
June 14, 1999 by and between XL Construction ("Design/Builder") and NaviSite,
Inc. ("Owner") (the "Agreement"). Capitalized terms used herein and not
otherwise defined shall have the respective meanings ascribed to such terms in
the Agreement.
CMGI, Inc. ("Guarantor") hereby guarantees the payment and performance by
Owner of its obligations under the Agreement, subject to, and in accordance
with, the terms and provisions thereof.
Notwithstanding anything to the contrary contained herein, this Guaranty
and all of Guarantor's obligations and agreements hereunder and under the
Agreement shall terminate and be of no further force or effect immediately upon
the closing of the initial public offering of shares of common stock of Owner
pursuant to an effective registration statement under the Securities Act of
1933, as amended.
CMGI, INC.
By:
---------------------------------
Name:
Title:
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
NaviSite General Conditions
Exhibit "B"
7/9/99
- -----------------------------------------------------------------------------------------------------------------------------------
XL DIRECT WORK
- -----------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION LABOR MATERIAL/EQUIPMENT TOTAL
- -------------------------------------------------------------------------------------------------------------
UPS TASK HR QTY UNIT RATE SUBTOTAL QTY UNIT RATE SUBTOTAL
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SITE FACILITIES
- -----------------------------------------------------------------------------------------------------------------------------------
1200 Jobsite Office Trailers 0 40 HR $ 38 $ 1,520 5 MO $460 $ 2,300 $ 3,820
- -----------------------------------------------------------------------------------------------------------------------------------
1205 Storage Sheds 0 $ 0 $ 0 4 MO $200 $ 800 $ 800
- -----------------------------------------------------------------------------------------------------------------------------------
1210 Phones (Usage Only) 0 $ 0 $ 0 5 MO $800 $ 4,000 $ 4,000
- -----------------------------------------------------------------------------------------------------------------------------------
1210 Phones - set-up 0 $ 0 $ 0 LS $700 $ 700 $ 700
- -----------------------------------------------------------------------------------------------------------------------------------
1220 Jobsite Radios 0 $ 0 $ 0 15 MO $ 65 $ 975 $ 975
- -----------------------------------------------------------------------------------------------------------------------------------
1230 Utilities Usage 0 $ 0 $ 0 BY OWNER $ 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------------------------
1240 Water and Sewer 0 $ 0 $ 0 BY OWNER $ 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------------------------
1250 Copier and Fax 0 $ 0 $ 0 5 MC $550 $ 2,750 $ 2,750
- -----------------------------------------------------------------------------------------------------------------------------------
1260 Computers and Printers 0 $ 0 $ 0 IN RATES $ 0 $ 0 $ 0
- -----------------------------------------------------------------------------------------------------------------------------------
Reproductions (SHOP DWGS
1270 ONLY) 0 $ 0 $ 0 4 MO $250 $ 1,000 $ 1,000
- -----------------------------------------------------------------------------------------------------------------------------------
1280 Postage and Courier 0 $ 0 $ 0 4 MO $500 $ 2,000 $ 2,000
- -----------------------------------------------------------------------------------------------------------------------------------
1290 Office Supplies 0 $ 0 $ 0 4 MO $350 $ 1,400 $ 1,400
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 1,520 $15,925 $ 17,445
- -----------------------------------------------------------------------------------------------------------------------------------
SUPERVISION/PROJECT MANAGEMENT
- -----------------------------------------------------------------------------------------------------------------------------------
1300 Project Executive-WILTMAN 0 20 WK $ 1,680 $33,600 0 $ 0 $ 0 $ 33,600
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
1310 Project Manager-DEBRINE 0 20 WK $2,400 $ 48,000 0 $ 0 $ 0 $ 48,000
- ------------------------------------------------------------------------------------------------------------
1320 Project Engineer-NETZER 0 22 WK $1,600 $ 35,200 0 $ 0 $ 0 $ 35,200
- ------------------------------------------------------------------------------------------------------------
1330 Project Coordinator-FULLTIME 0 20 WK $1,200 $ 24,000 0 $ 0 $ 0 $ 24,000
- ------------------------------------------------------------------------------------------------------------
1350 General Supt. dy/wk - FYFFE 0 17 WK $ 480 $ 8,160 0 $ 0 $ 0 $ 8,160
- ------------------------------------------------------------------------------------------------------------
1350 General Superintendent-BRITTNER - 17 WK $2,080 $ 35,360 0 $ 0 $ 0 $ 35,360
- ------------------------------------------------------------------------------------------------------------
TOTAL $184,320 $ 0 $184,320
- ------------------------------------------------------------------------------------------------------------
SAFETY
- ------------------------------------------------------------------------------------------------------------
1400 Safety Engineer 0 4 TRPS $ 300 $ 1,200 0 $ 0 $ 0 $ 1,200
- ------------------------------------------------------------------------------------------------------------
1410 Safety Coordinator 0 17 WK $ 608 $10,336 4 MO $600 $ 2,400 $ 12,736
- ------------------------------------------------------------------------------------------------------------
1420 0 $ 50 $ 0 $ 0 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------
TOTAL $ 11,536 $ 2,400 $ 13,936
- ------------------------------------------------------------------------------------------------------------
DEBRIS REMOVAL
- ------------------------------------------------------------------------------------------------------------
1500 Interim Cleaning 0 COST OF WORK $ 32 $ 0 0 $ 0 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------
1510 Debris Boxes 0 COST OF WORK $ 32 $ 0 0 $ 0 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------
TOTAL $ 0 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------
TEMPORARY FACILITIES
- ------------------------------------------------------------------------------------------------------------
1600 Temporary Toilets 0 $ 38 $ 0 20 MC $200 $ 4,000 $ 4,000
- ------------------------------------------------------------------------------------------------------------
1610 Temporary Fence 0 COST OF WORK $ 38 $ 0 0 $ 0 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------
1620 Temporary Power & Lighting 0 BY OB $ 38 $ 0 0 $ 0 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------
NOT
1630 Winter Weather 0 REQ $ 38 $ 0 0 $ 0 $ 0 $ 0
- ------------------------------------------------------------------------------------------------------------
TOTAL $ 0 $ 4,000 $ 4,000
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
BONDS
- -------------------------------------------------------------------------------------------------------------
NOT
1700 Bonds 0 REQ $ 0 $ 0 0 $ 0 $ 0 $ 0
- -------------------------------------------------------------------------------------------------------------
TOTAL $ 0 $ 0 $ 0
- -------------------------------------------------------------------------------------------------------------
INSURANCE
- -------------------------------------------------------------------------------------------------------------
1800 Liability Insurance 0 COST OF WORK $ 0 $ 0 0 $0.0075 $ 0 $ 0
- -------------------------------------------------------------------------------------------------------------
1800 Builders Risk Insurance 0 COST OF WORK $ 0 $ 0 0 $ 0.000 $ 0 $ 0
- -------------------------------------------------------------------------------------------------------------
TOTAL $ 0 $ 0 $
- -------------------------------------------------------------------------------------------------------------
TOTAL OF ALL "GC" COSTS ABOVE $219,701
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- -------------------------------------------------------------------------------------------------------------------
ID Task Name Dura- Start Finish Predecessors
tion
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 PRECONSTRUCTION 119d Mon 4/26/99 Tue 10/12/99
- -------------------------------------------------------------------------------------------------------------------
2 PLANNING DEPARTMENT SUBMISSIONS 22d Mon 5/24/99 Wed 6/23/99
- -------------------------------------------------------------------------------------------------------------------
3 Equipment Yard 22d Mon 5/24/99 Wed 6/23/99
- -------------------------------------------------------------------------------------------------------------------
4 DGA Prepare Equipment Yard Submission Package 7d Mon 5/24/99 Wed 6/2/99 92
- -------------------------------------------------------------------------------------------------------------------
5 Planning Department Review 5d Thu 6/3/99 Wed 6/9/99 4
- -------------------------------------------------------------------------------------------------------------------
6 DGA Respond to Comments/Re-Submit 10d Thu 6/10/99 Wed 6/23/99 5
- -------------------------------------------------------------------------------------------------------------------
7 Planning Department Approval 0d Wed 6/23/99 Wed 6/23/99 6
- -------------------------------------------------------------------------------------------------------------------
8 PERMIT AND BID PACKAGE DOCUMENT DEVELOPMENT 75d Wed 4/28/99 Thu 8/12/99
- -------------------------------------------------------------------------------------------------------------------
9 PACKAGE #1: STRUCTURAL & UNDERSLAB MEP 61d Thu 4/29/99 Mon 7/26/99
- -------------------------------------------------------------------------------------------------------------------
10 Seismic Upgrade 22d Thu 4/29/99 Fri 5/28/99
- -------------------------------------------------------------------------------------------------------------------
11 SEI Perform Seismic Upgrade Conceptual Analysis 9d Thu 4/29/99 Tue 5/11/99
- -------------------------------------------------------------------------------------------------------------------
12 XL Prepare Conceptual Budgets 1d Wed 5/12/99 Wed 5/12/99 11
- -------------------------------------------------------------------------------------------------------------------
13 NaviSite Review/Approve 1.25 Importance Factor 2d Thu 5/13/99 Fri 5/14/99 12
- -------------------------------------------------------------------------------------------------------------------
14 SEI Develop Seismic Upgrade Design 10d Mon 5/17/99 Fri 5/28/99 13
- -------------------------------------------------------------------------------------------------------------------
15 MEP & Elevator Driven Structural Design 37d Mon 5/3/99 Wed 6/23/99
- -------------------------------------------------------------------------------------------------------------------
16 XL Provide Preliminary Elevator Dimensions 1d Mon 5/3/99 Mon 5/3/99 174
- -------------------------------------------------------------------------------------------------------------------
17 CEI Size Ductbank Footing Penetration 1d Tue 5/4/99 Tue 5/4/99 53
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- -------------------------------------------------------------------------------------------------------------------
ID Task Name Dura- Start Finish Predecessors
tion
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
18 Therma Provide Preliminary Rooftop Equipment Weight & 1d Wed 6/9/99 Wed 6/9/99 63FS-4d,
F 64FS-4d
- -------------------------------------------------------------------------------------------------------------------
19 SEI Develop Structural Designs 14d Fri 6/4/99 Wed6/23/99 17,18FS-4d,
16
- -------------------------------------------------------------------------------------------------------------------
20 Underslab MEP 45d Fri 5/21/99 Mon7/26/99
- -------------------------------------------------------------------------------------------------------------------
21 CEI Prepare Underslab Conduit Plan 7d Mon 5/24/99 Wed 6/2/99 31,92
- -------------------------------------------------------------------------------------------------------------------
22 Therma/DGA Prepare Bathroom Fixture Layout 5d Fri 5/21/99 Thu 5/27/99 33FS-8d
- -------------------------------------------------------------------------------------------------------------------
23 NaviSite Review & Approve Bathroom Fixture Layout 2d Fri 5/28/99 Tue 6/1/99 22
- -------------------------------------------------------------------------------------------------------------------
24 Therma Prepare Underslab Plumbing Plan 5d Wed 6/2/99 Tue 6/8/99 23
- -------------------------------------------------------------------------------------------------------------------
25 Team Issue Structural & Underslab Permit Docs 0d Wed 6/23/99 Wed 6/23/99 14,19,24,
21
- -------------------------------------------------------------------------------------------------------------------
26 Team Issue Structural & Underslab CD's 0d Mon 7/26/99 Mon 7/26/99 102
- -------------------------------------------------------------------------------------------------------------------
27 PACKAGE #2: INTERIOR TI BUILDOUT 69D Wed 4/28/99 Wed 8/4/99
- -------------------------------------------------------------------------------------------------------------------
28 Interior Architectural Design 55d Wed 4/28/99 Thu 7/15/99
- -------------------------------------------------------------------------------------------------------------------
29 Data Center (First Floor) 55d Wed 4/28/99 Thu 7/15/99
- -------------------------------------------------------------------------------------------------------------------
30 NaviSite Provide Raised Floor Load Requirements 5d Wed 4/28/99 Tue 5/4/99
- -------------------------------------------------------------------------------------------------------------------
31 CEI Prepare Preliminary Battery & Electrical Room Lay 12d Thu 4/29/99 Fri 5/14/99
- -------------------------------------------------------------------------------------------------------------------
32 Visnick & Caulfield Prepare Schematic Floor Plan 12d Thu 4/29/99 Fri 5/14/99
- -------------------------------------------------------------------------------------------------------------------
33 NaviSite Review & Approve Schematic Floor Plan
- -------------------------------------------------------------------------------------------------------------------
34 NOC Programming/Schematic Design 5w Mon 5/10/99 Mon 6/14/99
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- -------------------------------------------------------------------------------------------------------------------
ID Task Name Dura- Start Finish Predecessors
tion
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
35 DGA Prepare Access Floor Layout & Specs for Bid 2d Tue 6/8/99 Wed 6/9/99 33FS+3d,30
F+5
- -------------------------------------------------------------------------------------------------------------------
36 Finalize & Detail NOC Design 2.5w Tue 6/15/99 Thu 7/1/99 34
- -------------------------------------------------------------------------------------------------------------------
37 DGA Prepare DD Docs 10d Wed 5/26/99 Wed 6/9/99 33FS-
10d,34FS-1
- -------------------------------------------------------------------------------------------------------------------
38 DD Fly Spec Document Review 1d Thu 6/10/99 Thu 6/10/99 37
- -------------------------------------------------------------------------------------------------------------------
39 DGA Prepare Permit Docs 11d Fri 6/11/99 Fri 6/25/99 38
- -------------------------------------------------------------------------------------------------------------------
40 DGA Complete CD's 7d Mon 6/28/99 Wed 7/7/99 39
- -------------------------------------------------------------------------------------------------------------------
41 CD Fly Speck Document Review 1d Thu 7/8/99 Thu 7/8/99 40
- -------------------------------------------------------------------------------------------------------------------
42 DGA Incorporate Fly Speck Comments 5d Fri 7/9/99 Thu 7/15/99 41
- -------------------------------------------------------------------------------------------------------------------
43 Administrative Spaces (Second Floor) 54d Thu 4/29/99 Thu 7/15/99
- -------------------------------------------------------------------------------------------------------------------
44 Visnick & Caulfield Prepare Schematic Floor Plan 18d Thu 4/29/99 Mon 5/24/99
- -------------------------------------------------------------------------------------------------------------------
45 NaviSite Review & Approve Schematic Floor Plan 6d Tue 5/25/99 Wed 6/2/99 44
- -------------------------------------------------------------------------------------------------------------------
46 DGA Prepare DD Docs 10d Wed 5/26/99 Wed 6/9/99 45FS-5d
- -------------------------------------------------------------------------------------------------------------------
47 DD Fly Spec Document Review 1d Thu 6/10/99 Thu 6/10/99 46,77
- -------------------------------------------------------------------------------------------------------------------
48 DGA Prepare Permit Docs 10d Fri 6/11/99 Thu 6/25/99 47
- -------------------------------------------------------------------------------------------------------------------
49 CD Fly Speck Document Review 1d Thu 7/8/99 Thu 7/8/99 48,78,41SS
- -------------------------------------------------------------------------------------------------------------------
50 DGA Incorporate Fly Speck Comments 5d Fri 7/9/99 Thu 7/15/99 49
- -------------------------------------------------------------------------------------------------------------------
51 MEP Design 68d Thu 4/29/99 Wed 8/4/99
- -------------------------------------------------------------------------------------------------------------------
52 Electrical Equipment Selection 41d Thu 4/29/99 4/25/99
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- -------------------------------------------------------------------------------------------------------------------
ID Task Name Dura- Start Finish Predecessors
tion
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
53 CEI Prepare Schematic Electrical Design Concepts 3d Thu 4/29/99 Mon 5/3/99
- -------------------------------------------------------------------------------------------------------------------
54 NaviSite Review & Approve 3d Tue 5/4/99 Thu 5/6/99 53
- -------------------------------------------------------------------------------------------------------------------
55 CEI Prepare Specifications & Equipment Bid Packages 5d Fri 5/7/99 Thu 5/13/99 54
- -------------------------------------------------------------------------------------------------------------------
56 Electrical Equipment Bid Period 1w Fri 5/14/99 Thu 5/20/99 55
- -------------------------------------------------------------------------------------------------------------------
57 CEI Review & Analyze Equipment Bids 3d Fri 5/21/99 Tue 5/25/99 56
- -------------------------------------------------------------------------------------------------------------------
58 Fuel Oil Storage Tanks/Pumps Bid Period 3w Fri 5/28/99 Fri 6/18/99 54FS+3w
- -------------------------------------------------------------------------------------------------------------------
59 CEI Review & Analyze Fuel Oil Bids 5d Mon 6/21/99 Fri 6/25/99 58
- -------------------------------------------------------------------------------------------------------------------
60 Mechanical Equipment Selection 40d Thu 4/29/99 Fri 6/25/99
- -------------------------------------------------------------------------------------------------------------------
61 Therma Prepare Admin. Space Mechanical Concepts 30d Mon 5/3/99 Mon 6/14/99
- -------------------------------------------------------------------------------------------------------------------
62 NaviSite Review & Select Admin. Space Design Conce 20d Mon 5/24/99 Mon 6/21/99 61FS-15d
- -------------------------------------------------------------------------------------------------------------------
63 Therma Size & Specify Computer Room HVAC Units 15d Fri 4/30/99 Thu 5/20/99
- -------------------------------------------------------------------------------------------------------------------
64 Therma Size Admin. Space Equipment & Prepare Spec 5d Tue 6/8/99 Mon 6/14/99 62FS-10d
- -------------------------------------------------------------------------------------------------------------------
65 Computer Room Units Bid Period 1w Fri 5/21/99 Thu 5/27/99 63
- -------------------------------------------------------------------------------------------------------------------
66 Therma Review & Analyze Computer Room HVAC Unit 15d Fri 5/28/99 Fri 6/18/99 65
- -------------------------------------------------------------------------------------------------------------------
67 Admin. Space Equipment Bid Period 1w Tue 6/15/99 Mon 6/21/99 64
- -------------------------------------------------------------------------------------------------------------------
68 Therma Review & Analyze admin. Space Equipment Bid 4d Tue 6/22/99 Fri 6/25/99 67
- -------------------------------------------------------------------------------------------------------------------
69 Data Center MEP Design (First Floor) 54d Thu 4/29/99 Thu 7/15/99
- -------------------------------------------------------------------------------------------------------------------
70 Therma/CEI Prepare Schematic Plan & RCP Drawing: 10d Thu 4/29/99 Wed 5/12/99
- -------------------------------------------------------------------------------------------------------------------
71 NaviSite Review & Approve 3d Thu 5/13/99 Mon 5/17/99 70
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- -------------------------------------------------------------------------------------------------------------------
ID Task Name Dura- Start Finish Predecessors
tion
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
72 Therma/CEI Prepare DD Docs 7d Tue 6/1/99 Wed 6/9/99 71,37FF
- -------------------------------------------------------------------------------------------------------------------
73 DD Fly Speck Document Review 1d Thu 6/10/99 Thu 6/10/99 38SS,72
- -------------------------------------------------------------------------------------------------------------------
74 Therma/CEI Prepare Permit Docs 10d Fri 6/11/99 Thu 6/24/99 73
- -------------------------------------------------------------------------------------------------------------------
75 Therma/CEI Incorporate Fly-Speck Comments 5d Fri 7/9/99 Thu 7/15/99 41
- -------------------------------------------------------------------------------------------------------------------
76 Administrative Spaces (Second Floor) 54d Thu 4/29/99 Thu 7/15/99
- -------------------------------------------------------------------------------------------------------------------
77 Therma/CEI Prepare DD Docs 5d Thu 6/3/99 Wed 6/9/99 45,46FF
- -------------------------------------------------------------------------------------------------------------------
78 Therma/CEI Prepare Permit Docs 5d Fri 6/11/99 Thu 6/17/99 47
- -------------------------------------------------------------------------------------------------------------------
79 Team Issue Interior TI Buildout Permit Docs 0d Fri 6/25/99 Fri 6/25/99 39,48,74,78
- -------------------------------------------------------------------------------------------------------------------
80 Therma/CEI Incorporate Fly-Speck Comments 5d Fri 7/9/99 Thu 7/15/99 49
- -------------------------------------------------------------------------------------------------------------------
81 Team Issue Interior TI Buildout Permit CD's 0d Wed 8/4/99 Wed. 8/4/99 42,50,75,80,
107
- -------------------------------------------------------------------------------------------------------------------
82 PACKAGE #3: SITE (Includes Equipment Yard) 75d Wed 4/28/99 Thu 8/12/99
- -------------------------------------------------------------------------------------------------------------------
83 Site Utilities 52d Thu 4/29/99 Tue 7/13/99
- -------------------------------------------------------------------------------------------------------------------
84 CEI Prepare Site Electrical Plan 7d Thu 4/29/99 Fri 5/7/99
- -------------------------------------------------------------------------------------------------------------------
85 CEI Obtain P.G.&E. Approval 35d Mon 5/10/99 Mon 6/28/99 84
- -------------------------------------------------------------------------------------------------------------------
86 Therma/CEI Identify Conflicts w/Existing UG Natural Gas 1d Tue 7/6/99 Tue 7/6/99 95
- -------------------------------------------------------------------------------------------------------------------
87 Allied/CEI Identify Conflicts w/Existing Site Fire Loop 1d Tue 7/6/99 Tue 7/6/99 95
- -------------------------------------------------------------------------------------------------------------------
88 Therma Prepare Revised Natural Gas Plan 5d Wed 7/7/99 Tue 7/13/99 86
- -------------------------------------------------------------------------------------------------------------------
89 Allied Prepare Revised Site Fire Loop Plan 5d Wed 7/7/99 Tue 7/13/99 87
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- -------------------------------------------------------------------------------------------------------------------
ID Task Name Dura- Start Finish Predecessors
tion
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
90 Equipment Yard 75d Wed 4/28/99 Thu 8/12/99
- -------------------------------------------------------------------------------------------------------------------
91 Team Prepare Preliminary Configuration and Location for E 3d Wed 4/28/99 Fri 4/30/99
- -------------------------------------------------------------------------------------------------------------------
92 CEI/Therma prepare Preliminary Yard Layout 15d Mon 5/3/99 Fri 5/12/99 91
- -------------------------------------------------------------------------------------------------------------------
93 NaviSite Review & Approve 3d Mon 5/24/99 Wed 5/26/99 92
- -------------------------------------------------------------------------------------------------------------------
94 DGA/CEI Develop Slab & Enclosure Design 20d Mon 5/24/99 Mon 6/21/99 92
- -------------------------------------------------------------------------------------------------------------------
95 CEI/Therma Finalize Equipment & Piping Layout 5d Mon 6/28/99 Tue 7/2/99 93,197,204,
211,2
- -------------------------------------------------------------------------------------------------------------------
96 Team Issue Site Permit Docs 0d Tue 7/13/99 Tue 7/13/99 85,88,89,94,
95
- -------------------------------------------------------------------------------------------------------------------
97 Team Issue Site CD's 0d Thu 8/12/99 Thu 8/12/99 112
- -------------------------------------------------------------------------------------------------------------------
98 PERMITS 35d Wed 6/23/99 Thu 8/12/99
- -------------------------------------------------------------------------------------------------------------------
99 Package #1 - STRUCTURAL AND UNDERSLAB MEP PERMIT 22d Wed 6/23/99 Mon 7/26/99
- -------------------------------------------------------------------------------------------------------------------
100 Submit Permit Docs to the City 0d Wed 6/23/99 Wed 6/23/99 25
- -------------------------------------------------------------------------------------------------------------------
101 City Review 15d Thu 6/24/99 Thu 7/15/99 100
- -------------------------------------------------------------------------------------------------------------------
102 Design Team Respond to Comments & Re-Submit 7d Fri 7/16/99 Mon 7/26/99 101
- -------------------------------------------------------------------------------------------------------------------
103 Structural & Underslab MEP Permit Issued 0d Mon 7/26/99 Mon 7/26/99 102
- -------------------------------------------------------------------------------------------------------------------
104 Package #2 - INTERIOR TI BUILDOUT PERMIT 27d Fri 6/25/99 Wed 8/4/99
- -------------------------------------------------------------------------------------------------------------------
105 Submit Permit Docs to the City 0d Wed 6/25/99 Fri 6/25/99 79
- -------------------------------------------------------------------------------------------------------------------
106 City Review 20d Mon 6/28/99 Mon 7/26/99 105
- -------------------------------------------------------------------------------------------------------------------
107 Design Team Respond to Comments & Re-Submit 7d Tue 7/27/99 Wed 8/4/99 106
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- -------------------------------------------------------------------------------------------------------------------
ID Task Name Dura- Start Finish Predecessors
tion
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
108 Interior Permit Issued 0d Wed 8/4/99 Wed 8/4/99 107
- -------------------------------------------------------------------------------------------------------------------
109 Package #3 - SITE (Including Equipment Yard) PERMIT 22d Tue 7/13/99 Thu 8/12/99
- -------------------------------------------------------------------------------------------------------------------
110 Submit Permit Docs to the City 0d Tue 7/13/99 Tue 7/13/99 96
- -------------------------------------------------------------------------------------------------------------------
111 City Review 15d Wed 7/14/99 Tue 8/3/99 110
- -------------------------------------------------------------------------------------------------------------------
112 Design Team Respond to Comments & Re-Submit 7d Wed 8/4/99 Thu 8/12/99 111
- -------------------------------------------------------------------------------------------------------------------
113 Interior Permit Issued 0d Thu 8/12/99 Thu 8/12/99 112
- -------------------------------------------------------------------------------------------------------------------
114 BUDGET AND GMP DEVELOPMENT 64d Tue 6/22/99 Tue 9/21/99
- -------------------------------------------------------------------------------------------------------------------
115 CONCEPTUAL BUDGET 8d Tue 6/22/99 Thu 7/1/99
- -------------------------------------------------------------------------------------------------------------------
116 XL Prepare and Submit Conceptual Budget 5d Tue 6/22/99 Mon 6/28/99 13,19FS-
10d,84,9
- -------------------------------------------------------------------------------------------------------------------
117 NaviSite Review and Approve Conceptual Budget 4d Tue 6/29/99 Thu 7/1/99 116
- -------------------------------------------------------------------------------------------------------------------
118 D.D. BUDGET 9d Fri 6/25/99 Thu 7/8/99
- -------------------------------------------------------------------------------------------------------------------
119 XL Prepare and Submit D.D. Budget 5d Fri 6/25/99 Thu 7/1/99
- -------------------------------------------------------------------------------------------------------------------
120 NaviSite Review and Approve D.D. Budget 4d Fri 7/2/99 Thu 7/8/99 119
- -------------------------------------------------------------------------------------------------------------------
121 Cost-Plus Budget 40d Tue 7/27/99 Tue 9/2199
- -------------------------------------------------------------------------------------------------------------------
122 XL Prepare Bid package #1 (Struct./UG) Bid Documents 5d Tue 7/27/99 Mon 8/2/99 26
- -------------------------------------------------------------------------------------------------------------------
123 Bid Package #1 Bid Period 2w Tue 8/3/99 Mon 8/16/99 122
- -------------------------------------------------------------------------------------------------------------------
124 XL/NaviSite Review and Approve Low Bidders 2d Tue 8/1799 Wed 8/18/99 123
- -------------------------------------------------------------------------------------------------------------------
125 XL Prepare Bid package #2 (Interior TI) Bid Documents 5d Thu 8/5/99 Wed 8/11/99 81
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- -------------------------------------------------------------------------------------------------------------------
ID Task Name Dura- Start Finish Predecessors
tion
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
126 Bid Package #2 Bid Period 2w Thu 8/12/99 Wed 8/25/99 125
- -------------------------------------------------------------------------------------------------------------------
127 XL/NaviSite Review & Approve Low Bidders 2d Thu 8/26799 Fri 8/27/99 126
- -------------------------------------------------------------------------------------------------------------------
128 XL Prepare Bid package #3 (Site) Bid Documents 5d Fri 8/13/99 Thu 8/19/99 97
- -------------------------------------------------------------------------------------------------------------------
129 Bid Package #3 Bid Period 2w Fri 8/20/99 Thu 9/2/99 128
- -------------------------------------------------------------------------------------------------------------------
130 XL/NaviSite Review and Approve Low Bidders 2d Fri 9/3799 Tue 9/7/99 129
- -------------------------------------------------------------------------------------------------------------------
131 XL Prepare & Submit GMP 5d Wed 9/8/99 Tue 9/14/99 124,130,127
- -------------------------------------------------------------------------------------------------------------------
132 XL/NaviSite Review & Approve GMP 5d Wed 9/15799 Tue 9/21/99 131
- -------------------------------------------------------------------------------------------------------------------
133 LONG LEAD PROCUREMENT 119d Mon 4/26/99 Tue 10/12/99
- -------------------------------------------------------------------------------------------------------------------
134 FM - 200 FIRE PROTECTION SYSTEM 64d Mon 5/3/99 Mon 8/2/99
- -------------------------------------------------------------------------------------------------------------------
135 XL Prepare FM-200 System Contractor Bid Analysis Package 15d Mon 5/3/99 Fri 5/21/99
- -------------------------------------------------------------------------------------------------------------------
136 NaviSite Review & Approve FM-200 Bid Analysis Package 3d Mon 5/2499 Wed 5/26/99 135
- -------------------------------------------------------------------------------------------------------------------
137 XL Issue FM-200 Subcontract 3d Thu 5/27/99 Tue 6/1/99 136
- -------------------------------------------------------------------------------------------------------------------
138 FM-200 Vendor Submittal Preparation & Design 2w Wed 6/2/99 Tue 6/15/99 137
- -------------------------------------------------------------------------------------------------------------------
139 Design Team Review & Approve 3d Wed 6/16799 Fri 6/18/99 138
- -------------------------------------------------------------------------------------------------------------------
140 Procurement of FM-200/Preaction System Equipment 6w Mon 6/21/99 Mon 8/2/99 139
- -------------------------------------------------------------------------------------------------------------------
141 RAISED ACCESS FLOOR 51d Thu 6/10/99 Fri 8/20/99
- -------------------------------------------------------------------------------------------------------------------
142 XL Bid Raised Access Floor 8d Thu 6/10/99 Mon 6/21/99 35
- -------------------------------------------------------------------------------------------------------------------
143 XL Submit Raised Floor Bid Analysis Package 0d Mon 6/21/99 Mon 6/21/99 142
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- -------------------------------------------------------------------------------------------------------------------
ID Task Name Dura- Start Finish Predecessors
tion
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
144 NaviSite Review & Approve Raised Floor Bid Analysis Package 2d Tue 6/22799 Wed 6/23/99 143
- -------------------------------------------------------------------------------------------------------------------
145 XL Release Raised Floor Subcontractor 1d Thu 6/24/99 Thu 6/24/99 144
- -------------------------------------------------------------------------------------------------------------------
146 Vendor Submittal Preparation 1w Fri 6/25/99 Thu 7/1/99 145
- -------------------------------------------------------------------------------------------------------------------
147 DGA Review & Approve Raised Floor Product Data 1w Fri 7/2/99 Fri 7/9/99 146
- -------------------------------------------------------------------------------------------------------------------
148 Delivery of Raised Floor Material 6w Mon 7/12/99 Fri 8/20/99 147
- -------------------------------------------------------------------------------------------------------------------
149 PACKAGED AIR HANDLING UNITS (Admin. Space) 45d Fri 6/25/99 Mon 8/30/99
- -------------------------------------------------------------------------------------------------------------------
150 Therma Submit A.H.U. Package for Approval 0d Fri 6/25/99 Fri 6/25/99 68
- -------------------------------------------------------------------------------------------------------------------
151 NaviSite Review & Approve A.H.U. Bid Analysis Package 2d Mon 6/28/99 Tue 6/29/99 150
- -------------------------------------------------------------------------------------------------------------------
152 Therma Issue P.O. for A.H.U.'s 1d Wed 6/30/99 Wed 6/30/99 151
- -------------------------------------------------------------------------------------------------------------------
153 Vendor Submittal Preparation 2w Thu 7/1/99 Thu 7/15/99 152
- -------------------------------------------------------------------------------------------------------------------
154 CEI/NaviSite Review & Approve 2d Fri 7/16/99 Mon. 7/19/99 153
- -------------------------------------------------------------------------------------------------------------------
155 Fabrication and Delivery of A.H.U.'s 6w Tue 7/20/99 Mon. 8/30/99 154
- -------------------------------------------------------------------------------------------------------------------
156 OFFICE FURNITURE AND PARTITIONS 68d Mon 5/10/99 Fri 8/13/99
- -------------------------------------------------------------------------------------------------------------------
157 NaviSite Solicit Proposals & Select Vendor 3w Mon 5/10/99 Fri 5/28/99
- -------------------------------------------------------------------------------------------------------------------
158 Vendor Product Data & Floor Plan Layout Preparation 2w Tue 6/1/99 Mon 6/14/99 157
- -------------------------------------------------------------------------------------------------------------------
159 NaviSite Review & Approve 3d Tue 6/15/99 Thu 6/17/99 158
- -------------------------------------------------------------------------------------------------------------------
160 Fabrication & Delivery 8w Fri 6/18/99 Mon. 8/13/99 159
- -------------------------------------------------------------------------------------------------------------------
161 UPS & PDU'S 63d Tue 5/25/99 Tue 5/24/99
- -------------------------------------------------------------------------------------------------------------------
162 C.E.I. Submit Equipment Package for Approval 0d Tue 5/25/99 Tue 5/25/99 57
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- ----------------------------------------------------------------------------------------------------------------------------
ID Task Name Dura- Start Finish Predecessors
tion
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
163 NaviSite Review & Approve Equipment Bid Analysis Package 2d Wed 5/26/99 Thu 5/27/99 162
- ----------------------------------------------------------------------------------------------------------------------------
164 C.E.I. Issue P.O. for Equipment 1d Fri 5/28/99 Fri 5/28/99 163
- ----------------------------------------------------------------------------------------------------------------------------
165 Vendor Submittal Preparation 2w Tue 6/1/99 Mon 6/14/99 164
- ----------------------------------------------------------------------------------------------------------------------------
166 CEI/NaviSite Review & Approve 2d Tue 6/15/99 Wed 6/16/99 165
- ----------------------------------------------------------------------------------------------------------------------------
167 Fabrication & Delivery of Equipment 12w Tue 6/1/99 Tue 8/24/99 164
- ----------------------------------------------------------------------------------------------------------------------------
168 NOC EQUIPMENT 65d Thur 7/1/99 Mon 10/4/99
- ----------------------------------------------------------------------------------------------------------------------------
169 XL Solicit Proposals from NOC Equipment Vendors/Award 2.5w Thu 7/1/99 Tue 7/20/99 36
- ----------------------------------------------------------------------------------------------------------------------------
170 Vendor Product Data & Shop Drawing Preparation & Approval 2.5w Wed 7/21/99 Fri 8/6/99 169
- ----------------------------------------------------------------------------------------------------------------------------
171 "Big Screen" Wall Monitor Fabrication & Delivery 8w Fri 8/6/99 Mon 10/4/99 170
- ----------------------------------------------------------------------------------------------------------------------------
172 Console Fabrication & Delivery 8w Fri 8/6/99 Mon 10/4/99 170
- ----------------------------------------------------------------------------------------------------------------------------
173 ELEVATORS 91.5d Mon 4/26/99 Thu 9/2/99
- ----------------------------------------------------------------------------------------------------------------------------
174 XL Solicit Elevator Cost & Technical Data 5d Mon 4/26/99 Fri 4/30/99
- ----------------------------------------------------------------------------------------------------------------------------
175 XL Submit Elevator Approval Package 1d Mon 5/3/99 Mon 5/3/99 174
- ----------------------------------------------------------------------------------------------------------------------------
176 DGA/VCA Review Elevator Technical Data 2d Tue 5/4/99 Wed 5/5/99 175
- ----------------------------------------------------------------------------------------------------------------------------
177 NaviSite Review & Approve Elevator Approval Package 2d Tue 5/4/99 Wed 5/5/99 175
- ----------------------------------------------------------------------------------------------------------------------------
178 XL Release Elevator Subcontract 1d Thu 5/6/99 Thu 5/6/99 176,177
- ----------------------------------------------------------------------------------------------------------------------------
179 Elevator Shop Drawings 2w Fri 5/7/99 Thu 5/20/99 178
- ----------------------------------------------------------------------------------------------------------------------------
180 DGA Review & Approve Elevator Show Drawings 5d Fri 5/21/99 Thu 5/27/99 179
- ----------------------------------------------------------------------------------------------------------------------------
181 Fabrication and Delivery of Elevator 13.5w Fri 5/28/99 Thu 9/2/99 180
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- ----------------------------------------------------------------------------------------------------------------------------
ID Task Name Dura- Start Finish Predecessors
tion
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
182 FUEL OIL SYSTEM 33d Fri 6/25/99 Thu 8/12/99
- ----------------------------------------------------------------------------------------------------------------------------
183 CEI Submit Fuel Oil Package for Approval 0d Fri 6/25/99 Fri 6/25/99 59
- ----------------------------------------------------------------------------------------------------------------------------
184 NaviSite Review & Approve Fuel Oil Bid Analysis Package 2d Mon 6/28/99 Tue 6/29/99 183
- ----------------------------------------------------------------------------------------------------------------------------
185 CEI Issue P.O. for Fuel Oil System 1d Wed 6/30/99 Wed 6/30/99 184
- ----------------------------------------------------------------------------------------------------------------------------
186 Vendor Submittal Preparation 2w Thu 7/1/99 Thu 7/15/99 185
- ----------------------------------------------------------------------------------------------------------------------------
187 CEI/NaviSite Review & Approve 2d Fri 7/16/99 Mon 7/19/99 186
- ----------------------------------------------------------------------------------------------------------------------------
188 Fabrication & Delivery of Main Fuel Tanks 6w Thu 7/1/99 Thu 8/12/99 185
- ----------------------------------------------------------------------------------------------------------------------------
189 Fabrication & Delivery of Fuel Oil Pumps 6w Thu 7/1/99 Thu 8/12/99 185
- ----------------------------------------------------------------------------------------------------------------------------
190 Fabrication & Delivery of Day Tanks 6w Thu 7/1/99 Thu 8/12/99 185
- ----------------------------------------------------------------------------------------------------------------------------
191 Delivery of Leak Detection Panel & Materials 6w Thu 7/1/99 Thu 8/12/99 185
- ----------------------------------------------------------------------------------------------------------------------------
192 GENERATORS 73d Tue 5/25/99 Wed 9/8/99
- ----------------------------------------------------------------------------------------------------------------------------
193 C.E.I. Submit Equipment Package for Approval 0d Tue 5/25/99 Tue 5/25/99 57
- ----------------------------------------------------------------------------------------------------------------------------
194 NaviSite Review & Approve Equipment Bid Analysis Package 2d Wed 5/26/99 Thu 5/27/99 193
- ----------------------------------------------------------------------------------------------------------------------------
195 C.E.I. Issue P.O. for Equipment 1d Fri 5/28/99 Fri 5/28/99 193,194
- ----------------------------------------------------------------------------------------------------------------------------
196 Vendor Submittal Preparation 2w Tue 6/1/99 Mon 6/14/99 195
- ----------------------------------------------------------------------------------------------------------------------------
197 CEI/NaviSite Review & Approve 2d Tue 6/15/99 Wed 6/16/99 196
- ----------------------------------------------------------------------------------------------------------------------------
198 Fabrication & Delivery of Equipment 14w Tue 6/1/99 Wed 9/8/99 195
- ----------------------------------------------------------------------------------------------------------------------------
199 DOUBLE-ENDED SUBSTATION 73d Tue 5/25/99 Wed 9/8/99
- ----------------------------------------------------------------------------------------------------------------------------
200 C.E.I. Submit Equipment Package for Approval 0d Tue 5/25/99 Tue 5/25/99 57
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- ----------------------------------------------------------------------------------------------------------------------------
ID Task Name Dura- Start Finish Predecessors
tion
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
201 NaviSite Review & Approve Equipment Bid Analysis Package 2d Wed 5/26/99 Thu 5/27/99 200
- ----------------------------------------------------------------------------------------------------------------------------
202 C.E.I. Issue P.O. for Equipment 1d Fri 5/28/99 Fri 5/28/99 201
- ----------------------------------------------------------------------------------------------------------------------------
203 Vendor Submittal Preparation 2w Tue 6/1/99 Mon 6/14/99 202
- ----------------------------------------------------------------------------------------------------------------------------
204 CEI/NaviSite Review & Approve 3d Tue 6/15/99 Thu 6/17/99 203
- ----------------------------------------------------------------------------------------------------------------------------
205 Fabrication & Delivery of Equipment 14w Tue 6/1/99 Wed 9/8/99 202
- ----------------------------------------------------------------------------------------------------------------------------
206 21KV TO F80V TRANSFORMERS 73d Tue 5/25/99 Wed 9/8/99
- ----------------------------------------------------------------------------------------------------------------------------
207 C.E.I. Submit Equipment Package for Approval 0d Tue 5/25/99 Tue 5/25/99 57
- ----------------------------------------------------------------------------------------------------------------------------
208 NaviSite Review & Approve Equipment Bid Analysis Package 2d Wed 5/26/99 Thu 5/27/99 207
- ----------------------------------------------------------------------------------------------------------------------------
209 C.E.I. Issue P.O. for Equipment 1d Fri 5/28/99 Fri 5/28/99 208
- ----------------------------------------------------------------------------------------------------------------------------
210 Vendor Submittal Preparation 2w Tue 6/1/99 Mon 6/14/99 209
- ----------------------------------------------------------------------------------------------------------------------------
211 CEI/NaviSite Review & Approve 3d Tue 6/15/99 Thu 6/17/99 210
- ----------------------------------------------------------------------------------------------------------------------------
212 Fabrication & Delivery of Equipment 14w Tue 6/1/99 Wed 9/8/99 209
- ----------------------------------------------------------------------------------------------------------------------------
213 PARALLELING GEAR & ATS' 73d Tue 5/25/99 Wed 9/8/99
- ----------------------------------------------------------------------------------------------------------------------------
214 C.E.I. Submit Equipment Package for Approval 0d Tue 5/25/99 Tue 5/25/99 57
- ----------------------------------------------------------------------------------------------------------------------------
215 NaviSite Review & Approve Equipment Bid Analysis Package 1d Wed 5/26/99 Thu 5/26/99 214
- ----------------------------------------------------------------------------------------------------------------------------
216 C.E.I. Issue P.O. for Equipment 2d Fri 5/27/99 Fri 5/28/99 215
- ----------------------------------------------------------------------------------------------------------------------------
217 Vendor Submittal Preparation 2w Tue 6/1/99 Mon 6/14/99 216
- ----------------------------------------------------------------------------------------------------------------------------
218 CEI/NaviSite Review & Approve 3d Tue 6/15/99 Thu 6/17/99 217
- ----------------------------------------------------------------------------------------------------------------------------
219 Fabrication & Delivery of Equipment 14w Tue 6/1/99 Wed 9/8/99 216
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- -------------------------------------------------------------------------------------------------------------------
ID Task Name Duration Start Finish Predecessors
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
220 COMPUTER ROOM UNITS 75d Fri 6/25/99 Tue 10/12/99
- -------------------------------------------------------------------------------------------------------------------
221 Therma Submit Computer Room Units Package for Approval 0d Fri 6/25/99 Fri 6/25/99 68
- -------------------------------------------------------------------------------------------------------------------
222 NaviSite Review & Approve Computer Room Unit Bid Analysis 2d Mon 6/28/99 Tue 6/29/99 221
Package
- -------------------------------------------------------------------------------------------------------------------
223 Therma Issue P.O. for Computer Room Unit 1d Wed 6/30/99 Wed 6/30/99 222
- -------------------------------------------------------------------------------------------------------------------
224 Vendor Submittal Preparation 2w Thu 7/1/99 Thu 7/15/99 223
- -------------------------------------------------------------------------------------------------------------------
225 CEI/NaviSite Review & Approve 2d Fri 7/16/99 Mon 7/19/99 224
- -------------------------------------------------------------------------------------------------------------------
226 Fabrication & Delivery of Equipment 12w Tue 7/20/99 Tue 10/12/99 225
- -------------------------------------------------------------------------------------------------------------------
227 DOORS/FRAMES/HARDWARE 50.5d Fri 7/16/99 Mon 9/27/99
- -------------------------------------------------------------------------------------------------------------------
228 XL Solicit D/F/H/Bids 1.5w Fri 7/16/99 Tue 7/27/99 42,50
- -------------------------------------------------------------------------------------------------------------------
229 Award D/F/H 3d Tue 7/27/99 Fri 7/30/99 228
- -------------------------------------------------------------------------------------------------------------------
230 D/F/H Submittal Preparation, Review, & Approval 2w Fri 7/30/99 Fri 8/13/99 229
- -------------------------------------------------------------------------------------------------------------------
231 D/F/H Delivery (Aluminum Frames) 6w Fri 8/13/99 Mon 9/27/99 230
- -------------------------------------------------------------------------------------------------------------------
232
- -------------------------------------------------------------------------------------------------------------------
233 CONSTRUCTION 87d Wed 6/30/99 Mon 11/1/99
- -------------------------------------------------------------------------------------------------------------------
234 SEISMIC UPGRADE 20d Wed 6/30/99 Wed 7/28/99
- -------------------------------------------------------------------------------------------------------------------
235 Complete Seismic Upgrade Work to Existing Bldg. 20d Wed 6/30/99 Wed 7/28/99 14FS+5d,10
3FS-
- -------------------------------------------------------------------------------------------------------------------
236 OWNER EQUIPMENT INSTALLATION 2d Thu Mon10/18/99 193
10/14/99
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- -------------------------------------------------------------------------------------------------------------------
ID Task Name Duration Start Finish Predecessors
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
237 NaviSite Begin Racks and Cabling at Data Rooms 0d Mon Mon 10/18/99 285FF
10/18/99
- -------------------------------------------------------------------------------------------------------------------
238 Second Floor Available For Office Furniture Installation 0d Thu Thu 10/14/99 268
10/14/99
- -------------------------------------------------------------------------------------------------------------------
239 EQUIPMENT YARDS 66d Mon 7/12/99 Tue 10/12/99
- -------------------------------------------------------------------------------------------------------------------
240 Generator & Fuel Oil Enclosure 62d Wed 7/14/99 Fri 10/8/99
- -------------------------------------------------------------------------------------------------------------------
241 Layout & Demo Existing AC Paving 2d Wed 7/14/99 Thu 7/15/99 254
- -------------------------------------------------------------------------------------------------------------------
242 Underground Conduits/Re-Route Existing Utilities 15d Fri 7/16/99 Thu 8/5/99 241,96
- -------------------------------------------------------------------------------------------------------------------
243 Foundations/S.O.G./Hskpng. Pads at Equip. Area 15d Fri 8/13/99 Thu 9/2/99 242,113
- -------------------------------------------------------------------------------------------------------------------
244 Set & Anchor Generators & Fuel Tanks 5d Mon 9/13/99 Fri 9/17/99 243FS+5d,1
88,18
- -------------------------------------------------------------------------------------------------------------------
245 Erect & Coat CMU Wall 15d Fri 9/3/99 Mon 9/24/99 243
- -------------------------------------------------------------------------------------------------------------------
246 Termination @ Generators 5d Mon 9/30/99 Fri 9/24/99 244
- -------------------------------------------------------------------------------------------------------------------
247 Complete Fuel Oil Piping 5d Mon 9/20/99 Fri 9/24/99 244
- -------------------------------------------------------------------------------------------------------------------
248 Patch Paving (throughout) 3d Mon 9/27/99 Wed 9/29/99 245,258
- -------------------------------------------------------------------------------------------------------------------
249 HiPot/ETI Test 3d Mon 9/27/99 Wed 9/29/99 246
- -------------------------------------------------------------------------------------------------------------------
250 Fill & Startup Fuel Oil System 5d Mon 9/27/99 Fri 10/1/99 247
- -------------------------------------------------------------------------------------------------------------------
251 Generator Start-Up 3d Mon 10/4/99 Wed 10/6/99 250,246
- -------------------------------------------------------------------------------------------------------------------
252 Gates/Misc. Painting/Pavement Striping 7d Thu 9/30/99 Fri 10/8/99 248,247,245
- -------------------------------------------------------------------------------------------------------------------
253 Switchgear and Transformer Enclosure 66d Mon 7/12/99 Tue 10/12/99
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- -------------------------------------------------------------------------------------------------------------------
ID Task Name Duration Start Finish Predecessors
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
254 Layout & Demo Existing AC Paving 2d Mon 7/12/99 Wed 7/14/99 255SF
- -------------------------------------------------------------------------------------------------------------------
255 Underground Conduits/Re-Route Existing Utilities 15d Wed 7/14/99 Tue 8/3/99 96
- -------------------------------------------------------------------------------------------------------------------
256 Foundations/S.O.G./Hskpng. Pads at Equip. Area 15d Fri 8/13/99 Thu 9/2/99 255,113
- -------------------------------------------------------------------------------------------------------------------
257 Set & Anchor Equipment 5d Mon 9/13/99 Fri 9/17/99 256FS+5d,2
05,21
- -------------------------------------------------------------------------------------------------------------------
258 Erect & Coat CMU Wall 15d Fri 9/3/99 Fri 9/24/99 256
- -------------------------------------------------------------------------------------------------------------------
259 Terminations 10d Mon 9/20/99 Fri 10/1/99 257
- -------------------------------------------------------------------------------------------------------------------
260 Megger/HiPot/ETI Test 5d Mon 10/4/99 Fri 10/8/99 259
- -------------------------------------------------------------------------------------------------------------------
261 Energize 2d Mon Tue 10/12/99 260
10/11/99
- -------------------------------------------------------------------------------------------------------------------
262 OFFICE SPACE - SECOND FLOOR 60d Thu 8/5/99 Thu 10/28/99
- -------------------------------------------------------------------------------------------------------------------
263 Complete M.E.P. Overhead Rough-In 10d Thu 8/5/99 Wed 8/18/99 235FS-
15d,81,10
- -------------------------------------------------------------------------------------------------------------------
264 Install Framing and Drywall 15d Thu 8/12/99 Wed 9/1/99 263 FS-5d
- -------------------------------------------------------------------------------------------------------------------
265 Install Elevator Rails and Cabs 20d Thu 8/19/99 Thu 8/16/99 263
- -------------------------------------------------------------------------------------------------------------------
266 Install Ceiling Grid, Fixtures and Diffusers 10d Thu 9/2/99 Thu 9/16/99 264
- -------------------------------------------------------------------------------------------------------------------
267 Install Flooring 10d Fri 9/17/99 Thu 9/30/99 266
- -------------------------------------------------------------------------------------------------------------------
268 Complete Office Space Finishes 10d Fri 10/1/99 Thu 10/14/99 267,265FF,2
31
- -------------------------------------------------------------------------------------------------------------------
269 Start-Up, Test and Balance Office Areas 10d Fri 10/15/99 Thu 10/28/99 266,261FS+
2d
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- ----------------------------------------------------------------------------------------------------------------------------
ID Task Name Duration Start Finish Predecessors
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
270 DATA CENTER - FIRST FLOOR 71D Thu 7/22/99 Fri 10/29/99
- ----------------------------------------------------------------------------------------------------------------------------
271 Complete Excavation and Install U/G Utilities 10d Thu 7/22/99 Wed 8/4/99 26FS-3d,103FS-5
- ----------------------------------------------------------------------------------------------------------------------------
272 Complete M.E.P. Overhead Rough-In & Preaction System 10d Mon 8/2/99 Fri 8/13/99 235FS-15d,271FS
- ----------------------------------------------------------------------------------------------------------------------------
273 FM-200 Rough-In 10d Mon 8/2/99 Fri 8/13/99 272FF
- ----------------------------------------------------------------------------------------------------------------------------
274 Metal Stud Wall Framing 10d Mon 8/9/99 Fri. 8/20/99 272FS-5d
- ----------------------------------------------------------------------------------------------------------------------------
275 In-Wall Rough-Ins 12d Thu 8/12/99 Fri 8/27/99 274FS-7d
- ----------------------------------------------------------------------------------------------------------------------------
276 Rock & Tape 12d Thu 8/19/99 Fri 9/3/99 275FS-7d
- ----------------------------------------------------------------------------------------------------------------------------
277 Paint 10d Fri 8/27/99 Fri 9/10/99 276FS-6d
- ----------------------------------------------------------------------------------------------------------------------------
278 Epoxy Floor Coating at Battery Room 6d Fri 9/3/99 Mon 9/13/99 277FS-5d
- ----------------------------------------------------------------------------------------------------------------------------
279 Install Ceiling Grid, Fixtures and Diffusers 10d Fri 9/3/99 Fri 9/17/99 277FS-5d
- ----------------------------------------------------------------------------------------------------------------------------
280 Layout and Install Raised Floor Pedestals 2w Mon 9/13/99 Fri 9/24/99 279FS-5d,148
- ----------------------------------------------------------------------------------------------------------------------------
281 Underfloor MEP Rough-Ins 2w Mon 9/20/99 Fri 10/1/99 280FS-1w
- ----------------------------------------------------------------------------------------------------------------------------
282 Set Raised Floor Panels 1w Thu 9/30/99 Wed 10/6/99 281FS-2d
- ----------------------------------------------------------------------------------------------------------------------------
283 NOC Interior Buildout & AV Equipment Installation 3w Mon 10/4/99 Mon 10/25/99 277FS+5d,171,17
- ----------------------------------------------------------------------------------------------------------------------------
284 Set and Connect Computer Room AC Units 10d Tue 10/5/99 Mon 10/18/99 282FS-2d
- ----------------------------------------------------------------------------------------------------------------------------
285 Complete Server Room Finishes 8d Thu 10/7/99 Mon 10/18/99 278,282
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
XL CONSTRUCTION NaviSite San Jose Data Center June 22, 1999
JOB #2031 Design and Construction Schedule Exhibit "C" Rev. 4
- ----------------------------------------------------------------------------------------------------------------------------
ID Task Name Duration Start Finish Predecessors
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
286 Start-Up & Check-Out Computer Room AC Units 1.5w Thu 10/19/99 Thu 10/28/99 284,261FS+2d,25
- ----------------------------------------------------------------------------------------------------------------------------
287 Functional Testing - Server Rooms & Electrical Systems 16d Fri 10/8/99 Fri 10/29/99 251,261FS-3d
- ----------------------------------------------------------------------------------------------------------------------------
288 AGENCY APPROVALS 10d Tue 10/19/99 Mon 11/1/99
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
BID PACKAGE #2
ATTACHMENT NO. 2 - LIST OF BID DOCUMENTS
7/16/99
Drawings
<TABLE>
<CAPTION>
<S> <C> <C>
Sheet Description Date
A0 Title 7/16/99
A0.1 Title 24 7/16/99
A0.2 Code Compliance Plans 7/16/99
A1.0 Site Plan 7/16/99
A1.1 Partial Landscape Plan 7/16/99
A2.1 First Floor Plan 8/6/99
A2.2 Second Floor Plan 8/6/99
A2.1f First Floor Finish Plan 8/1/99
A2.1q First Floor Equipment Plan 7/16/99
A2.1r First Floor Reflected Ceiling Plan 6/24/99
A2.2f Second Floor Finish Plan 8/2/99
A2.2r Second Floor Reflected Ceiling Plan 8/6/99
A2.3 Roof Plan 7/16/99
A2.4.1 Enlarged Plans - Restrooms & Showers 8/6/99
A3.1 Finish & Door Frame Schedules 8/5/99
A3.2 Wall Types, Mounting Heights & Window Schedule 7/16/99
A4.1 Building Sections 7/16/99
A4.2 Wall Sections 7/16/99
A4.3 Enlarged Stair & Elevator Plans 7/16/99
A5.1 Exterior Elevations 7/16/99
A6.1 Penetration & Roof Details 7/16/99
A7.1 Interior Elevations & Finish Patterns 8/6/99
A8.1 Interior Details 8/6/99
A8.2 Interior Details 7/16/99
A8.3 Interior Details 7/16/99
A8.4 Interior Details 7/16/99
A8.5 Interior Details/Enlarged Elevator Plan 7/16/99
Structural
S0.1T General Notes 7/9/99
S1.0T Plans 7/9/99
S1.1T Plans 6/24/99
S2.0T Details 7/9/99
S2.1T Details 6/30/99
S2.2T Details 7/9/99
Mechanical
M0 Title Sheet 8/13/99
M1.10 Mechanical First Floor Plan 8/13/99
M1.2.0 Mechanical Second Floor Plan 8/13/99
M1.3.0 Mechanical Roof Plan 8/13/99
M2.1 Mechanical Schedules 8/13/99
M3.1 Mechanical Details 7/26/99
M3.2 Mechanical Details 8/13/99
M4.1 Mechanical Flow Schematics 8/13/99
M4.2 Mechanical Flow Schematics 8/12/99
M5.1 Mechanical Title 24 8/13/99
MP1.1.0 Mechanical First Floor Piping Plan 7/26/99
MP1.1.1 Mechanical Partial Yard Piping Plan 8/12/99
MP1.2.0 Mechanical Second Floor Zoning Plan 8/13/99
Plumbing
P0.0.1 Site Plumbing Plan 8/12/99
P1.0.0 Underground Plumbing Plan 7/2/99
P1.1.0 First Floor Plumbing Plan 7/2/99
P1.2.0 Second Floor Plumbing Plan 6/25/99
P1.3.0 Roof Plumbing Plan 6/25/99
P31 Plumbing Details 6/25/99
Electrical
E-0 General 7/28/99
E-0.1 Title 24 7/8/99
E-1.1 Site Plan 7/8/99
E-2.1L First Floor Lighting Plan 7/8/99
E-2.1P First Floor Power Plan 7/28/99
E-2.2L Second Floor Lighting Plan 7/8/99
E-2.2P Second Floor Power Plan 7/8/99
E-2.3P Roof Plan 7/8/99
E-3.1SD Single Line Diagram - Composite 7/28/99
E-3.2SD Single Line Diagram - Part 1 7/28/99
E-3.3SD Single Line Diagram - Part 3 7/28/99
E-3.4SD Single Line Diagram - Part 4 7/28/99
E-4.1WD Switch Gear Wiring Diagrams - Part 1 7/8/99
E-4.2WD Switch Gear Wiring Diagrams - Part 2 7/8/99
E-5.1PS Panel Schedules - Part 1 7/28/99
E-5.2PS Panel Schedules - Part 2 7/28/99
E.5.3PS Panel Schedules - Part 3 7/28/99
E.5.4PS Panel Schedules - Part 4 7/28/99
E-6.1RS Raceway Schedules 7/28/99
E.6.2RS Control Conduit Schedules 7/8/99
E-7.1DT Site Electrical Equipment Layout 7/8/99
E-7.2DT Site Electrical Grounding Plan 7/8/99
E-7.3DT Site Electrical Conduit Routing Plan 7/8/99
E-8.1DT Main Electrical Room - Equip. Layout Plan 7/8/99
E-8.2DT Main Electrical Room - Grounding Plan 7/8/99
E-8.3DT Main Electrical Room - Conduit Routing Plan 7/8/99
E-9.1DT Details Part 1 7/8/99
E-9.2DT Details Part 2 7/8/99
E-9.3DT Detail 7/28/99
Specifications dated 7/16/99
Section Description Pages
Supplementary Conditions 6
01010 Summary of the Work 6
01045 Cutting and Patching 2
01049 Supporting from Building Structure 4
01300 Submittals 5
01400 Quality Control 2
01500 Construction Facilities & Temporary Controls 5
01532 Tree & Plant Protection 3
01540 Site Security & Safety 0
01600 Materials & Equipment 4
01640 Hazardous Materials 2
01700 Contract Closeout 3
01900 Color Schedule 2
02070 Demolition for Remodeling 2
02150 Shoring 3
02210 Site Grading 3
02225 Excavation & Backfilling 3
02235 Vapor Barrier & Sand Cushion 1
02380 Caissons 3
02500 Paving 2
02580 Pavement Marking 2
02810 Irrigation System 3
03100 Concrete Formwork 4
03200 Concrete Reinforcement 4
03300 Cast-in-Place Concrete 12
03361 Pneumatically Placed Concrete 4
03650 Metal Frame Grouting 1
04220 Concrete Unit Masonry 5
04400 Stone 0
05120 Structural Steel 6
05210 Steel Joists 2
05300 Metal Decking 3
05440 Light Gauge Framing 2
05999 Miscellaneous Metals 5
06100 Rough Carpentry 5
06200 Finish Carpentry 3
06640 FRP Panels 2
07115 Shower Pans 2
07145 Crystallization Waterproofing 2
07200 Insulation 3
07240 Exterior Insulation Finish System (EIFS) 4
07501 Membrane Roofing (Repair) 2
07600 Flashing & Sheet Metal 3
07700 Roof Accessories 2
07800 Skylights 0
07920 Sealants & Caulking 3
08100 Hollow Metal Doors & Frames 3
08120 Aluminum Frames 2
08200 Wood Doors 2
08300 Special Doors 3
08305 Access Doors 2
08499 Exterior Aluminum & Glass Systems 4
08710 Finish Hardware 7
08800 Glazing 3
09200 Lath and Plaster 4
09290 Drywall Systems 7
09300 Ceramic Tile 4
09500 Acoustical Treatment 4
09650 Resilient Flooring 3
09680 Carpeting 3
09690 Carpet Tile 3
09800 Special Coatings 3
09900 Painting 8
09950 Wall Covering 0
09951 Fabric Wrapped Panels 3
10160 Toilet Partitions 3
10210 Louvers 2
10270 Access Flooring 6
10650 Operable Partitions 3
10800 Toilet Accessories 3
10999 Miscellaneous Specialties 3
11160 Loading Dock Equipment 0
12500 Window Treatment 1
</TABLE>
<PAGE>
EXHIBIT 10.10
COST PLUS FEE
STANDARD FORM OF AGREEMENT
BETWEEN TENANT AND
CONSTRUCTION MANAGER
AGREEMENT Made as of the 12th day of April in the year Nineteen Hundred and
Ninety Nine between NaviSite, Inc., 100 Brickstone Square, Andover, MA 01810
(the "Tenant") and Gilbane Building Company, 7 Jackson Walkway, Providence,
------
Rhode Island, (the "Construction Manager"), for services in connection with the
--------------------
project described on Exhibit - A attached hereto (the "Project"), including,
----------- -------
without limitation, the following: Tenant fit up of the first floor data Center
and MEP support space and with associated infrastructure (rooftop equipment,
generators located at concrete pads on grade, etc.) at 400 Minuteman Drive,
Andover, MA 01810, a building of approximately 150 thousand square feet and
presently under construction, owned by 400 River Limited Partnership, 2101
Rosecrans Boulevard, Suite 5252, El Segundo, CA 90245, hereinafter referred to
as the "Landlord".
--------
The Tenant and the Construction Manager agree as set forth below:
The General Conditions estimate for the project is as per the attached Exhibit -
---------
B dated 4/12/99 (the "General Conditions Estimate").
- - ---------------------------
The Architect/Engineer for the Project are:
. Tenant Architect, Visnick & Caulfield, 334 Boylston Street, Boston, MA
02116
. Architect of Record, Burt Hill Kosar Rittleman Associates, 650
Smithfield Street, Suite 2600, Pittsburgh, PA 15222-3907
. Engineer, HF Lenz Company, 1407 Scalp Avenue, Jonestown, PA 15904-3329
1
<PAGE>
ARTICLE 1
- ---------
The Construction Team and Extent of Agreement
- ---------------------------------------------
The CONSTRUCTION MANAGER accepts the relationship of trust and confidence
established between him and the Tenant by this Agreement. He covenants with the
Tenant to furnish his best skill and judgment and to cooperate with the
Architect/Engineer in furthering the interests of the Tenant. He agrees to
furnish efficient business administration and superintendence and to use his
best efforts to complete the Project in an expeditious and economical manner
consistent with the interest of the Tenant.
1.1 The Construction Team: The Construction Manager and the Tenant, and the
Architect/Engineer called the "Construction Team" shall work from the beginning
of design through construction completion. The Construction Manager shall
provide leadership to the Construction Team on all matters relating to
construction.
1.2 Extent of Agreement: This Agreement represents the entire agreement
between the Tenant and the Construction Manager and supersedes all prior
negotiations, representations or agreements. When Drawings and Specifications
are complete, they shall be incorporated herein by amendment to this Agreement.
This Agreement shall not be superseded by any provisions of the plans and
specifications and may be amended only by written instrument signed by both the
Tenant and the Construction Manager.
1.3 Definitions: The Project is the total tenant fit out and associated
infrastructure and improvements to be performed under this Agreement. The Work
is that part of the Project that a particular Trade Contractor (or Construction
Manager's own forces) is to perform. The term "day" shall mean calendar day
unless otherwise specifically designated.
1.4 Contract Documents. The Contract Documents consist of this Agreement,
Drawings, Specifications, addenda issued prior to execution of this Agreement,
the other documents listed in this Agreement and written modifications issued
after execution after this Agreement. In the event of a conflict among the
Contract Documents, the Contract Documents shall be construed according to the
following priorities:
First: Modifications
Second: This Agreement
Third: Addenda
Fourth: Drawings - As per attached Exhibit A
Fifth: Specifications
ARTICLE 2
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Construction Manager's Services
- -------------------------------
The Construction Manager will perform the following services under this
Agreement in each of the two phases described below.
2.1 Design Phase (A part of the Construction Phase as pertains to Gilbane cost
outlined in Exhibit B).
2.1.1 Consultation During Project Development: Schedule and attend regular
meetings with the Architect/Engineer during the development of conceptual and
preliminary design to advise on site use and improvements, selection of
materials, building systems and equipment. Provide recommendations on
construction feasibility, availability of materials and labor, time requirements
for installation and construction, and factors related to cost, including costs
of alternative designs or materials, preliminary budgets and possible economies.
2.1.2 Scheduling: Develop a Project Time Schedule that coordinates and
integrates the Architect's/Engineer's design efforts with construction
schedules. Update the Project Time schedule on a monthly basis, incorporating a
detailed schedule for the construction operations of the Project, including
realistic activity sequences and durations, allocation of labor and materials,
processing of shop drawings
2
<PAGE>
and samples, and delivery of products requiring long lead time procurement.
Include the Tenant's occupancy requirements showing portions of the Project
having occupancy priority.
2.1.3 Project Construction Budget: Prepare a Project budget as soon as major
Project requirements have been identified, and update periodically for the
Tenant's approval. Update and refine the budget on a monthly basis for the
Tenant's approval and advise the Tenant if it appears that the Project
Construction budget will not be met and make recommendations for corrective
action. The Construction Manager will evidence a good faith effort to provide
his service within the budget outlined in Exhibit B.
2.1.4 Coordination of Construction Documents: Review the Drawings and
Specifications as they are being prepared, recommending alternative solutions
whenever design details affect construction feasibility or schedule without,
however, assuming any of the Architect/Engineer's responsibilities for design.
2.1.5 Construction Planning: Recommend for purchase and expedite the
procurement of long lead items to ensure their delivery by the required date
2.1.5.1 Make recommendations to the Tenant and the Architect/Engineer regarding
the division of Work in the Drawings and Specifications to facilitate the
bidding and awarding of Trade Contracts, allowing for phased construction and
taking into consideration such factors as time of performance, availability of
labor, overlapping trade jurisdictions, and provisions of temporary utilities.
2.1.5.2 Review the Drawings and Specifications with the Architect/Engineer to
eliminate areas of conflict and overlapping in the Work to be performed by the
various Trade Contractors and prepare pre-qualification criteria for bidders.
2.1.5.3 Develop Trade Contractor interest in the Project and as working
Drawings and Specifications are completed, take competitive bids on the Work of
the various Trade Contractors. After analyzing the bids, recommend to the
Tenant that such contracts be awarded after Tenant approval. Exceptions to the
Bid process may be required so as to meet the Project schedule via negotiation
with key Trade Contractors.
2.1.6 Equal Employment Opportunity: Determine applicable requirements for
equal employment opportunity programs for inclusion in the bidding documents.
2.2 Construction Phase
------------------
2.2.1 Project Control: Monitor the Work of the Trade Contractors and
coordinate the Work with the activities and responsibilities of the Tenant,
Architect/Engineer, and Construction Manager to complete the Project in
accordance with the Tenant's objectives of cost, time and quality.
2.2.1.1 Maintain a competent full-time staff at the Project site to coordinate
and provide general direction of the Work and progress of the Trade Contractors
on the Project.
2.2.1.2 Establish on-site organization and lines of authority in order to carry
out the overall plans of the Construction Team.
2.2.1.3 Establish procedures for coordination among the Tenant, Landlord,
Architect/Engineer, Trade Contractors and Construction Manager with respect to
all aspects of the Project and implement such procedures.
2.2.1.4 Schedule and conduct weekly progress meetings at which Trade
Contractors, Tenant, Landlord, Architect/Engineer and Construction Manager can
discuss jointly such matters as procedures, progress, problems and scheduling.
Construction Manager shall publish meeting minutes and distribute copies of same
to all applicable parties.
2.2.1.5 Provide regular weekly monitoring of the schedule as construction
progresses. Identify potential variances between scheduled and probable
completion dates. Review schedule for Work not started or incomplete and
recommend to the Tenant and Trade Contractors adjustments in the schedule to
meet the
3
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probable completion date. Provide summary reports of each monitoring and
document all changes in schedule.
2.2.1.6 Determine the adequacy of the Trade Contractors' personnel and
equipment and the availability of materials and supplies to meet the schedule.
Recommend courses of action to the Tenant when requirements of a Trade Contract
are not being met.
2.2.2 Physical Construction: Provide all labor, materials, construction
equipment, tools and subcontract items which are necessary for the completion of
the Project which are not provided by either the Trade Contractors or the
Tenant. Construction Manager shall supervise the Work of all Trade Contractors
and Construction Manager's own forces, and shall use good faith efforts to
coordinate such Work with the work of any of Tenant's separate contractors, so
as to complete the Project in a manner which will meet the Project Schedule and
the Project Budget.
2.2.3 Cost Control: Develop and monitor an effective system of Project cost
control. Revise and refine the initially approved Project Construction Budget,
incorporate approved changes as they occur, and develop cash flow reports and
forecasts as needed. Identify variances between actual and budgeted or
estimated costs on a monthly basis, and advise Tenant whenever projected cost
exceeds budgets or estimates.
2.2.3.1 Maintain cost accounting records on authorized Work performed under
unit costs, actual costs for labor and material, or other bases requiring
accounting records. Afford the Tenant access to these records and preserve them
for a period of three (3) years after final payment.
2.2.4 Change Orders: Develop and implement a system for the preparation,
review and processing of Change Orders reasonably acceptable to Tenant.
Recommend necessary or desirable changes to the Tenant and the
Architect/Engineer, review requests for changes, submit recommendations to the
Tenant and the Architect/Engineer and assist in negotiating Change Orders.
2.2.5 Payments to Trade Contractors: Develop and implement a procedure
reasonably acceptable to Tenant for the review, processing and payment of
applications by Trade Contractors for progress and final payments.
2.2.6 Permits and Fees: Assist the Tenant and Architect/Engineer in
obtaining all permits and approvals pertinent to the construction of the
Project, including, without limitation, building permits and certificates of
occupancy, but excluding permits for inspection or temporary facilities required
to be obtained directly by the various Trade Contractors. Assist in obtaining
permits and approvals from all the authorities having jurisdiction.
2.2.7 Tenant's Consultants: If required, assist the Tenant in selecting and
retaining professional services of a surveyor, testing laboratories and special
consultants, and coordinate these services, without assuming any responsibility
or liability of or for these consultants.
2.2.8 Inspection: Inspect the Work of Trade Contractors for defects and
deficiencies in the Work without assuming any of the Architect/Engineer's
responsibilities for inspection under the Architect/Engineer's contracts with
Tenant.
2.2.8.1 Review the safety programs of each of the Trade Contractors and make
appropriate recommendations. In making such recommendations and carrying out
such reviews, he shall not be required to make exhaustive or continuous
inspections to check safety precautions and programs in connection with the
Project. The performance of such services by the Construction Manager shall not
relieve the Trade Contractors of their responsibilities for the safety of
persons and property, and for compliance with all federal, state and local
statutes, rules, regulations and orders applicable to the conduct of the Work.
2.2.9 Document Interpretation: Refer all questions for interpretation of the
documents prepared by the Architect/Engineer to the Architect/Engineer.
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<PAGE>
2.2.10 Shop Drawings and Samples: In collaboration with the
Architect/Engineer, establish and implement procedures for expediting the
processing and Architect/Engineer approval of shop drawings, samples, and other
submittals. Receive from the Trade Contractors and review all such submittals,
coordinate them with the information contained in related documents, and
transmit them to the Architect/Engineer for its approval.
2.2.11 Reports and Project Site Documents: Record the progress of the
Project. Submit written progress reports to the Tenant, on a monthly basis,
including information on the Trade Contractors' Work, and the percentage of
completion. Keep a daily log available to the Tenant.
2.2.11.1 Maintain at the Project site, on a current basis: records of all
necessary Contracts, Drawings, samples, purchases, materials, equipment,
maintenance and operating manuals and instructions, and other construction
related documents, including all revisions. Obtain data from Trade Contractors
and maintain a current set of record Drawings, Specifications and operating
manuals. At the completion of the Project, deliver all such records to the
Tenant.
2.2.12 Substantial Completion: Upon Substantial Completion of the Work or
designated portions thereof, as determined by Architect/Engineer, determine and
prepare for the Tenant a list of incomplete or unsatisfactory items and a
schedule for their completion and a schedule of values for the cost to complete
each such item. Construction Manager shall assist Tenant and Architect/Engineer
in determining the date of Substantial Completion of the Work or designated
portions thereof.
2.2.13 Start-Up: With the Tenant's maintenance personnel, direct the checkout
of utilities, operations systems and equipment for readiness and assist in their
initial startup and testing by the Trade Contractors.
2.2.14 Final Completion: Provide written notice to the Tenant that the Work
is ready for final inspection and assist Tenant and Architect/Engineer in
determining the date of final completion of the Project. Secure and transmit to
the Tenant all guarantees, warranties, affidavits, releases, bonds and waivers
required by the Contract Documents, applicable law or Tenant. Turn over to the
Tenant all keys, manuals, record drawings, and maintenance stocks.
2.2.15 Warranty: Where any Work is performed by the Construction Manager's own
forces or by Trade Contractors under contract with the Construction Manager, the
Construction Manager shall, and does hereby, warrant that all materials and
equipment included in such Work will be new, unless otherwise specified, and
that such Work will be of good quality, free from improper workmanship and
defective materials and in conformance with the Drawings and Specifications.
With respect to the same Work, the Construction Manager shall correct all Work
defective in material or workmanship for a period of one year from the Date of
Substantial Completion or for such longer periods of time as may be set forth
with respect to specific warranties contained in the trade sections of the
Specifications. If Construction Manager corrects (or causes any Trade Contractor
to correct) any defective Work, then the one year corrective work period
(specific to that area of defective Work or the specific defective part) shall
be extended for an additional one (1) year with respect to such Work from the
date of correction thereof; provided, however, that the corrective work period,
as so extended, shall not exceed two years from the Date of Substantial
Completion or such later date as may be set forth with respect to specific
warranties contained in the trade sections of the Specifications. The
Construction Manager shall collect and deliver to the Tenant any specific
written warranties given by others.
2.2.16 The Construction Manager shall not be responsible for the removal,
encapsulation, transportation, and disposal of any hazardous material, including
without limitation, any asbestos or asbestos-related products as may be required
in connection with the Project, except for any such hazardous materials as may
be brought onto the Project site by Construction Manager. Construction Manager
shall notify Tenant prior to Construction Manager or any Trade Contractor
bringing any such hazardous materials on to the Project site, and shall notify
Tenant immediately upon discovery of any such hazardous materials on the Project
site.
2.3 Additional Services
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2.3.1 At the request of the Tenant, the Construction Manager will provide the
following additional services upon written agreement between the Tenant and
Construction Manager defining the extent of such additional services and the
amount and manner in which the Construction Manager will be compensated for such
additional services.
2.3.2 Notwithstanding the provisions of this paragraph 2.3.2, there shall be
included in the basic services of a Construction Manager hereunder such
investigation, appraisal, or valuation of existing conditions, facilities or
equipment as would be reasonably expected of a construction manager who is
providing construction management services for the construction of the base
building for the Landlord, and no additional compensation (beyond the
Construction Manager's fee) shall be due or payable in connection therewith.
2.3.3 Services related to Tenant furnished equipment, furniture and furnishings
which are not a part of this Agreement
2.3.4 Services for Tenant or rental spaces not a part of this agreement.
2.3.5 Obtaining or training maintenance personnel or negotiation maintenance
service contracts.
ARTICLE 3
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Tenant's Responsibilities
- -------------------------
3.1 The Tenant shall provide full information regarding his requirements for
the Project.
3.2 The Tenant shall designate in writing a representative who shall be fully
acquainted with the Project and has authority to issue and approve Project
Construction Budgets, issue Change Orders, render decisions promptly and furnish
information expeditiously. Any limitations of the foregoing shall be indicated
to the Construction Manager in writing.
3.3 The Tenant shall retain an Architect/Engineer for design and to prepare
construction documents for the project. The Architect/Engineer's services,
duties and responsibilities are described in the agreement between the Tenant
and the Architect/'Engineer, a copy of which will be forwarded to the
Construction Manager.
3.4 Section Deleted.
3.5 The Tenant shall provide auditing services as he may require.
3.6 The Construction Manager will be furnished without charge all copies of
Drawings and Specifications reasonably necessary for the execution of the Work.
3.7 The Tenant shall provide the insurance for the Project as provided in
Paragraph 12.4, and shall bear the cost of any bonds required by Tenant or any
permit granting authority in connection with the Work of the Project.
3.8 The services, information, surveys and reports required by the above
paragraphs or otherwise to be furnished by other consultants employed by the
Tenant, shall be furnished with reasonable promptness at the Tenant's expense
and the Construction Manager shall be entitled to reasonably rely upon the
accuracy and completeness thereof.
3.9 If the Tenant becomes aware of any fault or defect in the Project or non-
conformance with the Drawings and Specifications, he shall give prompt written
notice thereof to the Construction Manager who shall promptly cure such defect.
3.10 It shall be a condition of Construction Manager's obligations hereunder
that:
(i) until such time as the closing of the sale of shares of common stock of
Tenant in a public
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offering pursuant to an effective registration statement under the
securities Act of 1933, as amended, shall have occurred (an "IPO"),
the Guaranty of CMGI, Inc. attached hereto shall remain in full force
and effect; and
(ii) from and after the date of the IPO, Tenant shall deliver a letter of
credit in form and substance reasonably satisfactory to Tenant and
Construction Manager in an amount equal to the amount which Tenant and
Construction Manager reasonably estimate to be necessary to complete
the Project (the "Estimated Contract Balance"). Tenant shall have
--------------------------
the right, from time to time, to reduce the amount of the letter of
credit as the work progresses and the estimated Contract Balance
declines, and to deliver replacement letters of credit in such reduced
amounts. Tenant shall also have the right to substitute other security
in lieu of a letter of credit, including, without limitation, a
guaranty from CMGI, Inc., provided that such security is satisfactory
to Construction Manager in its reasonable discretion.
3.11 The Tenant shall communicate with the Trade Contractors only through the
Construction Manager. This Article shall be void and of no force or effect upon
the termination of this Agreement in accordance with the terms hereof.
3.12 Tenant shall use good faith efforts to identify Gilbane as the
Construction Manager on all public statements and releases in connection with
the Project, including issuance of photographs, renderings, and the like for all
media, as and when appropriate.
ARTICLE 4
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Trade Contracts
- ----------------
4.1 All portions of the Project that the Construction Manager does not perform
with his own forces shall be performed under Trade Contracts. The Construction
Manager shall request and receive proposals from Trade Contractors and Trade
Contracts will be awarded after the proposals are reviewed by the Construction
Manager and approved by Tenant.
4.2 If the Tenant refuses to accept a Trade Contractor recommended by the
Construction Manager, the Construction Manager shall recommend an acceptable
substitute. The Construction Manager shall not be required to contract with
anyone to whom he has made a reasonable objection.
4.3 Trade Contracts will be between the Construction Manager and the Trade
Contractors. The form of the Trade Contracts including the General and
Supplementary Conditions shall be satisfactory to the Construction Manager and
Tenant, and copies of each Trade Contract shall be provided to the Tenant.
Without limitation of the foregoing, all Trade Contracts shall include a
provision pursuant to which the applicable Trade Contractor shall agree to
recognize Tenant as the "owner" thereunder upon written notice from Tenant that
Tenant has terminated this Agreement and elected to assume the applicable Trade
Contract.
4.4 The Construction Manager shall be responsible to the Tenant for the acts
and omissions of his agents and employees, Trade Contractors performing Work
under a contract with the Construction Manager, and such Trade Contractors'
agents and employees.
ARTICLE 5
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Schedule
- --------
5.1 The services to be provided under this Contract shall be in general
accordance with the following schedule:
<TABLE>
<S> <C> <C>
Design Phase: Commencing 4/12/99 Ending: on or about 6/15/99
- -------------
Construction Phase: Commencing on or about 6/15/99 Ending: on or about 1/7/00
- -------------------
</TABLE>
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5.2 Section Reserved
5.3 The Date of Substantial Completion of the Project or a designated portion
thereof is the date certified by Architect/Engineer when (i) construction is
sufficiently complete in accordance with the Drawings and Specifications so the
Tenant can occupy or utilize the Project or designated portion thereof for the
use for which it is intended with a minimum of interference by Construction
Manage and the Trade Contractors and is complete with the exception of punch
list items of a minor nature (having an aggregate value of less than $25,000)
and (ii) Construction Manager has supplied Tenant with a certificate of
occupancy or an equivalent use or occupancy permit issued by the building
inspector within the municipality where the Project is located. Guarantees and
warranties called for by this Agreement or by the Drawings and Specifications
shall commence on the Date of Substantial Completion of the Project or
designated portion thereof, or such later date as may be specified in the
Specifications with respect to any applicable Trade Contractor or supplier.
Should the Construction Manager be unable to secure the certificate of occupancy
due to acts or omissions of the Tenant or its Architect/Engineer which are not
cured within seven days after written notice from the Construction Manager
specifying such acts or omissions in reasonable detail, then such delay shall
entitle the Construction Manager to the benefits allowed under Subparagraphs 5.4
and 7.2.2.
5.4 Subject to the provisions of Section 9.2.1., if the Construction Manager
is delayed at any time in the progress of the Project by any act or neglect of
the Tenant or the Architect/Engineer or by any employee of either, or by any
separate contractor employed by the Tenant, or by changes ordered in the
Project, or by labor disputes, fire, unusual delay in transportation, adverse
weather conditions not reasonably anticipated, unavoidable casualties or any
causes beyond the Construction Manager's control, the Substantial Completion
Date shall be extended by a written modification signed by Tenant and
Construction Manager for a reasonable length of time.
ARTICLE 6
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Article Reserved
ARTICLE 7
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Construction Manager's Fee
- --------------------------
7.1 In consideration of the performance of the Contract, the Tenant agrees to
pay the Construction Manager in current funds as compensation for his services a
Construction Manager's Fee as set forth in Subparagraphs 7.1.1 and 7.1.2.
7.1.1 For the performance of the Design Phase services, the Construction
Manager's fee shall be included in the Construction Phase fee.
7.1.2 For work or services performed during the Design and Construction Phase,
a lump sum fee of $250,000 which shall be paid proportionately to the ratio
which the monthly payment for the Cost of the Project bears to the estimated
cost of the Project, as set forth in the Project Budget, as the same may be
adjusted from time to time upon approval by Tenant. Any balance of this fee
shall be paid at the time of final payment.
7.2 Adjustments in fee shall be made as per Article 7.2.1 only if the
parameters of the scope of the Work expand materially beyond that which is
outlined in, contemplated by or reasonably inferable from, Exhibit A by Change
Order and/or if circumstances which were not reasonably foreseeable and which
are beyond the control of the Construction Manager require an extension of the
Construction Manager's service beyond the date of 1/28/00 which is the date of
cost projection outlined in Exhibit B provided that the Construction Manager
gives Tenant notice of such circumstances within seven days after the occurrence
thereof. Notwithstanding the foregoing or any other provision of the Agreement,
Construction Manager shall not be entitled to any increase in Construction
Manager's Fee or payment for general conditions costs or other compensation
hereunder to the extent that additional time to complete the Project beyond
1/28/00, as adjusted pursuant to Paragraph 5.4, is required due to any
negligence or default of Construction Manager.
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7.2.1 For changes in the Project as provided for in Article 9, the
Construction Manager's fee shall be adjusted by an amount equal to $1.50 per
each $1.00 of Construction Manager's direct labor cost (both Regional Labor and
Field Labor), plus the total cost of any Regional Labor and Regional Support
cost(s) as may be required to administer the change. A sample calculation is
attached hereto as Schedule 7.2.1.
--------------
7.2.2 For delays in the Project not the responsibility of the Construction
Manager as defined in Paragraph 5.4, there will be an equitable adjustment in
the fee and general conditions costs to compensate the Construction Manager for
its increased expenses, if any.
7.3 Included in the Construction Manager's Fee are the following:
7.3.1 Salaries or other compensation of the Construction Manager's employees
at the principal office and branch offices, except employees listed in
Subparagraph 8.2.2.
7.3.2 General operating expenses of the Construction Manager's principal and
branch offices other than the field office.
7.3.3 Any part of the Construction Manager's capital expenses, including
interest on the Construction Manager's capital employed for the project.
7.3.4 Overhead or general expenses of any kind, except as may be expressly
included in Article 8.
7.3.5 Regional Labor and Regional Support as outlined in Exhibit B.
---------
ARTICLE 8
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Cost of the Project
- -------------------
8.1 The term Cost of the Project shall mean charges for services provided by
the Construction Manager and costs necessarily incurred in the Project during
either the Design or Construction Phase, and paid by the Construction Manager.
8.1.1 The Tenant agrees to pay the Construction Manager for the Cost of the
Project as defined in Article 8. Such payment shall be in addition to the
Construction Manager's Fee stipulated in Article 7.
8.2 Cost Items
8.2.1 Section Reserved.
8.2.2 Charges for services provided by the Construction Manager's employees
based on:
8.2.2.1 Direct Personnel Expense of those employees stationed at the field
office, in whatever capacity employed, as per Exhibit B.
---------
8.2.2.2 Section Reserved.
8.2.2.3 Direct Personnel Expense is defined as the direct salaries of the
Construction Manager's employees engaged in performing the services under this
Agreement as described in Subparagraphs 8.2.2.1 and the cost of all employee
fringe benefits, including, without limitation, medical and workers'
compensation insurance, absences, vacations, pension and/or profit sharing, all
in accordance with the Construction Manager's standard personnel policy, and
taxes for such items as unemployment compensation and social security, as per
Exhibit B.
- ---------
8.2.3 Section Reserved.
8.2.4 Reasonable transportation, traveling, moving, temporary subsistence and
hotel expenses of the Construction Manager or of his officers or employees
incurred in discharge of duties connected with the
9
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Project, all in accordance with the Construction Manager's standard personnel
policy; provided that such expenses are approved in advance by Tenant.
8.2.5 Cost of all materials, supplies and equipment incorporated in the
Project, including costs of transportation and storage thereof.
8.2.6 Payments made by the Construction Manager to Trade Contractors for their
Work performed pursuant to contract under this Agreement, including the cost of
any Trade Contractor payment and performance bonds.
8.2.7 Cost, including transportation and maintenance, of all materials,
supplies, equipment, vehicles, and temporary facilities, which are employed and
consumed in the performance of the Work, and cost less salvage value on such
items used but not consumed which remain the property of the Construction
Manager.
8.2.8 Rental charges of all necessary machinery and equipment, exclusive of
hand tools, used at the site of the Project, whether rented from the
Construction Manager or others, including installation, repairs and
replacements, dismantling, removal, costs of lubrication, transportation and
delivery costs thereof, at rental charges consistent with those prevailing in
the area.
8.2.9 Cost of the premiums for all insurance and bonds which the Construction
Manager is required to procure by this Agreement or is deemed necessary by the
Construction Manager and approved by Tenant.
8.2.10 Sales, use, gross receipts or similar taxes related to the Project
imposed by any governmental authority, and for which the Construction Manager is
liable.
8.2.11 The Construction Manager is not required to indemnify for patent
infringement as may be caused by the design documents of the Architect/Engineer,
except to the extent that Construction Manager knew that the applicable
material, equipment or technique infringed upon the patent rights of any third
party and failed to notify Tenant and Architect/Engineer prior to the
installation or procurement thereof.
8.2.12 Losses, expenses or damages to the extent not compensated by insurance
or otherwise, including settlement of Trade Contractor claims or suits with
prior Tenant written approval.
8.2.13 In repairing or correcting damaged or nonconforming Work executed by the
Construction Manager or the Construction Manager's Trade Contractors or
suppliers, provided that such damaged or nonconforming Work was not caused by
the negligence or failure to fulfill a specific responsibility to the Tenant set
forth in this Agreement of the Construction Manager or the Construction
Manager's foremen, engineers or superintendents, or other supervisory,
administrative or managerial personnel of the Construction Manager, or the
failure of the Construction Manager's personnel to supervise the Work of the
Trade Contractors or suppliers, and only to the extent that the cost of repair
or correction is not recoverable by the Construction Manager from insurance,
Trade Contractors or suppliers.
8.2.14 Project expenses such as telegrams, long-distance telephone calls,
telephone service at the site, expressage, printing, reproduction and similar
items, as per Exhibit B.
---------
8.2.15 Cost of removal of all debris.
8.2.16 Cost incurred due to an emergency affecting the safety of persons and
property except to the extent such emergency is caused by the negligence of the
Construction Manager.
8.2.17 Cost of supplies for job site computer.
8.2.18 Cost of corporate and regional data processing/MIS services billable at
an hourly rate of $2.00 per hour times the labor hours (jobsite only) expended
for the Project, as per Exhibit B.
---------
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8.2.19 Legal costs reasonably and properly incurred by the Construction Manager
in the discharge of its duties under this Agreement with prior Tenant written
approval which shall not be unreasonably withheld provided that such costs do
not arise from any default by the Construction Manager of its obligations
hereunder or under any contract or agreement with any Trade Contractor or
supplier, or any fault of Construction Manager relating to any permit or
approval.
8.2.20 Cost of storage of Project records beyond Project completion, as per
Exhibit B.
- ---------
8.2.21 Section Reserved.
8.2.22 All costs directly, reasonably and properly incurred in the performance
of the Project and not included in the Construction Manager's Fee as set forth
in Paragraph 7.3, subject to Tenant's prior written approval which shall not be
unreasonably withheld.
8.3 Section Reserved.
8.4 The Cost of the Project shall not include:
.1 Cost due to the negligence of Construction Manager or to the failure
of Construction Manager to fulfill a specific responsibility to
Tenant set forth in the Contract Documents.
.2 Fines, penalties, sanctions or impositions assessed or imposed by
any governmental body, instrumentality or tribunal to the extent
arising from any act or omission of Construction Manager or any
Trade Contractor.
.3 Costs associated with Construction Manager's failure to obtain any
and all permits in a timely manner, including without limitation,
the costs of any delays resulting therefrom, unless such failure is
due to the failure of the Drawings and Specifications to conform
with the laws and regulations applicable thereto.
.5 Costs of accelerating the Work to the extent caused by the
negligence or default of Construction Manager.
.6 Costs resulting from the failure of Construction Manager or any
Trade Contractor to procure and maintain insurance as required by
the Contract Documents.
.7 Overtime required to the extent caused by the negligence or fault of
Construction Manager.
.8 Project incentive bonuses, except as approved in advance by Tenant
in writing.
.9 Cost of bonding or securing liens or defending claims filed by any
Trade Contractor or supplier arising from any default by
Construction Manager in making any payment due to any such Trade
Contractor or supplier, unless such default by Construction Manager
is due to a default by Tenant in making progress payments to
Construction Manager hereunder.
.10 Losses or expenses for which Construction Manager is compensated by
insurance.
ARTICLE 9
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Changes in the Project
- ----------------------
9.1.1 The parties hereby acknowledge the Project is being designed and built
on a so-called "fast track" basis. As such, the Drawings and Specifications are
not complete as of the date hereof. The development of the Drawings and
Specifications may require multiple rounds of drafting, review, comments,
changes and modifications. The Project Construction Budget and the Project
Schedule (including the date of Substantial Completion) shall be subject to
adjustment in connection with such
11
<PAGE>
changes and modifications to the Drawings and Specifications. However, subject
to the provisions of Section 9.1.2 and 9.1.3 below, no such change or and
modification to the Drawings and Specifications shall constitute (or require) a
"Change Order" or entitle Construction Manager to any claim for an adjustment to
Construction Manager's fee, notwithstanding whether any such change or
modification requires alteration, removal, replacement or reperformance of Work
which has been completed provided the Work requested is within the parameters of
the scope of the Work outlined in, contemplated by or reasonably inferable from
Exhibit A and that the Work can be completed by the date of 1/28/00, which is
the date of cost projection outlined in Exhibit B and which date is subject to
extension to the extent not caused by or resulting from any negligence or
default of the Construction Manager. Should the "Change Order" be materially
different than the scope of Work outlined in, contemplated by or reasonably
inferable from Exhibit A and/or should the Change Order cause an extension of
Construction Manager service beyond the date of 1/28/00 (as the same may be
extended as aforesaid), but subject to the provisions of Section 7.2 hereof, the
Construction Manager will provide a revised Exhibit B for the cost of the
administration of the change with a fee calculation as per the terms of Article
7.2.1.
9.1.2 A "Change Order" is a written order to the Construction Manager signed by
the Tenant or his authorized agent issued after the execution of this Agreement
and the finalization of any applicable Drawings and Specifications, authorizing
a Change in the Project or the method or manner of performance and/or an
adjustment in the Project Construction Budget, the Construction Manager's fee or
the Substantial Completion Date. Trade Contractors shall be entitled to
adjustment of their fees and costs for Change Order work in accordance with the
terms of their respective Trade Contracts. The Construction Manager shall be
entitled to compensation for all Costs of the Project incurred by Construction
Manager in connection with the applicable Change Order work as per the
parameters outlined in Section 9.1.1 above.
9.1.3 Should (i) concealed conditions encountered in the performance of the
Work below the surface of the ground, or (ii) concealed or unknown conditions in
any existing structure which are at variance with the conditions indicated by
the Drawings, Specifications, or Tenant furnished information, or (iii) unknown
physical conditions below the surface of the ground or concealed or unknown
conditions in an existing structure which are of an unusual nature, differing
materially from those ordinarily encountered and generally recognized as
inherent in work of the character provided for in this Agreement be encountered,
then, to the extent that such conditions were not reasonably foreseeable by
Construction Manager, the Project Construction Budget and the Substantial
Completion Date shall be equitably adjusted by Change Order upon claim by either
party made within seven (7) days after the date of discovery of the applicable
condition (provided, however, that Construction Manager's fee shall not be
increased except to the extent that the applicable condition results in a delay
in the date of Substantial Completion, in which case Construction Manager's fee
shall be equitably adjusted). No such claim shall be valid unless so made. Any
change in the Project Construction Budget or the Substantial Completion Date or
Construction Manager's fee resulting from such claim shall be authorized only by
Change Order.
9.2 Claims for Additional Cost or Time
----------------------------------
9.2.1 If the Construction Manager wishes to make a claim for an extension in
the Substantial Completion Date, he shall give the Tenant written notice thereof
within seven (7) days time after the occurrence of the event giving rise to such
claim. This notice shall be given by the Construction Manager before proceeding
to execute any Work, except in an emergency endangering life or property in
which case the Construction Manager shall act, at his discretion, to prevent
threatened damage, injury or loss. Claims arising from delay shall be made
within seven (7) days time after the delay. No such claim shall be valid unless
so made. Any change in the Project Construction Budget or Substantial Completion
Date resulting from such claim shall be authorized by Change Order.
9.3 Minor Changes in the Project
----------------------------
9.3.1 The parties hereby acknowledge and agree that no Change Order shall be
valid or effective unless signed by Tenant.
9.4 Emergencies
-----------
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9.4.1 In any emergency affecting the safety of persons or property, the
Construction Manager shall act, at his discretion, to prevent threatened damage,
injury or loss. Any extension of time claimed by the Construction Manager on
account of emergency work shall be determined as provided in this Article.
ARTICLE 10
- ----------
Discounts
- ---------
All discounts for prompt payment shall accrue to the Tenant to the extent the
Cost of the Project is paid directly by the Tenant or from a fund made available
by the Tenant to the Construction Manager for such payments. All trade
discounts, rebates and refunds, and all returns from sale of surplus materials
and equipment, shall be credited to the Cost of the Project.
ARTICLE 11
- ----------
Payments to the Construction Manager
- ------------------------------------
11.1 The Construction Manager shall submit monthly to the Tenant and
Architect/Engineer a statement, sworn to if required, showing all moneys paid
out, costs accumulated or costs incurred on account of the Cost of the Project
during the previous month and the amount of the Construction Manager's Fee due
as provided in Article 7. Construction Manager shall coordinate monthly
requisition meetings and delivery of monthly requisitions with the meeting and
requisition schedule for the work being performed by Construction Manager for
Landlord. Each monthly requisition shall be accompanied by lien waivers from
each Trade Contractor and Construction Manager (for the previous months billing
except that final lien waivers shall be required for release of retainage and
final payment to any Trade Contractor or Construction Manager) in the statutory
form, and such other invoices, receipts and supporting documentation as Tenant
or Architect/Engineer may reasonably request. Payment by the Tenant to the
Construction Manager less retainage as hereinafter provided, shall be made
within thirty (30) days after it is submitted. The Tenant shall withhold from
each monthly payment an amount equal to ten percent (10%) on account of each
Trade Contractor's payment. At such time as each Trade Contractor's Work is
fifty percent (50%) complete, no further retainage will be withheld, provided,
in the Tenant's and the Construction Manager's opinions, the Trade Contractor is
performing satisfactorily. The Construction Manager will be paid one hundred
percent (100%) of its direct costs and fee earned to the billing date.
11.1.1 The Construction Manager shall maintain detailed statements, including
without limitation, payroll records, receipted invoices, check vouchers, and any
other evidence demonstrating costs incurred by the Construction Manager on
account of the Cost of the Project, which records shall be available for the
Tenant's examination during regular business hours.
11.2 Within thirty (30) days after the date of Substantial Completion of the
Work, Tenant shall release the retainage held by Tenant with respect to the Cost
of the Project, less an amount equal to 200% of the estimated cost of completing
any unfinished punchlist items, provided that said unfinished items are listed
separately and the estimated cost of completing any unfinished items likewise
listed separately. Thereafter, Tenant shall pay to Construction Manager, within
thirty (30) days of the Construction Manager's invoice, the amount retained for
incomplete items as each of said items is completed.
11.3 The Construction Manager shall pay all the amounts due Trade Contractors
or other persons with whom he has a contract within seven (7) days after receipt
of any payment from the Tenant, the application for which includes amounts due
such Trade Contractor or other persons. Before issuance of final payment, the
Construction Manager shall submit to Tenant satisfactory evidence that all
payrolls, materials bills and other indebtedness connected with the Project have
been paid or otherwise satisfied, together with final lien waivers from each
Trade Contractor and Supplier.
11.4 If the Tenant should fail to pay the Construction Manager within seven
(7) days after the time the payment of any amount becomes due, then the
Construction Manager may, upon seven (7) additional days' written notice to the
Tenant and the Architect/Engineer, stop the Project until payment of the amount
owing has been received.
13
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11.5 Payments due but unpaid shall bear interest at the rate of one percent
above the Fleet/Norstar Bank prime rate prevailing on the date payment was due.
11.6 In the event a lien or notice of contract is filed or claimed against the
Project site by any Trade Contractor, laborer or supplier of materials, the
Construction Manager shall immediately bond such lien or cause such lien to be
discharged. Any payment due Construction Manager hereunder shall be reduced by
an amount up to one hundred fifty percent (150%) of the amount of any such lien
until such lien is removed as of record and/or bonded.
ARTICLE 12
- ----------
Insurance, Indemnity and Waiver of Subrogation
- ----------------------------------------------
12.1 Indemnity
12.1.1 The Construction Manager agrees to indemnify and hold the Tenant and
the Landlord harmless from all claims for bodily injury and property damage
(other than the damage or loss to the Work itself and other property insured
under Paragraph 12.4) that may arise from the Construction Manager's or any
Trade Contractor's operations under this Agreement.
12.1.2 The Tenant shall cause any other contractor who may have a contract
with the Tenant to perform construction or installation work in the areas where
Work will be performed under this Agreement, to agree to indemnify the Tenant,
the Construction Manager and the Landlord and hold them harmless from all claims
for bodily injury and property damage (other than property insured under
Paragraph 12.4) that may arise from that contractor's operations. Such
provisions shall be in a form reasonably satisfactory to the Construction
Manager.
12.2 Construction Manager's Liability Insurance
------------------------------------------
12.2.1 The Construction Manager shall purchase and maintain such insurance as
will protect him from the claims set forth below which may arise out of or
result from the Construction Manager's operations under this Agreement whether
such operations be by himself or by any Trade Contractor or by anyone directly
or indirectly employed by any of them, or by anyone for whose acts any of them
may be liable.
12.2.1.1 Claims under workers' compensation, disability benefit and other
similar employee benefit acts which are applicable to the Work to be performed.
12.2.1.2 Claims for damages because of bodily injury, occupational sickness or
disease, or death of his employees under any applicable employer's liability
law.
12.2.1.3 Claims for damages because of bodily injury, death of any person other
than his employees.
12.2.1.4 Claims for damages insured by usual personal injury liability coverage
which are sustained (1) by any person as a result of an offense directly or
indirectly related to the employment of such person by the Construction Manager
or (2) by any other person.
12.2.1.5 Claims for damages, other than to the Work itself, because of injury to
or destruction of tangible property, including loss of use therefrom.
12.2.1.6 Claims for damages because of bodily injury or death of any person or
property damage arising out of the ownership, maintenance or use of any motor
vehicle.
12.2.2 The Construction Manager's Commercial General Liability Insurance shall
include premises -- operations (including explosion, collapse and underground
coverage) elevators, independent contractors, completed operations, and blanket
contractual liability on all written contracts, all including broad form
property damage coverage.
14
<PAGE>
12.2.3 The Construction Manager's Commercial General and Automobile Liability
Insurance, as required by Subparagraphs 12.2.1 and 12.2.2 shall be written for
not less than limits of liability as follows:
a. Commercial General Liability
1. General Liability $ 2,000,000 Aggregate
---------
b. Business Automobile Liability
1. Combined Single Limit $ 1,000,000
---------
c. Excess Umbrella Liability $75,000,000
12.2.4 Commercial General Liability Insurance may be arranged under a single
policy for the full limits required or by a combination of underlying policies
with the balance provided by an Excess or Umbrella Liability policy.
12.2.5 The foregoing policies shall contain a provision that coverage
afforded under the policies will not be cancelled or not renewed until at least
sixty (60) days' prior written notice has been given to the Tenant. All
liability insurance policies shall be written on an occurrence basis and shall
name Tenant and Landlord as additional insureds. Certificates of Insurance
showing such coverage to be in force shall be filed with the Tenant prior to
commencement of the Work.
12.2.6 In the event the Tenant elects to provide insurance coverage for the
Construction Manager and/or its Trade Contractors and Trade Subcontractors via a
Wrap-up Insurance Program or otherwise, and the Tenant's insurance program does
not afford the same coverage as stated herein above, the Construction Manager
may purchase a Difference in Conditions policy, the premium for which shall be
reimbursed to the Construction Manager as a Cost of the Project.
12.3 Tenant's Liability Insurance
----------------------------
12.3.1 The Tenant shall be responsible for purchasing and maintaining his own
liability insurance and, at his option, may purchase and maintain such insurance
as will protect him against claims which may arise from operations under this
Agreement.
12.4 Insurance to Protect Project
----------------------------
12.4.1 The Tenant shall purchase and maintain property insurance in a form
acceptable to the Construction Manager upon the entire Project for the full cost
of replacement as of the time of any loss. This insurance shall include as named
insured the Tenant, Landlord, the Construction Manager, Trade Contractors and
their Trade Subcontractors and shall insure against loss from the perils of
Fire, Extended Coverage, and shall include "All Risk" insurance for physical
loss or damage including, without duplication of coverage, at least theft,
vandalism, malicious mischief, transit, collapse, flood, and earthquake. The
Tenant will increase limits of coverage, if necessary, to reflect estimated
replacement cost. The Tenant will be responsible for any co-insurance penalties
or deductibles (provided, however, that Construction Manager shall pay the
amount of the one thousand dollar ($1,000) deductible to the extent that the
applicable loss or claim arises from any negligence of Construction Manager or
any Trade Contractor). If the Project covers an addition to or is adjacent to an
existing building, the Construction Manager, Trade Contractors and their Trade
Subcontractors shall be named as additional insurers under the Tenant's Property
Insurance covering such building and its contents.
12.4.1.1 If the Tenant finds it necessary to occupy or use a portion or
portions of the Project prior to Substantial Completion thereof, such occupancy
shall not commence prior to a time mutually agreed to by the Tenant and
Construction Manager and to which the insurance company or companies providing
the property insurance have consented by endorsement to the policy or policies.
This insurance shall not be cancelled or lapsed on account of such partial
occupancy. Consent of the Construction Manager and of the insurance company or
companies to such occupancy or use shall not be unreasonably withheld.
15
<PAGE>
12.4.2 The Tenant shall purchase and maintain such boiler and machinery
insurance as may be required or necessary. This insurance shall include the
interests of the Tenant, the Construction Manager, Trade Contractors and their
Trade Subcontractors in the Work.
12.4.3 The Tenant shall purchase and maintain such insurance as will protect
the Tenant, Landlord and Construction Manager against loss of use of Tenant's
and Landlord's property due to those perils insured pursuant to Subparagraph
12.4.1. Such policy will provide coverage for expediting expenses of materials,
continuing overhead of the Tenant, Landlord and Construction Manager, necessary
labor expense, including overtime, and other determined exposures approved by
Tenant. Exposures of the Tenant, Landlord and the Construction Manager shall be
determined by mutual agreement and separate limits of coverage fixed for each
item.
12.4.4 The Tenant shall file a copy of certificates for all such policies with
the Construction Manager before an exposure to loss may occur. Copies of any
subsequent endorsements will be furnished to the Construction Manager. The
Construction Manager will be given sixty (60) days notice of cancellation, non-
renewal, or any endorsements restricting or reducing coverage. If the Tenant
does not intend to purchase such insurance, he shall inform the Construction
Manager in writing prior to the commencement of the Work. The Construction
Manager may then effect insurance which will protect the interest of himself,
the Trade Contractors and their Trade Subcontractors in the Project, the cost of
which shall be a Cost of the Project pursuant to Article 8, and the Project
Construction Budget shall be increased accordingly. If the Construction Manager
is damaged by failure of the Tenant to purchase or maintain such insurance or to
so notify the Construction Manager, the Tenant shall bear all reasonable costs
properly attributable thereto.
12.5 Property Insurance Loss Adjustment
----------------------------------
12.5.1 Any insured loss shall be adjusted by the Tenant and/or the Landlord and
made payable to the Tenant and/or the Landlord as trustees for the insured, as
their interests may appear, subject to any applicable mortgagee clause.
12.5.2 Upon the occurrence of an insured loss, monies received will be
deposited in a separate account and the trustees shall make distribution in
accordance with the agreement of the parties in interest.
12.6 Waiver of Subrogation
---------------------
12.6.1 The Tenant and Construction Manager waive all rights against each other,
the Architect/Engineer, Trade Contractors, and their Trade Subcontractors for
damages caused by perils covered by insurance provided under Paragraph 12.4,
except such rights as they may have to the proceeds of such insurance held by
the Tenant and Construction Manager as trustees. The Construction Manager shall
require similar waivers from all Trade Contractors and their Trade
Subcontractors.
12.6.2 The Tenant and Construction Manager waive all rights against each other
and the Architect/Engineer, Trade Contractors and their Trade Subcontractors for
loss or damage to any equipment used in connection with the Project and covered
by any property insurance. The Construction Manager shall require similar
waivers from all Trade Contractors and their Trade Subcontractors.
12.6.3 The Tenant waives subrogation against the Construction Manager,
Engineer, Trade Contractors, and their Trade Subcontractors on all property and
consequential loss policies carried by the Tenant on adjacent properties and
under property and consequential loss policies purchased for the Project after
its completion.
12.6.4 If the policies of insurance referred to in this Paragraph require an
endorsement to provide for continued coverage where there is a waiver of
subrogation, the owners of such policies will cause them to be so endorsed.
12.6.5 The Construction Manager shall require all Trade Contractors to carry
and maintain until completion of such Trade Contractor's work insurance meeting
at least the following requirements: (i) worker's compensation having the
statutory coverage, (ii) comprehensive general liability insurance having
16
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coverage limits which are commercially reasonable for the applicable trades and
approved by Tenant, and (iii) owned, non-owned and hired motor vehicle insurance
having coverage limits which are commercially reasonable for the applicable
trades and approved by Tenant. Such policies of insurance shall name Tenant and
Landlord as additional insureds.
ARTICLE 13
- ----------
13.1 Termination by the Construction Manager
---------------------------------------
13.1.1 If the Project, in whole or substantial part, is stopped for a period of
thirty days under an order of any court or other public authority having
jurisdiction, or as a result of an act of government, such as a declaration of a
national emergency making materials unavailable, through no act or fault of the
Construction Manager, or if the Project should be stopped for a period of thirty
days by the Construction Manager for the Tenant's failure to make payment
thereon, then the Construction Manager may, upon seven days' written notice to
the Tenant, terminate this Agreement and recover from the Tenant payment for all
work executed, the Construction Manager's Fee earned to date (which shall be in
the same percentage as the percentage completion of the work of the Project as
of the date of termination), and for any proven loss sustained upon any
materials, equipment, tools, construction equipment and machinery, cancellation
charges on existing obligations of the Construction Manager.
13.2 Tenant's Right to Perform Construction Manager's Obligations and
----------------------------------------------------------------
Termination by the Tenant for Cause
- -----------------------------------
13.2.1 If the Construction Manager fails to perform any of his obligations
under this Agreement, including any obligation he assumes to perform Work with
his own forces, the Tenant shall have the right, but not the obligation, after
seven days' written notice during which period the Construction Manager fails to
perform such obligation, to make good such deficiencies and charge Construction
Manager for all costs incurred for the remedy of such deficiencies.
13.2.2 If the Construction Manager is adjudged a bankrupt, or if he makes a
general assignment for the benefit of his creditors, or if a receiver is
appointed on account of his insolvency, or if he refuses or fails, except in
cases for which extension of time is provided, to supply enough properly skilled
workmen or proper materials (and such default is not cured within seven (7) days
after notice from Tenant), or if he fails to make proper payment to Trade
Contractors or for materials or labor, or violates any laws, ordinances, rules,
regulations or orders of any public authority having jurisdiction, or otherwise
is guilty of a violation of any provision of this Agreement (and such default is
not cured within seven (7) days after notice from Tenant), then the Tenant may,
without prejudice to any right or remedy, upon giving the Construction Manager
and his surety, if any, written notice, terminate this Agreement and take
possession of the site and of all materials, equipment, tools, construction
equipment and machinery thereon owned by the Construction Manager and may finish
the Project by whatever method he may deem expedient. In such case, the
Construction Manager shall not be entitled to receive any further payment until
the Project is finished. The Construction Manager shall be responsible for
damages incurred by the Tenant arising as a direct result of the Construction
Manager's default hereunder.
13.2.3. The Tenant reserves the right to terminate this agreement for
convenience at any time. Tenant will provide seven (7) days written notice to
the Construction Manager and will pay all costs incurred to that point in time
subject to and in accordance with the terms and conditions of this Agreement,
together with a portion of Construction Manager's Fee (which shall be in the
same percentage as the percentage completion of the work of the Project as of
the date of termination).
ARTICLE 14
- ----------
Assignment and Governing Law
- ----------------------------
14.1 Neither the Tenant nor the Construction Manager shall assign his interest
in this Agreement without the written consent of the other except as to the
assignment of proceeds; provided, however, that (i) Tenant shall have the right
to assign its interest hereunder to any person or entity at any time prior to
17
<PAGE>
Substantial Completion of the Project with the consent of Construction Manager,
such consent not to be unreasonably withheld or delayed, (ii) notwithstanding
the foregoing, Tenant shall have the right to assign its interest hereunder to
any person or entity controlling, controlled by or under control with Tenant or
any of its shareholders, members or partners at any time without the consent of
Construction Manager, and (iii) notwithstanding the foregoing, Tenant shall have
the right to assign its interest hereunder to any person or entity at any time
from or after the date of Substantial Completion of the Project without the
consent of Construction Manager.
14.2 This Agreement shall be governed by the law of the place where the Project
is located.
ARTICLE 15
- ----------
Miscellaneous Provisions
- ------------------------
15.1 It is expressly understood that the Tenant shall be directly retaining the
services of an Architect/Engineer.
15.2 Notwithstanding anything contained herein, it is expressly understood that
the Construction Manager's Project Control Systems, including without limitation
estimating, scheduling, purchasing, cost reporting, and project engineering
systems, and all modifications, additions, or alterations thereto, are and shall
remain the sole property of the Construction Manager.
15.3 It is expressly understood that in the event the Construction Manager
incurs reasonable legal or other professional fees in the process of pursuing or
defending a claim, suit, or dispute with a Trade Contractor which is (i)
directly related to the Project, (ii) not caused by any negligent act or
omission or intentional misconduct of Construction Manager, and (iii) not caused
by any default by Construction Manager under its contract with the applicable
Trade Contractor, then such fees shall be reimbursable to the Construction
Manager as a Cost of the Project pursuant to Article 8 subject, however, to the
Guaranteed Maximum Price if one is established.
15.4 Notwithstanding the event of any claim, dispute, or other matter in
question arising out of or relating to this Agreement or the breach thereof, the
Construction Manager shall carry on the Work and the Tenant shall continue to
make payments in accordance with this Agreement.
15.5 Construction Manager shall cause all trade contracts with trade
contractors (including, without limitation, trade contractors, vendors and
consultants) and all purchase orders or supply agreements with all suppliers of
materials and equipment (including, without limitation, all electrical machinery
and appliances if such equipment contains any hardware, software or embedded
microchips) to contain the following representation, warranty and covenant:
"The (Trade Contractor or supplier, as the case may be) hereby
represents, warrants and covenants that all materials and equipment furnished by
(the applicable Trade Contractor or supplier) to be incorporated into or used in
connection with the Project, including, without limitation, all electrical
machinery and appliances if such equipment contains any hardware, software or
embedded microchips) shall be Year 2000 compliant (as such term is defined
below). (The Trade Contractor or supplier) hereby agrees that (Tenant) shall be
entitled to rely upon this representation, warranty and covenant and that (Trade
Contractor or Supplier) shall be liable to (Construction Manager) and (Tenant)
for any breach thereof. As used herein, the term "Year 2000 Compliant" means
that the equipment or materials, if containing or calling on a calendar function
including, without limitation, any functions indexed to the CPU clock, and any
function providing specific dates or days, or calculating spans of dates or
days: will record, store, process, calculate, present and where appropriate
insert true and accurate dates and calculations for calendar dates falling on or
after (and if applicable, spans of time including) January 1, 2000 and February
29, 2000, and will record, store, process, calculate and present any information
and/or data dependent on or relating to such dates in the same manner, and with
the same functionality, data integrity and performance as the equipment records,
stores, processes, calculates and presents calendar dates on or before December
31, 1999, and in such fashion as to eliminate all ambiguities as to the century
of concern, and correctly and accurately regards and processes data and
information with respect thereto such that such equipment will lose no
functionality (as determined in all material respects in accordance with the
substantive warranty provisions provided by the respective manufacturer.)
Without limitation of
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<PAGE>
the foregoing, the Construction Manager shall use commercially reasonable
efforts to ensure that all material and equipment incorporated in the Project is
Year 2000 compliant.
15.6 Construction Manager hereby agrees that the employees of Construction
Manager listed on Schedule 15.6 attached hereto shall be dedicated to the
-------------
Project and shall not be removed or replaced from the Project without Tenant's
prior written consent.
15.7 Notwithstanding any provision hereof or of any of the Contract Documents
to the contrary, disputes under this Agreement shall not be subject to
arbitration or mediation, but shall be decided by a court of competent
jurisdiction in Boston, Massachusetts. All references in this Agreement or to
any of the Contract Documents shall be deemed to mean and refer to litigation in
a court of competent jurisdiction in Boston, Massachusetts.
15.8 Estoppel Certificates. Each party hereby agrees to deliver to the other,
---------------------
within ten (10) days after any written request thereof, a certificate certifying
(i) the amount that has been paid to Construction Manager by Tenant hereunder as
of the date of such certificate, (ii) that there are not defaults by the
certifying party or, to the best of the certifying parties' knowledge, the
requesting party, under this Agreement, except as set forth in such certificate,
(iii) that this Agreement is in full force and effect and has not been modified
or amended, except to set forth in such certificate, and (iv) such other matters
as the requesting party may reasonably request.
19
<PAGE>
This Agreement executed the day and year first written above.
ATTEST: TENANT:
/s/ C. Newton, Controller
- ------------------------------ NaviSite, Inc.
By: /s/ Kenneth W. Hale
------------------------------------
Title: CFO
---------------------------------
ATTEST: CONSTRUCTION MANAGER:
(illegible)
- ------------------------------ GILBANE BUILDING COMPANY
By: /s/ Thomas F. Gilbane, Jr.
------------------------------------
Title: President/Chief Operating Officer
---------------------------------
20
<PAGE>
Exhibits and Schedules
----------------------
Exhibit Description
------- -----------
A Description of Project
B General Conditions Estimate
Schedule Description
-------- -----------
7.2.1 Example of added fee calculation.
15.6 Key Personnel
21
<PAGE>
GUARANTY
--------
Reference is hereby made to that certain Construction Agreement dated as of
April 12, 1999 by and between Gilbane Building Company and NaviSite, Inc.
("Tenant") (the "Agreement"). Capitalized terms used herein and not otherwise
defined shall have the respective meanings ascribed to such terms in the
Agreement.
CMGI, Inc. ("Guarantor") hereby guarantees the payment and performance by
Tenant of its obligations under the Agreement, subject to, and in accordance
with, the terms and provisions thereof.
Notwithstanding anything to the contrary contained herein, this Guaranty
and all of Guarantor's obligations and agreements hereunder and under the
Agreement shall terminate and be of no further force or effect immediately upon
the closing of the initial public offering of shares of common stock of Tenant
pursuant to an effective registration statement under the Securities Act of
1933, as amended.
CMGI, INC.
By: _______________________________
Name:
Title:
22
<PAGE>
Exhibit A - Note That This Drawing List Represents The Entirety Of The Scope Of
The 400 Minuteman Drive Project for the Landlord As Well As The Fit-Out Work Of
The Tenant. The Documents (In Some Cases) Contain A Blend Of The Work For Both
And The Comments Column Will Attempt To Define The Specific Work Contained On
That Drawing For the Tenant.
Gilbane
400 Minuteman/Navisite Grouped by Discipline
GBCo Job #2695/2728 Date Range: All Dates
400 Minuteman Printed on: 10/15/99
1776 Drive
Andover, MA 01810
Architectural
<TABLE>
<S> <C> <C> <C> <C>
A001 2 General Notes, Partition Types, Door 7/30/99 Tenant responsibility as pertains to First Floor only.
Types, Details
A201 2 First Floor Plan 7/30/99 All Work from inside face of ext. wall is by Tenant.
Stair towers, lobby, toilet rooms and loading dock is
by Landlord.
A202 2 Second Floor Plan 7/30/99 Landlord provided.
A203 2 Roof Plan 7/30/99 Landlord provided.
A301 2 Reflected Ceiling Plan 7/30/99 Landlord provided (Lobby).
A401 2 Floor Finish Plans 7/30/99 Landlord provided (Lobby & Toilet rooms).
A501 Enlarged Stair Plans, Sections, and Details 7/30/99 Landlord provided.
A502 2 Enlarged Stair Plans, Sections, and Details 7/30/99 Landlord provided.
A503 2 Enlarged Toilet Room Plans & Details 7/30/99 Landlord provided.
A504 2 Enlarged Lobby Plans 7/30/99 Landlord provided.
A700 2 Elevations 7/30/99 Landlord provided.
A701 2 Enlarged Elevations 7/29/99 Landlord provided.
A710 2 Wall Sections, Detail Elevations & Plans 7/30/99 Notations "By Others" are by Tenant. Also, Bentonite
waterproofing at below grade ext. foundations is by
Tenant.
A711 2 Lobby Cross Sections 7/30/99 Landlord provided.
A713 2 Wall Sections, 7/30/99 Landlord provided.
</TABLE>
23
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
A714 2 Lobby Longitudinal Sections 7/30/99 Landlord provided.
I-201 2 Partial Second Floor Partition Plan 7/29/99 Landlord provided except for fabric wall
panels to be by Tenant.
I-202 2 Partial Second Floor Partition Plan 7/29/99 Landlord provided except for operable wall
which is by Tenant.
I-203 2 Partial Second Floor Finish Plan 7/29/99 Landlord provided except for areas receiving
fabric wall covering which is by Tenant.
I-204 2 Partial Second Floor Finish Plan 7/29/99 Landlord provided.
I-205 2 Partial Second Floor Furniture Plan 7/29/99 All furniture and workstations shown are by
Tenant.
I-206 2 Partial Second Floor Furniture Plan 7/29/99 All furniture and workstations shown are by
Tenant.
I-207 2 Partial Second Floor Reflected Ceiling 7/29/99 Landlord provided.
Plan
I-208 2 Partial Second Floor Reflected Ceiling 7/29/99 Landlord provided.
Plan
I-301 2 Interior Elevations 7/29/99 NOC areas are by Tenant, Breakroom is by
Landlord, Conf. Room(s) are by Landlord.
I-401 2 Interior Details 7/29/99 Landlord provided except for Moveable
Partition by Tenant.
I-501 2 Door Elevations 7/29/99 Landlord provided except security hardware by
Tenant.
</TABLE>
ARCHITECTURAL - NAVISITE
<TABLE>
<S> <C> <C> <C> <C>
I-000 2 Title Sheet 7/29/99 Tenant provided except shaded areas are
Landlord provided.
I-101 2 Partial First Floor Partition Plan 7/29/99 Tenant provided except shaded areas are
Landlord provided
I-102 2 Partial First Floor Partition Plan 7/29/99 Tenant provided except shaded areas are
Landlord provided.
I-103 2 Partial First Floor Finish Plan 7/29/99 Tenant provided except shaded areas are
Landlord provided.
I-104 2 Partial First Floor Finish Plan 7/29/99 Tenant provided except shaded areas are
Landlord provided.
I-105 2 Partial First Floor Furniture Plan 7/29/99 Tenant provided except shaded areas are
Landlord provided.
I-106 2 Partial First Floor Furniture Plan 7/29/99 Tenant provided except shaded areas are
Landlord provided.
I-107 2 Partial First Floor Reflected Ceiling Plan 7/29/99 Tenant provided except shaded areas are
Landlord provided.
I-108 2 Partial First Floor Reflected Ceiling Plan 7/29/99 Tenant provided except shaded areas are
Landlord provided.
I-502 2 Door Schedule 7/29/99 Tenant provided.
</TABLE>
24
<PAGE>
Civil
<TABLE>
<S> <C> <C> <C> <C>
AL-3 Proposed Grading Plan 4/20/99 Superseded by L-3 5/17/99. Landlord provided.
AL-4 Proposed Drainage & Utilities Plan 4/20/99 Supersede by L-4 5/17/99. Landlord provided.
AL-6 Planting Plan 4/20/99 Superseded by L-5, 5/17/99. Landlord provided.
L-1 Existing Conditions Plan 5/17/99 Landlord provided.
L-10 Details 5/17/99 Landlord provided.
L-2 Existing Conditions Plan 5/17/99 Landlord provided.
L-3 Proposed Grading Plan 5/17/99 Landlord provided.
L-4 Proposed Drainage & Utilities Plan 5/17/99 Landlord provided except for added waterline cost per RFA 25.
L-5 Proposed layout Plan 5/17/99 Landlord provided with exception of implied generator pads
by Tenant.
L-6 SKL-14 Planting - Plan 8/20/99 Landlord provided.
L-7 Details 5/17/99 Landlord provided.
L-8 Details 5/17/99 Landlord provided.
L-9 Details 5/17/99 Landlord provided.
LSC01 NONE 5/17/99 Landlord provided.
</TABLE>
Electrical
<TABLE>
<S> <C> <C> <C> <C>
E-0 1 Electrical Symbols, Abbreviations and 7/30/99 Landlord provided.
Details
E-1 1 Partial First Floor South - Power Plan 7/19/99 Landlord provided.
E-10 2 Roof Plan - North - Electrical Plan 8/ 6/99 Landlord provided.
E-11 1 Mechanical Connections Power Plan 8/ 6/99 Landlord provided.
E-12 Electrical Riser Diagram 7/ 7/99 Landlord provided.
E-13 Electrical Details 7/ 7/99 Landlord provided.
E-14 2 Electrical Details 7/30/99 Landlord provided.
</TABLE>
25
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
E-15 Electrical Details 7/ 7/99 Landlord provided.
E-16 2 Electrical Panel Schedules 8/ 6/99 Landlord provided.
E-17 2 Electrical Panel Schedules 8/ 6/99 Landlord provided.
E-2 2 Partial First Floor North - Power Plan 7/30/99 Landlord provided.
E-3 1 Partial First Floor South - Lighting Plan 7/30/99 Landlord provided.
E-4 1 Partial First Floor North - Lighting Plan 7/30/99 Landlord provided.
E-5 1 Partial Second Floor South - Power Plan 7/19/99 Landlord provided except for UPS wiring shown.
E-6 1 Partial Second Floor North - Power Plan 7/19/99 Landlord provided except for UPS wiring shown.
E-7 1 Partial Second Floor South - Lighting Plan 7/30/99 Landlord provided.
E-8 Partial Second Floor North - Lighting Plan 7/ 7/99 Landlord provided.
E-9 2 Roof Plan - South - Electrical Plan 8/ 6/99 Landlord provided.
ESL-1 2 Electrical Site Lighting and Utility Plan 7/30/99 Landlord provided except for 50% cost
to Tenant for incoming telephone, 100% of cost
for incoming electrical from Generators and 100%
cost for Emergency Intercom Stations.
</TABLE>
Electrical - Navisite
<TABLE>
<S> <C> <C> <C> <C>
E-0/ N 1 Electrical Symbols, Abbreviations and 7/19/99 Tenant provided.
Details
E-1/ N 3 Partial First Floor South - Power Plan 8/ 6/99 Tenant provided.
E-10/ N 2 Electrical Panel Schedules 8/ 6/99 Tenant provided.
E-11/N 1 Electrical Panel Schedules 7/30/99 Tenant provided.
E-12/N Details - Power Distribution Units 7/30/99 Tenant provided.
E-13/N Roof Plan - Security Camera Locations 7/30/99 Tenant provided.
E-14/N 1 2nd Floor Plan Leak Detection Equipment 8/ 6/99 Tenant provided.
Plan
E-2/ N 2 Partial First Floor North - Power Plan 7/30/99 Tenant provided.
E-3/ N Partial First Floor South - Lighting Plan 7/ 7/99 Tenant provided.
E-4/ N Partial First Floor North - Lighting Plan 7/ 7/99 Tenant provided.
E-5/ N 2 Mechanical/ Electrical Room Power Plan 7/30/99 Tenant provided.
E-6/ N 2 Penthouse Area Power and Lighting Plan 8/ 6/99 Tenant provided.
E-7/ N Mechanical/ Electrical Room Duct Bank Plan 7/ 7/99 Tenant provided.
and Details
E-8/ N 1 One Line Diagram 7/19/99 Tenant provided.
E-9/ N 2 Electrical Riser Diagram 8/ 6/99 Tenant provided.
</TABLE>
26
<PAGE>
<TABLE>
<S> <C> <C> <C>
UGC-1/N Underground Conduit 7/ 7/99 Tenant provided.
</TABLE>
Fire Protection
<TABLE>
<S> <C> <C> <C>
FP-1 Partial Second Floor South - Fire 7/ 7/99 Landlord provided.
Protection Plan
FP-2 Partial Second Floor North - Fire 7/ 7/99 Landlord provided.
Protection Plan
FP-3 Penthouse Floor - Fire 7/ 7/99 Landlord provided.
Protection Plan
FP-4 Fire Protection Notes, Symbols, and 7/ 7/99 Landlord provided.
Abbreviations and Details
FP-5 Fire Service Schematic and Schedules 7/ 7/99 Landlord provided.
</TABLE>
Fire Protection - Navisite
<TABLE>
<S> <C> <C> <C> <C>
CS01 2 Cover Sheet 7/30/99 Tenant provided.
FP-1/ N Partial First Floor South - Fire Protection 7/ 7/99 Tenant provided except for FP at Lobby
Plan Zone 5, Stair Towers and Loading Dock.
FP-2/ N Partial First Floor North - Fire Protection 7/ 7/99 Tenant provided except for FP at Lobby
Plan Zone 5, Stair Towers and Loading Dock.
</TABLE>
Mechanical
<TABLE>
<S> <C> <C> <C> <C>
M-0 Symbols, Abbreviations and Notes 7/ 7/99 Landlord provided.
M-1 Partial First Floor South- HVAC Plan 7/ 7/99 Landlord provided.
M-2 1 Partial First Floor North - HVAC Plan 7/30/99 Landlord provided.
M-3 1 Partial Second Floor South - HVAC Plan 7/30/99 Landlord provided.
M-4 1 Partial Second Floor North - HVAC Plan 7/30/99 Landlord provided.
M-5 Roof Plan - South - HVAC Plan 7/ 7/99 Landlord provided.
M-6 Roof Plan - North - HVAC Plan 7/ 7/99 Landlord provided.
M-7 1 Details 7/30/99 Landlord provided.
M-8 Details 7/ 7/99 Landlord provided.
M-9 1 Schedules 7/30/99 Landlord provided with exception of
Tenant shared cost on RTU's/AHU per
RFA 19.
</TABLE>
Mechanical - Navisite
<TABLE>
<S> <C> <C> <C>
M-0 /N Symbols, Abbreviations and Notes 7/ 7/99 Tenant provided.
</TABLE>
27
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
M-1/ N 1 Partial First Floor South - HVAC Plan 7/30/99 Tenant provided.
M-10/ N 2 Details 8/ 6/99 Tenant provided.
M-11/ N 1 Details 7/30/99 Tenant provided.
M-12/ N 1 Schedules 7/30/99 Tenant provided.
M-2/ N Partial First Floor North - HVAC Plan 7/ 7/99 Tenant provided.
M-3/ N Roof - South - HVAC Plan 7/ 7/99 Tenant provided.
M-4/ N Roof - North - HVAC Plan 7/ 7/99 Tenant provided.
M-5/ N 1 Mechanical Room Plan 7/30/99 Tenant provided.
M-6/ N 1 Mechanical Room Sections 7/30/99 Tenant provided.
M-7/ N 1 Mechanical Room Perspective 7/30/99 Tenant provided.
M-8/ N 1 Condenser Water Flow Diagram 7/30/99 Tenant provided.
M-9/ N Chilled Water Flow Diagram 7/ 7/99 Tenant provided.
</TABLE>
Plumbing
<TABLE>
<S> <C> <C> <C> <C>
P1 2 First Floor Plumbing 7/15/99 Landlord provided.
P2 2 Second Floor Plumbing 7/15/99 Landlord provided.
P3 1 Roof Plan Plumbing 5/24/99 Landlord provided.
P4 2 Plumbing 1/4" Scale Toilet Rooms & 7/ 8/99 Landlord provided.
Water/Fire Service Room
P5 1 Plumbing Details & General Notes 5/24/99 Landlord provided.
P6 1 Plumbing Details 5/24/99 Landlord provided.
</TABLE>
Plumbing - Navisite
<TABLE>
<S> <C> <C> <C> <C>
P-1/ N Symbols, Abbreviations and Details 7/ 7/99 Tenant provided.
P-2/ N Partial First Floor South - Plumbing Plan 7/ 7/99 Tenant provided.
P-3/ N Partial First Floor North - Plumbing Plan 7/ 7/99 Tenant provided.
P-4/ N Partial Second Floor South - Plumbing Plan 7/ 7/99 Tenant provided.
P-5/ N Partial Second Floor North - Plumbing Plan 7/ 7/99 Tenant provided.
P-6/ N Roof Plan - Plumbing 7/ 7/99 Tenant provided except drains by Landlord.
P-7/ N 1 Mechanical Room Plan 7/30/99 Tenant provided.
</TABLE>
28
<PAGE>
Structural
<TABLE>
<S> <C> <C> <C> <C>
S100 2 Foundation Plan Area A 5/ 7/99 Landlord provided.
S101 2 Foundation Plan Area B 5/ 7/99 Landlord provided.
S200 2 Second Floor Framing Plan Area A 5/ 7/99 Landlord provided.
S201 2 Second Floor Framing Plan Area B 5/ 7/99 Landlord provided.
S300 3 Roof Framing Plan Area A 6/30/99 By Landlord except for increase steel at
chillers. Also, steel pipe & flashing at 12
locations (RFA 21&45).
S301 2 Roof Framing Plan Area B 5/ 7/99 Landlord provided.
S302 3 High Roof Framing Plan 7/ 1/99 Landlord provided except for steel pipe &
flashing at 12 locations (RFA 21 & 45)
S400 2 Column Schedule 5/ 7/99 Landlord provided.
S401 2 Column Schedule & Typical Details 5/ 7/99 Landlord provided.
S402 2 Lateral Bracing Elevations 5/ 7/99 Landlord provided.
S500 2 Sections & Details 5/ 7/99 Landlord provided.
S600 2 Sections & Details 5/ 7/99 Landlord provided.
S700 3 Sections & Details 7/ 1/99 Landlord provided.
</TABLE>
Structural - Navisite
<TABLE>
<S> <C> <C> <C>
SP-1 Slab On Grade Plan 7/23/99 Tenant provided.
SP-2 Slab On Grade Plan 7/23/99 Tenant provided.
SP-3 Typical Details 7/23/99 Tenant provided.
</TABLE>
29
<PAGE>
Organizational Chart - Schedule 15.6
<TABLE>
<CAPTION>
--------------------
NaviSite
--------------------
GILBANE
Regional Project
Executive
Kevin Unsworth
--------------------
GILBANE
Local Project
Executive
Dave Deforest
(part time)
-----------------------------------------------------------------------
Regional Services Field Staff
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gilbane Gilbane Gilbane Gilbane Gilbane *
Chief Estimator Sr. Purchasing Cost Accounting Project Manager Tenant/MEP
Don Michaels Agent Joe Loiselle Jim Driscoll Coordinator
Gene Oakland Bob Vierra
- ----------------------------------------------------------------------------------------------------------------------------------
Gilbane Gilbane Gilbane *
Architecture Area Data Center
Estimator Superintendant Consultant
Joe McCoy Mick Owens Scott Good
[Text Deleted]
- --------------- -------------------------------------------
Gilbane Gilbane Gilbane *
Mechanical Project Engineer Assistant
Estimator Neil Benner Superintendent
Ashvin Kapadia (part time) Al Choulnerd
[Text Deleted]
- --------------- -------------------------------------------
Gilbane Gilbane *
Plumbing Asst. Project.
Estimator Engr.
John Morenzi Laura C
[Text Deleted]
to 8-12-98
[Text Deleted]
- --------------- -------------------------------------------
Gilbane Gilbane *
Elec. Estimator Technical Assistant
Ron Dupont Jeff Mattson
(part time)
- --------------- -------------------------------------------
Gilbane *
Prj. Accountant
Alan Burns
(part time)
- --------------- -------------------------------------------
</TABLE>
*As per Exhibit B, represents only those whose charges are billed direct and
thus pertinent to the terms of Article 15.6.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT B
GENERAL CONDITIONS SUMMARY
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Estimate Type: GMP Saft: 50,000
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
BUDGET: $0
PRECON SCHEDULE: Through 0.00 MONTHS
CONSTR. SCHEDULE: 8/2/99 Through 1/28/00 5.97 MONTHS
====================================================================================================================================
TOTALS DIRECT LABOR OH & BURDEN DIRECT COST TOTALS
- ------------------------------------------------------------------------------------------------------------------------------------
PRECONSTRUCTION
BP 902 Regional Labor $0 $0 $0
BP 900 Field Labor $0 $0 $0
BP 908 Regional Support $0 $0
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL PRECONSTRUCTION $0 $0 $0 $0
Percent of Budget #DIV/0!
- ------------------------------------------------------------------------------------------------------------------------------------
CONSTRUCTION
BP 922 Regional Labor $26,917 $32,301 $ 59,218
BP 920 Field Labor $113,228 $53,840 $167,068
BP 928 Regional Support $3,536 $ 3,536
BP 925 Field Office Operations $65,020 $ 65,020
BP 926 Field Office Support $55,300 $ 55,300
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CONSTRUCTION $140,145 $86,140 $123,856 $350,141
Percent of Budget
TOTAL GENERAL CONDITIONS $140,145 $86,140 $123,856 $350,141
Percent of Budget
BOND REQUIRED? Yes $0 Calculates from budget above $0
BUILDER'S RISK INSUR. 0 $0 " $0
BUILDING PERMIT 0 $0 " $0
STATE SALES TAX 0 $0 $0
PROFESSIONAL LIAB 0 $0 .00186 up to $1mil $0
GENERAL LIABILITY 0.00416 $0 Get Quote if Prof Liab (greater than) $1 mil $0
TOTAL ALL COSTS $350,141
FEE ANALYSIS
Total Raw Labor $140,145
Excess OH $0
Base fee on Budget 0.00% $0
Base Fee Plus Excess Overhead $0
Less Non-reimbursables $62,754
NET FEE ($62,754)
ROL (0.45)
RATE TABLE
<CAPTION>
<S> <C> <C> <C>
Home Office Field Rates GBCo MIS = 2.00
Excess OH 0.00% Excess OH 0.00% NON REIMBURSABLE ITEMS
Fringes 44.00% Taxes 10.49% Precon discounting 0
Overhead 76.00% Work Cmp 10.10% ? 0
TOTAL 220.00% Maj Med 19.46% ? 0
Escalation Vacation 7.50% ? 0
Precon 0.00% TOTAL 47.55% ? 0
Const. 0.00% TOTAL 0
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
B.P. 902 PRECONSTRUCTION - REGIONAL
LABOR
992110 R Project Executive $346 0 Dys 0 $0 yes $0
992200 R Scheduling $288 0 Dys 0 $0 yes $0
992300 R. Accounting Dept $210 0 Dys 0 $0 yes $0
992170 R Cost Accounting $262 0 Dys 0 $0 yes $0
992400 R Purchasing, Support In below
(Carry None) $0 Dys 0 $0 yes $0
992400 R Purchasing, PA 3.5 day per BP $212 0 Dys 0 $0 yes $0
992520 R Chief Estimator $365 0 Dys 0 $0 yes $0
992530 R Electrical Estimator $315 0 Dys 0 $0 yes $0
992540 R. Mechanical Estimator $297 0 Dys 0 $0 yes $0
992540 R Plumbing/FP Estimator $196 0 Dys 0 $0 yes $0
992550 R Architectural Estimator $212 0 Dys 0 $0 yes $0
992560 R Est Exec, Job Capt $288 0 Dys 0 $0 yes $0
Subtotal Regional Bare Labor 0 Dys 0 $0
Escalation 0.00% $0 $0
Subtotal Escalation $0 $0
982500 G Excess OH 0.00% $0 $0
000098 G. Fringes 44.00% $0 $0
000099 G Overhead 76.00% $0 $0
Subtotal Fringes & Overhead $0 $0
B.P. 900 PRECONSTRUCTION - FIELD LABOR
991001 P Project Execution $346 0 Dys 0 $0 yes $0
991010 P Project Manager $269 0 Dys 0 $0 yes $0
991500 P Project Engineer $173 0 Dys 0 $0 yes $0
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
? P Est Exec $288 0 Dys 0 $0 yes $0
991630 P Project Estimator $212 0 0 $0 yes $0
Subtotal Field Bare Labor 0 0 $0 $0
Escalation 0.00% $0 $0
Subtotal Escalation $0 $0
982500 G Excess Overhead 0.00% $0 $0
981010 G Fed/State Taxes 10.49% $0 $0
981030 G Worker's Comp. 10.10% $0 $0
981050 G Major Medical 19.46% $0 $0
982300 G Accrued Vacation 7.50% $0 $0
Subtotal Field Burden $0 $0
Total Preconstruction Labor $0 $0
B.P. 908 PRECONSTRUCTION -
REGIONAL SUPPORT
992650 G Travel - Auto from ? ? 0 Trips $0 yes $0
992650 G Travel - Auto from ? ? 0 Trips $0 yes $0
992700 G Stationary/Supplies $0 0 MO $0 yes $0
992710 G Bid Document printing,
shipping ? 0 Sets $0 yes $0
992720 G MIS Services $2 MH $0 yes $0
992730 G Postage $25 0 MO $0 yes $0
992740 G Photocopy $25 0 MO $0 yes $0
992750 G Telephone $50 0 MO $0 yes $0
992755 G Miscellaneous out of pocket $0 0 LS $0 yes $0
Subtotal Preconstruction Support $0 $0
Total Preconstruction $0 $0
B.P. 922 CONST. - REGIONAL LABOR NON
RECOVERABLE
992112 R Principal $385 0 Dys 0 $0 no $0
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
992110 R. Project Executive - 8dy/wk $404 35 Dys 280 $14,140 no $14,140
992120 R Safety Engineer $288 0 Dys 0 $0 no $0
992300 R Accounting $210 15 Dys 120 $3,156 no $3,156
992170 R Cost Accountant - 1 dy/mo $262 10 Dys 80 $2,615 no $2,615
992200 R Scheduling, updates $288 0 Dys 0 $0 no $0
992400 R Purchasing Agent 3.5 day per
v BP $239 18 Dys 144 $4,302 no $4,302
992400 R Purchasing, Support $ 0 In above 0 $0 no $0
Dys
992185 R Technology Set-up $192 10 Dys 80 $1,920 no $1,920
992185 R Technology Support (2dy/month) $192 0 Dys 0 $0 no $0
992540 R Mechanical Estimator $297 0 Dys 0 $0 no $0
992540 R Plumbing, FP Estimator $196 0 Dys 0 $0 no $0
992530 R Electrical Estimator $315 0 Dys 0 $0 no $0
992550 R Architectural Estimator $212 0 Dys 0 $0 no $0
992560 R Est Exec, Job Captain $288 0 Dys 0 $0 no $0
Subtotal Regional Bare Labor 88 Dys 704 $26,133 $26,133
Escalation 3.00% $784 $784
Subtotal Escalation $784 $784
982500 G Excess OH 0.00% $0 $0
000098 G Fringes 44.00% $11,844 $11,844
000099 G Overhead 76.00% $20,457 $20,457
Subtotal Fringes & Overhead $32,301 $32,301
B.P. 920 CONSTRUCTION - FIELD LABOR 5.97 mnth - 25.85
weeks
If you change the duration
unit (weeks to days), change
man hour calc too.
991001 P Project Executive 0 Dys 0 $0 yes $0
991010 P Project Manager 0 Wks 0 $0 yes $0
925991720 P Completion Bonus, 9% PM, 12% 9.00% - 0 $0 yes $0
on site PX
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
991020 P Asst. Project Manager 0 Wks 0 $0 yes $0
991200 P General Superintendent 0 Wks 0 $0 yes $0
991210 P Asst. Superintendent 0 Wks 0 $0 yes $0
991220 P Area Superintendent 0 Wks 0 $0 yes $0
991240 P Mech Superintendent $1,346 35 Wks 1,400 $47,110 yes $0
991250 P Elect. Superintendent 0 Wks 0 $0 yes $0
991410 P Computer Consultant $308 35 Dys 280 $10,780 yes $0
991500 P Project Engineer 0 Wks 0 $0 yes $0
991510 P Asst. Project Engineer $1,000 35 Wks 1,400 $35,000 yes $0
991050 P Project Acct, 1 dy/wk. $193 35 Dys 280 $6,755 yes $0
991670 P Technical Asst. $121 85 Dys 680 $10,285 yes $0
991630 P Project Estimator 0 Wks 0 $0 yes $0
991650 P Project Scheduler 0 Wks 0 $0 yes $0
Subtotal Field Bare Labor 4,040 $109,930 $0
Escalation 3.00% $3,298 $0
Subtotal Escalation $3,298 $0
992500 G Excess Overhead 0.00% $0 $0
981010 G Fed/State Taxes 10.49% $11,878 $0
981030 G Worker's Comp. 10.10% $11,436 $0
981050 G Major Medical 19.46% $8,492 $0
982300 G Accrued Vacation 7.50% $8,492 $0
Subtotal Field Burden $53,840 $0
Total Construction Labor $226,285 $59,218
B.P. 928 CONST. - REGIONAL SUPPORT
NON RECOVERABLE
992650 G Travel - Auto from CT $56 38 Trips $2,128 no $2,128
992650 G Travel - Auto from Prov. ? 0 Trips $0 no $0
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
992700 G Stationary/Supplies 0 MO $0 no $0
992720 G MIS Charges - QBCo $2 704 MH $1,408 no $1,408
992740 G Photocopying - Rgnl $20 0 MO $0 no $0
992730 G Postage $25 0 MO $0 no $0
992750 G Telephone - Rgnl $0 0 MO $0 no $0
992755 G Miscellaneous, Out of pocket $0 0 LS $0 no $0
Subtotal Regional Support $3,536 $3,536
B.P. 925 CONSTRUCTION -
FIELD OFFICE OPERATIONS
991700 G Subsistence/Moving $25,000 1 Allow $25,000 yes $0
991710 G Relocation - Payroll $0 0 Wks $0 yes $0
991750 G Job Travel - Auto None 0 Trips $0 yes $0
991750 G Job Travel - Air None 0 Trips $0 yes $0
991751 G Site Vehicle Lease $600 0 MO $0 yes $0
991752 G Site Vehicle Fuel/Maintain $200 0 MO $0 yes $0
993005 G Setup/Demob Fld Office $500 0 LS $0 yes $0
993010 G Gilbane Fld Office Rent $300 0 MO $0 yes $0
993010 G Own/AE Fld Office None 0 MO $0 yes $0
993020 G Fld Office Furniture $500 0 EA $0 yes $0
993015 S Fld Office Janitor $40 0 MO $0 yes $0
994010 G Stationary/Supplies $500 0 LS $0 yes $0
994020 G Postage, Overnite $150 0 MO $0 yes $0
994030 G Misc Office Equip $0 0 EA $0 yes $0
994035 G Fax Machine $350 0 LS $0 yes $0
994040 G Telephone use $1 0 MO $0 yes $0
994050 G Phones and Radios $1 0 LS $0 yes $0
994055 G Trailer lap top Comp, Prolog,
MS of 1 set up $5,970 2 EA $11,940 yes $0
994055 G Office Desk top Comp.,
Prolog, MS Off., 1 ea $3,570 0 EA $0 yes $0
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
994055 G Site Printer, 500 to 1500
range each $0 0 EA $0 yes $0
994055 G Site Primavera Lease $95 0 MO $0 yes $0
994056 G MIS Charges (field Only) $2 4,040 Hrs $8,080 yes $0
994060 G Site trailer Lighting $100 0 MO $0 yes $0
994070 G Site trailer Heat $100 0 MO $0 yes $0
994080 G Coffee/Water $75 0 MO $0 yes $0
994100 G First Aid $500 0 LS $0 yes $0
992710 G Bid Document printing,
shipping $20,000 1 Allow $20,000 yes $0
994210 G Shop Drawing Printing $ 1,000 0 LS $0 yes $0
994220 G Record Document Printing $0 0 Sets $0 yes $0
994240 G Photocopier rental $400 0 MO $0 yes $0
$0 $0
Subtotal Field Office Operation $65,020 $0
B.P. 926 CONSTRUCTION -
FIELD OFFICE SUPPORT
993025 G Storage Trailer None 0 MO $0 yes $0
993035 G Temporary Toilets,
2 each $130 0 MO $0 yes $0
993035 S Trailer Temp plumbing ? 0 LS $0 yes $0
993040 S Temporary Fencing $8 0 LF $0 yes $0
993050 G Project Signs,
(Main & Safety) $1,000 0 EA $0 yes $0
993060 S Sidewalk Overhead
Protection None 0 LF $0 yes $0
993070 S Safety rails, opening
protection None 0 LF $0 yes $0
993081 S Gang ladders,
temp stairs None 0 LF $0 yes $0
993080 S Safety Consultant By
regional 0 EACH $0 yes $0
993080 G Safety, misc. material,
incentives $500 0 LS $0 yes $0
993089 G Drug Testing Costs $50 0 EA $0 yes $0
995040 G Progress Photos $50 0 week $0 yes $0
995055 S Field Eng. Services Trades 0 Wks $0 yes $0
9950?? S Preconstruction Site Survey Trades 0 Wks $0 yes $0
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
995060 S Pest Control Trades 0 MO $0 yes $0
995070 G Ceremonies None 0 LS $0 yes $0
995080 S Testing $0 0 ALLW $0 yes $0
995090 G Misc Advertising Costs $0 0 ALLW $0 yes $0
995100 G Dumpsters $550 56 LOAD $30,800 yes $0
995105 S Interim Clean $15,000 1 LS $15,000 yes $0
995110 S Final Cleanup $0 75000 SF $ 9,000 yes $0
995120 S Clean Glass Inc. Above 0 SF $0 yes $0
951151 S Chutes/Hoppers None 0 EA $0 yes $0
995220 S Gen. Weather Protection Trades 0 LS $0 yes $0
995250 S Snow Removal None 0 LS $0 yes $0
995670 G Survey Equipment None 0 LS $0 yes $0
995710 G Record Storage $500 1 LS $500 yes $0
995860 G Small Tools/Suppliers $1 0 LS $0 yes $0
995870 G Small Staff Gear $1 0 LS $0 yes $0
996220 G Water Consumption $25 0 MO $0 yes $0
996320 S Temporary Heat None 0 MO $0 yes $0
996420 S Temp. Electric Hookup $1,500 0 LS $0 yes $0
996420 G Temp Elec. Consumption $1 0 MO $0 yes $0
996510 S Watchmen/Security None 0 MO $0 yes $0
996600 G Temp Fire Extinguishers $40 0 EA $0 yes $0
Subtotal Field Office Support $55,300 $0
Construction Services $350,141 $62,754
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule 7.2.1
Example of Added Fee Calculation
GENERAL CONDITIONS SUMMARY
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Estimate Type: Saft:
====================================================================================================================================
<S> <C> <C> <C> <C> <C>
BUDGET: $0
PRECON SCHEDULE: Through 0.00 MONTHS
CONSTR. SCHEDULE: 1/31/00 Through 3/3/00 1.07 MONTHS
====================================================================================================================================
TOTALS DIRECT LABOR OH & BURDEN DIRECT COST TOTALS
- ------------------------------------------------------------------------------------------------------------------------------------
PRECONSTRUCTION
BP 902 Regional Labor $0 $0 $0
BP 900 Field Labor $0 $0 $0
BP 908 Regional Support $0 $0
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL PRECONSTRUCTION $0 $0 $0 $0
Percent of Budget #DIV/0!
- ------------------------------------------------------------------------------------------------------------------------------------
CONSTRUCTION
BP 922 Regional Labor $2,228 $2,674 $4,901
BP 920 Field Labor $15,895 $7,558 $23,453
BP 928 Regional Support $365
BP 925 Field Office Operations $84,211 $8,421
BP 926 Field Office Support $0 $0
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL CONSTRUCTION $18,123 $10,231 $8,786 $37,140
Percent of Budget #DIV/0!
TOTAL GENERAL CONDITIONS $18,123 $10,231 $8,786 $37,140
Percent of Budget #DIV/0!
BOND REQUIRED? No $0 Calculates from budget above $0
BUILDER'S RISK INSUR. 0 $0 " $0
BUILDING PERMIT 0 $0 " $0
STATE SALES TAX 0 $0 $0
PROFESSIONAL LIAB. 0 $0 .00186 up to $1 mil $0
GENERAL LIABILITY 0.00416 $0 Get Quote if Prof Liab (greater than) $1 mil $0
TOTAL ALL COSTS $37,140
FEE ANALYSIS
Total Raw Labor $18,123
Excess OH $0
Base fee on Budget 0.00% $0
Base Fee Plus Excess Overhead $0
Less Non-reimbursables $5,266
NET FEE ($5,266)
ROL (0.29)
<CAPTION>
RATE TABLE
<S> <C> <C> <C> <C> <C>
Home Office Field Rates GBCo MIS = 2.00
Excess OH 0.00% Excess OH 0.00% NON REIMBURSABLE ITEMS
Fringes 44.00% Taxes 10.49% Precon discounting 0
Overhead 76.00% Work Cmp 10.10% ? 0
TOTAL 220.00% Maj Med 19.46% ? 0
Escalation Vacation 7.50% ? 0
Precon 0.00% TOTAL 47.55% ? 0
Const. 0.00% TOTAL 0
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
B.P. 902 PRECONSTRUCTION -
REGIONAL LABOR
992110 R Project Executive $346 0 Dys 0 $0 yes $0
992200 R Scheduling $288 0 Dys 0 $0 yes $0
992300 R Accounting Dept $210 0 Dys 0 $0 yes $0
992170 R Cost Accounting $262 0 Dys 0 $0 yes $0
992400 R Purchasing, Support
(Carry None) $ 0 In below Dys 0 $0 yes $0
992400 R Purchasing, PA
3.5 day per BP $212 0 Dys 0 $0 yes $0
992520 R Chief Estimator $365 0 Dys 0 $0 yes $0
992530 R Electrical Estimator $315 0 Dys 0 $0 yes $0
992540 R Mechanical Estimator $297 0 Dys 0 $0 yes $0
992540 R Plumbing/FP Estimator $196 0 Dys 0 $0 yes $0
992550 R Architectural Estimator $212 0 Dys 0 $0 yes $0
992560 R Est Exec, Job Capt $288 0 Dys 0 $0 yes $0
Subtotal Regional Bare Labor 0 Dys 0 $0 $0
Escalation 0.00% $0 $0
Subtotal Escalation $0 $0
982500 G Excess OH 0.00% $0 $0
000098 G. Fringes 44.00% $0 $0
000099 G Overhead 76.00% $0 $0
Subtotal Fringes & Overhead $0 $0
B.P. 900 PRECONSTRUCTION - FIELD LABOR
991001 P Project Executive $346 0 Dys 0 $0 yes $0
991010 P Project Manager $269 0 Dys 0 $0 yes $0
991500 P Project Engineer $173 0 Dys 0 $0 yes $0
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
? P Est Exec $288 0 Dys 0 $0 yes $0
991630 P Project Estimator $212 0 Dys 0 $0 yes $0
Subtotal Field Bare Labor 0 Dys 0 $0 $0
Escalation 0.00% $0 $0
Subtotal Escalation $0 $0
982500 G Excess Overhead 0.00% $0 $0
981010 G Fed/State Taxes 10.49% $0 $0
981030 G Worker's Comp. 10.10% $0 $0
981050 G Major Medical 19.46% $0 $0
982300 G Accrued Vacation 7.50% $0 $0
Subtotal Field Burden $0 $0
Total Preconstruction Labor $0 $0
B.P. 908 PRECONSTRUCTION -
REGIONAL SUPPORT
992650 G Travel - Auto from ? ? 0 Trips $0 yes $0
992650 G Travel - Auto from ? ? 0 Trips $0 yes $0
992700 G Stationary/Supplies $0 0 MO $0 yes $0
992710 G Bid Document printing, shipping ? 0 Sets $0 yes $0
992720 G MIS Services $2 MH $0 yes $0
992730 G Postage $25 0 MO $0 yes $0
992740 G Photocopy $25 0 MO $0 yes $0
992750 G Telephone $50 0 MO $0 yes $0
992755 G Miscellaneous out of pocket $0 0 LS $0 yes $0
Subtotal Preconstruction Support $0
Total Preconstruction $0 $0
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
B.P. 992 CONST. -
REGIONAL LABOR NON-RECOVERABLE
992112 R Principal $0 0 Dys 0 $0 no $0
992110 R Project Executive-8hrs/wk $439 4 Dys 32 $1,756 no $1,756
992120 R Safety Engineer $288 0 Dys 0 $0 no $0
992300 R Accounting $210 1 Dys 8 $210 no $210
992170 R Cost Accountant 1 dy/mo $262 1 Dys 8 $262 no $262
992200 R Scheduling, updates $288 0 Dys 0 $0 no $0
992400 R Purchasing Agent 3.5
day per BP $239 0 Dys 0 $0 no $0
992400 R Purchasing, Support $0 In 0 $0 no $0
above
Dys
992185 R Technology Set-up $192 0 Dys 0 $0 no $0
992185 R Technology Support (2dy/month) $192 0 Dys 0 $0 no $0
992540 R Mechanical Estimator $297 0 Dys 0 $0 no $0
992540 R Plumbing, FP Estimator $196 0 Dys 0 $0 no $0
992530 R Electrical Estimator $315 0 Dys 0 $0 no $0
992550 R Architectural Estimator $212 0 Dys 0 $0 no $0
992560 R Est Exec, Job Captain $288 0 Dys 0 $0 no $0
Subtotal Regional Bare Labor 6 Dys 4 $2,228 $2,228
Escalation 0.00% $0 $0
Subtotal Escalation $0 $0
982500 G Excess OH 0.00% $0 $0
000098 G Fringes 44.00% $ 980 $980
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
000099 G Overhead 76.00% $1,693 $1,693
Subtotal Fringes & Overhead $2,674 $2,674
</TABLE>
<TABLE>
<CAPTION>
B.P. 920 CONSTRUCTION - FIELD LABOR 1.07 mnth = 4.63 weeks
If you change the duration unit (weeks to days), change man hour calc. too.
<S> <C> <C> <C> <C> <C> <C>
991001 P Sr. Project
Manager-DeForest $360 6 Dys 48 $2,160 yes $0
991010 P Project Manager-Driscoll $1,346 4.63 Wks 185 $6,232 yes $0
P Completion Bonus, 9% PM,
12% on site PX 9.00% $820 yes $0
991020 P Asst. Project Manager 0 Wks 0 $0 yes $0
991200 P General Superintendent 0 Wks 0 $0 yes $0
991210 P Asst. Superintendent 0 Wks 0 $0 yes $0
991220 P Area Superintendent 0 Wks 0 $0 yes $0
991240 P Mech. Superintendent 0 Wks 0 $0 yes $0
991250 P Elect. Superintendent 0 Wks 0 $0 yes $0
991410 P Computer Consultant 0 Dys 0 $0 yes $0
991500 P Project Engineer 0 Wks 0 $0 yes $0
991510 P. Asst. Project Engineer $989 4.63 Wks 185 $4,579 yes $0
991050 P Project Acct, 1 dy/wk $193 4.63 day 37 $894 yes $0
991670 P Technical Asst. $121 10 Dys 80 $1,210 yes $0
991630 P Project Estimator 0 Wks 0 $0 yes $0
991650 P Project Scheduler 0 Wks 0 $0 yes $0
Subtotal Field Bare Labor 535 $15,895 $0
Escalation 0.00% $0 $0
Subtotal Escalation $0 $0
992500 G Excess Overhead 0.00% $0 $0
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
981010 G Fed/State Taxes 10.49% $1,667 $0
981030 G Worker's Comp. 10.10% $1,605 $0
981050 G Major Medical 19.46% $3,093 $0
982300 G Accrued Vacation 7.50% $1,192 $0
Subtotal Field Burden $7,558 $0
Total Construction Labor $28,354 $4,901
B.P. 928 CONST. -
REGIONAL SUPPORT NON RECOVERABLE
992650 G Travel - Auto from CT. $56 4 Trips $224 no $224
992650 G Travel - Auto from Prov. ? 0 Trips $0 no $0
992700 G Stationary/Supplies 0 MO $0 no $0
992720 G MIS Charges - GBCo $2.00 48 MH $96 no $96
992740 G Photocopying - Rgnl $20 1 MO $20 no $20
992730 G Postage $25 1 MO $25 no $25
992750 G Telephone - Rgnl $0 0 MO $0 no $0
992755 G Miscellaneous; Out of pocket $0 0 LS $0 no $0
Subtotal Regional Support $365 $365
B.P. 925 CONSTRUCTION - FIELD OFFICE
OPERATIONS
991700 G Subsistence/Moving $500 1 Allow $500 yes $0
991710 G Relocation Payroll $0 0 Wks $0 yes $0
991750 G Job Travel - Auto None 0 Trips $0 yes $0
991750 G Job Travel - Air None 0 Trips $0 yes $0
991751 G Site Vehicle Lease $600 2 MO $1,200 yes $0
991752 G Site Vehicle fuel/Maintain $200 2 MO $400 yes $0
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
993005 G Setup/Demob Fld Office $500 1 LS $500 yes $0
993010 G Gilbane Fld Office Rent $400 2 MO $800 yes $0
993010 G Own/AE Fld Office None 0 MO $0 yes $0
993020 G Fld Office Furniture $500 0 EA $0 yes $0
993015 S Fld Office Janitor $40 0 MO $0 yes $0
994010 G Stationary/Supplies $500 0 LS $0 yes $0
994020 G Postage, Overnite $150 0 MO $0 yes $0
994030 G Misc Office Equip $0 0 EA $0 yes $0
994035 G Fax Machine $350 0 LS $0 yes $0
994040 G Telephone use $1,500 2 MO $3,000 yes $0
994050 G Phones and Radios $1 0 LS $0 yes $0
994055 G Trailer lap top Comp, Prolog, MS
of. 1 set up $5,970 0 EA $0 yes $0
994055 G Office Desk top Comp., Prolog,
MS Off., 1 ea $3,570 0 EA $0 yes $0
994055 G Sire Printer, 500 to 1500 range
each $0 0 EA $0 yes $0
994055 G Site Primavera Lease $95 0 MO $0 yes $0
994056 G MIS Charges (field Only) $2 535 Hrs $1,071 yes $0
994060 G Site trailer Lighting $100 0 MO $0 yes $0
994070 G Site trailer Heat $100 0 MO $0 yes $0
994080 G Coffee/Water $75 2 MO $150 yes $0
994100 G First Aid $500 0 LS $0 yes $0
992710 G Bid Document printing, shipping $0 0 Allow $0 yes $0
994210 G Shop Drawing Printing $1,000 0 LS $0 yes $0
994220 G Record Document Printing $0 0 Sets $0 yes $0
994240 G Photocopier rental $400 2 MO $800 yes $0
$0 $0
Subtotal Field Office Operations $8,421 $0
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
B.P. 926 CONSTRUCTION -
FIELD OFFICE SUPPORT
993025 G Storage Trailer None 0 MO $0 yes $0
993035 G Temporary Toilets, 2 each $130 0 MO $0 yes $0
993035 S Trailer Temp plumbing ? 0 LS $0 yes $0
993040 S Temporary Fencing $8 0 LF $0 yes $0
993050 G Project Signs, (Main & Safety) $1,000 0 EA $0 yes $0
993060 S Sidewalk Overhead Protection None 0 LF $0 yes $0
993070 S Safety rails, opening protection None 0 LF $0 yes $0
993081 S Gang ladders, temp stairs None 0 LF $0 yes $0
993080 S Safety Consultant By regional 0 EACH $0 yes $0
993080 G Safety, misc material, incentives $500 0 LS $0 yes $0
993089 G Drug Testing costs $50 0 EA $0 yes $0
995040 G Progress Photos $50 0 week $0 yes $0
995055 S Field Eng. Services Trades 0 Wks $0 yes $0
9950?? S Preconstruction Site Survey Trades 0 Wks $0 yes $0
995060 S Pest Control Trades 0 MO $0 yes $0
995070 G Ceremonies None 0 LS $0 yes $0
995080 S Testing $0 0 ALLW $0 yes $0
995090 G Misc advertising costs $0 0 ALLW $0 yes $0
995100 G Dumpsters $550 0 LOAD $0 yes $0
995105 S Interim Clean $15,000.00 0 LS $0 yes $0
995110 S Final Cleanup $0.12 0 SF $0 yes $0
995120 S Clean Glass Inc. Above 0 SF $0 yes $0
995115 S Chutes/Hoppers None 0 EA $0 yes $0
995220 S Gen. Weather Protection Trades 0 LS $0 yes $0
995250 S Snow Removal None 0 LS $0 yes $0
995670 G Survey Equipment None 0 LS $0 yes $0
</TABLE>
<PAGE>
GENERAL CONDITIONS DETAIL
Job Name: 400 Minuteman Drive - Tenant Work
Location: Andover, MA
Prepared by: WKU
State Job in: MA Duration: 5.97 Mnth Sqft: 10,000
[logo of Gilbane]
<TABLE>
<CAPTION>
Cost Description Unit Rate Quantity Man Hours Total Cost Reimbursable Total
Code yes or no Non-Reimbursable
<S> <C> <C> <C> <C> <C> <C>
995710 G Record Storage $500 0 LS $0 yes $0
995860 G Small Tools/Supplies $1 0 LS $0 yes $0
995870 G Small Staff Gear $1 0 LS $0 yes $0
996220 G Water Consumption $25 0 MO $0 yes $0
996320 S Temporary Heat None 0 MO $0 yes $0
996420 S Temp. Electric Hookup $1,500 0 LS $0 yes $0
996420 G Temp Elec. Consumption $1 0 MO $0 yes $0
996510 S Watchmen/Security None 0 MO $0 yes $0
996600 G Temp Fire Extinguishers $40 0 EA $0 yes $0
Subtotal Field Office Support $0 $0
TOTAL CONSTRUCTION SERVICES $37,140 $5,266
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> JUL-31-2000 JUL-31-1999
<PERIOD-START> AUG-01-1999 AUG-01-1998
<PERIOD-END> OCT-31-1999 OCT-31-1998
<CASH> 69,560 0
<SECURITIES> 0 0
<RECEIVABLES> 5,873 816
<ALLOWANCES> 416 5
<INVENTORY> 0 0
<CURRENT-ASSETS> 75,724 1,250
<PP&E> 23,060 4,746
<DEPRECIATION> 3,254 966
<TOTAL-ASSETS> 99,120 6,187
<CURRENT-LIABILITIES> 14,944 20,729
<BONDS> 0 0
0 0
0 0
<COMMON> 272 81
<OTHER-SE> 82,138 0
<TOTAL-LIABILITY-AND-EQUITY> 99,120 (14,577)
<SALES> 5,866 1,668
<TOTAL-REVENUES> 5,866 1,668
<CGS> 0 0
<TOTAL-COSTS> 9,069 3,786
<OTHER-EXPENSES> 7,298 2,239
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 50 152
<INCOME-PRETAX> (10,551) (4,509)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (10,551) (4,509)
<EPS-BASIC> (3.49) (0.56)
<EPS-DILUTED> (3.49) (0.56)
</TABLE>
