UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 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 0-6216
BRENTON BANKS, INC.
(Exact name of registrant as specified in its charter)
Incorporated in Iowa No. 42-0658989
(State or other jurisdiction of (I.R.S. Employer Identification)
incorporation or organization)
Suite 200, Capital Square, 400 Locust, Des Moines, Iowa 50309
(Address of principle executive offices) (zip code)
515-237-5100
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed
since last report)
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 that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date,
November 2, 1999.
20,422,834 shares of Common Stock, $2.50 par value
<PAGE>
<TABLE>
PART 1 - Item 1. Financial Statements
<CAPTION>
Brenton Banks, Inc. and Subsidiaries
Consolidated Statements of Condition
(Unaudited)
September 30, December 31,
1999 1998
_________ ____________
</CAPTION>
<S> <C> <C>
Assets:
Cash and due from banks $ 76,335,562 76,460,049
Interest-bearing deposits with banks 2,228,224 2,167,288
Federal funds sold and securities purchased
under agreements to resell --- 6,000,000
Investment securities:
Available for sale 561,833,688 605,183,788
Held to maturity (approximate market value of
$32,861,000 and $44,011,000 at September 30, 1999,
and December 31, 1998, respectively) 32,549,403 43,027,501
_____________ _____________
Investment securities 594,383,091 648,211,289
_____________ _____________
Loans held for sale 43,782,940 98,147,391
Loans 1,160,907,136 1,033,554,556
Allowance for loan losses (14,603,263) (14,172,264)
_____________ _____________
Loans, net 1,146,303,873 1,019,382,292
_____________ _____________
Premises and equipment 37,404,749 32,523,113
Accrued interest receivable 17,828,961 16,458,066
Other assets 53,888,501 40,207,277
_____________ _____________
Total assets $1,972,155,901 1,939,556,765
============== =============
Liabilities and Stockholders' Equity:
Deposits:
Noninterest-bearing $ 204,749,659 190,625,140
Interest-bearing:
Demand 101,852,650 131,602,358
Savings 653,329,991 603,367,340
Time 542,413,039 571,080,293
_____________ _____________
Total deposits 1,502,345,339 1,496,675,131
_____________ _____________
Federal funds purchased and securities sold
under agreements to repurchase 164,396,744 155,847,300
Other short-term borrowings 127,973,584 87,050,000
Accrued expenses and other liabilities 17,142,873 18,315,348
Long-term borrowings 23,783,000 41,546,000
_____________ _____________
Total liabilities 1,835,641,540 1,799,433,779
_____________ _____________
Minority interest in consolidated subsidiaries 4,633,384 4,912,667
Redeemable preferred stock, $1 par; 500,000 shares
authorized; issuable in series, none issued --- ---
Common stockholders' equity:
Common stock, $2.50 par; 50,000,000 shares authorized;
20,432,674 and 18,752,381 shares issued and outstanding
at September 30, 1999 and December 31, 1998, respectively 51,081,685 46,880,953
Capital surplus --- ---
Retained earnings 84,882,391 85,010,569
Accumulated other comprehensive income (loss) --
unrealized gains (losses) on securities available for
sale, net (4,083,099) 3,318,797
_____________ _____________
Total common stockholders' equity 131,880,977 135,210,319
_____________ _____________
Total liabilities and stockholders' equity $1,972,155,901 1,939,556,765
============= =============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
PART 1 - Item 1. Financial Statements
<CAPTION>
Brenton Banks, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
1999 1998 1999 1998
____ ____ ____ ____
</CAPTION>
<S> <C> <C> <C> <C>
Interest Income
Interest and fees on loans $68,600,961 66,866,025 23,964,719 22,702,244
Interest and dividends on investments:
Available for sale -- taxable 19,113,212 17,530,400 6,210,273 5,839,805
Available for sale -- tax-exempt 5,300,349 4,149,085 1,761,522 1,503,639
Held to maturity -- taxable 85,198 240,744 24,459 40,801
Held to maturity -- tax-exempt 1,319,313 1,983,337 381,498 616,100
__________ __________ __________ __________
Total interest and dividends on investments 25,818,072 23,903,566 8,377,752 8,000,345
__________ __________ __________ __________
Interest on federal funds sold and securities
purchased under agreements to resell 67,971 1,281,330 6,768 452,502
Other interest income 720,554 151,884 161,501 34,869
__________ __________ __________ __________
Total interest income 95,207,558 92,202,805 32,510,740 31,189,960
__________ __________
Interest Expense
Interest on deposits 37,700,119 37,641,982 12,327,601 12,865,427
Interest on federal funds purchased and
securities sold under agreements
to repurchase 5,009,541 3,639,521 2,268,757 1,368,474
Interest on other short-term borrowings 4,711,678 2,862,511 1,900,244 872,957
Interest on long-term borrowings 1,604,914 2,270,159 415,203 823,029
__________ __________ __________ __________
Total interest expense 49,026,252 46,414,173 16,911,805 15,929,887
__________ __________ __________ __________
Net interest income 46,181,306 45,788,632 15,598,935 15,260,073
Provision for loan losses 3,150,000 3,150,000 1,050,000 1,050,000
__________ __________ __________ __________
Net interest income after provision for
loan losses 43,031,306 42,638,632 14,548,935 14,210,073
__________ __________ __________ __________
Noninterest Income
Service charges on deposit accounts 6,884,262 5,738,903 2,429,966 2,046,248
Mortgage banking income 3,547,758 5,327,034 558,353 1,868,328
Investment brokerage commissions 3,233,899 4,098,108 1,025,740 1,275,256
Fiduciary income 2,784,211 2,471,855 845,827 813,607
Insurance commissions and fees 1,108,276 1,058,744 387,542 289,943
Other service charges, collection and
exchange charges, commissions and fees 3,644,329 3,486,222 1,182,941 1,167,726
Net realized gains from securities
available for sale 220,356 466,765 13,437 222,189
Other operating income 1,363,148 1,494,106 300,857 865,608
__________ __________ __________ __________
Total noninterest income 22,786,239 24,141,737 6,744,663 8,548,905
__________ __________ __________ __________
Noninterest Expense
Compensation 23,097,142 21,288,088 7,966,710 7,308,696
Employee benefits 4,341,695 3,793,292 1,265,519 1,124,012
Occupancy expense of premises, net 4,495,346 4,345,228 1,552,958 1,404,439
Furniture and equipment expense 3,700,443 3,151,141 1,433,312 1,110,644
Data processing expense 2,109,148 1,956,001 725,855 669,798
Marketing 1,314,190 1,101,570 378,401 364,398
Supplies 1,080,164 939,568 333,135 326,565
Other operating expense 8,812,367 8,658,680 2,921,721 2,863,404
__________ __________ __________ __________
Total noninterest expense 48,950,495 45,233,568 16,577,611 15,171,956
__________ __________ __________ __________
Income before income taxes and minority interest 16,867,050 21,546,801 4,715,987 7,587,022
Income taxes 4,081,089 6,001,631 1,061,835 2,101,221
__________ __________ __________ __________
Income before minority interest 12,785,961 15,545,170 3,654,152 5,485,801
Minority interest 476,699 534,874 152,358 190,045
__________ __________ __________ __________
Net income $12,309,262 15,010,296 3,501,794 5,295,756
========== ========== ========== ==========
Per common share:
Net income--basic $ 0.60 0.72 0.17 0.26
Net income--diluted 0.59 0.70 0.17 0.25
Cash dividends 0.259 0.231 0.087 0.082
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
PART 1 - Item 1. Financial Statements
<CAPTION>
Brenton Banks, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
For the nine months ended September 30,
1999 1998
_____________ _______________
</CAPTION>
<S> <C> <C>
Operating Activities:
Net income $ 12,309,262 15,010,296
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses 3,150,000 3,150,000
Depreciation and amortization 3,993,549 3,467,589
Net realized gains from securities available
for sale (220,356) (466,765)
Investment securities amortization and accretion 1,930,831 460,599
Net (increase) decrease in loans held for sale 54,364,451 (13,211,778)
Net increase in accrued interest
receivable and other assets (5,371,357) (5,939,281)
Net decrease in accrued expenses, other
liabilities and minority interest (1,167,350) (669,270)
____________ ____________
Net cash provided by operating activities 68,989,030 1,801,390
____________ ____________
Investing Activities:
Investment securities available for sale:
Purchases (102,637,521) (316,176,477)
Maturities 94,110,559 227,955,392
Sales 37,892,131 35,950,119
Investment securities held to maturity:
Purchases (954,576) (7,671,143)
Maturities 11,339,282 23,779,382
Net increase in loans (130,124,181) (32,316,168)
Cash used for acquisition (5,247,150) ---
Purchase of other assets for investment --- (5,000,000)
Purchases of premises and equipment (8,574,653) (6,619,501)
____________ ____________
Net cash used by investing activities (104,196,109) (80,098,396)
____________ ____________
Financing Activities:
Net increase in noninterest-bearing, interest-
bearing demand and savings deposits 34,337,462 35,368,111
Net increase (decrease) in time deposits (28,667,254) 4,853,090
Net increase in federal funds purchased and
securities sold under agreements to repurchase 8,549,444 24,095,111
Net increase (decrease) in other short-term borrowings 15,423,584 (20,700,000)
Proceeds of long-term borrowings 9,772,000 29,394,000
Repayment of long-term borrowings (2,035,000) (1,333,000)
Dividends on common stock (5,336,751) (4,834,838)
Proceeds from issuance of common stock under
the employee stock purchase plan 243,573 649,593
Proceeds from issuance of common stock under
the stock option plan 4,296 ---
Proceeds from issuance of common stock under
the long-term stock compensation plan --- 970,220
Payment for shares reacquired under common stock
repurchase plan (3,133,823) (8,961,094)
Payment for fractional shares resulting from
common stock dividend (14,003) (13,961)
____________ ____________
Net cash provided by financing activities 29,143,528 59,487,232
____________ ____________
Net decrease in cash and cash equivalents (6,063,551) (18,809,774)
Cash and cash equivalents at the beginning of the year 84,627,337 88,165,130
____________ ____________
Cash and cash equivalents at the end of the period $ 78,563,786 69,355,356
============ ============
</TABLE>
<TABLE>
<CAPTION>
Supplemental Cash Flow Information
(Unaudited)
</CAPTION>
<S> <C> <C>
Interest paid during the period $ 49,358,680 44,995,212
Income taxes paid during the period 3,599,296 5,683,252
=========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
PART 1 - Item 1. Financial Statements
<CAPTION>
Brenton Banks, Inc. and Subsidiaries
Consolidated Statements of Changes in Common Stockholders' Equity
(Unaudited)
For the nine months ended September 30,
1999 1998
_____________ _______________
</CAPTION>
<S> <C> <C>
Common Stock
Beginning of year balance $ 46,880,953 43,335,120
Ten percent common stock dividend 4,655,915 4,315,397
Issuance of shares of common stock
under the stock option plan 33,280 ---
Issuance of shares of common stock
under the long-term stock compensation plan --- 268,960
Issuance of common stock
under the employee stock purchase plan 33,647 78,980
Shares reacquired under the common
stock repurchase plan (522,110) (1,083,750)
____________ ___________
End of period balance 51,081,685 46,914,707
____________ ___________
Capital Surplus
Beginning of year balance --- ---
Ten percent common stock dividend --- (78,529)
Issuance of shares of common stock
under the stock option plan (28,984) ---
Issuance of shares of common stock
under the long-term stock compensation plan --- 842,685
Issuance of shares of common stock
under the employee stock purchase plan 209,926 570,692
Shares reacquired under the common
stock repurchase plan (180,942) (1,334,848)
____________ ___________
End of period balance --- ---
____________ ___________
Retained Earnings
Beginning of year balance 85,010,569 82,824,333
Net income 12,309,262 15,010,296
Dividends on common stock (5,336,751) (4,834,838)
Ten percent common stock dividend (4,655,915) (4,236,868)
Fractional shares resulting from common
stock dividend (14,003) (13,961)
Issuance of shares of common stock
under the long-term stock compensation plan --- (141,425)
Issuance of shares of common stock
under the employee stock purchase plan --- (79)
Shares reacquired under the common
stock repurchase plan (2,430,771) (6,542,496)
____________ ___________
End of period balance 84,882,391 82,064,962
____________ ___________
Accumulated Other Comprehensive Income
Beginning of year balance 3,318,797 3,219,846
Change in unrealized holding gains (losses)
on securities, net (7,401,896) 1,403,477
____________ ___________
End of period balance (4,083,099) 4,623,323
____________ ___________
Total Stockholders' Equity $ 131,880,977 133,602,992
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
PART 1 - Item 1. Financial Statements
<CAPTION>
Brenton Banks, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
1999 1998 1999 1998
____ ____ ____ ____
</CAPTION>
<S> <C> <C> <C> <C>
Net Income $12,309,262 15,010,296 3,501,794 5,295,756
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on securities
available for sale:
Unrealized holding gains (losses) arising
during the period (net of deferred tax
of $899,779 and $4,414,964, respectively,
for the three and nine months ended
September 30, 1999, and $(1,306,509) and
$(1,017,123), respectively, for the three
and nine months ended September 30, 1998) (7,264,835) 1,695,205 (1,480,588) 2,177,515
Less: reclassification adjustment for net
realized gains included in net income (net
of tax expense of $5,079 and $83,295,
respectively, for the three and nine months
ended September 30, 1999, and $83,321 and
$175,037, respectively, for the three and nine
months ended September 30, 1998) (137,061) (291,728) (8,358) (138,868)
__________ __________ _________ _________
Other comprehensive income (loss), net of tax (7,401,896) 1,403,477 (1,488,946) 2,038,647
__________ __________ _________ _________
Comprehensive income $ 4,907,366 16,413,773 2,012,848 7,334,403
========== ========= ========= =========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
PART 1 -- ITEM 1. FINANCIAL STATEMENTS
BRENTON BANKS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
1. Adjustments and Reclassifications
The accompanying financial statements for the interim periods were
prepared without audit. In the opinion of management, all
adjustments which were necessary for a fair presentation of
financial position and results of operations have been made.
These adjustments were of a normal recurring nature.
2. Additional Footnote Information
In reviewing these financial statements, reference should be made
to the notes to consolidated financial statements contained in the
Appendix to the Proxy Statement for the year ended December 31,
1998.
3. Statements of Cash Flows
In the statements of cash flows, cash and cash equivalents include
cash and due from banks, interest-bearing deposits with banks and
federal funds sold and securities purchased under agreements to
resell.
4. Changes in Accounting Policies
SFAS No. 134, "Accounting for Mortgage-Backed Securities Retained
after the Securitization of Mortgage Loans Held for Sale by a
Mortgage Banking Enterprise," was issued in October 1998, and was
adopted by the Company effective January 1, 1999. This statement
requires that after the securitization of mortgage loans held for
sale, an entity engaged in mortgage banking activities classify
the resulting mortgage-backed securities or other retained
interests based on its ability and intent to sell or hold those
investments. The adoption of SFAS No. 134 did not have a material
effect on the Company.
5. Income Taxes
Federal income tax expense for the nine months ended September 30,
1999, and 1998, was computed using the consolidated effective
federal income tax rate.
For the first nine months of 1999 and 1998, the Company also
recognized income tax expense pertaining to state franchise taxes
payable individually by the subsidiary banks.
<PAGE>
Part 1 -- Item 1
Page 2 of 3
6. Common Stock Transactions
On May 20, 1999, the Board of Directors declared a 10 percent
common stock dividend for stockholders of record on June 1, 1999.
The stock dividend certificates were distributed on June 18,
1999. Fractional shares resulting from this stock dividend were
paid in cash. All appropriate per-share data has been restated to
reflect the ten percent common stock dividends.
During the first nine months of 1999, options on 13,312 shares of
common stock were exercised under the Company's 1996 Stock Option
Plan. The exercise price on these options was the fair market
value of the Company's common stock at the date of grant.
In January 1999, as part of the Company's ongoing stock repurchase
plan, the Board of Directors approved the repurchase of up to $4
million of the Company's common stock during 1999. Through
September 30, 1999, 222,244 common shares (restated for the ten
percent common stock dividend) had been repurchased at a cost of
$3,133,823.
The Company's Employee Stock Purchase Plan allows employees to
purchase the Company's common stock at 85 percent of the current
market price on four defined purchase dates during the year. The
Company issued 14,804 shares of common stock (restated for the ten
percent common stock dividend) under this plan during the first
nine months of 1999. This transaction added $243,573 to the
equity of the Company.
7. Income Per Share
Basic net income per common share amounts are computed by dividing
net income by the weighted average number of common shares
outstanding during the period. The weighted average number of
common shares outstanding for the three and nine months ended
September 30, 1999, was 20,462,200 and 20,530,231, respectively,
and 20,818,340 and 20,918,778, respectively, for the three and
nine months ended September 30, 1998.
Diluted net income per common share amounts are computed by
dividing net income by the weighted average number of common
shares and all dilutive potential common shares outstanding during
the period. The weighted average number of common shares and all
dilutive potential common shares outstanding for the three and
nine months ended September 30, 1999, was 20,788,333 and
20,856,364, respectively, and 21,285,356 and 21,385,794,
respectively, for the three and nine months ended September 30,
1998.
<PAGE>
Part 1 -- Item 1
Page 3 of 3
8. Segment Information
The Company has one reportable operating segment: banking. The
banking segment generates revenues through personal, business,
commercial and agricultural lending, providing deposit account
services and trust services, and management of the investment
securities portfolio. The Company evaluates the banking
segment's performance on the basis of profit.
Included in "all other" in the table below are mortgage banking,
investment brokerage, insurance sales and real estate brokerage.
All operations are concentrated in the state of Iowa.
The following table presents a summary of the Company's operating
segments for the nine months ended September 30, 1999, and 1998
(in thousands):
<TABLE>
<CAPTION>
All Parent Intersegment Reported
Banking Other Company Eliminations Balances
_______________________________________________________________
</CAPTION>
<S> <C> <C> <C> <C> <C>
1999
____________________________
Net interest income $ 45,300 1,257 (376) --- 46,181
Noninterest income from
Nonaffiliates 14,180 8,537 69 --- 22,786
Noninterest income from
Affiliates 129 --- 12,634 (12,763) ---
Income before income taxes
and minority interest 17,404 596 11,497 (12,630) 16,867
1998
____________________________
Net interest income $ 45,699 575 (485) --- 45,789
Noninterest income from
Nonaffiliates 12,698 11,369 75 --- 24,142
Noninterest income from
Affiliates 224 --- 12,656 (12,880) ---
Income before income taxes
and minority interest 19,422 3,359 11,418 (12,652) 21,547
</TABLE>
<PAGE>
Part 1 -- Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
The following presentation describes Brenton Banks, Inc. and
Subsidiaries ("Brenton" or the "Company") results of operations
for the three and nine month periods ended September 30, 1999, and
1998, capital resources, market risk management, asset/liability
management, liquidity management, Year 2000 efforts, the impact of
recently issued accounting standards and a look towards the
future. This discussion should be read in conjunction with the
Consolidated Financial Statements of the Company and the notes
thereto, which are included elsewhere in this report.
Forward-Looking Information
Forward-looking information relating to the financial results or
strategies of the Company is referenced throughout Management's
Discussion and Analysis. The following paragraphs identify
forward-looking statements and the risks that need to be
considered when reading those statements.
Forward-looking statements include such words as believe, expect,
anticipate, target, goal, objective or other words with similar
meaning. The Company is under no obligation to update such
forward-looking information statements.
The risks involved in the operations and strategies of the Company
include competition from other financial institutions and other
financial service providers, changes in interest rates, changes in
economic or market conditions and changes in regulations from
federal and state regulators. These risks, which are not all
inclusive, cannot be estimated.
Results of Operations
The nine months ended September 30, 1999, compared to the nine
months ended September 30, 1998.
Net Income
For the nine months ended September 30, 1999, Brenton recorded net
income of $12,309,262, which declined 18.0 percent from net income
of $15,010,296 for the first nine months of 1998. Lower mortgage
banking revenues and investment brokerage commissions, along with
normal expense growth including costs associated with the
Company's growth initiatives (see Looking Ahead on page 12)
contributed to the reduction. Net interest income grew only
slightly due to continued compression of the net interest margin.
Year-to-date diluted earnings per common share were $.59,
compared to $.70 for the first nine months of 1998.
<PAGE>
Part 1 -- Item 2
Page 2 of 12
The Company's annualized return on average equity (ROE) was 12.21
percent, compared to 15.21 percent one year ago; the annualized
return on average assets (ROA) was .89 percent, compared to 1.19
percent for the same period in 1998.
Net Interest Income
During the first nine months of 1999, net interest income grew .9
percent to $46,181,306, compared to $45,788,632 for the same
period a year ago as favorable volume variances were tempered by
tighter interest spreads. Net interest margin declined 33 basis
points from 4.02 percent for the first nine months of 1998 to 3.69
percent for the same period in 1999 as the yield on interest-
earning assets declined more than the rate on interest-bearing
liabilities. The growth of net interest income was limited by
this compression of the net interest margin, which was caused by
Iowa's highly competitive banking environment and the Federal
Reserve's rate reductions in 1998. Year-to-date 1999 average
interest-earning assets increased 10.1 percent, while average
interest-bearing liabilities rose 10.4 percent compared to the
first three quarters of 1998.
Loan Quality
At September 30, 1999, total loans had grown 13.4 percent to
$1,160.9 million from $1,023.8 million a year earlier. Increases
of $47.6 million (29.5 percent) in average indirect consumer
loans, $21.5 million (9.4 percent) in average direct consumer
loans and $23.5 million (5.6 percent) in average
commercial/business/agricultural loans led the growth. Average
residential real estate loans declined $31.3 million (21.1
percent) primarily due to refinancings and normal paydowns.
Refinanced loans are generally sold in the secondary market to
reduce the risk of holding long-term, fixed-rate loans in the
portfolio.
Nonperforming loans were $11,694,000, or 1.01 percent of total
loans, at September 30, 1999, compared to $11,289,000, or 1.09
percent of total loans, at the end of the prior year and
$10,525,000, or 1.03 percent of total loans, at September 30,
1998. Nonperforming loans include loans on nonaccrual status,
loans that have been renegotiated to below market interest rates
or terms and loans past due 90 days or more. The allowance for
loan losses, which totaled $14.6 million, represented 124.88
percent of nonperforming loans and 1.26 percent of total loans at
September 30, 1999. At September 30, 1998, the same ratios were
135.13 percent and 1.39 percent, respectively.
<PAGE>
Part 1 -- Item 2
Page 3 of 12
The provision for loan losses totaled $3,150,000 for the nine
months ended September 30, 1999, and 1998. Annualized year-to-
date net charge-offs were .34 percent of average loans for the
first nine months of 1999, compared with .22 percent for the same
period last year and .28 percent for all of 1998.
The Company has a formal structure for reviewing and approving
loans. Loan quality control and risk management is carefully
balanced with goals for loan growth. Management believes the
allowance for loan losses at September 30, 1999, is sufficient to
absorb probable loan losses within the portfolio.
Noninterest Income
Noninterest income for the nine months ended September 30, 1999,
was $22,565,883 (excluding securities gains and losses), a 4.7
percent decline from $23,674,972 one year ago. Growth in service
charges on deposit accounts, fiduciary income, and other
traditional service charges and fees were exceeded by declines in
mortgage banking income and investment brokerage commissions.
Service charges on deposits rose $1,145,359, or 20.0 percent,
compared to the first nine months of 1998. This growth was the
result of increased account analysis charges on commercial and
business deposit accounts by virtue of a higher number of clients
and revised fee schedules for deposit products.
Fiduciary income grew 12.6 percent to $2,784,211 as a result of
increased assets from existing trust accounts.
Other service charges, collection and exchange charges,
commissions and fees increased $158,107 from the prior year. The
gain was caused by improvements in merchant credit card fees,
ATM/debit card fees, official check commissions and international
fees exceeding declines in real estate sales commissions and
purchased receivable fees.
Mortgage banking income declined 33.4 percent to total $3,547,758
for the first nine months of 1999. Rising mortgage interest rates
during 1999 led to higher than anticipated losses on sales of
originated loans. Residential real estate loan closings for the
first nine months of 1999 totaled $354 million, up slightly
compared to $335 million for the same period last year.
A reduction of $864,209, or 21.1 percent, in investment brokerage
commissions was due to lower transaction volume.
Investment securities gains totaled $220,356 compared to gains of
$466,765 for the same period in 1998.
<PAGE>
Part 1 -- Item 2
Page 4 of 12
Noninterest Expense
Noninterest expense totaled $48,950,495 at September 30, 1999, an
8.2 percent increase from the first nine months of 1998.
Compensation, the largest component of noninterest expense,
increased 8.5 percent over the prior year as a result of normal
annual salary adjustments and an increase in the number of
employees due to the Company's growth initiatives. The number of
full-time equivalent employees increased by 2.7 percent over
September 30, 1998, to 751.1. The cost of benefit expenses
increased 14.5 percent on account of growth in compensation
expense, higher medical insurance premiums and an award of Brenton
stock to employees during the first quarter of 1999.
Furniture and equipment expense increased $549,302 for the first
nine months of 1999 due to depreciation on computer upgrades and
higher costs for software maintenance agreements.
Marketing expense rose $212,620 to $1,314,190 in the first nine
months of 1999 because of expanded marketing efforts for various
lines of business and costs related to revising the Company's
deposit products.
Supplies expense increased 15.0 percent to $1,080,164 from
$939,568 in the prior year. The increase was primarily due to a
higher volume of debit cards issued and a higher volume of client
provided checks and deposit slips as a result of new accounts
opened, including the acquisition of deposit accounts in Pella and
Knoxville, and changes in deposit products.
While the Company's growth initiatives have caused and will
continue to cause some components of expense to increase, the
Company continues to carefully focus on cost management and
evaluates all major expense items in an effort to control the
growth rate of all noninterest expense categories.
The Company's net noninterest margin, which measures operating
efficiency, was (1.83) percent, compared to (1.65) percent one
year ago. Another ratio the Company utilizes to measure
productivity is the efficiency ratio. This ratio divides
noninterest expense by the sum of tax-equivalent net interest
income plus noninterest income (excluding gains and losses on the
sale of securities and loans). At September 30, 1999, the
Company's efficiency ratio was 68.32 percent, compared with 62.59
percent one year ago.
<PAGE>
Part 1 -- Item 2
Page 5 of 12
Income Taxes
The Company's income tax strategies include reducing income taxes
by purchasing securities and originating loans that produce tax-
exempt income. The goal is to maintain an optimum level of tax-
exempt assets in order to benefit the Company both on a tax-
equivalent yield basis and in income tax savings. The effective
rate of income tax expense as a percent of income before income
tax and minority interest was 24.2 percent for the first nine
months of 1999 compared to 27.9 percent for 1998.
Results of Operations
The three months ended September 30, 1999, compared to the three
months ended September 30, 1998.
Net Income
For the three months ended September 30, 1999, net income totaled
$3,501,794, compared to $5,295,756 for the third quarter of 1998,
a decline of 33.9 percent. Diluted earnings per common share was
$.17 for the third quarter of 1999, compared to $.25 for the third
quarter of 1998.
Net Interest Income
Net interest income for the quarter totaled $15,598,935, an
increase of $338,862, or 2.2 percent, over the same period in
1998. The net interest margin for the third quarter of 1999 was
3.68 percent, compared to 3.96 percent for the third quarter of
1998. Similar to the nine-month comparison, competitive factors
have compressed the net interest margin, thus limiting net
interest income growth. Quarter-to-date average earning assets
increased $158,999,000, or 9.7 percent, over the third quarter of
1998.
Provision for Loan Losses
The provision for loan losses for the third quarters of both 1999
and 1998 totaled $1,050,000. Annualized net charge-offs as a
percent of average loans were .27 percent for the third quarter of
1999, compared to .30 percent for the same period of 1998.
Noninterest Income
Noninterest income (excluding securities gains) declined by
$1,595,490, or 19.2 percent, from the third quarter of 1998 to the
third quarter of 1999.
<PAGE>
Part 1 -- Item 2
Page 6 of 12
Service charges on deposit accounts increased 18.8 percent to
$2,429,966 over the prior year due to growth in account analysis
charges on commercial and business deposit accounts and deposit
products revisions.
Insurance commissions and fees rose $97,599 from the prior year as
a result of an increase of $190,939 in credit-related insurance
commissions. This increase was offset by a $93,340, decline in
insurance agency commissions.
Mortgage banking income declined $1,309,975, due to losses on
sales of originated loans into the marketplace, as previously
discussed.
Investment brokerage commissions declined 19.6 percent to
$1,025,740 due to lower transaction volume.
Other operating income declined to $300,857. Several
miscellaneous non-recurring items were recorded in 1998.
Net gains from securities transactions totaled $13,437 for the
third quarter of 1999, versus net gains of $222,189 in the third
quarter of 1998.
Noninterest Expense
Noninterest expense increased by 9.3 percent when comparing the
third quarter of 1999 with the third quarter of 1998. The
Company's net noninterest margin was (2.00) percent for the third
quarter of 1999, compared to (1.54) percent for the third quarter
of 1998. Quarter-to-quarter, the largest noninterest expense
changes were in the categories of compensation and benefits,
occupancy and furniture and equipment expense.
Compensation and related benefit costs increased by a combined 9.5
percent over the third quarter of 1998. As a result of Brenton's
growth initiatives, standard salaries increased by 16.1 percent,
while variable compensation and bonus accruals declined slightly
due to lower revenues and lower net income, respectively.
Occupancy costs increased $148,519 to $1,552,958 because of higher
depreciation expense and a net increase in rental costs.
Like the year-to-date comparison, furniture and equipment expense
increased by $322,668 to $1,433,312 due to depreciation on
computer technology upgrades and higher repairs and maintenance
expense.
<PAGE>
Part 1 -- Item 2
Page 7 of 12
Capital Resources
Common stockholders' equity totaled $131.9 million as of September
30, 1999, a 2.5 percent decline from December 31, 1998. Excluding
the change in accumulated other comprehensive income (loss),
realized stockholders' equity increased 3.1 percent compared to
year-end 1998. The Company continues to monitor its capital
position to balance the goals of maximizing return on average
equity, while maintaining adequate capital levels for business
risk and regulatory purposes. The Company's risk-based core
capital ratio at September 30, 1999, was 9.13 percent and the
total risk-based capital ratio was 10.14 percent. These ratios
exceeded the minimum regulatory requirements of 4.00 and 8.00
percent, respectively. The Company's tier 1 leverage capital
ratio, which measures capital excluding intangible assets was 6.82
percent at September 30, 1999, exceeding the regulatory minimum
requirement for well-capitalized institutions of 5.0 percent.
As part of the Company's ongoing stock repurchase plan, 222,244
shares of common stock have been repurchased during the first
three quarters of 1999 at a cost of $3,133,823. The Board of
Directors has approved the repurchase of $4 million of Company
stock during 1999. Since the inception of the plan in 1994, the
Company has repurchased 3,566,603 shares (restated for all stock
splits/dividends) at a total cost of $37,078,201.
In May 1999, the Board of Directors declared a 10 percent common
stock dividend. As a result of this action, each shareholder
received one additional share of Brenton Banks, Inc. common stock
for every 10 shares they owned. Fractional shares were paid in
cash.
The Company paid dividends of $.259 per common share in the first
nine months of 1999. This was an increase of 12.1 percent
compared to $.231 per common share for the same period of 1998.
Dividends totaled $5,336,751 for the first nine months of 1999 and
the dividend payout ratio was 43.9 percent of diluted earnings per
common share. In October 1999, the Board of Directors declared a
regular quarterly cash dividend of $.087 per common share, which
was equal to the third quarter dividend.
The debt-to-equity ratio of Brenton Banks, Inc. (the "Parent
Company") was 5.5 percent at September 30, 1999. This percentage
has declined from the December 31, 1998, ratio of 6.7 percent.
Long-term borrowings of the Parent Company at September 30, 1999,
consisted entirely of capital notes totaling $7,283,000. In
addition, the Parent Company has a $5 million line of credit with
a regional bank that was unused at the end of September 1999.
<PAGE>
Part 1 -- Item 2
Page 8 of 12
Brenton Banks, Inc. common stock closed on September 30, 1999, at
$13.91 per share, compared to $17.10 a year earlier. The closing
price at September 30, 1999, was 215.7 percent of the book value
per share of $6.45. This closing stock price represented a price-
to-trailing-12-months-diluted-earnings multiple of 16.56 times.
Brenton Banks, Inc. continues to pursue acquisition and expansion
opportunities that fit the Company's strategic business and
financial plans. On September 24, 1999, the Company closed the
previously announced acquisition of two U.S. Bank offices in Pella
and Knoxville, with deposits totaling approximately $53 million.
There are currently no other pending acquisitions that would
require Brenton Banks, Inc. to secure capital from public or
private markets.
Market Risk Management
Market risk is the risk of earnings volatility that results from
adverse changes in interest rates and market prices. The
Company's market risk is comprised primarily of interest rate risk
arising from its core banking activities of lending and deposit
taking. Interest rate risk is the risk that changes in market
interest rates may adversely affect the Company's net interest
income. Management continually develops and applies strategies to
mitigate this risk. Management does not believe that the
Company's primary market risk exposures and how those exposures
have been managed to-date in 1999 changed significantly when
compared to 1998.
Asset/Liability Management
The Company has a fully integrated asset/liability management
system to assist in managing the balance sheet. The process,
which is used to project the results of alternative investment
decisions, includes the development of simulations that reflect
the effects of various interest rate scenarios on net interest
income. Management analyzes the simulations to manage interest
rate risk, the net interest margin and levels of net interest
income.
The goal is to structure the balance sheet so that net interest
margin fluctuates in a narrow range during periods of changing
interest rates. The Company currently believes that net interest
income would fall by less than 5 percent if interest rates
increased or decreased by 300 basis points over a one-year time
horizon. This is within the Company's policy limits.
<PAGE>
Part 1 -- Item 2
Page 9 of 12
The slope of the yield curve is also a major determinant in the
net interest income of the Company. Generally, the steeper the
intermediate treasury to the one-week LIBOR rate, the better the
prospects for net interest income improvement. Recently, the
yield curve has started to exhibit a more normal slope, although
it is not yet back to historical norms.
To improve net interest income and lessen interest rate risk,
management continues its strategy of de-emphasizing fixed-rate
portfolio residential real estate loans with long repricing
periods. When appropriate for interest rate management purposes,
the Company securitizes residential real estate loans. The
Company continues to focus on reducing interest rate risk by
emphasizing growth in variable-rate consumer and commercial loans.
Other actions include the use of fixed-rate Federal Home Loan Bank
(FHLB) advances as alternatives to certificates of deposit, active
management of the available for sale investment securities
portfolio to provide for cash flows that will facilitate interest
rate risk management and, in selected cases, the use of interest
rate swaps and interest rate floor contracts.
The highly competitive banking environment in Iowa also greatly
impacts the Company's net interest margin. The effect of
competition on net interest income is difficult to predict.
Liquidity
The Company actively monitors and manages its liquidity position
with the objective of maintaining sufficient cash flows to fund
operations, meet customer commitments, take advantage of market
opportunities and provide a margin against unforeseeable liquidity
needs. Federal funds sold, trading account securities, loans held
for sale and investment securities available for sale are readily
marketable assets. Maturities of all investment securities are
managed to meet the Company's normal liquidity needs. Investment
securities available for sale may be sold prior to maturity to
meet liquidity needs, to respond to market changes or to adjust
the Company's interest rate risk position. Readily marketable
assets, as defined above, comprised 30.7 percent of the Company's
total assets at September 30, 1999.
The Company has historically maintained a stable deposit base and
a relatively low level of large deposits, which result in a low
dependence on volatile liabilities. As of September 30, 1999, the
Company had borrowings of $144,474,000 from the Federal Home Loan
Bank ("FHLB") of Des Moines, of which $62,200,000 represents a
variable-rate line of credit used to fund mortgage lending
operations. The remaining balance was used as a means of
providing both long- and short-term, fixed-rate funding for
certain assets and managing interest rate risk.
<PAGE>
Part 1 -- Item 2
Page 10 of 12
The combination of high levels of potentially liquid assets,
strong cash flows from operations, low dependence on volatile
liabilities and additional borrowing capacity provided sufficient
liquidity for the Company at September 30, 1999.
The Company has entered into agreements for the construction of an
operations and sales support facility with an estimated total cost
of $12.5 million. Groundbreaking occurred in October and
completion is expected in the fourth quarter of 2000. The
building will replace existing leased space and will also allow
for additional growth.
Year 2000
The "Year 2000" issue has been and continues to be a top priority
for the Company. Brenton's critical core loan and deposit
applications are ALLTEL Information Services, Inc. ("ALLTEL")
software programs and Brenton outsources the data processing
function to ALLTEL. Brenton and ALLTEL have been working in
partnership to resolve the Year 2000 issues of the critical core
application programs as well as all other computer software
programs used in the Company. Also considered has been the
readiness of vendors and other third parties with which the
Company does business, and an assessment of significant clients
has been performed.
The Company has taken this issue so seriously because it could be
faced with severe consequences if Year 2000 issues are not
identified and resolved in a timely manner by the Company and
significant third parties, which include public utilities, various
governmental agencies and clients. A worst case scenario would
result in the short-term inability to update client financial
records due to unforeseen processing issues. This would result in
clients being unable to receive timely information regarding their
balances. If clients were to experience significant Year 2000
issues, loan delinquency ratios could increase and the clients'
ability to repay loans could be impaired. The Company has
surveyed its larger clients and believes there should be no
material adverse effect on the Company.
The Company has had a Year 2000 Committee and a formal plan in
place since August 1997 and has been executing on that plan. The
Company completed substantially all Year 2000 work associated with
its critical core application systems in 1998 and testing has now
been successfully completed. The Committee is also finalizing
contingency plans for unforeseen difficulties related to the Year
2000 issue. As a result of modifications and upgrades to existing
systems, management believes the Year 2000 issue will not be a
significant operational matter for the Company.
<PAGE>
Part 1 -- Item 2
Page 11 of 12
The Company has also contracted with an outside consultant to
review the Year 2000 formal plan and monitor the progress of Year
2000 efforts. Management regularly reports on the status of the
Year 2000 project to the Board of Directors and its Audit
Committee. The Company is also subject to review by various
banking regulatory agencies. These agencies prescribe very strict
guidelines that must be adhered to by financial institutions.
The incremental expense associated with becoming Year 2000
compliant is not anticipated to be material. However, there is an
opportunity cost associated with this project in that the people
involved are regular Brenton and ALLTEL employees who would
normally be spending their time on other projects. The
incremental direct costs associated with this project were
approximately $350,000 in 1998. It is estimated these costs will
approach $500,000 in 1999. There are additional benefits that
result from this project, because in addition to becoming Year
2000 compliant, systems have been enhanced.
The Company will incur an additional opportunity cost in the
fourth quarter of 1999 when additional cash reserves are
maintained to meet possible client requests for extra cash. The
Company has finalized its plan for additional cash reserves. The
additional cash reserves will result in lower interest income due
to the need to convert an interest-earning asset to noninterest-
earning cash. It is estimated that the planned additional cash
reserves could result in a slight reduction to interest income for
the fourth quarter of this year.
The preceding paragraphs include forward-looking statements that
involve inherent risks and uncertainties. A number of important
factors could result in the actual costs of Year 2000 compliance
and impact of Year 2000 issues to differ from what is anticipated.
Those uncertainties include incomplete assessment results, higher
than anticipated costs to update software and hardware, and the
inability of vendors, significant customers and other third
parties to effectively address the Year 2000 issue.
<PAGE>
Part 1 -- Item 2
Page 12 of 12
Recently Issued Accounting Standards
In June 1998, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities",
which originally was scheduled to be effective for the year
beginning January 1, 2000. The effective date has been postponed
until January 1, 2001. This statement requires recognition of
all derivative instruments as either assets or liabilities in the
statement of financial position measured at fair value. This
statement requires that changes in the derivative's fair value be
recognized currently in earnings unless specific hedge accounting
criteria are met. Special accounting for qualifying hedges
allows gains and losses from derivatives to offset related
results on the hedged item in the income statement, and requires
a company to formally document, designate and assess the
effectiveness of transactions for which hedge accounting is
applied. Management is evaluating the impact the adoption of
SFAS No. 133 will have on the Company's financial statements. The
Company expects to adopt SFAS No. 133 when required.
Looking Ahead
The Company began a new growth initiative called "Defining Our
Destiny" in late 1998. The objective is to grow our client base
at a rate significantly above Iowa's population and economic
growth rates. The initiative is designed to further evolve the
Company's growing sales culture by increasing the sales staff
over the next three years, by creating opportunities for
additional sales from the existing sales staff and by
strengthening partnerships with the sales support staff. Defining
Our Destiny relies on the partnerships between Brenton associates
to deliver the entire Company to meet clients' financial needs.
In addition to the Company's purchase of two U.S. Bank offices in
September 1999, two new Brenton office locations are being planned
to expand our market presence. In November 1999, a new full-
service banking office was opened in Coralville. This new office
will complement our existing grocery store facility in Iowa City.
In the first half of 2000, the Company, which currently has four
full-service offices in the Quad Cities, plans to expand into
Moline, Illinois. It will mark the first time Brenton has crossed
into another state with a full-service banking office.
The Company's substantial investment and commitment to these
initiatives demonstrate Brenton's resolve to be an even stronger,
more dynamic competitor and to continue building on the successes
of the past several years.
<PAGE>
Part 1 -- Item 3. Quantitative and Qualitative Disclosures About
Market Risk.
The information appearing on page 8 of Item 2 under the heading
"Market Risk Management" is incorporated herein by reference.
Part 2 -- Item 6. Exhibits and Reports on Form 8-K
(b) Reports on Form 8-K -- There were no reports on Form 8-K filed
for the three months ended September 30, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
BRENTON BANKS, INC.
- -----------------------------------
(Registrant)
November 8, 1999 /s/ Robert L. DeMeulenaere
- ----------------------------------------------------------------
Dated Robert L. DeMeulenaere
President and Chief Executive
Officer
November 8, 1999 /s/ Steven T. Schuler
- ----------------------------------------------------------------
Dated Steven T. Schuler
Chief Financial Officer/
Treasurer/Secretary and
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEPTEMBER 30, 1999 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 76,335,562
<INT-BEARING-DEPOSITS> 2,228,224
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 561,833,688
<INVESTMENTS-CARRYING> 32,549,403
<INVESTMENTS-MARKET> 32,861,000
<LOANS> 1,160,907,136
<ALLOWANCE> 14,603,263
<TOTAL-ASSETS> 1,972,155,901
<DEPOSITS> 1,502,345,339
<SHORT-TERM> 292,370,328
<LIABILITIES-OTHER> 21,776,257
<LONG-TERM> 23,783,000
0
0
<COMMON> 51,081,685
<OTHER-SE> 80,799,292
<TOTAL-LIABILITIES-AND-EQUITY> 1,972,155,901
<INTEREST-LOAN> 68,600,961
<INTEREST-INVEST> 25,818,072
<INTEREST-OTHER> 788,525
<INTEREST-TOTAL> 95,207,558
<INTEREST-DEPOSIT> 37,700,119
<INTEREST-EXPENSE> 49,026,252
<INTEREST-INCOME-NET> 46,181,306
<LOAN-LOSSES> 3,150,000
<SECURITIES-GAINS> 220,356
<EXPENSE-OTHER> 49,427,194
<INCOME-PRETAX> 16,390,351
<INCOME-PRE-EXTRAORDINARY> 16,390,351
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,309,262
<EPS-BASIC> .60
<EPS-DILUTED> .59
<YIELD-ACTUAL> 3.47
<LOANS-NON> 9,420,000
<LOANS-PAST> 1,864,000
<LOANS-TROUBLED> 410,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 14,172,264
<CHARGE-OFFS> 4,380,804
<RECOVERIES> 1,661,803
<ALLOWANCE-CLOSE> 14,603,263
<ALLOWANCE-DOMESTIC> 14,603,263
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
T H E A M E R I C A N I N S T I T U T E O F
A R C H I T E C T S
_______________________________________________________________
AIA Document A111
Standard Form of Agreement
Between Owner and Contractor
where the basis of payment is the
Cost of the Work Plus a Fee
With a Guaranteed Maximum Price
1987 EDITION
This document has important legal consequences; consultation with
An attorney is encouraged with respect to its completion or
modification.
The 1987 Edition of AIA Document A201, General Conditions of the
Contract for Construction, is adopted
in this document by reference. Do not use with other general
conditions unless this document is modified.
This document has been approved and endorsed by The Associated
General Contractors of America.
________________________________________________________________
Agreement
made as of the 15th day of June in the year of
Nineteen Hundred and Ninety-Nine
Between the Owner: Brenton Bank
(Name and address) 6800 Lake Drive, Suite 250
West Des Moines, IA 50266-2504
and the Contractor: The Weitz Company, Inc.
(Name and adddress) 800 Second Avenue, Suite 300
Des Moines, IA 50309-1388
the Project is: Brenton Bank Operations Center
(Name and address) Clive, IA
the Architect is: Savage-Ver Ploeg & Associates, Inc.
(Name and address) 1466 28th Street, Suite 200
West Des Moines, IA 50266
The Owner and Contractor agree as set forth below.
________________________________________________________________
Copyright 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978,
Copyright 1987 by The American Institute of Architects, 1735 New
York Avenue, N.W., Washington, D.C. 20006. 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 be subject to legal prosecution.
________________________________________________________________
AIA Document A111 - Owner-Contractor Agreement - Tenth Edition -
AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A111-1987 1
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS
AND IS SUBJECT TO LEGAL PROSECUTION.
<PAGE>
Article 1
The Contract Documents
1.1 The Contract Documents consist of this Agreement, Conditions
of the Contract (General, Supplementary and other Conditions),
Drawings, Specifications, addenda issued prior to execution of
this Agreement, other documents listed in this Agreement and
Modifications issued after execution of this Agreement; these
form the Contract, and are as fully a part of the Contract as if
attached to this Agreement or repeated herein. The Contract
represents the entire and integrated agreement between the
parties hereto and supersedes prior negotiations, representations
or agreements, either written or oral. An enumeration of the
Contract Documents, other than Modifications, appears in Article
16. If anything in the other Contract Documents is inconsistent
with this Agreement, this Agreement shall govern.
Article 2
The Work of this Contract
2.1 The Contractor shall execute the entire Work described in the
Contract Documents, except to the extent specifically indicated
in the Contract Documents to be the responsibility of others,
See Exhibit A
Article 3
Relationship of the Parties
3.1 The Contractor accepts the relationship of trust and
confidence established by this Agreement and covenants with the
Owner to cooperate with the Architect and utilize the
Contractor's best skill, efforts and judgment in furthering the
interests of the Owner; to furnish efficient business
administration and supervision; to make efforts to furnish at all
times an adequate supply of workers and materials; and to perform
the Work in the best way and most expeditious and economical
manner consistent with the interests of the Owner. The Owner
agrees to exercise efforts to enable the Contractor to perform
the Work in the best way and most expeditious manner by
furnishing and approving in a timely way information required by
the Contractor and making payments to the Contractor in
accordance with requirements of the Contract Documents.
Article 4
Date of Commencement and Substantial Completion
4.1 See Exhibit A
(Insert the date of commencement, if it differs from the date of
this Agreement or, if applicable, state that the date will be
fixed in a notice to proceed.)
________________________________________________________________
AIA Document A111 - Owner-Contractor Agreement - Tenth Edition -
AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A111-1987 2
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS
AND IS SUBJECT TO LEGAL PROSECUTION.
<PAGE>
4.2 The Contractor shall achieve Substantial Completion of the
entire Work not later than November 1, 2000
(Insert the calendar date or number of calendar days after the
date of commencement. Also insert any requirements for earlier
Substantial Completion of certain portions of The Work, if not
stated elsewhere in the Contract Documents.)
,subject to adjustments of this Contract Time as provided in the
Contract Documents.
(Insert provisions, if any, for liquidated damages relating to
failure to complete on time.)
Article 5
Contract Sum
5.1 The Owner shall pay the Contractor in current funds for the
Contractor's performance of the Contract the Contract Sum
consisting of the Cost of the Work as defined in Article 7 and
the Contractor's Fee determined as follows:
(State a lump sum, percentage of Cost of the Work or other
provision for determining the Contractor's Fee, and explain how
the Contractor's Fee is to be adjusted for changes in the Work.)
See Exhibit A
5.2 Guaranteed Maximum Price (If Applicable)
5.2.1 The sum of the Cost of the Work and the Contractor's Fee is
guaranteed by the Contractor not to exceed an agreed upon sum to
be added by amendment, subject to additions and deductions by
Change Order as provided in the Contract Documents. Such maximum
sum is referred to in the Contract Documents as the Guaranteed
Maximum Price. Costs which would cause the Guaranteed Maximum
Price to be exceeded shall be paid by the Contractor without
reimbursement by the Owner.
(Insert specific provisions if the Contractor is to participate
in any savings.)
See Exhibit A
________________________________________________________________
AIA Document A111 - Owner-Contractor Agreement - Tenth Edition -
AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A111-1987 3
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS
AND IS SUBJECT TO LEGAL PROSECUTION.
<PAGE>
5.2.2 The Guaranteed Maximum Price is based upon the following
alternates, if any, which are described in the Contract Documents
and are hereby accepted by the Owner:
(State the numbers or other identification of accepted
alternates. but only if a Guaranteed Maximum Price is inserted in
Subparagraph 5.2.1. If decisions on other alternates are to be
made by the Owner subsequent to the execution of this Agreement,
attach a schedule of such other alternates showing the amount for
each and the date until which that amount is valid.)
To be added by amendment
5.2.3 The amounts agreed to for unit prices, if any, are as
follows:
(State unit prices only if a Guaranteed Maximum Price is inserted
in Subparagraph 5.2.1.)
To be added by amendment
Article 6
Changes in the Work
6.1 Contracts With a Guaranteed Maximum Price
6.1.1 Adjustments to the Guaranteed Maximum Price on account of
changes in the Work may be determined by any of the methods
listed in Subparagraph 7.3.3 of the General Conditions.
6.1.2 In calculating adjustments to subcontracts (except those
awarded with the Owner's prior consent on the basis of cost plus
a fee), the terms "cost" and "fee" as used in Clause 7.3.3.3 of
the General Conditions and the terms "costs" and "a reasonable
allowance for overhead and profit" as used in Subparagraph 7.3.6
of the General Conditions shall have the meanings assigned to
them in the General Conditions and shall not be modified by
Articles 5, 7 and 8 of this Agreement. Adjustments to
subcontracts awarded with the Owner's prior consent on the basis
of cost plus a fee shall be calculated in accordance with the
terms of those subcontracts.
6.1.3 In calculating adjustments to this Contract, the terms
"cost" and "costs" as used in the above-referenced provisions of
the General Conditions shall mean the Cost of the Work as defined
in Article 7 of this Agreement and the terms "fee" and "a
reasonable allowance for overhead and profit" shall mean the
Contractor's Fee as defined in Paragraph 5.1 of this Agreement.
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6.3 All Contracts
6.3.1 If no specific provision is made in Paragraph 5.1 for
adjustment of the Contractor's Fee in the case of changes in the
Work, or if the extent of such changes is such, in the aggregate,
that application of the adjustment provisions of Paragraph 5.1
will cause substantial inequity to the Owner or Contractor, the
Contractor's Fee shall be equitably adjusted on the basis of the
Fee established for the original Work.
Article 7
Costs to be Reimbursed
7.1 The term Cost of the Work shall mean costs necessarily
incurred by the Contractor in the proper performance of the Work.
Such costs shall be at rates not higher than the standard paid at
the place of the Project except with prior consent of the Owner.
The Cost of the Work shall include only the items set forth in
this Article 7.
7.1.1 Labor Costs
7.1.1.1 Wages of construction workers directly employed by the
Contractor to perform the construction of the Work at the site
or, with the Owner's agreement, at off-site workshops. See
Exhibit A
7.1.1.2 Wages or salaries of the Contractor's supervisory and
administrative personnel when stationed at the site with the
Owner's agreement. See Exhibit A
(If it is intended that the wages or salaries of certain
personnel stationed at the Contractor's principal or other
offices shall be included in the Cost of the Work. identify in
Article 14 the personnel to be included and whether for all or
only part of their time.)
7.1.1.3 Wages and salaries of the Contractor's supervisory or
administrative personnel engaged, at factories, workshops or on
the road, in expediting the production or transportation of
materials or equipment required for the Work, but only for that
portion of their time required for the Work. See Exhibit A
7.1.1.4 Costs paid or incurred by the Contractor for taxes,
insurance, contributions, assessments and benefits required by
law or collective bargaining agreements and, for personnel not
covered by such agreements, customary benefits such as sick
leave, medical and health benefits, holidays, vacations and
pensions, provided such costs are based on wages and salaries
included in the Cost of the Work under clauses 7.1.1.1 through
7.1.1.3.
7.1.2 Subcontract Costs
Payments made by the Contractor to Subcontractors in accordance
with the requirements of the subcontracts.
7.1.3 Costs of Materials and Equipment Incorporated in the
Completed Construction
7.1.3.1 Costs, including transportation, of materials and
equipment incorporated or to be incorporated in the completed
construction.
7.1.3.2 Costs of materials described in the preceding Clause
7.1.3.1 in excess of those actually installed but required to
provide reasonable allowance for waste and for spoilage. Unused
excess materials, if any, shall be handed over to the Owner at
the completion of the Work or, at the Owner's option, shall be
sold by the Contractor; amounts realized, if any, from such sales
shall be credited to the Owner as a deduction from the Cost of
the Work.
7.1.4 Costs of Other Materials and Equipment, Temporary
Facilities and Related Items
7.1.4.1 Costs, including transportation, installation,
maintenance, dismantling and removal of materials, supplies,
temporary facilities, machinery, equipment, and hand tools not
customarily owned by the construction workers, which are provided
by the Contractor at the site and fully consumed in the
performance of the Work; and cost less salvage value on such
items if not fully consumed, whether sold to others or retained
by the Contractor. Cost for items previously used by the
Contractor shall mean fair market value.
7.1.4.2 Rental charges for temporary facilities, machinery,
equipment, and hand tools not customarily owned by the
construction workers, which are provided by the Contractor at the
site, whether rented from the Contractor or Others, and costs of
transportation, installation, minor repairs and replacements,
dismantling and removal thereof. Rates and quantities of
equipment rented shall be subjcct to the Owner's prior approval.
See Exhibit A
7.1.4.3 Costs of removal of debris from the site.
7.1.4.4 Costs of telegrams and long-distance telephone calls,
postage and parcel delivery charges, telephone service at the
site and reasonable petty cash expenses of the site office. See
Exhibit A
7.1.4.5 That portion of the reasonable travel and subsistence
expenses of the Contractor's personnel incurred while traveling
in discharge of duties connected with the Work.
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7.1.5 Miscellaneous Costs
7.1.5.1 That portion directly attributable to this Contract of
premiums for insurance and bonds. See Exhibit A
7.1.5.2 Sales, use or similar taxes imposed by a governmental
authority which are related to the Work and for which the
Contractor is liable.
7.1.5.3 Fees and assessments for the building permit and for
other permits, licenses and inspections for which the Contractor
is required by the Contract Documents to pay.
7.1.5.4 Fees of testing laboratories for tests required by the
Contract Documents, except those related to defective or
nonconforming Work for which reimbursement is excluded by
Subparagraph 13.5.3 of the General Conditions or other provisions
of the Contract Documents and which do not fall within the scope
of Subparagraphs 7.2.2 through 7.2.4 below.
7.1.5.5 Royalties and license fees paid for the use of a
particular design, process or product required by the Contract
Documents; the cost of defending suits or claims for infringement
of patent rights arising from such requirement by the Contract
Documents; payments made in accordance with legal judgments
against the Contractor resulting from such suits or claims and
payments of settlements made with the Owner's consent; provided,
however, that such costs of legal defenses, judgment and
settlements shall not be included in the calculation of the
Contractor's Fee or of a Guaranteed Maximum Price, if any, and
provided that such royalties, fees and costs are not excluded by
the last sentence of Subparagraph 3.17.1 of the General
Conditions or other provisions of the Contract Documents.
7.1.5.6 Deposits lost for causes other than the Contractor's
fault or negligence.
7.1.6 Other Costs See Exhibit A
7.1.6.1 Other Costs incurred in the performance of the Work if
and to the extent approved in advance in writing by the Owner.
7.2 Emergencies: Repairs to Damaged, Defective or Nonconforming
Work
The Cost of the Work shall also include costs described in
Paragraph 7.1 which are incurred by the Contractor:
7.2.1 In taking action to prevent threatened damage, injury or
loss in case of an emergency affecting the safety of persons and
property, as provided in Paragraph 10.3 of the General
Conditions.
7.2.2 In repairing or correcting Work damaged or improperly
executed by construction workers in the employ of the Contractor,
provided such damage or improper execution did not result from
the fault or negligence of the Contractor or the Contractor's
foremen, engineers or superintendents, or other supervisory,
administrative or managerial personnel of the Contractor. See
Exhibit A
7.2.3 In repairing damaged Work other than that described in
Subparagraph 7.2.2, provided such damage did not result from the
fault or negligence of the Contractor or the Contractor's
personnel, and only to the extent that the cost of such repairs
is not recoverable by the Contractor from others and the
Contractor is not compensated therefor by insurance or otherwise.
See Exhibit A
7.2.4 In correcting defective or nonconforming Work performed or
supplied by a Subcontractor or material supplier and not
corrected by them, provided such defective or nonconforming Work
did not result from the fault or neglect of the Contractor or the
Contractor's personnel adequately to supervise and direct the
Work of the Subcontractor or material supplier, and only to the
extent that the cost of correcting the defective or nonconforming
Work is not recoverable by the Contractor from the Subcontractor
or material supplier. See Exhibit A
Article 8
Costs Not to be Reimbursed
8.1 The Cost of the Work shall not include:
8.1.1 Salaries and other compensation of the Contractor's
personnel stationed at the Contractor's principal office or
offices other than the site office, except as specifically
provided in Clauses 7.1.1.2 and 7.1.1.3 or as may be provided in
Article 14.
8.1.2 Expenses of the Contractor's principal office and offices
other than the site office.
8.1.3 Overhead and general expenses, except as may be expressly
included in Article 7.
8.1.4 The Contractor's capital expenses, including interest on
the Contractor's capital employed for the Work.
8.1.5 Rental costs of machinery and equipment, except as
specifically provided in Clause 7.1.4.2.
8.1.6 Except as provided in Subparagraphs 7.2.2 through 7.2.4 and
Paragraph 13.5 of this Agreement, costs due to the fault or
negligence of the Contractor, Subcontractors, anyone directly or
indirectly employed by any of them, or for whose acts any of them
may be liable, including but not limited to costs for the
correction of damaged, defective or nonconforming Work, disposal
and replacement of materials and equipment incorrectly ordered or
supplied, and making good damage to property not forming part of
the Work. See Exhibit A
8.1.7 Any cost not specifically and expressly described in
Article 7.
8.1.8 Costs which would cause the Guaranteed Maximum Price, if
any, to be exceeded.
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Article 9
Discounts, Rebates and Refunds
9.1 Cash discounts obtained on payments made by the Contractor
shall accrue to the Owner if (1) before making the payment, the
Contractor included them in an Application for Payment and
received payment therefor from the Owner, or (2) the Owner has
deposited funds with the Contractor with which to make payments;
otherwise, cash discounts shall accrue to the Contractor. Trade
discounts, rebates, refunds and amounts received from sales of
surplus materials and equipment shall accrue to the Owner, and
the Contractor shall make provisions so that they can be secured.
9.2 Amounts which accrue to the Owner in accordance with the
provisions of Paragraph 9.1 shall be credited to the Owner as a
deduction from the Cost of the Work.
Article 10
Subcontracts and Other Agreements
10.1 Those portions of the Work that the Contractor does not
customarily perform with the Contractor's own personnel shall be
performed under subcontracts or by other appropriate agreements
with the Contractor. The Contractor shall obtain bids from
Subcontractors and from suppliers of materials or equipment
fabricated especially for the Work and shall deliver such bids to
the Architect. The Owner will then determine, with the advice of
the Contractor and subject to the reasonable objection of the
Architect, which bids will be accepted. The Owner may designate
specific persons or entities from whom the Contractor shall
obtain bids; however, if a Guaranteed Maximum Price has been
established, the Owner may not prohibit the Contractor from
obtaining bids from others. The Contractor shall not be required
to contract with anyone to whom the Contractor has reasonable
objection.
10.2 If a Guaranteed Maximum Price has been established and a
specific bidder among those whose bids are delivered by the
Contractor to the Architect (1) is recommended to the Owner by
the Contractor; (2) is qualified to perform that portion of the
Work; and (3) has submitted a bid which conforms to the
requirements of the Contract Documents without reservations or
exceptions, but the Owner requires that another bid be accepted;
then the Contractor may require that a Change Order be issued to
adjust the Guaranteed Maximum Price by the difference between the
bid of the person or entity recommended to the Owner by the
Contractor and the amount of the subcontract or other agreement
actually signed with the person or entity designated by the
Owner.
10.3 Subcontracts or other agreements shall conform to the
payment provisions of Paragraphs 12.7 and 12.8, and shall not be
awarded on the basis of cost plus a fee without the prior consent
of the Owner.
Article 11
Accounting Records
11.1 The Contractor shall keep full and detailed accounts and
exercise such controls as may be necessary for proper financial
management under this Contract; the accounting and control
systems shall be satisfactory to the Owner. The Owner and the
Owner's accountants shall be afforded access to the Contractor's
records, books, correspondence, instructions, drawings, receipts,
subcontracts, purchase orders, vouchers, memoranda and other data
relating to this Contract, and the Contractor shall preserve
these for a period of three years after final payment, or for
such longer period as may be required by law.
Article 12
Progress Payments
12.1 Based upon Applications for Payment submitted to the
Architect by the Contractor and Certificates for Payment issued
by the Architect, the Owner shall make progress payments on
account of the Contract Sum to the Contractor as provided below
and elsewhere in the Contract Documents.
12.2 The period covered by each Application for Payment shall be
one calendar month ending on the last day of the month,
12.3 Provided an Application for Payment is received by the
Architect not later than the First day of a month, the Owner
shall make payment to the Contractor not later than the Fifteenth
day of the same month. If an Application for Payment is received
by the Architect after the application date fixed above, payment
shall be made by the Owner not later than Fifteen days after the
Architect receives the Application for Payment.
12.4 Already made by the Contractor on account of the Cost of the
Work equal or exceed (1) progress payments already received by
the Contractor; less (2) that portion of those payments
attributable to the Contractor's Fee; plus (3) payrolls for the
period covered by the present Application for Payment; plus (4)
retainage provided in Subparagraph 12.5.4, if any, applicable to
prior progress payments.
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AIA - Copyright 1987 - The
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12.5 Contracts With a Guaranteed Maximum Price
12.5.1 Each Application for Payment shall be based upon the most
recent schedule of values submitted by the Contractor in
accordance with the Contract Documents. The schedule of values
shall allocate the entire Guaranteed Maximum Price among the
various portions of the Work, except that the Contractor's Fee
shall be shown as a single separate item. The schedule of values
shall be prepared in such form and supported by such data to
substantiate its accuracy as the Architect may require. This
schedule, unless objected to by the Architect, shall be used as a
basis for reviewing the Contractor's Applications for Payment.
12.5.2 Applications for Payment shall show the percentage
completion of each portion of the Work as of the end of the
period covered by the Application for Payment. The percentage
completion shall be the lesser of (1) the percentage of that
portion of the Work which has actually been completed or (2) the
percentage obtained by dividing (a) the expense which has
actually been incurred by the Contractor on account of that
portion of the Work for which the Contractor has made or intends
to make actual payment prior to the next Application for Payment
by (b) the share of the Guaranteed Maximum Price allocated to
that portion of the Work in the schedule of values.
12.5.3 Subject to other provisions of the Contract Documents, the
amount of each progress payment shall be computed as follows:
12.5.3.1 Take that portion of the Guaranteed Maximum Price
properly allocable to completed Work as determined by multiplying
the percentage completion of each portion of the Work by the
share of the Guaranteed Maximum Price allocated to that portion
of the Work in the schedule of values. Pending final
determination of cost to the Owner of changes in the Work,
amounts not in dispute may be included as provided in
Subparagraph 7.3.7 of the General Conditions, even though the
Guaranteed Maximum Price has not yet been adjusted by Change
Order.
12.5.3.2 Add that portion of the Guaranteed Maximum Price
properly allocable to materials; and equipment delivered and
suitably stored at the site for subsequent incorporation in the
Work or, if approved in advance by the Owner, suitably stored off
the site at a location agreed upon in writing.
12.5.3.3 Add the Contractor's Fee. The Contractor's Fee shall be
computed upon the Cost of the Work described in the two preceding
Clauses at the rate stated in Paragraph 5.1 or, if the
Contractor's Fee is stated as a fixed sum in that Paragraph,
shall be an amount which bears the same ratio to that fixed-sum
Fee as the Cost of the Work in the two preceding Clauses bears to
a reasonable estimate of the probable Cost of the Work upon its
completion.
12.5.3.4 Subtract the aggregate of previous payments made by the
Owner.
12.5.3.5 Subtract the shortfall, if any, indicated by the
Contractor in the documentation required by Paragraph 12.4 to
substantiate prior Applications for Payment, or resulting from
errors subsequently discovered by the Owner's accountants in such
documentation.
12.5.3.6 Subtract amounts, if any, for which the Architect has
withheld or nullified a Certificate for Payment as provided in
Paragraph 9.5 of the General Conditions.
12.5.4 Additional retainage, if any, shall be as follows:
(If it is intended to retain additional amounts from progress
payments to the Contractor beyond (1) The retainage from the
Contractor's Fee provided in Clause 12.5.3.3,(2) the retainage
from subcontractors provided in Paragraph 12.7 below, and (3) the
retainage, if any, provided by other provisions of the Contract,
insert provision for such additional retainage here. Such
provision, if made, should also describe any arrangement for
limiting or reducing the amount retained after the Work reaches a
certain stale of completion.)
See Exhibit A
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12.7 Except with the Owner's prior approval, payments to
Subcontractors included in the Contractor's Applications for
Payment shall not exceed an amount for each Subcontractor
calculated as follows:
12.7.1 Take that portion of the Subcontract Sum properly
allocable to completed Work as determined by multiplying the
percentage completion of each portion of the Subcontractor's Work
by the share of the total Subcontract Sum allocated to that
portion in the Subcontractor's schedule of values, less retainage
of Five percent (5%). Pending final determination of amounts to
be paid to the Subcontractor for changes in the Work, amounts not
in dispute may be included as provided in Subparagraph 7.3.7 of
the General Conditions even though the Subcontract Sum has not
yet been adjusted by Change Order.
12.7.2 Add that portion of the Subcontract Sum properly allocable
to materials and equipment delivered and suitably stored at the
site for subsequent incorporation in the Work or, if approved in
advance by the Owner, suitably stored off the site at a location
agreed upon in writing, less retainage of Five percent (5%).
12.7.3 Subtract the aggregate of previous payments made by the
Contractor to the Subcontractor.
12.7.4 Subtract amounts, if any, for which the Architect has
withheld or nullified a Certificate for Payment by the Owner to
the Contractor for reasons which are the fault of the
Subcontractor.
12.7.5 Add, upon Substantial Completion of the entire Work of the
Contractor, a sum sufficient to increase the total payments to
the Subcontractor to Ninety-Five percent (95%) of the Subcontract
Sum, less amounts, if any, for incomplete Work and unsettled
claims; and, if final completion of the entire Work is thereafter
materially delayed through no fault of the Subcontractor, add any
additional amounts payable on account of Work of the
Subcontractor in accordance with Subparagraph 9.10.3 of the
General Conditions.
(If it is intended, prior to Substantial Completion of the entire
Work of the Contractor, to reduce or limit the retainage from
Subcontractors resulting from the percentages inserted in
Subparagraphs 12.7.1 and 12.7.2 above, and this is not explained
elsewhere in the Contract Documents, insert here provisions for
such reduction or limitation.)
See Exhibit A
The Subcontract Sum is the total amount stipulated in the
subcontract to be paid by the Contractor to the Subcontractor for
the Subcontractor's performance of the subcontract.
12.8 Except with the Owner's prior approval, the Contractor shall
not make advance payments to suppliers for materials or equipment
which have not been delivered and stored at the site.
12.9 In taking action on the Contractor's Applications for
Payment, the Architect shall be entitled to rely on the accuracy
and completeness of the information furnished by the Contractor
and shall not be deemed to represent that the Architect has made
a detailed examination, audit or arithmetic verification of the
documentation submitted in accordance with Paragraph 12.4 or
other supporting data; that the Architect has made exhaustive or
continuous on-site inspections or that the Architect has made
examinations to ascertain how or for what purposes the Contractor
has used amounts previously paid on account of the Contract. Such
examinations, audits and verifications, if required by the Owner,
will be performed by the Owner's accountants acting in the sole
interest of the Owner.
Article 13
Final Payment
13.1 Final payment shall be made by the Owner to the Contractor
when (1) the Contract has been fully performed by the Contractor
except for the Contractor's responsibility to correct defective
or nonconforming Work, as provided in Subparagraph 12.2.2 of the
General Conditions, and to satisfy other requirements, if any,
which necessarily survive final payment; (2) a final Application
for Pay-
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ment and a final accounting for the Cost of the Work have been
submitted by the Contractor and reviewed by the Owner's
accountants; and (3) a final Certificate for Payment has then
been issued by the Architect; such final payment shall be made by
the owner not more than 30 days after the issuance of the
Architect's final Certificate for Payment, or as follows:
13.2 The amount of the final payment shall be calculated as
follows:
13.2.1 Take the sum of the Cost of the Work substantiated by the
Contractor's final accounting and the Contractor's Fee; but not
more than the Guaranteed Maximum Price, if any.
13.2.2 Subtract amounts, if any, for which the Architect
withholds, in whole or in part, a final Certificate for Payment
as provided in Subparagraph 9.5.1 of the General Conditions or
other provisions of the Contract Documents.
13.2.3 Subtract the aggregate of previous payments made by the
Owner.
If the aggregate of previous payments made by the Owner exceeds
the amount due the Contractor, the Contractor shall reimburse the
difference to the Owner.
13.3 The Owner's accountants will review and report in writing on
the Contractor's final accounting within 30 days after delivery
of the final accounting to the Architect by the Contractor. Based
upon such Cost of the Work as the Owner's accountants report to
be substantiated by the Contractor's final accounting, and
provided the other conditions of Paragraph 13.1 have been met,
the Architect will, within seven days after receipt of the
written report of the Owner's accountants, either issue to the
Owner a final Certificate for Payment with a copy to the
Contractor, or notify the Contractor and Owner in writing of the
Architect's reasons for withholding a certificate as provided in
Subparagraph 9.5.1 of the General Conditions. The time periods
stated in this Paragraph 13.3 supersede those stated in
Subparagraph 9.4.1 of the General Conditions.
13.4 If the Owner's accountants report the Cost of the Work as
substantiated by the Contractor's final accounting to be less
than claimed by the Contractor, the Contractor shall be entitled
to demand arbitration of the disputed amount without a further
decision of the Architect. Such demand for arbitration shall be
made by the Contractor within 30 days after the Contractor's
receipt of a copy of the Architect's final Certificate for
Payment; failure to demand arbitration within this 30-day period
shall result in the substantiated amount reported by the owner's
accountants becoming binding on the Contractor. Pending a final
resolution by arbitration, the Owner shall pay the Contractor the
amount certified in the Architect's final Certificate for
Payment.
13.5 If, subsequent to final payment and at the Owner's request,
the Contractor incurs costs described in Article 7 and not
excluded by Article 8 to correct defective or nonconforming Work,
the Owner shall reimburse the Contractor such costs and the
Contractor's Fee applicable thereto on the same basis as if such
costs had been incurred prior to final payment, but not in excess
of the Guaranteed Maximum Price, if any. If the Contractor has
participated in savings as provided in Paragraph 5.2, the amount
of such savings shall be recalculated and appropriate credit
given to the Owner in determining the net amount to be paid by
the Owner to the Contractor.
Article 14
Miscellaneous Provisions
14.1 Where reference is made in this Agreement to a provision of
the General Conditions or another Contract Document, the
reference refers to that provision as amended or supplemented by
other provisions of the Contract Documents.
14.2 Payments due and unpaid under the Contract shall bear
interest from the date payment is due, at the legal rate
prevailing from time to time at the place where the Project is
located.
(Insert rate of interest agreed upon, if any.)
(Usury laws and requirements under the Federal Truth in Lending
Act, similar state and local consumer credit laws and other
regulations at the Owner's and Contractor's principal places of
business, the location of the Project and elsewhere may affect
the validity of this provision. Legal advice should be obtained
with respect to deletions or modifications, and also regarding
requirements such as written disclosures or waivers.)
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14.3 Other provisions:
See Exhibit A
Article 15
Termination or Suspension
15.1 The Contract may be terminated by the Contractor as provided
in Article 14 of the General Conditions, however, the amount to
be paid to the Contractor under Subparagraph 14.1.2 of the
General Conditions shall not exceed the amount the Contractor
would be entitled to receive under Paragraph 15.3 below, except
that the Contractor's Fee shall be calculated as if the Work had
been fully completed by the Contractor, including a reasonable
estimate of the Cost of the Work for Work not actually completed.
15.2 If a Guaranteed Maximum Price is established in Article 5,
the Contract may be terminated by the Owner for cause as provided
in Article 14 of the General Conditions; however, the amount, if
any, to be paid to the Contractor under Subparagraph 14.2.4 of
the General Conditions shall not cause the Guaranteed Maximum
Price to be exceeded, nor shall it exceed the amount the
Contractor would be entitled to receive under Paragraph 15.3
below.
15.3 If no Guaranteed Maximum Price is established in Article 5,
the Contract may be terminated by the Owner for cause as provided
in Article 14 of the General Conditions; however, the Owner shall
then pay the Contractor an amount calculated as follows:
15.3.1 Take the Cost of the Work incurred by the Contractor to
the date of termination.
15.3.2 Add the Contractor's Fee computed upon the Cost of the
Work to the date of termination at the rate stated in Paragraph
5.1 or, if the Contractor's Fee is stated as a fixed sum in that
Paragraph, an amount which bears the same ratio to that fixed-sum
Fee as the Cost of the Work at the time of termination bears to a
reasonable estimate of the probable Cost of the Work upon its
completion.
15.3.3 Subtract the aggregate of previous payments made by the
Owner.
The Owner shall also pay the Contractor fair compensation, either
by purchase or rental at the election of the Owner, for any
equipment owned by the Contractor which the Owner elects to
retain and which is not otherwise included in the Cost of the
Work under Subparagraph 15.3.1. To the extent that the Owner
elects to take legal assignment of subcontracts and purchase
orders (including rental agreements), the Contractor shall, as a
condition of receiving the payments referred to in this Article
15, execute and deliver all such papers and take all such steps,
including the legal assignment of such subcontracts and other
contractual rights of the Contractor, as the Owner may require
for the purpose of fully vesting in the Owner the rights and
benefits of the Contractor under such subcontracts or purchase
orders.
15.4 The Work may be suspended by the Owner as provided in
Article 14 of the General Conditions; in such case, the
Guaranteed Maximum Price, if any, shall be increased as provided
in Subparagraph 14.3.2 of the General Conditions except that the
term "cost of performance of the Contract" in that Subparagraph
shall be understood to mean the Cost of the Work and the term
"profit" shall be understood to mean the Contractor's Fee as
described in Paragraphs 5.1 and 6.3 of this Agreement.
Article 16
Enumeration of Contract Documents
16.1 The Contract Documents, except for Modifications issued
after execution of this Agreement, are enumerated as follows:
16.1.1 The Agreement is this executed Standard Form of Agreement
Between Owner and Contractor, AIA Document A111, 1987 Edition.
16.1.2 The General Conditions are the General Conditions of the
Contract for Construction, AIA Document A201, 1987 Edition.
________________________________________________________________
AIA Document A111 - Owner-Contractor Agreement - Tenth Edition -
AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A111-1987 11
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS
AND IS SUBJECT TO LEGAL PROSECUTION.
<PAGE>
16.1.4 The Specifications are those contained in the Project
Manual dated as in Paragraph 16.1.3, and are as follows:
(Either list the Specifications here or refer to an exhibit
attached to this Agreement.)
Section Title Pages
To be added by amendment
________________________________________________________________
AIA Document A111 - Owner-Contractor Agreement - Tenth Edition -
AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A111-1987 12
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS
AND IS SUBJECT TO LEGAL PROSECUTION.
<PAGE>
16.1.5 The Drawings are as follows, and are dated ________ unless
a different date is shown below:
(Either list the Drawings here or refer to an exhibit attached to
this Agreement.)
Number Title Date
To be added by amendment
16.1.6 The addenda, if any, are as follows:
Number Date Pages
To be added by amendment
Portions of Addenda relating to bidding requirements are not part
of the Contract Documents unless the bidding requirements are
also enumerated in this Article 16.
________________________________________________________________
AIA Document A111 - Owner-Contractor Agreement - Tenth Edition -
AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A111-1987 13
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS
AND IS SUBJECT TO LEGAL PROSECUTION.
<PAGE>
16.1.7 Other Documents, if any, forming part of the Contract
Documents are as follows:
(List here any additional documents which are intended to form
part of the Contract Documents. The General Conditions provide
that bidding requirements such as advertisement or invitation to
bid, Instructions to Bidders, sample forrms and the Contractor's
bid are not part of the Contract Documents unless enumerated in
this Agreement. They should be listed here only if intended to be
part of the Contract Documents.)
To be added by amendment
This Agreement is entered into as of the day and year first
written above and is executed in at least three original copies
of which one is to be delivered to the Contractor, one to the
Architect for use in the administration of the Contract, and the
remainder to the Owner.
OWNER Brenton Bank CONTRACTOR The Weitz Company, Inc.
BY: /s/ Phillip L. Risley BY: /s/ James P. Simmons
(Signature) (Signature)
Phillip L. Risley, Executive James P. Simmons, President -
Vice President Weitz Iowa
CAUTION: YOU SHOULD SIGN AN ORIGINAL AIA DOCUMENT WHICH HAS THIS
CAUTION PRINTED IN RED. AN ORIGINAL ASSURES THAT CHANGES WILL NOT
BE OBSCURED AS MAY OCCUR WHEN DOCUMENTS ARE REPRODUCED.
________________________________________________________________
AIA Document A111 - Owner-Contractor Agreement - Tenth Edition -
AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A111-1987 14
WARNING: UNLICENSED PHOTOCOPYING VIOLATES U.S. COPYRIGHT LAWS
AND IS SUBJECT TO LEGAL PROSECUTION.
<PAGE>
Exhibit A
Supplementary Contract Terms to Standard Form of
Agreement Between Owner and Contractor (A111) 4/27/99
These Supplementary Contract Terms modify, change, delete from,
or add to those terms set forth in the "Standard Form of
Agreement Between Owner and Contractor", AIA Document A111, Tenth
Edition, 1987, and shall supersede such Owner/Contractor
Agreement to the extent inconsistent or in conflict therewith.
Where any Article, Paragraph, Subparagraph or Clause of the
Owner/Contractor Agreement is modified or deleted by these
Supplementary Contract Terms, the unaltered provisions of that
Article, Paragraph, Subparagraph or Clause shall remain in
effect:
Page 1, at the top, delete "or without", and, at the bottom, add:
"The Owner's Consultant is: Capital Resources Group, Ltd.
James McCulloh
400 Locust Street, Suite 300
Des Moines, IA 50309"
Paragraph 2.1, at the end, delete ", or as follows:"
Paragraph 2.2, add the following new paragraph:
"2.2 The Contractor agrees to provide preconstruction services as
listed in this Paragraph 2.2 to further the interests of the
Owner by furnishing the Contractor's skill and judgement in
cooperation with, and in reliance upon, the services of the
Architect. The Contractor agrees to furnish business
administration and management services and to perform
preconstruction services in an expeditious and economical manner
consistent with the interests of the Owner."
"2.2.1 Provide preliminary evaluation of the program and Project
budget requirements, each in terms of the other. With the
Architect's assistance, prepare a preliminary cost estimate for
the early schematic design based on area, volume or other
standards. Assist the Owner and the Architect in achieving
mutually agreed upon program and Project budget requirements and
other design parameters. Provide cost evaluations of alternative
materials and systems."
"2.2.2 Review designs during their development. Provide
recommendations on relative feasibility of construction methods,
availability of materials and labor, time requirements for
procurement, installation and construction, and factors related
to cost including, but not limited to, costs of alternative
designs or materials, preliminary budgets and possible
economies."
"2.2.3 Provide for the Architect's and the Owner's review and
acceptance, and periodically update, a project schedule that
coordinates and integrates the Contractors services, the
Architect's services and the Owner's responsibilities with the
anticipated construction schedule."
"2.2.4 Prepare a more detailed cost estimate based on Schematic
Design Documents prepared by the Architect. Update and refine
this estimate periodically as the Architect prepares Design
Development and Construction Documents. Advise the Owner and the
Architect if it appears that the construction cost may exceed the
Project budget. Make recommendations for corrective action."
"2.2.5 Review Contract Documents as they are being prepared and
recommend alternative solutions whenever design details affect
construction feasibility, or the design is likely to exceed the
Project budget or
1
<PAGE>
schedule."
"2.2.6 Advise on the method to be used for selecting
Subcontractors and awarding Subcontracts. Review the drawings and
specifications and make recommendations as required to provide
that (1) the Work of Subcontractors is coordinated, (2) the
likelihood of jurisdictional disputes has been minimized, and (3)
proper coordination has been provided for phased construction."
"2.2.7 Recommend purchase of materials and equipment requiring.
long lead time procurement. Purchase, expedite and coordinate
delivery of these purchases after Owner approval."
"2.2.8 Make recommendations for pre-qualification criteria for
Subcontract Bidders and develop Subcontract Bidders' interest in
the Project. Establish bidding schedules. Assist the Architect
with the receipt of questions from Subcontract Bidders, and with
the issuance of Addenda."
"2.2.9 Assist in obtaining building permits, approvals and
special permits for the Project."
"2.2.10 If requested, assist the Owner in selecting and retaining
the professional services of surveyors, special consultants and
testing laboratories. Coordinate their services."
Paragraph 3.1, delete "best" and substitute "commercially
reasonable" in lines 3 and 5.
Paragraph 4.1 is deleted and the following substituted:
"The date of commencement is the date from which the Contract
Time of Subparagraph 4.2 is measured, and it shall be the latest
of the following dates: (1) the date established by a Notice to
Proceed issued by the Owner, (2) the date all governmental
permits and approvals necessary to commence and continue the Work
on an ongoing basis are received, or (3) the date of Contractors
acceptance of evidence pursuant to General Conditions
Subparagraph 2.2.1."
Subparagraphs 5.1.1, 5.1.2 and 5.1.3, add the following new
subparagraphs:
"5.1.1 The Contractors Fee shall be three percent (3%) of the
Cost of the Work as defined in Article 7 of the Agreement as
estimated in establishing the initial Guaranteed Maximum Price."
"5.1.2 The Contractors Fee for added items shall be three percent
(3%)."
"5.1.3 There shall be no change in Contractor's Fee for deleted
items unless the initial Guaranteed Maximum Price amount is, in
the aggregate, reduced by more than 7.5%, in which event the Fee
shall likewise be reduced by 3% of such aggregate net deletion."
Subparagraph 5.2.1.1, add the following new subparagraph:
"The Guaranteed Maximum Price shall be proposed by the Contractor
within one week of receipt of all subcontractor/supplier bids for
the project. Provided that this Guaranteed Maximum Price (GMP)
proposal is acceptable to the Owner it will be added to this
Agreement by amendment. If such Guaranteed Maximum Price proposal
is not acceptable to Owner, the Owner, Owner's Consultant,
Architect, and Contractor shall provide commercially reasonable
efforts to reduce the Guaranteed Maximum Price proposal to an
acceptable amount at which time it will be added to this
Agreement by supplement. Not withstanding such agreement to use
commercially reasonable efforts, the parties agree that the Owner
may nonetheless terminate this Agreement at any time prior to
establishment of an acceptable GMP at no cost, except for those
Costs of the Work and pro-rata Fee incurred by Contractor prior
to receipt of such notice of termination."
2
<PAGE>
Subparagraph 5.2.1.2, add the following new subparagraph:
"If the actual Cost of the Work plus the Contractor's Fee is less
than the Guaranteed Maximum Price, as adjusted as provided
herein, such difference ("savings") shall accrue fifty percent
(50%) to the Owner and fifty percent (50%) to the Contractor. The
amount of savings shall be initially determined by the Contractor
and submitted to the Owner as part of the final application for
payment as described in Paragraph 13.1, and payment of the
savings shall be made with final payment as provided in that
Paragraph 13.1."
Subparagraph 5.2.4, add the following new subparagraph:
"It is agreed that the Guaranteed Maximum Price includes certain
items for which all specifications or determinations have not
been made, and thus final estimates of cost cannot be made. The
Owner has established reasonable allowances for such items. When
the actual Cost of the Work for each allowance item is
determined, the Guaranteed Maximum Price shall be adjusted by
change order by the difference between the allowance amount and
the final estimated cost of the Work along with any appropriate
general conditions, tax, insurance, bond (if any), and
Contractor's Fee adjustments. Allowances will be identified in
the Guaranteed Maximum Price Amendment."
Subparagraph 6.2 is deleted in its entirety.
Subparagraphs 7.1.1.1, 7.1.1.2 are deleted and the following
substituted:
"7.1.1.1 Wages plus fringe benefit charges of construction
workers directly employed by the Contractor to perform the
construction of the Work at the site or at off-site workshops and
to make deliveries or pickups for the Project."
"7.1.1.2 The Contractor's supervisory and administrative
personnel at the following charging rates:"
Project Manager $70.00/hour
Preconstruction Manager $70.00/hour
Estimator $55.00/hour
Project Engineer $45.00/hour
Project Superintendent $2,400/week
Project Accountant $23.00/hour
Project Coordinator $23.00/hour
Subparagraph 7.1.1.3, add the following at the end of the
existing paragraph:
"Labor burden of thirty-five percent (35%) for FICA taxes,
Workers Compensation insurance and unemployment contributions
shall be added to costs in 7.1.1.1. This burden shall be referred
to as LIT. LIT has already been included in the rates under
7.1.1.2 and so shall not be added to costs in 7.1.1.2."
Subparagraph 7.1.2, is deleted and the following substituted:
"7.1.2 SUBCONTRACT COSTS
Payments made by the Contractor to Subcontractors in accordance
with the requirements of the subcontracts and the costs of
subcontractor bonds or Subguard insurance as required by the
Owner or Contractor."
Subparagraph 7.1.4.2, is revised by deleting the last sentence
and inserting in lieu thereof, the following:
"Rental charges for equipment owned by the Contractor shall be as
shown in Exhibit B."
3
<PAGE>
Subparagraph 7.1.4.4, is deleted and the following substituted:
"The costs of telegrams, fax, and long-distance calls; postage,
delivery and express charges; telephone service at the site;
printing and copy charges; petty cash expenses at the site; data
processing and computer charger, at the rate of $1.80 per
thousand dollars of Guaranteed Maximum Price; photography;
computerized scheduling charges; office furniture, equipment and
supplies for the site office; and other similar expenses related
to the Work."
Subparagraph 7.1.5.1, is revised by adding the following new
sentence at the end:
"The cost for liability insurance required under Subparagraph
14.3.1.2 is $10.10 per thousand dollars of Guaranteed Maximum
Price. "
Subparagraphs 7.1.6.2 add the following new subparagraph:
"7.1.6.2 Losses and expenses, not compensated by insurance or
otherwise, sustained by the Contractor in connection with the
Work, provided they have resulted from causes other than the
failure of the Contractor's personnel to exercise good faith or
that degree of care which they normally exercise."
Subparagraph 7.2.2, is deleted and the following substituted:
"7.2.2 In repairing or correcting Work damaged or improperly
executed by construction workers in the employ of the Contractor,
provided such damage or improper execution did not result from
the failure of the Contractor's engineers, superintendents, or
other administrative or managerial personnel of the Contractor to
exercise good faith or that degree of care which they normally
exercise."
Subparagraph 7.2.3, is deleted and the following substituted:
"7.2.3 In repairing damaged Work, other than that described in
Subparagraph 7.2.2, provided such damage did not result from the
failure of the Contractor's personnel to exercise good faith or
that degree of care which they normally exercise, and only to the
extent that the cost of such repairs is not recoverable by the
Contractor from others and the Contractor is not compensated
therefore by insurance or otherwise."
Subparagraph 7.2.4, is deleted and the following substituted:
"7.2.4 In correcting defective or nonconforming Work performed or
supplied by subcontractors or material suppliers and not
corrected by them, provided such defective or nonconforming Work
did not result from the failure of the Contractor's personnel to
exercise good faith or that degree of care which they normally
exercise in adequately supervising and directing the Work of a
subcontractor or material supplier, and only to the extent that
the cost of correcting the defective or nonconforming Work is not
recoverable by the Contractor from the subcontractor or material
supplier."
Subparagraph 7.3, add the following new subparagraph:
"7.3 The costs of providing electronic closeout of Contract
Documents, Warranties and other Project Documents."
Subparagraph 8.1.6, is deleted and the following substituted:
"8.1.6 Except as provided in Subparagraphs 7.2.2 through 7.2.4
and Paragraph 13.5 of this Agreement, costs due to the failure of
the Contractor's personnel to exercise good faith or that degree
of care which they normally exercise, including but not limited
to, cost for the correction of damage, defective or nonconforming
4
<PAGE>
Work, disposal and replacement of materials and equipment
incorrectly ordered or supplied, and making good damage to
property not forming a part of the Work."
Paragraph 10.1, in line 4 after the word "Contractor" add "and
Owner's Consultant".
Paragraph 12.1, In line 1, after the word "Architect" add "and to
Owner's Consultant"; and in line 2, after the word "Architect"
add "and approved by Owners Consultant,".
Paragraph 12.2, at the end delete "or as follows:".
Paragraph 12.3, after the word "Architect" each time it appears
add "and Owners Consultant".
Paragraph 12.4, delete lines 1 and 2 and substitute "With each
succeeding Application for Payment the Contractor shall submit
lien waivers as to prior payments from all Subcontractors and
suppliers with contracts in excess of $5000 to demonstrate that
cash disbursements".
Paragraph 12.5, after the word "Architect" each time it appears,
add "or Owner's Consultant".
Subparagraph 12.5.3.3, Change the first sentence to read "Add the
Contractors Fee".
Paragraph 12.5.4, add "Subject to Paragraph 12.7.6, subtract
retainage of five percent (5%) of the net sum payable under
Paragraphs 12.5.3.1, 12.5.3.2 and 12.5.3.3 above."
Paragraph 12.6, is deleted in its entirety.
Subparagraph 12.7.6, add the following new subparagraph:
"12.7.6 Upon mutual agreement by Owner and Contractor, payment in
full may be made to those subcontractors whose Work is fully
completed during the early stages of the Project, or any retained
amounts reduced with respect to subcontractors at such times as
the parties may mutually agree, which agreement will not be
unreasonably withheld. Agreement to any such reduction in
retained amounts will not constitute a waiver of or otherwise
prejudice the Owner's right to subsequently reinstate full
retainage, as to that subcontractor, should circumstances justify
such action in the Owner's sole judgement."
Paragraph 12.9, after the word "Architect" each time it appears
add "and Owners Consultant". In the last sentence delete
"accountants" and substitute "Consultant".
Paragraph 13.1, in line 4 delete "accountants" and substitute
"Consultant"; in line 5 after "Architect" add "and approved by
Owners Consultant"; and in line 6 change "30" to " 15" and delete
",or as follows:" and substitute new sentence: "Contractor shall
provide electronic closeout for Project documents(in compact disk
media)."
Paragraph 13.3, delete "accountants" each time it appears and
substitute "Consultant".
Paragraph 13.4, delete "accountants" each time it appears and
substitute "Consultant".
Paragraph 14.3, add the following new paragraph:
"14.3.1 Limits of liability of insurance required to be carried
by the Contractor shall be no less than:"
"14.3.1.1 Workers Compensation: statutory limits, including
employer's liability limits $1,000,000 each accident, $1,000,000
disease policy limit, $1,000,000 disease each employee, including
a waiver of subrogation in favor of Owner."
5
<PAGE>
"14.3.1.2 Comprehensive Public Liability including operations,
premises, products, completed operations, independent
contractors, contractual, personal injury, and broad form
property damage endorsement: limits $1,000,000 bodily injury and
property damage combined, with Owner named as additional
insured."
"14.3.1.3 Automobile Liability: including owned, hired and non-
owned, limits $1,000,000 bodily injury and property damage
combined, with Owner named as additional insured."
"14.3.1.4 Excess Liability Umbrella policy not less than
$10,000,000, to cover all items required to be covered under
Subparagraphs 14.3.1.1, 14.3.1.2 and 14.3.1.3 with Owner named as
additional insured."
"14.3.1.5 Thirty days written cancellation notice stating a firm
30 days written notice will be furnished to the holder of the
certificate."
"14.3.1.6 XCU coverage to provide protection for explosion,
collapse and underground damage exposure."
"14.3.1.7 Pollution liability, subject to the policy form, of
$1,000,000 per claim and aggregate with the Owner named as
additional insured."
"14.3.1.8 All insurance shall be issued by an underwriter rated
"A minus" or better by the A. M. Best Company."
"14.3.2 The Owner hereby designates Phillip L. Risley, or his
designee, as its representative, with authority to approve
Modifications and other changes in the Work. Such representative
shall be available when needed during working hours at the site
of the Work and, in all cases, such representative's signature
shall be final and binding on the Owner."
Paragraph 16.1.2, add at end ", as modified by the Supplementary
General Conditions attached as Exhibit C."
Paragraph 16.1.3, change to read "The Supplementary Terms of the
Contract are attached as Exhibit A."
End of Supplementary Contract Terms
6
<PAGE>
Exhibit B
02/19/99 The Weitz Co., Des Moines Warehouse Page 1 of 3
The following is a list of Des Moines Warehouse owned equipment
with rental rates. good through January 1, 2000.
Operator not included in rates unless otherwise noted.
<TABLE>
<CAPTION>
spec cost HOURLY DAY WEEK MONTH
number code MAJOR EQUIPMENT: RATE RATE RATE RATE
</CAPTION>
<S> <C> <C> <C> <C> <C> <C>
PNEUMATIC EQUIPMENT:
01.100 01-9101 Air Compressor - 185 CFM $70 $210 $630
01.110 01-9110 Sand Blaster 300 lb Pot $86 $258 $774
01.120 01-9111 Sand Blaster 150 lb Pot $66 $198 $594
CONCRETE EQUIPMENT:
02.100 01-9200 Power Trowel 44" $50 $150 $450
02.110 01-9210 Power Trowel 36" $42 $127 $380
02.120 01-9201 Double Ridding Trowel 36" $106 $360 $1,125
02.125 01-9201 Double Ridding Trowel 44" $150 $450 $1,350
02.125 01-9201 Double Ridding Hydro Trowel 44" $222 $667 $2,000
02.130 01-9120 Power Floor Screed $200 $600 $1,800
01-9120 Power Roller Screed $0. 10 per
square foot
02.140 01-9711 Generator Hi-Cycle Gas $70 $210 $630
02.150 01-9712 Generator Hi-Cycle Elec $35 $105 $315
02.160 01-9240 Concrete Saw 14 HP $59 $177 $530
02.170 01-9230 Concrete Saw 18 HP $66 $200 $600
02.175 01-9240 Concrete Saw Green Cut 7.5" $44 $133 $400
02.175 01-9240 Concrete Saw Green Cut 8" $133 $400 $1,200
02.180 01-9125 Power Buggy $60 $180 $560
STEEL ERECTION EQUIPMENT:
04.100 01-9310 Welder Gas 200 AMP $50 $150 $450
04.110 019300 Welder Gas 400 AMP $65 $195 $585
04.120 01-9520 Roust a Bout 25' $50 $150 $450
RADIO & SURVEY EQUIPMENT:
05.100 01-9340 Transit $33 $100 $300
05.110 01-9340 Transit (Electronic) $40 $120 $360
05.120 01-9340 Electronic Distance Meter $40 $120 $360
01-9324 Total Station $83 $250 $750
05.130 01-9345 Surveyor's Level $20 $64 $208
05.140 01-9330 Laser Level $50 $150 $450
05.145 01-9330 Laser Level (Visable Beam) $50 $150 $450
05.150 01-9320 Radio $7 $21 $60
</TABLE>
<PAGE>
02/19/99 The Weitz Co., Des Moines Warehouse Page 2 of 3
<TABLE>
<CAPTION>
spec cost HOURLY DAY WEEK MONTH
number code MAJOR EQUIPMENT: RATE RATE RATE RATE
</CAPTION>
<S> <C> <C> <C> <C> <C> <C>
TRUCK & TRAILER EQUIPMENT:
06.100 01-9430 Office Trailer 8' $28 $83 $250
06.110 01-9435 Office Trailer 10' $33 $100 $300
06.120 01-9437 Office Trailer 12' $50 $150 $450
06.125 01-9437 Office Trailer 14' $80 $240 $720
06.130 01-9420 Van Trailer $17 $50 $150
06.140 01-9350 Tandem Dump Truck $24 $192 $960 $3,840
06.150 01-9350 Single Dump Truck $24 $192 $960 $3,840
06.170 01-9410 Flatbed Truck w/Boom $25 $200 $600 $1,800
06.180 01-9401 1 Ton Stake Truck $8 $75 $225 $675
06.190 01-9400 Pickup Truck $6 $75 $225 $675
06.210 01-9430 Equipment Trailer 12-Ton $2 $22 $66 $198
06.220 01-9430 Skid Steer Trailer $2 $22 $60 $198
HOISTING EQUIPMENT:
(Only Hourly Rates In This
Section INCLUDE Operator)
06.230 01-9490 Hydro Crane - 25 Ton $450 $1,350 $4,000
06.240 01-9495 Hydro Truck Crane - 50 Ton $125 $644 $1,933 $5,800
06.250 01-9480 Crawler Crane - 60 Ton $650 $2,200 $6,500
06.260 01-9955 Forklift Rough Terrain $275 $825 $2,475
06.270 01-9481 Man Lift Basket $35 $123 $368
EARTH WORK EQUIPMENT:
(Only Hourly Rates In This
Section INCLUDE Operator)
($32.00 Per Hour Including
L.I.T. And Benefits For
John Sundblad)
(Winter Premiums Will Apply
In This Section)
06.280 01-9460 * Track Hydraulic Excavator $135
06.290 019465 * Rubber Tire Backhoe/Loader $85
06.300 Track Loader $288 $931 $2,747
06.310 01-9470 Skid Steer Loader $233 $700 $2,100
06.320 01-9471 Sweeper for Skid Steer $165 $660 $1,980
06.330 01-9472 Breaker for Skid Steer $105 $420 $1,260
06.340 01-9473 Trencher for Skid Steer $165 $660 $1,980
06.350 01-9473 Tiller for Skid Steer $125 $500 $1,500
WEATHER PROTECTION EQUIPMENT:
08.100 01-9610 Oil Heater 350,00 BTU $44 $132 $396
08.110 01-9600 Oil Heater 650,000 BTU $40 $160 $495
08.120 01-9620 Propane/Nat. Gas 350,000 BTU $54 $167 $471
</TABLE>
<PAGE>
02/19/99 The Weitz Co., Des Moines Warehouse Page 3 of 3
<TABLE>
<CAPTION>
spec cost HOURLY DAY WEEK MONTH
number code MAJOR EQUIPMENT: RATE RATE RATE RATE
</CAPTION>
<S> <C> <C> <C> <C> <C> <C>
MISCELLANEOUS EQUIPMENT
10.100 01-9810 Electric Paving Breaker $66 $198 $594
10.110 01-9700 Compactor - Small Plate $61 $183 $549
10.120 01-9705 Compactor - Large Plate $105 $420 $1,200
10.130 01-9715 Power Post Hole Auger $67 $200 $600
10.140 01-9958 Water Pump Gas 2" $30 $90 $270
10.150 01-9710 Generator 5,000 Watt $40 $160 $487
10.160 01-9900 Power Washer 3,000 psi $65 $195 $585
10.170 01-9960 Portable Conveyor $135 $540 $1,620
10.180 01-9122 Grout Pump (pneumatic) $157 $550 $1,607
01-9850 Trash Chute $42 $125 $375
Carpet Sripper $260 $780 $2,340
OFFICE EQUIPMENT
10.180 01-0162 Computer $15 $50 $150
10.190 01-0163 Copier $15 $50 $150
10.200 01-0164 Fax Machine $15 $50 $150
10.210 01-0165 Blue Print Copier $22 $66 $200
<FN>
* A four hour minimum charge will apply for these items.
* A two hour minimum delivery (include to and from) charge at machine
rate will apply for these items.
</TABLE>
<PAGE>
Exhibit C
Supplementary General Conditions
of the Contract for Construction
These Supplementary General Conditions modify, change, delete
from or add to the "General Conditions of the Contract For
Construction," AIA Document A201, Fourteenth Edition, 1987, and
shall supersede the General Conditions to the extent inconsistent
or in conflict therewith. Where any Article of the General
Conditions is modified, or any Paragraph, Subparagraph or Clause
thereof is modified or deleted by these Supplementary General
Conditions, the unaltered provisions of that Article, Paragraph,
Subparagraph or Clause shall remain in effect:
Subparagraph 2.4.1, beginning in line 6, delete the words "give
the Contractor a second written notice to correct such
deficiencies within a second seven-day period. If the Contractor
within such second seven-day period after receipt of such second
notice fails to commence and continue to correct any
deficiencies, the Owner may,".
Subparagraph 3.5.1, in line 1, delete "and Architect"; at the end
of the first sentence, add "and, without Contractor assuming any
design liability, be appropriate for its intended use. "
Subparagraph 3.10.3, delete in its entirety.
Subparagraph 3.16.1, add to the end of the line, "and Owner's
Consultant".
Subparagraph 3.18.4, add as a new subparagraph:
"3.18.4 Liens. Subject to Owner's payment of all sums due under
the Agreement, Contractor shall indemnify and hold Owner harmless
from any liens and claims of liens filed against the Project.
Contractor shall remove or bond over any such liens within 15
days of receipt of notice thereof. Upon default by Contractor
under this paragraph 3.18.4 Owner may bond over or pay such lien
and deduct such costs from sums otherwise due Contractor, or
Owner may exercise its remedies under paragraph 14.2 below."
Subparagraph 4.2.1, add to the end of the second sentence: "and
the Owner's Consultant". Delete the final sentence.
Subparagraph 4.2.2, in the first two sentences, after the word
"Architect" each time it appears add "and the Owner's
Consultant."
Subparagraph 4.2.3, after the word "Architect" each time it
appears add "and the Owner's Consultant."
1
<PAGE>
Subparagraph 4.2.4, delete the first sentence and substitute the
following: "Owner, Contractor, Owner's Consultant and Architect
shall communicate with each other as appropriate to facilitate
the completion of the Project, and shall endeavor to keep each
other as fully informed as necessary or desirable to further the
interests of the Owner."
Subparagraph 4.2.5, in line 1 after "Architect's" add "and the
Owner's Consultant"; and add at the end "and the Owner's
Consultant will also be required to approve such Certificates for
Payment."
Subparagraph 4.2.8, in line 1 delete "Architect" and substitute
"Contractor", and in line 2 after "and" add "the Architect".
Subparagraph 4.2.9, in line 1 after "Architect" add "and the
Owner's Consultant."
Subparagraph 4.5.5, add the following at the end of the
paragraph:
"Notwithstanding anything apparently to the contrary herein
contained, the Contractor agrees that any arbitration pursuant to
this contract or in connection with Project, shall include all
relevant parties to the matter in question and the Contractor
agrees to participate in a single arbitration proceeding
involving all parties."
Subparagraph 4.5.8, add as a new subparagraph:
"4.5.8 Procedural Issues. The arbitration shall be held in Des
Moines, Iowa. Each party shall bear its own directs costs,
including attorney's fees, but general costs of the arbitration
shall be shared by both parties equally; provided, the arbitrator
may choose to award the general costs of arbitration against the
losing party if the arbitrator determines that the proposed
resolution urged by the losing party was not reasonable.
Notwithstanding anything in the Contract Documents to the
contrary, each party shall be required to submit its proposed
resolutions of each Claim to the arbitrator, and the arbitrator
shall be required to render a decision adopting in full either
one or the other of such proposed resolutions, and no compromises
or alternative resolutions shall be allowed or considered by the
arbitrator. Each party shall be entitled to full discovery and
the process, proceedings, practices and procedures provided for
under the Federal Rules of Civil Procedure in effect at the time
notice of demand for arbitration is filed."
Subparagraph 4.5.9, add as a new subparagraph:
"4.5.9 Limitations on Arbitration. Notwithstanding anything in
the Contract Documents to the contrary, if the (1) Claims involve
a proposed, net aggregate payment or reimbursement in an amount
greater than $500,000 or (2) the Claims
2
<PAGE>
involve an interested person or entity (including the Architect)
who has not consented to be joined in the arbitration, then
arbitration shall apply only if both parties consent to
arbitration. For this purpose an "interested person or entity"
means any person or entity if (1) in such interested person or
entity's absence, complete relief cannot be accorded among those
already parties, or (2) the interested person or entity is so
situated that the disposition of the Claim without the joinder of
such interested person or entity may leave any of those already
parties subject to a substantial risk of incurring double,
multiple or otherwise inconsistent obligations. If both parties
do not consent to arbitration for such Claims as described
herein, then all requirements, conditions, and conditions
precedent pertaining to arbitration shall be deemed appropriately
adjusted to permit either party to pursue such Claims as
otherwise permitted by the Contract Documents or by law."
Subparagraph 5.2.1, change "promptly" to " within 10 days " in
lines 7 and 11.
Subparagraph 7.3.4, add at the end:
"Notwithstanding the foregoing, if the evidence required by
subparagraph 2.2.1 indicates the Owner will not have sufficient
funds to make timely payment for the Construction Change
Directive, the Contractor shall not be required to proceed with
the change in Work."
Subparagraph 9.7.1, change line 6 as follows:
"tified by the Architect or awarded by arbitration, or if the
Owner does not promptly furnish evidence as required by
subparagraph 2.2.1, then the Con-", and add to the end of such
sentence "or until such reasonable evidence is received and
approved by the Contractor, as applicable."
Subparagraph 9.8.2, add "and the Owner's Consultant" after the
word "Architect" each time it appears in lines 4, 9, 12, 17, 18.
Add to the end of the penultimate sentence "and shall continue
for a period of one year thereafter.
Subparagraph 9.8.3, in line 3 after the word "Architect" add "and
approval by the Owner's Consultant,".
Subparagraph 9.10.1, add "and Owner's Consultant" after the word
"Architect" each time it appears in lines 3 and 4. Add a new
sentence at the end "The Owner's Consultant shall also be
required to approve such final Certificate for Payment".
3
<PAGE>
Subparagraph 9.10.2, add to end of 9.10.2(l) "or will be paid or
satisfied from such final payment"; and delete 9.10.2(4) and (5)
and substitute "and (4) final lien waivers from Subcontractors
and suppliers with total contract balances in excess of $5,000."
Subparagraph 10.1.1, add at the end:
"The Contractor shall have no responsibility for the discovery,
presence, handling, removal, disposal, transportation or exposure
of persons to hazardous substances in any form existing at the
site prior to commencement of the Work. The Contractor shall
comply with all applicable laws, rules and regulations pertaining
to the handling, disposal, transportation or exposure of persons
to known hazardous substances which are brought to the site by
Contractor or its Subcontractors or suppliers."
Subparagraph 10.1.2, add after the phrase "asbestos or
polychlorinated biphenyl (PCB)", the phrase "or other hazardous
substances", in lines 2-3, 8, 10-11.
Subparagraph 10.1.3, add at the end:
"...or other hazardous substances."
Subparagraph 10.1.4, delete in its entirety and substitute the
following:
"10.1.4 The Owner agrees to indemnify and hold harmless the
Contractor and its employees, officers, agents and subcontractors
(regardless of tier) from and against any and all liabilities,
losses, claims, damages, demands, judgments, interest, penalties,
fines, monetary sanctions, costs, attorney's fees, expenses,
court costs, and all other costs and expenses (collectively
"Costs") resulting from, and in connection with, or arising in
any manner whatsoever out of the hazardous substances existing at
the site prior to commencement of the Work. Without limiting the
generality of the foregoing, it is agreed that such
indemnification shall apply to any Costs incurred as a result of:
(a) complying with all federal, state and local environmental
health and safety rules, laws, regulations and ordinances and/or
orders, directives and/or recommendations of any governmental
entity having jurisdiction for the enforcement of such laws,
rules, regulations and ordinances which may now or may hereafter
be in effect and be applicable to or be issued in connection with
the hazardous substances; (b) performing or arranging for the
performance of medical examinations of individuals exposed to the
hazardous substances, maintaining medical records for such
individuals and conducting any employee educational programs,
whether or not such tests, record keeping or programs are
currently required by applicable law; (c) involvement in any
suits or actions asserting public or employer liability resulting
from the hazardous substances; and (d) performing the Work, which
for this purpose shall
4
<PAGE>
include the disposal of any hazardous substances which may have
been undertaken by the Contractor. The Contractor shall indemnify
the Owner to the same extent and terms as above with respect to
any hazardous substances which are brought to the site by the
Contractor or its subcontractors or suppliers.
10.1.5 The Owner agrees to pay and/or reimburse the Contractor
for all additional costs of the Work together with any impact
costs and expenses incurred by the Contractor in the resequencing
and/or performance of the Work under Contract which would not
have been incurred but for the hazardous substances on the site
prior to commencement of the Work. The Contract Sum and the
Guaranteed Maximum Price, if applicable, shall be increased by
the amount of the additional Cost of the Work to be paid and/or
reimbursed to the Contractor pursuant to this Subparagraph 10.1.5.
No like charges and adjustments shall be made with respect to
any hazardous substances which are brought to the site by the
Contractor or its subcontractors or suppliers.
10.1.6 The obligations of the Owner as set forth in this
Paragraph 10.1 shall survive the termination of the Contract."
Subparagraph 11.3.1, change line 1 to read "The Contractor shall
purchase".
Subparagraph 12.2.1, change "or" to "as" in line 2.
Subparagraph 14.1.2, in line 3 after the word "Architect" add
"and upon Owner's failure to cure within such additional seven
days".
Subparagraph 14.2.2, in line 5 after the word "notice" add "and
upon Contractor's or surety's failure to cure within such
additional seven days,".
End of Supplementary General Conditions
5
<PAGE>
T H E A M E R I C A N I N S T I T U T E O F
A R C H I T E C T S
_______________________________________________________________
AIA Document A201
General Conditions of the Contract
for Construction
This document has important legal consequences; consultation
with an attorney is encouraged with respect to its modification.
________________________________________________________________
1987 Edition
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
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
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, Copyright 1987 by The American Institute
of Architects, 1735 New York Avenue, N.W., Washington, D.C.
20006. 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 be
subject to legal prosecution.
________________________________________________________________
AIA Document A201 - General Conditions of the Contract for
Construction - Fourteenth Edition - AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A201-1987 1
<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
Access to Work 3.16, 6.2.1, 12.1
Accident Prevention 4.2.3, 10
Acts and Omissions 3.2.1, 3.2.2, 3.3.2, 3.12.8, 3.18, 4.2.3,
4.3.2, 4.3.9, 8.3.1, 10.1.4, 10.2.5, 13.4..2, 13.7, 14.1
Addenda 1.1.1, 3.11
Additional Cost, Claims for 4.3.6, 4.3.7, 4.3.9, 6.1.1, 10.3
Additional Inspections and Testing 4.2.6, 9.8,2, 12.2.1, 13.5
Additional Time, Claims for 4.3.6, 4.3.8, 4.3.9, 8.3.2
Administration of the Contract 3.3.3, 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 11.3.1.1
Applications for Payment..4.2.5, 7.3.7, 9.2, 9.3, 9.4, 9.5.1,
9.6.3, 9.8.3, 9.10.1, 9.10.3, 9.10.4, 11.1.3, 14.2.4
Approvals 2.4, 3.3.3, 3.5, 3.10.2, 3.12.4 through 3.12.8,
3.18.3, 4.2.7, 9.3.2, 11.3.1.4, 13.4.2. 13.5
Arbitration 4.1.4, 4.3.2, 4.3.4, 4.4.4, 4.5, 8.3.1, 10.1.2,
11.3.9, 11.3.10
Architect 4.1
Architect, Definition of 4.1.1
Architect, Extent of Authority 2.4, 3.12.6, 4.2, 4.3.2, 4.3.6,
4.4, 5.2, 6.3, 7.1.2, 7.2.1, 7.3.6, 7.4, 9.2, 9.3.1, 9.4, 9.5,
9.6.3, 9.8.2, 9.8.3, 9.10.1, 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 3.3.3,
3.12.8, 3.12.11, 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, 4.3.2, 5.2.1, 7.4, 9.4.2, 9.6.4, 9.6.6
Architect's Additional Services and Expenses 2.4, 9.8.2,
11.3.1.1, 12.2.1, 12.2.4, 13.5.2, 13.5.3, 14.2.4
Architect's Administration of the Contract 4.2,4.3.6, 4.3.7,
4.4, 9.4, 9.5
Architect's Approvals 2.4, 3.5.1, 3.10.2, 3.12.6, 3.12.8, 3.18.3,
4.2.7
Architect's Authority to Reject Work 3.5.1, 4.2.6, 12.1.2,
12.2.1
Architect's Copyright 1.3
Architect's Decisions 4.2.6, 4.2.7, 4.2.11, 4.2.12, 4.2.13,
4.3.2, 4.3.6, 4.4.1, 4.4.4, 4.5, 6.3, 7.3.6, 7.3.8, 8.1.3, 8.3.1,
9.2, 9.4, 9.5.1, 9.8.2, 9.9.1, 10.1.2, 13.5.2, 14.2.2, 14.2.4
Architect's Inspections 4.2.2, 4.2.9, 4.3.6, 9.4.2, 9.8.2,
9.9.2, 9.10.1, 13.5
Architect's Instructions..4.2.6, 4.2.7, 4.2.8, 4.3.7, 7.4.1,
12.1, 13.5.2
Architect's Interpretations....4.2.11, 4.2.12, 4.3.7
Architect's On-Site Obsesrvations..4.2.2, 4.2.5, 4.3.6, 9.4.2,
9.5.1, 9.10.1, 13.5
Architect's Project Representative 4.2.10
Architect's Relationship with Contractor 1.1.2, 3.2.1, 3.2.2,
3.3.3, 3.5.1, 3.7.3, 3.11, 3.12.8, 3.12.11, 3.16, 3.18, 4.2.3,
4.2.4, 4.2.6, 4.2.12, 5.2, 6.2.2, 7.3.4, 9.8.2, 11.3.7, 12.1,
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, 11.3.7
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, 4.3.6, 9.4.2,
9.5.1, 9.8.2, 9.9.2, 9.10.1, 13.5
Asbestos 10.1
Attorneys' Fees 3.18.1, 9.10.2, 10.1.4
Award of Separate Contracts 6.1.1
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, 11.4.1
Boiler and Machinery Insurance 11.3.2
Bonds, Lien 9.10.2
Bonds, Performance and Payment..7.3.6.4, 9.10.3, 11.3.9, 11.4
Building Permit 3.7.1
Capitalization 1.4
Certificate of Substantial Completion 9.8.2
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, 9.8.3, 9.10.1, 9.10.3, 13.7, 14.1.1.3, 14.2.4
Certificates of Inspection. Testing or Approval 3.12.11, 13.5.4
Certificates of Insurance 9.3.2, 9.10.2, 11.1.3
Change Orders 1.1.1, 2.4.1, 3.8.2.4, 3.11, 4.2.8, 4.3.3, 5.2.3,
7.1, 7.2, 7.3.2, 8.3.1, 9.3.1.1, 9.10.3, 11.3.1.2, 11.3.4,
11.3.9. 12.1.2
Change Orders, Definition of 7.2.1
Changes 7.1
Changes in the Work 3.11, 4.2.8, 7, 8.3.1, 9.3.1.1, 10.1 3
Claim, Definition of 4.3.1
Claims and Disputes 4.3, 4.4, 4.5, 6.2.5, 8.3.2, 9.3.1.2, 9.3,3,
9.10.4, 10.1.4
Claims and Timely Assertion of Claims 4.5.6
Claims for Additional Cost 4.3.6, 4.3.7, 4.3.9, 6.1.1, 10.3
Claims for Additional Time 4.3.6, 4.3.8, 4.3.9, 8.3.2
Claims for Concealed or Unknown Conditions 4.3.6
Claims for Damages 3.18, 4.3.9, 6.1.1, 6.2.5, 8.3.2, 9.5.1.2,
10.1.4
Claims Subject to Arbitration 4.3.2, 4.4.4, 4.5.1
Cleaning Up 3.15, 6.3
Commencement of Statutory Limitation Period 13.7
Commencement of the Work, Conditions Relating to 2.1.2, 2.2.1,
3.2.1, 3.2.2, 3.7.1, 3.10.1, 3.12.6, 4.3.7, 5.2.1, 6.2.2, 8.1.2,
8.2.2, 9.2, 11.1.3, 11.3.6, 11.4.1
Commencement of the Work, Definition of 8.1.2
Communications Facilitating Contract
Administration 3.9.1, 4.2.4, 5.2.1
Completion, Conditions Relating to 3.11, 3.15, 4.2.2, 4.2.9,
4.3.2, 9.4.2, 9.8, 9.9.1, 9.10, 11.3.5, 12.2.2, 13.7.1
Completion, Payments and 9
Completion, Substantial 4.2.9, 4.3.5.2, 8.1.1, 8.1.3, 8.2.3,
9.8, 9.9.1, 12.2.2, 13.7
Compliance, with Laws 1.3, 3.6, 3.7, 3.13, 4.1.1, 10.2.2, 11.1,
11.3, 13.1, 13.5.1, 13.5.2, 13.6, 14.1.1, 14.2.1.3
Concealed or Unknown Conditions 4.3.6
Conditions of the Contract 1.1.1, 1.1.7, 6.1.1
Consent. Written 1.3.1, 3.12.8, 3.14.2, 4.1.2, 4.3.4, 4.5.5,
9.3.2, 9.8.2, 9.9.1, 9.10.2, 9.10.3, 10.1.2, 10.1.3, 11.3.1,
11.3.1.4, 11.3.11. 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, 4.2.8, 7.1, 7.3, 9.3.1.1
Construction Schedules. Contractor's 3.10, 6.1.3
Contingent Assignment of Subcontracts 5.4
Continuing Contract Performance 4.3.4
Contract, Definition of 1.1.2
Contract, Termination or
Suspension of the 4.3.7, 5.4.1.1, 14
Contract Administration 3.3.3, 4, 9.4, 9.5
Contract Award and Execution, Conditions Relating to 3.7.1,
3.10, 5.2, 9.2, 11.1.3, 11.3.6, 11.4.1
Contract Documents, The 1.1, 1.2, 7
Contract Documents, Copies Furnished and Use of 1.3, 2.2.5, 5.3
Contract Documents, Definition of 1.1.1
Contract Performance During Arbitration 4.3.4, 4.5.3
Contract Sum 3.8, 4.3.6, 4.3.7, 4.4.4, 5.2.3, 6.1.3, 7.2, 7.3,
9.1, 9.7, 11.3.1, 12.2.4, 12.3, 14.2.4
Contract Sum, Definition of 9.1
Contract Time 4.3.6, 4.3.8, 4.4.4, 7.2.1.3, 7.3, 8.2.1, 8.3.1,
9.7, 12.1.1
Contract Time, Definition of 8.1.1
________________________________________________________________
AIA Document A201 - General Conditions of the Contract for
Construction - Fourteenth Edition - AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A201-1987 2
<PAGE>
Contractor 3
Contractor, Definition of 3.1, 6.1.2
Contractor's Bid 1.1.1
Contractor's Construction Schedules 3.10, 6.1.3
Contractor's Employees 3.3.2, 3.4.2, 3.8.1, 3.9, 3.18, 4.2.3,
4.2.6, 8.1.2, 10.2. 10.3, 11.1.1, 14.2.1.1
Contractor's Liability Insurance 11.1
Contractor's Relationship with Separate Contractors
and Owner's Forces 2.2.6, 3.12.5, 3.14.2, 4.2.4, 6, 12.2.5
Contractor's Relationship with Subcontractors 1.2.4, 3.3.2,
3.18.1, 3.18.2, 5.2, 5.3, 5.4, 9.6.2, 11.3.7, 11.3.8, 14.2.1.2
Contractor's Relationship with the Architect 1.1.2, 3.2.1,
3.2.2, 3.3.3, 3.5.1, 3.7.3, 3.11, 3.12.8, 3.16, 3.18. 4.2.3,
4.2.4, 4.2.6, 4.2.12, 5.2, 6.2.2, 7.3.4, 9.8.2, 11.3.7, 12.1,
13.5
Contractor's Representations 1.2.2, 3.5.1, 3.12.7, 6.2.2, 8.2.1,
9.3.3
Contractor's Responsibility for Those
Performing the Work 3.3.2, 3.18, 4.2.3, 10
Contractor's Review of Contract Documents 1.2.2, 3.2, 3.7.3
Contractor's Right to Stop the Work 9.7
Contractor's Right to Terminate the Contract 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, 9.3.1, 9.8.2, 9.9.1, 9.10,2, 9.10.3, 10.1.2, 11.4.2,
11.4.3
Contractor's Superintendent 3.9, 10.2.6
Contractor's Supervision and Construction Procedures 1.2.4, 3.3,
3.4, 4.2.3, 8.2.2, 8.2.3, 10
Contractual Liability Insurance 11.1.1.7, 11.2.1
Coordination and Correlation 1.2.2, 1.2.4, 3.3.1, 3.10, 3.12.7,
6.1.3, 6.2.1
Copies Furnished of Drawings and Specifications 1.3, 2.2.5, 3.11
Correction of Work 2.3, 2.4, 4.2.1, 9.8.2, 9.9.1, 12.1.2. 12.2,
13.7.1.3
Cost, Definition of 7.3.6, 14.3.5
Costs 2.4, 3.2.1, 3.7.4, 3.8.2, 3.15.2, 4.3.6, 4.3.7, 4.3.8.1,
5.2.3, 6.1.1, 6.2.3, 6.3, 7.3.3.3, 7.3.6, 7.3.7, 9.7, 9.8.2,
9.10.2, 11.3.1.2, 11.3.1.3, 11.3.4, 11.3.9, 12.1, 12.2.1, 12.2.4,
12.2.5, 13.5, 14
Cutting and Patching 3.14, 6.2.6
Damage to Construction of Owner or Separate Contractors 3.14.2,
6.2.4, 9.5.1.5, 10.2.1.2, 10.2.5, 10.3, 11.1, 11.3, 12.2.5
Damage to the Work 3.14.2, 9.9.1, 10.2.1.2, 10.2.5, 10.3, 11.3
Damages,Claims for 3.18, 4.3.9, 6.1.1, 6.2.5, 8.3.2, 9.5.1.2,
10.1.4
Damages for Delay 6.1.1, 8.3.3, 9.5.1.6, 9.7
Date of Commencement of the Work, Definition of 8.1.2
Date of Substantial Completion, Definition of 8.1.3
Day. Definition of 8.1.4
Decisions of the Architect 4.2.6, 4.2.7, 4.2.11, 4.2.12, 4.2.13,
4.3.2, 4.3.6, 4.4.1, 4.4.4, 4.5, 6.3, 7.3.6, 7.3.8, 8.1.3, 8.3.1,
9.2, 9.4, 9.5.1, 9.8.2, 9.9.1, 10.1.2, 13.5.2, 14.2.2, 14.2.4
Decisions to Withhold Certification 9.5, 9.7, 14.1.1.3
Defective or Nonconforming Work, Acceptance,
Rejection and Correction of 2.3, 2.4, 3.5.1, 4.2.1, 4.2.6,
4.3.5, 9.5.2, 9.8.2, 9.9.1, 10.2.5, 12, 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. 9.8.1
Delays and Extensions of Time 4.3.1, 4.3.8.1, 4.3.8.2, 6.1.1,
6.2.3, 7.2.1, 7.3.1, 7.3.4, 7.3.5, 7.3.8, 7.3.9. 8.1.1, 8.3,
10.3.1, 14.1.1.4
Disputes 4.1.4, 4.3, 4.4, 4.5, 6.2.5, 6.3, 7.3.8, 9.3.1.2
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
Duty to Review Contract Documents and Field Conditions 3.2
Effective Date of Insurance 8.2.2, 11.1.2
Emergencies 4.3.7, 10.3
Employees, Contractor's 3.3.2, 3.4.2, 3.8.1, 3.9, 3.18.1,
3.18.2, 4.2.3, 4.2.6, 8.1.2, 10.2, 10.3, 11.1.1, 14.2.1.1
Equipment, Labor, Materials and 1.1.3, 1.1.6, 3.4, 3.5.1, 3.8.2,
3.12.3, 3.12.7, 3.12.11, 3.13, 3.15.1, 4.2.7, 6.2.1. 7.3.6,
9.3.2, 9.3.3, 11.3, 12.2.4, 14
Execution and Progress of the Work 1.1.3, 1.2.3, 3.2, 3.4.1,
3.5.1, 4.2.2, 4.2.3, 4.3.4, 4.3.8, 6.2.2, 7.1.3, 7.3.9, 8.2, 8.3,
9.5, 9.9.1, 10.2, 14.2, 14.3
Execution, Correlation and Intent of the
Contract Documents 1.2, 3.7.1
Extensions of Time 4.3.1, 4.3.8, 7.2.1.3, 8.3, 10.3.1
Failure of Payment by Contractor 9.5.1.3, 14.2.1.2
Failure of Payment by Owner 4.3.7, 9.7, 14.1.3
Faulty Work (See Defective or Nonconforming Work)
Final Completion and Final Payment 4.2.1, 4.2.9, 4.3.2, 4.3.5,
9.10, 11.1.2, 11.1.3, 11.3.5, 12.3.1, 13.7
Financial Arrangaements, Owner's 2.2.1
Fire and Extended Coverage Insurance 11.3
General Provisions 1
Governing Law 13.1
Guarantees (See Warranty and Warranties)
Hazardous Material 10.1, 10.2.4
Identification of Contract Documents 1.2.1
Identification of Subcontractors and Suppliers 5.2.1
Indemnification 3.17, 3.18, 9.10.2, 10.1.4, 11.3.1.2, 11.3.7
Information and Services Required of the Owner 2.1.2, 2.2,
4.3.4, 6.1.3, 6.1.4, 6.2.6, 9.3.2, 9.6.1, 9.6.4, 9.8.3, 9.9.2,
9.10.3, 10.1.4. 11.2, 11.3, 13.5.1, 13.5.2
Injury or Damage to Person or Property 4.3.9
Inspections 3.3.3, 3.3.4, 3.7.1, 4.2.2, 4.2.6, 4.2.9, 4.3.6,
9.4.2, 9.8.2, 9.9.2, 9.10.1, 13.5
Instructions to Bidders 1.1.1
Instructions to the Contractor 3.8.1, 4.2.8, 5.2.1, 7, 12.1,
13.5.2
Insurance 4.3.9, 6.1.1, 7.3.6.4, 9.3.2, 9.8.2, 9.9.1, 9.10.2, 11
Insurance, Boiler and Machinery 11.3.2
Insurance, Contractor's Liability 11.1
Insurance. Effective Date of 8.2.2, 11.1.2
Insurance, Loss of Use 11.3.3
Insurance, Owner's Liability 11.2
Insurance, Property 10.2.5, 11.3
Insurance, Stored Materials 9.3.2, 11.3.1.4
Insurance and Bonds 11
Insurance Companies, Consent to Partial Occupancy 9.9.1, 11.3.11
Insurance Companies, Settlement with 11.3.10
Intent of the Contract Documents 1.2.3, 3.12.4, 4.2.6, 4.2.7,
4.2.12, 4.2.13, 7.4
Interest 13.6
Interpretation 1.2.5, 1.4, 1.5, 4.1.1, 4.3.1, 5.1, 6.1.2, 8.1.4
Interpretations, Written 4.2.11, 4.2.12, 4.3.7
Joinder and Consolidation of Claims Required 4.5.6
Judgment on Final Award 4.5.1, 4.5.4.1, 4.5.7
Labor and Materials, Equipment 1.1.3, 1.1.6, 3.4, 3.5.1, 3.8.2,
3.12.2, 3.12.3, 3.12.7, 3.12.11, 3.13, 3.15.1, 4.2.7, 6.2.1,
7.3.6, 9.3.2, 9.3.3, 12.2.4, 14
Labor Disputes 8.3.1
Laws and Regulations 1.3, 3.6, 3.7, 3.13, 4.1.1, 4.5.5, 4.5.7,
9.9.1, 10.2.2, 11.1, 11.3, 13.1, 13.4, 13.5.1, 13.5.2, 13.6
Liens 2.1.2, 4.3.2, 4.3.5.1, 8.2.2, 9.3.3, 9.10.2
Limitation an Consolidation or Joinder 4.5.5
Limitations, Statutes of 4.5.4.2, 12.2.6, 13.7
Limitations of Authority 3.3.1, 4.1.2, 4.2.1, 4.2.3, 4.2.7,
4.2.10, 5.2.2, 5.2.4, 7.4, 11.3.10
________________________________________________________________
AIA Document A201 - General Conditions of the Contract for
Construction - Fourteenth Edition - AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A201-1987 3
<PAGE>
Limitations of Liability 2.3, 3.2.1, 3.5.1, 3.7.3, 3.12.8,
3.12.11, 3.17, 3.18, 4.2.6, 4.2.7, 4.2.12, 6.2.2, 9.4.2, 9.6.4,
9.10.4, 10.1.4, 10.2.5, 11.1.2, 11.2.1, 11.3.7, 13.4.2, 13.5.2
Limitations of Time, General 2.2.1, 2.2.4, 3.2.1, 3.7.3,.3.8.2,
3.10, 3.12.5, 3.15.1, 4.2.1, 4.2.7, 4.2.11, 4.3.2, 4.3.3, 4.3.4,
4.3.6, 4.3.9, 4.5.4.2, 5.2.1, 5.2.3, 6.2.4, 7.3.4, 7.4, 8.2, 9.5,
9.6.2, 9.8, 9.9, 9.10, 11.1.3, 11.3.1, 11.3.2, 11.3.5, 11.3.6,
12.2.1, 12.2.2, 13.5, 13.7
Limitations of Time, Specific 2.1.2, 2.2.1, 2.4, 3.10, 3.11,
3.15.1, 4.2.1, 4.2.11, 4.3, 4.4, 4.5, 5.3, 5.4, 7.3.5, 7.3.9,
8.2, 9.2, 9.3.1, 9.3.3, 9.4.1, 9.6.1, 9.7, 9.8.2, 9.10.2, 11.1.3,
11.3.6, 11.3.10, 11.3.11, 12.2.2, 12.2.4, 12.2.6, 13.7, 14
Loss of Use Insurance 11.3.3
Material Suppliers 1.3.1, 3.12.1, 4.2.4, 4.2.6, 5.2.1, 9.3.1,
9.3.1.2, 9.3.3, 9.4.2, 9.6.5, 9.10.4
Materials, Hazardous 10.1, 10.2.4
Materials, Labor, Equipment and 1.1.3, 1.1.6, 3.4, 3.5.1, 3.8.2,
3.12.2, 3.12.3, 3.12.7, 3.12.11, 3.13, 3.15.1, 4.2.7, 6.2.1,
7.3.6, 9.3.2, 9.3.3, 12.2.4, 14
Means, Methods, Techniques, Sequences and
Procedures of Construction 3.3.1, 4.2.3, 4.2.7, 9.4.2
Minor Changes in the Work 1.1.1, 4.2.8, 4.3.7, 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
Mutual Responsibility 6.2
Nonconforming Work, Acceptance of 12.3
Nonconforming Work, Rejection and Correction of 2.3.1, 4.3.5,
9.5.2, 9.8.2, 12, 13.7.1.3
Notice 2.3, 2.4, 3.2.1, 3.2.2, 3.7.3, 3.7.4, 3.9, 3.12.8,
3.12.9, 3.17, 4.3, 4.4.4, 4.5, 5.2.1, 5.3, 5.4.1.1, 8.2.2, 9.4.1,
9.5.1, 9.6.1, 9.7, 9.10, 10.1.2, 10.2.6, 11.1.3, 11.3, 12.2.2,
12.2.4, 13.3, 13.5.1, 13.5.2, 14
Notice, Written 2.3, 2.4, 3.9, 3.12.8, 3.12.9, 4.3, 4.4.4, 4.5,
5.2.1, 5.3, 5.4.1.1, 8.2.2, 9.4.1, 9.5.1, 9.7, 9.10, 10.1.2,
10.2.6, 11.1.3, 11.3, 12.2.2, 12.2.4, 13.3, 13.5.2, 14
Notice of Testing and Inspections 13.5.1, 13.5.2
Notice to Proceed 8.2.2
Notices, Permits, Fees and 2.2.3, 3.7, 3.13, 7.3.6.4, 10.2.2
Observations, Architect's On-Site 4.2.2, 4.2.5, 4.3.6, 9.4.2,
9.5.1, 9.10.1, 13.5
Observations, Contractor's 1.2.2, 3.2.2
Occupancy 9.6.6, 9.8.1, 9.9, 11.3.11
On-Site Inspections by the Architect 4.2.2, 4.2.9, 4.3.6, 9.4.2,
9.8.2, 9.9.2, 9.10.1
On-Site Observations by the Architect 4.2.2, 4.2.5, 4.3.6,
9.4.2, 9.5.1, 9.10.1, 13.5
Orders. Written 2.3, 3.9, 4.3.7, 7, 8.2.2, 11.3.9, 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,
4.3.4, 6, 9, 10.1.4, 11.2, 11.3, 13.5.1, 14.1.1.5, 14.1.3
Owner's Authority 3.8.1, 4.1.3, 4.2.9, 5.2.1, 5.2.4, 5.4.1,
7.3.1, 8.2.2, 9.3.1, 9.3.2, 11.4.1, 12.2.4, 13.5.2, 14.2, 14.3.1
Owner's Financial Capability 2.2.1, 14.1.1.5
Owner's Liability Insurance 11.2
Owner's Loss of Use Insurance 11.3.3
Owner's Relationship with Subcontractors 1.1.2, 5.2.1, 5.4.1,
9.6.4
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, 4.3.7
Owner's Right to Suspend the Work 14.3
Owner's Right to Terminate the Contract 14.2
Ownership and Use of Architect's Drawings, Specifications
and Other Documents 1.1.1, 1.3, 2.2.5, 5.3
Partial Occupancy or Use 9.6.6, 9.9,11.3.11
Patching, Cutting and 3.14, 6.2.6
Patents, Royalties and 3.17
Payment, Applications for 4.2.5, 9.2, 9.3, 9.4, 9.5.1, 9.8.3,
9.10.1, 9.10.3, 9.10.4, 14.2.4
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, 9.8.3, 9.10.1, 9.10.3, 13.7, 14.1.1.3, 14.2.4
Payment, Failure of 4.3.7, 9.5.1.3, 9.7, 9.10.2, 14.1.1.3,
14.2.1.2
Payment, Final 4.2.1, 4.2.9, 4.3.2, 4.3.5, 9.10, 11.1.2, 11.1.3,
11.3.5, 12.3.1
Payment Bond, Performance Bond and 7.3.6.4, 9.10.3, 11.3.9, 11.4
Payments, Progress 4.3.4, 9.3, 9.6, 9.8.3, 9.10.3, 13.6, 14.2.3
Payments and Completion 9, 14
Payments to Subcontractors 5.4.2, 9.5.1.3, 9.6.2, 9.6.3, 9.6.4,
11.3.8, 14.2.1.2
PCB 10.1
Performance Bond and Payment Bond 7.3.6.4, 9.10.3, 11.3.9, 11.4
Permits, Fees and Notices 2.2.3, 3.7, 3.13, 7.3.6.4, 10.2.2
Persons and Property, Protection of 10
Polychlorinated Biphenyl 10.1
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, 4.3.4, 8.2
Progress Payments 4.3.4, 9.3, 9.6, 9.8.3, 9.10.3, 13.6, 14.2.3
Project, Definition of the 1.1.4
Project Manual, Definition of the 1.1.7
Project Manuals 2.2.5
Project Representatives 4.2.10
Property Insurance 10.2.5, 11.3
Protection of Persons and Property 10
Regulations and Laws 1.3, 3.6, 3.7, 3.13, 4.1.1, 4.5.5, 4.5.7,
10.2.2, 11.1, 11.3, 13.1, 13.4, 13.5.1, 13.5.2, 13.6, 14
Rejection of Work 3.5.1, 4.2.6, 12.2
Releases of Waivers and Liens 9.10.2
Representations 1.2.2, 3.5.1, 3.12.7, 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
Responsibility for Those Performing the Work 3.3.2, 4.2.3,
6.1.3, 6.2, 10
Retainage 9.3.1, 9.6.2, 9.8.3, 9.9.1, 9.10.2, 9.10.3
Review of Contract Documents and Field
Conditions by Contractor 1.2.2, 3.2, 3.7.3, 3.12.7
Review of Contracator's Submittals by
Owner and Architect 3.10.1, 3.10.2, 3.11, 3.12, 4.2.7, 4.2.9,
5.2.1, 5.2.3, 9.2, 9.8.2
Review of Shop Drawings. Product Data
and Samples by Contractor 3.12.5
Rights and Remedies 1.1.2, 2.3, 2.4, 3.5.1, 3.15.2, 4.2.6,
4.3.6, 4.5, 5.3, 6.1, 6.3, 7.3.1, 8.3.1, 9.5.1, 9.7, 10.2.5,
10.3, 12.2.2, 12.2.4, 13.4, 14
Royalties and Patents 3.17
________________________________________________________________
AIA Document A201 - General Conditions of the Contract for
Construction - Fourteenth Edition - AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A201-1987 4
<PAGE>
Rules and Notices for Arbitration 4.5.2
Safety of Persons and Property 10.2
Safety Precautions and Programs 4.2.3, 4.2.7, 10.1
Samples. Definition of 3.12.3
Samples, Shop Drawings, Product Data and 3.11, 3.12, 4.2.7
Samples at the Site, Documents and 3.11
Schedules of Values 9.2, 9.3.1
Schedules, Construction 3.10
Separate Contracts and Contractors 1.1.4, 3.14.2, 4.2.4, 4.5.5,
6, 11.3.7, 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, 3.3.4, 4.2.2, 4.2.9, 4.3.6, 9.8.2,
9.10.1, 13.5
Site Visits, Architect's 4.2.2, 4.2.5, 4.2.9, 4.3.6, 9.4.2,
9.5.1, 9.8.2, 9.9.2, 9.10.1, 13.5
Special Inspections and Testing 4.2.6, 12.2.1, 13.5
Specifications, Definition of the 1.1.6
Specifications, The 1.1.1, 1.1.6, 1.1.7, 1.2.4, 1.3, 3.11
Statutes of Limitations 4.5.4.2, 12.2.6, 13.7
Stopping the Work 2.3, 4.3.7, 9.7, 10.1.2, 10.3, 14.1
Stored Materials 6.2.1, 9.3.2, 10.2.1.2, 11.3.1.4, 12.2.4
Subcontractor, Definition of 5.1.1
Subcontractors 5
Subcontractors, Work by 1.2.4, 3.3.2, 3.12.1, 4.2.3, 5.3, 5.4
Subcontractual Relations 5.3, 5.4, 9.3.1.2, 9.6.2, 9.6.3, 9.6.4.
10.2.1, 11.3.7, 11.3.8, 14.1.1, 14.2.1.2, 14.3.2
Submittals 1.3, 3.2.3, 3.10, 3.11, 3.12, 4.2.7, 5.2.1, 5.2.3,
7.3.6, 9.2, 9.3.1, 9.8.2, 9.9.1, 9.10.2, 9.10.3, 10.1.2, 11.1.3
Subrogation, Waivers of 6.1.1, 11.3.5, 11.3.7
Substanital Completiton 4.2.9, 4.3.5.2, 8.1.1, 8.1.3, 8.2.3,
9.8, 9.9.1, 12.2.1, 12.2.2. 13.7
Substantial Completion. Definition of 9.8.1
Substitution of Subcontractors 5.2.3, 5.2.4
Substitution of the Architect 4.1.3
Substitutions of Materials 3.5.1
Sub-subcontractor, Definition of 5.1.2
Subsurface Conditions 4.3.6
Successors and Assigns 13.2
Superintendent 3.9, 10.2.6
Supervision and Constructioin Procedures 1.2.4, 3.3, 3.4, 4.2.3,
4.3.4, 6.1.3, 6.2.4, 7.1.3, 7.3.4, 8.2, 8.3.1, 10, 12, 14
Surety 4.4.1, 4.4.4, 5.4.1.2, 9.10.2, 9.10.3, 14.2.2
Surety, Consent of 9.9.1, 9.10.2, 9.10.3
Surveys 2.2.2, 3.18.3
Suspension by the Owner for Convenience 14.3
Suspension of the Work 4.3.7, 5.4.2,, 14.1.1.4, 14.3
Suspension or Termination of the Contract 4.3.7, 5.4.1.1, 14
Taxes 3.6, 7.3.6.4
Termination by the Contractor 14.1
Termination by the Owner for Cause 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 3.3.3, 4.2.6, 4.2.9, 9.4.2, 12.2.1, 13.5
Time 8
Time, Delays and Extensions of 4.3.8, 7.2.1, 8.3
Time Limits, Specific 2.1.2, 2.2.1, 2.4, 3.10, 3.11, 3.15.1,
4.2.1, 4.2.11, 4.3, 4.4, 4.5, 5.3, 5.4, 7.3.5, 7.3.9, 8.2, 9.2,
9.3.1, 9.3.3, 9.4.1, 9.6.1, 9.7, 9.8.2, 9.10.2, 11.1.3, 11.3.6,
11.3.10, 11.3.11, 12.2.2, 12.2.4, 12.2.6, 13.7, 14
Time Limits on Claims 4.3.2, 4.3.3, 4.3.6, 4.3.9, 4.4, 4.5
Title to Work 9.3.2, 9.3.3
Uncovering and Correction of Work 12
Uncovering of Work 12.1
Unforeseen Conditions 4.3.6, 8.3.1, 10.1
Unit Prices 7.1.4, 7.3.3.2
Use of Documents 1.1.1, 1.3, 2.2.5, 3.12.7, 5.3
Use of Site 3.13, 6.1.1, 6.2.1
Values, Schedule of 9.2, 9.3.1
Waiver of Claims: Final Payment 4.3.5, 4.5.1, 9.10.3
Waiver of Claims by the Architect 13.4.2
Waiver of Claims by the Contractor 9.10.4, 11.3.7, 13.4.2
Waiver of Claims by the Owner 4.3.5, 4.5.1, 9.9.3, 9.10.3,
11.3.3, 11.3.5, 11.3.7, 13.4.2
Waiver of Liens 9.10.2
Waivers of Subrogation 6.1.1, 11.3.5, 11.3.7
Warranty and Warranties 3.5, 4.2.9, 4.3.5.3, 9.3.3, 9.8.2,
9.9.1, 12.2.2, 13.7.1.3
Weather Delays 4.3.8.2
When Arbitration May Be Demanded 4.5.4
Work. Definition of 1.1.3
Written Consent 1.3.1, 3.12.8, 3.14.2, 4.1.2, 4.3.4, 4.5.5,
9.3.2, 9.8.2, 9.9.1, 9.10.2, 9.10.3, 10.1.2, 10.1.3, 11.3.1,
11.3.1.4, 11.3.11, 13.2, 13.4.2
Written Interpretations 4.2.11, 4.2.12, 4.3.7
Written Notice 2.3, 2.4, 3.9, 3.12.8, 3.12.9, 4.3, 4.4.4, 4.5,
5.2.1, 5.3, 5.4.1.1, 8.2.2, 9.4.1, 9.5.1, 9.7, 9.10, 10.1.2,
10.2.6, 11.1.3, 11.3, 12.2.2, 12.2.4, 13.3, 13.5.2. 14
________________________________________________________________
AIA Document A201 - General Conditions of the Contract for
Construction - Fourteenth Edition - AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A201-1987 5
<PAGE>
General Conditions of the Contract for Construction
Article 1
General Provision
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) between the Architect and
Contractor, (2) between the Owner and a Subcontractor or
Sub-subcontractor or (3) between any persons or entities other
than the Owner and Contractor. The Architect shall, however, be
entitled to performance and enforcement of obligations under the
Contract intended to facilitate performance of the Architect's
duties.
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.
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, wherever located and whenever issued showing
the design, location and dimensions of the Work generally
including plans, elevations, sections, details, schedules and
diagrams.
1.1.6 The Specifications
The Specifications are that portion of the Contract Documents
consisting of the written requirements for materials, equipment,
construction systems, standards and workmanship for the Work, and
performance of related services.
1.1.7 The Project Manual
The Project Manual is the volume usually assembled for the Work
which may include the bidding requirements, sample forms,
Conditions of the Contact and Specifications.
1.2 Execution, Correlation and Intent
1.2.1 The Contact Documents shall be signed by the Owner and
Contractor as provided in the Agreement. If either the Owner or
Contractor or both do not sign all the Contact Documents, the
Architect shall identify such unsigned Documents upon request.
1.2.2 Execution of the Contract by the Contractor is a
representation that the Contractor has visited the site, become
familiar with local conditions under which the Work is to be
performed and correlated personal observations with requirements
of the Contract Documents.
1.2.3 The intent of the Contact 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
inferable from them as being necessary to produce the intended
results.
1.2.4 Organization of the Specifications into divisions, sections
and articles, and arrangement of Drawings shall not control the
Contractor in dividing the Work among Subcontactors or in
establishing the extent of Work to be performed by any trade.
1.2.5 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 Ownership and Use of Architect's Drawings, Specifications
and Other Documents
1.3.1 The Drawings, Specifications and other documents prepared
by the Architect are instruments of the Architect's service
through which the Work to be executed by the Contractor is
described. The Contractor may retain one contract record set.
Neither the Contractor nor any Subcontractor, Sub-subcontractor
or material or equipment supplier shall own or claim a copyright
in the Drawings, Specifications and other documents prepared by
the Architect, and unless otherwise indicated the Architect shall
be deemed the author of them and will retain all common law,
statutory and other reserved rights, in addition to the
copyright. All copies of them, except the Contractor's record
set, shall be returned or suitably accounted for to the
Architect, on request, upon completion of the Work. The Drawings,
Specifications and other documents prepared by the Architect, and
copies thereof furnished to the Contractor, are for use solely
with respect to this Project. They are not to be used by the
Contractor or any Subcontractor, Sub-subcontractor or material or
equipment supplier on other projects or for additions of this
Project outside the scope of the
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Work without the specific written consent of the Owner and
Architect. The Contractor, Subcontractors, Sub-subcontractors and
material or equipment suppliers are granted a limited license to
use and reproduce applicable portions of the Drawings,
Specifications and other documents prepared by the Architect
appropriate to and for use in the execution of their Work under
the Contract Documents. All copies made under this license shall
bear the statutory copyright notice, if any, shown on the
Drawings, Specifications and other documents prepared by the
Architect. Submittal or distribution to meet official regulatory
requirements or for other purposes in connection with this
Project is not to be construed as publication in derogation of
the Architect's copyright or other reserved rights.
1.4 Capitalization
1.4.1 Terms capitalized in these General Conditions include those
which are (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 documents
published by the American Institute of Architects.
1.5 Interpretation
1.5.1 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.
Article 2
Owner
2.1 Definition
2.1.1 The Owner is the person or entity identified as such in the
Agreement and is referred to throughout the Contract Documents as
if singular in number. The term "Owner" means the Owner or the
Owner's authorized representative.
2.1.2 The Owner upon reasonable written request shall furnish to
the Contractor in writing information which is necessary and
relevant for the Contractor to evaluate, give notice of or
enforce mcchanic'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 at the time of execution of the
Agreement and, within five days after any change, information of
such change in title, recorded or unrecorded.
2.2 Information and Services
Required of the Owners
2.2.1 The Owner shall, at the request of the Contractor, prior to
execution of the Agreement and promptly from time to time
thereafter, furnish to the Contractor reasonable evidence that
financial arrangements have been made to fulfill the Owner's
obligations under the Contract. [Note: Unless such reasonable
evidence were furnished on request prior to the execution of the
Agreement, the prospective contractor would not be required to
execute the Agreement or to commence the Work.]
2.2.2 The Owner shall furnish surveys describing physical
characteristics, legal limitations and utility locations for the
site of the Project, and a legal description of the site.
2.2.3 Except for permits and fees which are the responsibility of
the Contractor under the Contract Documents, the Owner Shall
secure and pay for necessary approvals, easements, assessments and
charges required for construction, use or occupancy of permanent
structures or for permanent changes in existing facilities.
2.2.4 Information or services under the Owner's control shall be
furnished by the Owner with reasonable promptness to avoid delay
in orderly progress of the Work.
2.2.5 Unless otherwise provided in the Contract Documents, the
Contractor will be furnished, free of charge, such copies of
Drawings and Project Manuals as are reasonably necessary for
execution of the Work.
2.2.6 The foregoing are in addition to other duties and
responsibiliLics of the Owner enumerated herein and especially
those in respect to Article 6 (Construction by Owner or by
Separate Contractors), Article 9 (Payments and Completion) and
Article 11 (Insurance and Bonds).
2.3 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, by
written order signed personally or by an agent specifically so
empowered by the Owner in writing, may order the Contractor to
stop the Work, or any portion thereof, until the cause for such
order has been eliminated; however, the right of the Owner to
stop the Work shall not give rise to a duty on the part of the
Owner to exercise this right for the benefit of the Contractor or
any other person or entity, except to the extent required by
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 within a second seven-day period. If the
Contractor within such second seven-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 cost of correcting such
deficiencies, including compensation for the Architect's
additional services and expenses made necessary by such default,
neglect or failure. Such action by the Owner and, amounts charged
to the Contractor are both subject to prior approval of the
Architect. If payments then or thereafter due the Contractor are
not sufficient to cover such amounts, the Contractor shall pay
the difference to the Owner.
Article 3
Contractor
3.1 Definition
3.1.1 The Contractor is the person or entity identified as such
in the Agreement and is referred to throughout the Contract
Documents as if singular in number. The term "Contractor" means
the Contractor or the Contractor's authorized representative.
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3.2 Review of Contract Documents and
Field Conditions by Contractor
3.2.1 The Contractor shall carefully study and compare the
Contract Documents with each other and with information furnished
by the Owner pursuant to Subparagraph 2.2.2 and shall at once
report to the Architect errors, inconsistencies or omissions
discovered. The Contractor shall not be liable to the Owner or
Architect for damage resulting from errors, inconsistencies or
omissions in the Contract Documents unless the Contractor
recognized such error, inconsistency or omission and knowingly
failed to report it to the Architect. If the Contractor performs
any construction activity knowing it involves a recognized error,
inconsistency or omission in the Contract Documents without such
notice to the Architect, the Contractor shall assume appropriate
responsibility for such performance and shall bear an appropriate
amount of the attributable costs for correction.
3.2.2 The Contractor shall take field measurements and verify
field conditions and shall carefully compare such field
measurements and conditions and other information known to the
Contractor with the Contract Documents before commencing
activities. Errors, inconsistencies or omissions discovered shall
be reported to the Architect at once.
3.2.3 The Contractor shall perform the Work in accordance with
the Contract Documents and submittals, approved pursuant to
Paragraph 3.12.
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
Contract Documents give other specific Instructions concerning
these matters.
3.3.2 The Contractor shall be responsible to the Owner for acts
and omissions of the Contractor's employees, Subcontractors and
their agents and employees, and other persons performing portions
of the Work under a contract with the Contractor.
3.3.3 The Contractor shall not be relieved of obligations to
perform the Work in accordance. with the Contract Documents
either by activities or duties of the Architect in the
Architect's administration of the Contract, or by tests,
inspections or approvals required or performed by persons other
than the Contractor.
3.3.4 The Contractor shall be responsible for inspection of
portions of Work already performed under this Contract to
determine that such portions are in proper condition to receive
subsequent Work.
3.4 Labor and Materials
3.4.1 Unless otherwise provided in the Contract Documents, the
Contractor shall provide and pay for labor, materials, equipment,
tools, construction equipment and machinery, water, heat,
utilities, transportation, and other facilities and services
necessary for proper execution and completion of the Work,
whether temporary or permanent and whether or not incorporated or
to be incorporated in the Work.
3.4.2 The Contractor shall enforce strict discipline and good
order among the Contractor's employees and other persons carrying
out the Contract. The Contractor shall not permit employment of
unfit persons or persons not skilled in tasks assigned to them.
3.5 Warranty
3.5.1 The Contractor warrants to the Owner and Architect that
materials and equipment furnished under the Contract will be of
good quality and new unless otherwise required or permitted by
the Contract Documents, that the Work will be free from defects
not inherent in the quality required or permitted, and that the
Work will conform with the requirements of the Contract
Documents. Work not conforming to these requiremcnts, 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 under normal usage. If
required by the Architect, the Contractor shall furnish
satisfactory evidence as to the kind and quality of materials and
equipment.
3.6 Taxes
3.6.1 The Contractor shall pay sales, consumer, use and similar
taxes for the Work or portions thereof provided by the Contractor
which are legally enacted when bids are received or negotiations
concluded, whether or not yet effective or merely scheduled to go
into effect.
3.7 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 bearing on performance of the Work.
3.7.3 It is not the Contractor's responsibility to ascertain that
the Contract Documents are in accordance with applicable laws,
statutes, ordinances, building codes, and rules and regulations.
However, if the Contractor observes that portions of the Contract
Documents are at variance therewith, the Contractor shall
promptly notify the Architect and Owner in writing, and necessary
changes shall be accomplished by appropriate Modification.
3.7.4 If the Contractor perofmrs Work knowing it to be contrary
to laws, statutes, ordinanccs, building codes, and rules and
regulations without such notice to the Architect and Owner, the
Contractor shall assume full responsibility for such Work and
shall bear the attributable costs.
3.8 Allowances
3.8.1 The Contractor shall include in the Contract Sum all
allowances stated in the Contract Documents. Items covered by
allowances shall be supplied for such amounts and by such persons
or entities as the Owner may direct, but the Contractor shall not
be required'to employ persons or entities against which the
Contractor makes reasonable objection.
3.8.2 Unless otherwise provided in the Contract Documents:
.1 materials and equipment under allowance shall be selected
promptly by the Owner to avoid delay in the Work;
.2 allowances shall cover the cost to the Contractor of materials
and equipment delivered at the site and all required taxes, less
applicable trade discounts;
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.3 Contractor's costs for unloading and handling at the site,
labor, installation costs, overhead, profit and other expenses
contemplated for stated allowance amounts shall be included in
the Contract Sum and not in the allowances;
.4 whenever costs are more than or less than allowances, the
Contract Sum shall be adjusted accordingiy by Change Order. The
amount of the Change Order shall reflect (1) the difference
between actual costs and the allowances under Clause 3.8.2.2 and
(2) changes in Contract's costs under Clause 3.8.2.3.
3.9 Superintendent
3.9.1 The Contractor shall employ a competent superintendent and
necessary assistants who shall be in attendance at the Project
site during performance of the Work. The superintendent shall
represent the Contractor, and communications given to the
superintendent shall be as binding as 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 and Architect's
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 expeditious 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 conform to the most recent schedules.
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
Orders and other Modifications, in good order and marked
currently to record changes and selections made during
construction, and in addition approved Shop Drawings, Product
Data, Samples and similar required submittals. These shall be
available to the Architect and shall be delivered to the
Architect for submittal to the owner upon completion of the Work.
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,
perforanance charts, instructions, brochures, diagrams and other
information furnished by the Contractor to illustrate materials
or equipment for some portion of the Work.
3.12.3 Samples are physical examples which illustrate materials,
equipment or workmanship and establish standards by which the
Work will be judged.
3.12.4 Shop Drawings, Product Data, Samples and similar
submittals are not Contract Documents. The purpose of their
submittal is to demonstrate for those portions of the Work for
which submittals are required the way the Contractor proposes to
conform to the information given and the design concept expressed
in the Contract Documents. Review by the Architect is subject to
the limitations of Subparagraph 4.2.7.
3.12.5 The Contractor shall review, approve and submit to the
Architect Shop Drawings, Product Data, Samples and similar
submittals required by the Contract Documents with reasonable
promptness and in such sequence as to cause no delay in the Work
or in the activities of the Owner or of separate contractors.
Submittals made by the Contractor which are not required by the
Contract Documents may be returned without action.
3.12.6 The Contractor shall perform no portion of the work
requiring submittal and review of Shop Drawings, Product Data,
Samples or similar submittals until the respective submittal has
been approved by the Architect. Such Work shall be in accordance
with approved submittals.
3.12.7 By approving and submitting Shop Drawings, Product Data,
Samples and similar submittals, the Contractor represents that
the Contractor has 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.
3.12.8 The Contractor shall not be relieved of responsibility for
deviations from requirements of the Contract Documents by the
Architect's approval of Shop Drawings, Product Data, Samples or
similar submittals unless the Contractor has specifically
informed the Architect in writing of such deviation at the time
of submittal and the Architect has given written approval to the
specific deviation. The Contractor shall not be relieved of
responsibility for errors or omissions in Shop Drawings, Product
Data, Samples or similar submittals by the Architect's approval
thereof.
3.12.9 The Contractor shall direct specific attention, in writing
or on resubmitted Shop Drawings, Product Data, Samples or similar
submittals, to revisions other than those requested by the
Architect on previous submittals.
3.12.10 Informational submittals upon which the Architect is not
expected to take responsive action may be so identified in the
Contract Documents.
3.12.11 When professional certification of performance criteria
of materials, systems or equpment is required by the Contract
Documents, the Architect shall be entitled to rely upon the
accuracy and completeness of such calculations and
certifications.
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
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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.
3.15.2 If the Contractor fails to clean up as provided in the
Contract Documents, the Owner may do so and the cost thereof
shall be charged to the Contractor.
3.16 Access to Work
3.16.1 The Contractor shall provide the Owner and Architect
access to the Work in preparation and progress wherever located.
3.17 Royalties and Patents
3.17.1 The Contractor shall pay all royalties and license fees.
The Contractor shall defend suits or claims for inhingement of
patent rights and shall hold the Owner and Architect 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. However, if the Contractor has reason to
believe that the required design, process or product is an
infringement of a patent, the Contractor shall be responsible for
such loss unless such information is promptly furnished to the
Architect.
3.18 Indemnification
3.18.1 To the fullest extent permitted by law, the Contractor
shall indemnify and hold harmless the Owner, Architect.
Architect's consultants, and agents and employees of any of them
from and against claims, damages, losses and expenses, including
but not limited to attorneys' fees, arising out of or resulting
from performance of the Work, 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 whole or in
part by negligent 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 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 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 indircctly employed by them or
anyone for whose acts they may be liable, the indemnification
obligation under this Paragraph 3.18 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' or workmen's compensation acts, disability benefit acts
or other employee benefit acts.
3.18.3 The obligations of the Contractor under this Paragraph
3.18 shall not extend to the liability of the Architect, the
Architect's consultants, and agents and employees of any of them
arising out of (1) the preparation or approval of maps, drawings,
opinions, reports, surveys, Change Orders, designs or
specifications, or (2) the giving of or the failure to give
directions or instructions; by the Architect, the Architect's
consultants, and agents and employees of any of them provided
such giving or failure to give is the primary cause of the injury
or damage.
Article 4
Administration of the Contract
4.1 Architect
4.1.1 The Architect is the person lawfully licensed to practice
architecture or an entity lawfully practicing architecture
identified as such in the Agreement and is referred to throughout
the Contract Documents as if singular in number. The term
"Architect" means the Architect or the Architect's authorized
representative.
4.1.2 Duties, responsibilities and limitations of authority of
the Architect as set forth in the Contract Documents shall not be
restricted, modified or extended without written consent of the
owner, Contractor and Architect. Consent shall not be
unreasonably withheld.
4.1.3 In case of termination of employment of the Architect, the
Owner shall appoint an architect against whom the Contractor
makes no reasonable objection and whose status under the Contract
Documents shall be that of the former architect.
4.1.4 Disputes arising under Subparagraphs 4.12 and 4.1.3 shall
be subject to arbitration.
4.2 Architect's Administration
of the Contract
4.2.1 The Architect will provide administration of the Contract
as described in the Contract Documents. and will be the owner's
representative (1) during construction, (2) until final payment
is due and (3) with the Owner's concurrence from time to time
during the correction period described in Paragraph 12.2. The
Architect will advise and consult with the Owner. The Architect
will have authority to act on behalf of the Owner only to the
extent provided in the Contract Documents, unless otherwise
modified by written instrument in accordance with other
provisions of the Contract.
4.2.2 The Architect will visit the site at intervals appropriate
to the stage of construction to become generally familiar with
the progress and quality of the completed Work and to determine
in general if the Work is being performed in a manner indicating
that the Work, when completed. Will be in accordance with the
Contract Documents. However, the Architect will not be required
to make exhaustive or continuous on-site inspections to check
quality or quantity of the Work. On the basis of on-site
observations as an architect, the Architect will keep the Owner
informed of progress of the Work. and will endeavor to guard the
Owner against defects and deficiencies in the Work.
4.2.3 The Architect will not have control over or charge of and
will not be responsible for construction means, methods,
techniques, sequences or procedures, or for safety precautions
and programs in connection with the Work, since these are solely
the Contractor's responsibility as provided in Paragraph 3.3. The
Architect will not be responsible for the Contractor's failure to
carry out the Work in accordance with the Contract Documents. The
Architect will not have control over or charge of and will not be
responsible for acts or omissions of the Con-
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tractor, Subcontractors, or their agents or employees, or of any
other persons performing portions of the Work.
4.2.4 Communications Facilitating Contract Administration. Except
as otherwise provided in the Contract Documents or when direct
communications have been specially authorized, the Owner and
Contractor shall endeavor to communicate through the Architect.
Communications by and with the Architect's consultants shall be
through the Architect. Communications by and with Subcontractors
and material supplier's shall be through the Contractor.
Communications by and with separate contractors shall be through
the Owner.
4.2.5 Based on the Architect's observations and evaluations of
the Contractor's Applications for Payment, the Architect will
review and certify the amounts due the Contractor and will issue
Certificates for Payment in such amounts.
4.2.6 The Architect will have authority to reject Work which does
not conform to the Contract Documents. Whenever the Architect
considers it necessary or advisable for implementation of the
intent of the Contract Documents, the Architect will have
authority to require additional inspection or testing of the Work
in accordance with Subparagrphs 13.5.2 and 13.5.3, whether or not
such Work is fabricated, installed or completed. However, neither
this authority of the Architect nor a decision made in good faith
either to exercise or not to exercise such authority shall give
rise to a duty or responsibility of the Architect to the
Contractor, Subcontractors, material and equipment suppliers,
their agents or employees, or other persons performing portions
of the Work.
4.7.7 The Architect will review and approve or take other
appropriate action upon the Contractor's submittals such as Shop
Drawings, Product Data and Samples, but only for the limited
purpose of checking for conformance with information given and
the design concept expressed in the Contract Documents. The
Architect's action will be taken with such reasonable promptness
as to cause no delay in the Work or in the activities of the
Owner, Contractor or separate contractors, while allowing
sufficient time in the Architect's professional judgment to
permit adequate review. Review of such submittals is not
conducted for the purpose of determining the accuracy and
completeness of other details such as dimensions and quantities,
or for substantiating instructions for installation or
performance of equipment or systems, all of which remain the
responsibility of the Contractor as required by the Contract
Documents. The Architect's review of the Contractor's submittals
shall not relieve the Contractor of the obligations under
Paragraphs 3.3, 3.5 and 3.12. The Architect's review shall not
constitute approval of safety precautions or, unless otherwise
specifically stated by the Architect, of any construction means,
methods, techniques, sequences or procedures. The Architect's
approval of a specific item shall not indicate approval of an
assembly of which the item is a component.
4.2.8 The Architect will prepare Change Orders and Construction
Change Directives, and may authorize minor changes in the Work as
provided in Paragraph 7.4.
4.2.9 The Architect will conduct inspections to determine the
date or dates of Substantial Completion and the date of final
completion, will receive and forward to the owner for the Owner's
review and records written warranties and related documents
required by the Contract and assembled by the Contractor, and
will issue a final Certificate for Payment upon compliance with
the requirements of the Contract Documents.
4.2.10 If the Owner and Architect agree, the Architect will
provide one or more proejct representatives to assist in carrying
out the Architect's responsibilities at the site. The duties,
responsibilities and limitations of authority of such project
representatives shall be as set forth in an exhibit to be
incorporated in the Contract Documents.
4.2.11 The Architect will interpret and decide matters concerning
performance under and requirements of the Contract Documents on
written request of either the Owner or Contractor. The
Architect's response to such requests will be made with
reasonable promptness and within any time limits agreed upon. If
no agreement is made concerning the time within which
interpretations required of the Architect shall be furnished in
compliance with this Paragraph 4.2, then delay shall not be
recognized on account of failure by the Architect to furnish such
interpretations until 15 days after written request is made for
them.
4.2.12 Interpretations and decisions of the Architect will be
consistent with the intent of and reasonably inferable from the
Contract Documents and will be in writing or in the form of
drawings. When making such interpretations and decisions, the
Architect will endeavor to secure faithful performance by both
owner and Contractor, will not show partiality to either and will
not be liable for results of interpretations or decisions so
rendered in good faith.
4.7.13 The Architect's decisions on matters relating to aesthetic
effect will be final if consistent with the intent expressed in
the Contract Documents.
4.3 Claims and Disputes
4.3.1 Definition. A Claim is a demand or assertion by one of the
parties seeking, as a matter of right, adjustment 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. Claims must be made by written notice.
The responsibility to substantiate Claims shall rest with the
party making the Claim.
4.3.2 Decision of Architect. Claims, including those alleging an
error or omission by the Architect, shall be referred initially
to the Architect for action as provided in Paragraph 4.4. A
decision by the Architect, as provided in Subparagraph 4.4.4,
shall be required as a condition precedent to arbitration or
litigation of a Claim between the Contractor and Owner as to all
such matters arising prior to the date final payment is due,
regardless of (1) whether such marters relate to execution and
progress of the Work or (2) the extent to which the Work has been
completed. The decision by the Architect in response to a Claim
shall not be a condition precedent to arbitration or litigation
in the event (1) the position of Architect is vacant, (2) the
Architect has not received evidence or has fialed to render a
decision within agreed time limits, (3) the Architect has failed
to take action required under Subparagraph 4.4.4 within 30 days
after the Claim is made, (4) 45 days have passed after the Claim
has been referred to the Architect or (5) the Claim relates to a
mechanic's lien.
4.3.3 Time Limits on Claims. Claims by either parry must be made
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 made by written notice. An additional Claim made after
the initial Claim has been implemented by Change Order will not
be considered unless submitted in a timely manner.
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4.3.4 Continuing Contract Performance. Pending final resolution
of a Claim including arbitration, unless otherwise agreed in
writing the Contractor shall proceed diligently with performance
of the Contract and the Owner shall continue to make payments in
accordance with the Contract Documents.
4.3.5 Waiver of Claims: Final Payment. 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.
4.3.6 Claims for Concealed or Unknown Conditions. If conditions
are encountered at the site which are (1) subsurface or otherwise
concealed physical conditions which differ materially from those
indicated in the Contract Documents or (2) unknown physical
conditions of an, unusual nature, which differ materially from
those ordinarily found to exist and generally recognized as
inherent in construction activities of the character provided for
in the Contract Documents, then notice by 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 Architect will promptly
investigate such conditions and, if they differ materially and
cause an increase or decrease in the Contractor's cost of, or
time required for, performance of any part of the Work, will
recommend an equitable adjustment in the Contract Sum or Contract
Time, or both. If the Architect determines that the conditions at
the site are not materially different from those indicated in the
Contract Documents and that no change in the terms of the
Contract is justified, the Architect shall so notify the Owner
and Contractor in writing, stating the reasons. Claims by either
party in opposition to such determination must be made within 21
days after the Architect has given notice of the decision. If the
Owner and Contractor cannot agree on an adjustment in the
Contract Sum or Contract Time, the adjustment shall be referred
to the Architect for initial determination, subject to further
proceedings pursuant to Paragraph 4.4.
4.3.7 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
10.3. If the Contractor believes additional cost is involved for
reasons including but not limited to (1) a written interpretation
from the Architect, (2) an order by the Owner to stop the Work
where the Contmaor was not at fault, (3) a written order for a
minor change in the Work issued by the Architect, (4) failure of
payment by the Owner, (5) termination of the Contract by the
Owner, (6) Owner's suspension or (7) other reasonable grounds,
Claim shall be filed in accordance with the procedure established
herein.
4.3.8 Claims for Additional Time
4.3.8.1 If the Contractor wishes to make Claim for an increase in
the Contract Time, written notice as provided herein shall be
given. The 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.
4.3.8.2 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 and could not have been reasonably anticipated,
and that weather conditions had an adverse effect on the
scheduled construction.
4.3.9 Injury or Damage to Person or Property. If either party to
the Contract suffers injury or damage to person or property
because of an act or omission of the other party, of any of the
other party's employees or agents, or of others for whose acts
such party is legally liable, written notice of such injury or
damage, whether or not insured, shall be given to the other party
within a reasonable time not exceeding 21 days after first
observance. The notice shall provide sufficient detail to enable
the other party to investigate the matter. If a Claim for
additional cost or time related to this Claim is to be asserted,
it shall be filed as provided in Subparagraphs 4.3.7 or 4.3.8.
4.4 Resolution of Claims and Disputes
4.4.1 The Architect will review Claims and take one or more of
the following preliminary actions within ten days of receipt of a
Claim: (1) request additional supporting data from the claimant,
(2) submit a schedule to the parties indicating when the
Architect expects to take action, (3) reject the Claim in whole
or in part, stating reasons for rejection, (4) recommend approval
of the Claim by the other party or (5) suggest a compromise. The
Architect may also, but is not obligated to, notify the surety,
if any, of the nature and amount of the Claim.
4.4.2 If a Claim has been resolved, the Architect will prepare or
obtain appropriate documentation.
4.4.3 If a Claimhas not been resolved, the party making the Claim
shall, within ten days after the Architect's preliminary
response, take one or more of the following actions: (1) submit
additional supporting data requested by the Architect, (2) modify
the initial Claim or (3) notify the Architect that the initial
Claim stands.
4.4.4 If a Claim has not been resolved after consideration of the
foregoing and of further evidence presented by the parties or
requested by the Architect, the Architect will notify the parties
in writing that the Architect's decision will be made within
seven days, which decision shall be final and binding on the
parties but subject to arbitration. Upon expiration of such time
period, the Architect will render to the parties the Architect's
written decision relative to the Claim, including any change in
the Contract Sum or Contract's time or both. If there is a surety
and there appears to be a possibility of a Contractor's default,
the Architect may, but is not obligated to, notify the surety and
request the surety's assistance in resolving the controversy.
4.5 Arbitration
4.5.1 Controversies and Claims Subject to Arbitration. Any
controversy or Claim arising out of or related to the Contract,
or the breach thereof, shall be settled by arbitration in
accordance with the Construction Industry Arbitration Rules of
the American Arbitration Association, and judgment upon the award
rendered by the arbitrator or arbitrators may be entered in any
court having jurisdiction thereof, except controversies or Claims
relating to aesthetic effect and except those waived as provided
for in Subparagraph 4.3.5. Such controversies or Claims upon
which the Architect has given notice and rendered a decision as
provided in Subparagraph 4.4.4 shall be subject to arbitration
upon written demand of either party. Arbitration may be commenced
when 45 days have passed after a Claim has been referred to the
Architect as provided in Paragraph 4.3 and no decision has been
rendered.
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Construction - Fourteenth Edition - AIA - Copyright 1987 - The
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Washington, D.C. 20006 A201-1987 12
<PAGE>
4.5.2 Rules and Notices for Arbitration. Claims between the Owner
and Contractor not resolved under Paragraph 4.4 shall, if subject
to arbitration under Subparagraph 4.5.1, be decided by
arbitration in accordance with the Construction Industry
Arbitration Rules of the American Arbitration Association
currently in effect, unless the parties mutually agree otherwise.
Notice of demand for arbitration shall be filed in writing with
the other party to the Agreement between the Owner and Contractor
and with the American Arbitration Association, and a copy shall
be filed with the Architect.
4.5.3 Contract Performance During Arbitration. During arbitration
proceedings, the Owner and Contractor shall comply with
Subparagraph 4.3.4.
4.5.4 When Arbitration May Be Demanded. Dernand for arbitration
of any Claim may not be made until the earlier of (1) the date on
which the Architect: has rendered 2 final written decision on the
Claim, (2) the tenth day after the parties have presented
evidence to the Architect or have been given reasonable
opportunity to do so, if the Architect has not rendered a final
written decision by that date, or (3) any of the five events
described in Subparagraph 4.3.2.
4.5.4.1 When a written decision of the Architect states that (1)
the decision is final but subject to arbitration and (2) a demand
for arbitration of a Claim. covered by such decision must be made
within 30 days after the date on which the party making the
demand receives the final written decision, then failure to
demand arbitration within said 30 days' period shall result in
the Architect's decision becoming final and binding upon the
Owner and Contractor. If the Architect renders a decision after
arbitration proceedings have been initiated, such decision may be
entered as evidence, but shall not supersede arbitration
proccedings unless the decision is acceptable to all parties
concerned.
4.5.4.2 A demand for arbitration shall be made within the time
limits specified in Subparagraphs 4.5.1 and 4.5.4 and Clause
4.5.4.1 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.
4.5.5 Limitation on Consolidation or Joinder. No arbitration
arising out of or relating to the Contract Documents shall
include, by consolidation or joinder or in any other manner, the
Architect, the Architect's employees or consultants, except by
written consent containing specific reference to the Agreement
and signed by the Architect, Owner, Contractor and any other
person or entity sought to be joined. 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
oiginal third party or additional third party to an arbitration
whose interest or responsibility is insubsstantial. Consent to
arbitration involving an additional person or entity shall not
constitute consent to arbitration of a dispute 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 Agreement shall be specifically
enforceable under applicable law in any court having jurisdiction
thereof.
4.5.6 Claims and Timely Assertion of Claims. A party who files a
notice of demand for arbitration must assert in the demand all
Claim then known to that party on which arbitration is permitted
to be demanded. When a party fails to include a Claim through
oversight, inadvertence or excusable neglect, or when a Claim has
matured or been acquired subsequently, the arbitrator or
arbitrators may permit amendment.
4.5.7 Judgment on Final Award. The award rendered by the
arbitrator or arbitrators shall be final, and judgment may be
entered upon it in accordance with applicable law in any court
having jurisdiction thereof.
Article 5
Subcontractors
5.1 Definitions
5.1.1 A Subcontractor is a person or entity who has a direct
contract with the Contractor to perform a portion of theWork 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 Unless otherwise stated in the Contract Documents or the
bidding requirements, the Contractor, as soon as practicable
after award of the Contract, shall furnish in writing to the
Owner through the Architect the names of persons or entities
(including those who are to furnish materials or equipment
fabricated to a special design) proposed for each principal
portion of the Work. The Architect will promptly reply to the
Contractor in writing stating whether or not the Owner or the
Architect, after due investigation, has reasonable objection to
any such proposed person or entity. Failure of the Owner or
Architect to reply promptly shall constitute notice of no
reasonable objection.
5.2.2 The Contractor shall not contract with a proposed person or
entity to whom the Owner or Architect 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 or Architect has reasonable objection to a
person or entity proposed by the Contractor, the Contractor shall
propose another to whom the Owner or Architect has no reasonable
objection. The Contract Sum shall be increased or decreased by
the difference in cost occasioned by such change and an
appropriate Change Order shall be issued. However, no increase in
the Contract Sum shall be allowed for such change unless the
Contractor has acted promptly and responsively in submitting
names as required.
5.2.4 The Contractor shall not change a Subcontractor, person or
entity previously selected if the Owner or Architect makes
reasonable objection to such change.
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AIA Document A201 General Conditions of the Contract for
Construction - Fourteenth Edition - AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A201-1987 13
<PAGE>
5.3 Subcontractual Relations
5.3.1 By appropriate agreement, written where legally required or
validity, the Contractor Shall require each Subcontractor, to the
extent of the Work to be performed by the Subcontractor, to be
bound to the Contractor by terms of the Contract Documents, and
to assume toward the Contractor all the obligations and
responsibilities which the Contractor, by these Documents,
assumes toward the Owner and Architect. Each subcontract
agreement shall preserve and protect the rights of the Owner and
Architect under the Contract Documents with respect to the Work
to be performed by the Subcontractor so that subcontracting
thereof will not prejudice such rights, and shall allow to the
Subcontractor, unless specifically provided otherwise in the
subcontract agreement, the benefit of all rights, remedies and
redress against the Contractor that the Contractor, by the
Contract Documents, has against the Owner. Where appropriate, the
Contractor shall require each Subcontractor to enter into similar
agreements with Sub-subcontractors. The Contractor shall make
available to each proposed Subcontractor, prior to 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 shall
similarly make copies of applicable portions of such documents
available to their respective proposed Sub-subcontractors.
5.4 Contingent Assignment of Subcontracts
5.4.1 Each subcontract agreement for a portion of the Work is
assigned by the Contractor to the Owner provided that:
.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 in writing: and
.2 assignment is subject to the prior rights of the surety, if
any, obligated under bond relating to the Contract.
5.4.2 If the Work has been suspended for more than 30 days, the
Subcontractor's compensation shall be equitably adjusted.
Article 6
Construction by Owner
or by Separate Contracators
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 operations on the site
under Conditions of the Contract identical or substantially
similar to these including those portions related to insurance
and waiver of subrogation. If the Contractor claims that delay or
additional cost is involved because of such action by the Owner,
the Contractor shall make such Claim as provided elsewhere in the
Contract Documents.
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 Owncr-
Contractor Agreement.
6.1.3 The Owner shall provide for coordination of the activities
of the Owner's own forces and of each separate contractor with
the Work of the Contractor, who shall cooperate with them. The
Contractor shall participate with other separate contractors and
the Owner in reviewing their construction schedules when directed
to do so. The Contractor shall make any revisions to the
construction schedule and Contract Sum 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 Owner until subsequently revised.
6.1.4 Unless otherwise provided in the Contract Documents, when
the Owner performs construction or operations related to the
Project with 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 Ccontracator's Work depends for proper
execution or results upon construction or operations by the Owner
or a separate contractor, the Contractor shall, prior to
proceeding with that portion of the Work, promptly report to the
Architect apparent discrepancies or defects in such other
construction that would render it unsuitable for such proper
execution and results. Failure of the Contractor so to report
shall constitute an acknowledgment that the Owner's or separate
contraactors' completed or partialty.completed construction is
fit and proper to receive the Contractor's Work, except as to
defects not then reasonably discoverable.
6.2.3 Costs caused by delays or by improperly timed activities or
defective construction shall be borne by the party responsible
therefor.
6.2.4 The Contractor shall promptly remedy damage wrongfully
caused by the Contractor to completed or partially completed
construction or to property of the Owner or separate contractors
as provided in Subparagraph 10.2.5.
6.2.5 Claim and other disputes and matters in question between
the Contractor and a separate contractor shall be subject to the
provisions of Paragraph 4.3 provided the separate contractor has
reciprocal obligations.
6.2.6 The Owner and each separate contractor shall have the same
responsibilities for cutting and patching as are described for
the Contractor in Paragraph 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 as described in
Paragraph 3.15, the Owner may clean up and allocate the cost
among those responsible as the Architect determines to be just.
________________________________________________________________
AIA Document A201 - General Conditions of the Contract for
Construction - Fourteenth Edition - AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A201-1987 14
<PAGE>
Article 7
Changes in the Work
7.1 Changes
7.1.1 Changes in the Work may be accomplished after execution of
the Contract, and without invalidating the Contract, by Change
Order, Construction Change Directive or order for a minor change
in the Work, subject to the limitations stated in this Article 7
and elsewhere in the Contract Documents.
7.1.2 A Change Order shall be based upon agreement among the
Owner, Contractor and Architect; a Construction Change Directive
requires agreement by the Owner and Architect and may or may nor
be agreed to by the Contractor; an order for a minor change in
the Work may be issued by the Architect 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.
7.1.4 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 Contracator, the applicable unit prices
shall be equitably adjusted.
7.2 Change Orders
7.2.1 A Change Order is a written instrument prepared by the
Architect and signed by the Owner, Contractor and Architect,
stating their agreement upon all of the following:
.1 a change in the Work;
.2 the amount of the adjustment in the Contract Sum, if any; and
.3 the extent of the adjustment in the Contraact Time, if any.
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 prepared
by the Architect and signed by the Owner and Architect, directing
a change in the Work and stating a proposed basis for adjustment,
if any, in the Contract Sum or Contract Time, or both. The Owner
may by Construction Change Directive, without invalidating the
Contract, order changes in the Work within the general scope of
the Contract consisting of additions, deletions or other
revisions, the Contract Sum and Contract Time being adjusted
accordingly.
7.3.2 A Construction Change Directive shall be used in the
absence of total agreement on the terms of a Change Order.
7.3.3 If the Construction Change Directive provides for an
adjustment to the Contract Sum, the adjustment shall be based on
one of the following methods:
.1 mutual acceptance of a lump sum properly itemized and
supported by sufficient substantiating data to permit evaluation;
.2 unit prices stated in the Contract Documents or subsequently
agreed upon;
.3 cost to be determined in a manner agreed upon by the parites
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 Architect of the Contractor's agreement
or disagreement with the method, if any, provided in the
Construction Change Directive for determining the proposed
adjustment in the Contract Sum or Contract Time.
7.3.5 A Construction Change Direciive 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 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
Documents, 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' or workmen's 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 or similar taxes related to the Work. and
.5 additional costs of supervision and field office personnel
directly attributable to the change.
7.3.7 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 Contractor to the Owner for
a deletion or change which results in a net decrease in the
Contract Sum shall be actual net cost as confirmed by the
Architect. When both additions and credits covering related Work
or substitutions are involved in a change, the allowance for
overhead and profit shall be figured on the basis of net
increase, if any with respect to that change.
7.3.8 If the Owner and Contractor do not agree with the
adjustment in Contract Time or the method for determining it, the
adjustment or the method shall be referred to the Architect for
determination.
7.3.9 When the Owner and Contractor agree with the
determination made by the Architect concerning the adjustments in
the Contract Sum and Contract Time, or otherwise reach agreement
upon the adjustments, such agreement shall be effective
immediately and shall be recorded by preparation and execution of
an appropriate Change Order.
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AIA Document A201 - General Conditions of the Contract for
Construction - Fourteenth Edition - AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A201-1987 15
<PAGE>
7.4 Minor Changes in the Work
7.4.1 The Architect will have authority to order minor changes in
the Work not involving adjustment in the Contact Sum or extension
of the Contact Time and not inconsistent with the intent of the
Contract Documents. Such changes shall be effected by written
order and shall be binding on the Owner and Contractor. The
Contractor shall carry out such written orders promptly.
Article 8
Time
8.1 Definitions
8.1.1 Unless otherwise provided, Contact 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. The date shall not be postponed by
the failure to act of the Contractor or of persons or entities
for whom the Contractor is responsible.
8.1.3 The date of Substantial Completion is the date certified by
the Architect in accordance with Paragraph 9.8.
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. The date of commencement of the Work shall not be
changed by the effective date of such insurance. Unless the date
of commencement is established by 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 Contracator 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 progress of the
Work by an act or neglect of the Owner or Architect, or of an
employee of either, or of a separate contractor employed by the
Owner, or by changes ordered in the Work, or by labor disputes,
fire, unusual delay in deliveries, unavoidable casualties or
other causes beyond the Contractor's control.,or by delay
authorized by the Owner pending arbitration, or by other causes
which the Architect determines may justify delay, then the
Contract Time shill be extended by Change Order for such
reasonable time as the Architect may 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.
Article 9
Payments and Completion
9.1 Contract Sum
9.1.1 The Contract Sum is stated in the Agreement and, including
authorized adjustments, is the total amount payable by the Owner
to the Contractor for performince of the Work under the Contract
Documents.
9.2 Schedule of Values
9.2.1 Before the first Application for Payment, the Contractor
shall submit to the Architect a schedule of values allocated to
various portions of the Work, prepared in such form and supported
by such data to substantiate its accuracy as the Architect may
require. This schedule, unless objected to by the Architect,
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 Architect an
itemized Application for Payment for operations completed in
accordance with the schedule of values. Such application shall be
notarized, if required, and supported by such data substantiating
the Contractor's right to payment as the Owner or Architect may
require, such as copies of requisitions from Subcontractors and
material suppliers, and reflecting retainage if provided for
elsewhere in the Contract Documents.
9.3.1.1 Such applications may include requests for payment on
account of changes in the Work which have been properly
authorized by Construction Change Directives but not yet included
in Change Orders.
9.3.1.2 Such applications may not include requests for payment of
amounts the Contractor does not intend to pay to a Subcontractor
or material supplier because of a dispute or other reason.
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 the site at a location agreed upon in
writing. Payment for materials and equipment stored on or off the
site shall be conditioned upon compliance by the Contractor with
procedures satisfactory to the Owner to establish the Owner's
tide to such materials and equipment or otherwise protect the
Owner's interest, and shall include 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
submittal of an Application for Payment all Work for which
Certificates for Payment have been previously issued and 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 The Architect will, within seven days aftcr receipt of the
Contractor's Application for Payment, either issue to the
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Owner a Certificate for Payment, with a copy to the Contractor,
for such amount as the Architect determines is properly due, or
notify the Contractor and Owner in writing of the Architect's
reasons for withholding certification in whole or in part as
provided in Subparagraph 9.5.1.
9.4.2 The issuance of a Certificate for Payment will constitute a
representation by the Architect to the Owner, based on the
Architect's observations at the site and the data comprising the
Application for Payment, that the Work has progressed to the
point indicated and that, to the best of the Architect's
knowledge, information and belief, quality of the Work is in
accordance with the Contract Documents. The foregoing
representations are subject to an evaluation of the work for
conformance with the Contract Documents upon Substantial
Completion, to results of subsequent tests and inspections, to
minor deviations from the Contract Documents correctable prior to
completion and to specific qualifications expressed by the
Architect. The issuance of a Certificate for Payment will further
constitute a representation that the Contractor is entitled to
payment in the amount certified. However, the issuance of a
Certificate for Payment will not be a representation that the
Architect has (1) made exhaustive or continuous on-site
inspections to check the quality or quantity of the Work, (2)
reviewed construction means, methods, techniques, sequences or
procedures, (3) reviewed copies of requisitions received from
Subcontractors and material suppliers and other data requested by
the Owner to substantiate the Contractor's right to payment or
(4) made examination to ascertain how or for what purpose the
Contractor has used money previously paid on account of the
Contract Sum.
9.5 Decisions to Withhold Certification
9.5.1 The Architect may decide not to certify payment and may
withhold a Certificate for Payment in whole or in part, to the
extent reasonably necessary to protect the Owner, if in the
Architect's opinion the representations to the Owner required by
Subparagraph 9.4.2 cannot be made. If the Architect is unable to
certify payment in the amount of the Application, the Architect
will notify the Contractor and Owner as provided in Subparagraph
9.4.1. If the Contractor and Architect cannot agree on a revised
amount, the Architect will promptly issue a Certificate for
Payment for the amount for which the Architect is able to make
such representations to the Owner. The Architect may also decide
not to certify payment or, because of subsequently discovered
evidence or subsequent observations, may nullify the whole or a
part of a Certificate for Payment previously issued, to such
extent as may be necessary in the Architect's opinion to protect
the Owner from loss because of:
.1 defective Work not remedied;
.2 third party claims filed or reasonable evidence indicating
probable filing of such claims;
.3 failure of the Contractor to make payments properly to
Subcontractors or for labor, materials or equipment;
.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 reasonable evidence that the Work will not be completed within
the Contract Time, and that the unpaid balance would not be
adequate to cover actual or liquidated damages for the
anticipated delay; or
.7 persistent failure to carry out the Work in accordance with
the Contract Documents.
9.5.2 When the above reasons for withholding certification are
removed, certification will be made for amounts previously
withheld.
9.6 Progress Payments
9.6.1 After the Architect has issued a Certificate for Payment,
the Owner shall make payment in the manner and within the time
provided in the Contract Documents, and shall so notify the
Architect.
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 payments to the
Contractor on account of such Subcontractor's portion of the
Work. The Contractor shall, by appropriate agreement with each
Subcontractor, require each Subcontractor to make payments to
Sub-subcontractors in similar manner.
9.6.3 The Architect will, on request, furnish to a Subcontractor,
if practicable, information regarding percentages of completion
or amounts applied for by the Contractor and action taken thereon
by the Architect and Owner on account of portions of the Work
done by such Subcontractor.
9.6.4 Neither the Owner nor Architect shall have an obligation to
pay or 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.
9.6.6 A Certificate for Payment, a progress payment, or partial
or entire use or occupancy of the Project by the Owner shall not
constitute acceptance of Work not in accordance with the Contract
Documents.
9.7 Failure of Payment
9.7.1 If the Architect does not issue a Certificate for Payment,
through no fault of the Contractor, within seven days after
receipt of the Contractor's Application for Payment, or if the
Owner does not pay the Contractor within seven days after the
date established in the Contract Documents the amount certified
by the Architect or awarded by arbitration, then the Contractor
may upon seven additional days' written notice to the Owner and
Architect, stop the Work until payment of the amount owing has
been received. The Contract Time shall be extended appropriately
and the Contract Sum shall be increased by the amount of the
Contractor's reasonable costs of shut-down, delay and start-up,
which shall be accomplished as provided in Article 7.
9.8 Substantial Completion
9.8.1 Substantial Completion is the stage in the progress of the
Work when the Work or designated portion thereof is sufficiently
complete in accordance with the Contract Documents so the Owner
can occupy or utilize the Work for its intended use.
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 Architect a comprehensive list of items to be completed or
corrected. The Contractor shall proceed promptly to complete and
correct items on the list. 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. Upon
receipt of the Contractor's list, the Architect will make an
inspection to determine whether the Work or desig-
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nated portion thereof is substantially complete. If the
Architect's inspection discloses any item, whether or not
included on the Contractor's lisr, which is not in accordance
with the requirements of the Contract Documents. the Contractor
shall, before issuance of the Certificate of Substantial
Completion, complete or correct such item upon notification by
the Architect. The Contractor shall then submit a request for
another inspection by the Architect to determine Substantial
Completion. When the Work or designated portion thereof is
substantially complete, the Architect 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. The Certificate of
Substantial Completion shall be submitted to the Owner and
Contractor for their written acceptance of responsibilities
assigned to them in such Certificate.
9.8.3 Upon Substantial Completion of the Work or designated
portion thereof and upon application by the Contractor and
certification by the Architect, the Owner shall make payment,
reflecting adjustment in retainage, if any, for such Work or
portion thereof as provided in 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 Subparagraph 11.3.11 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 insusrance, and have agreed in
writing concerning the period for correction 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 Architect
as provided under Subparagraph 9.8.2. Consent of the Contractor
to partial occupancy or use shall not be unreasonably withheld.
The stage of the progress of the Work shall, be determined by
written agreement between the Owner and Contractor or, if no
agreement is reached, by decision of the Architect.
9.9.2 Immediately prior to such partial occupancy or use, the
Owner, Contractor and Architect shad 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 Upon receipt of written notice that the Work is ready for
final inspection and acceptanceand upon receipt of a final
Application for Payment, the Architect will promptly make such
inspection and, when the Architect finds the Work acceptable
under the Contract Documents and the Contract fully performed,
the Architect will promptly issue a final Certificate for Payment
stating that to the best of the Architect's knowledge,
information and belief, and on the basis of the Architect's
observations and inspections, the Work has been completed in
accordance with terms and conditions of the Contract Documents
and that the entire balance found to be due the Contractor and
noted in said final Certificate is due and payable. The
Architect's final Certificate for Payment will constitute a
further representation that conditions listed in Subparagraph
9.10.2 as precedent to the Contractor's being entitled to final
payment have been fulfilled.
9.10.2 Neither final payment nor any remaining retained
percentage shall become due until the Contractor submits to the
Architect (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 certificatc evidencing that insurance
required by the Contract Documents to remain in force after final
payment is currently in effect and will not be cancelled or
allowed to expire until at least 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 our of the Contract, to the extent and in such form as
may be designated by the Owner. If a Subconatractor refuses to
furnish a release or waiver 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. and the Architect so confirms, the Owner shall, upon
application by the Contractor and certification by the Architect,
and without terminating the Contract, make payment of the balance
due for that portion of the Work fully completed and accepted. If
the remaining balance for Work not fully completed or corrected
is less than retainage stipulated in the Contract Documents, and
if bonds have been furnished, the written consent of surety to
payment of the balance due for that portion of the Work fully
completed and accepted shall be submitted by the Contractor to
the Architect prior to certification of such payment. Such
payment shall be made under terms and conditions governing final
payment, except that it shall not constitute a waiver of claims.
The making of final payment shal1 constitute a waiver of claims
by the Owner as provided in Subparagraph 4.3.5.
9.10.4 Acceptance of final payment bv the Contractor, a
Subcontractor or material supplier shall constitute a waiver of
claim by that payee except those previously made in writing and
identified by that payee as unsettled at the time of final
Application for Payment. Such waivers shall, be in addition to
the waiver described in Subparagraph 4.3.5.
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Article 10
Protection of Persons and Property
10.1 Safety Precautions and Programs
10.1.1 The Contractor shall be responsible for initiating,
maintaining and supervising all safety precautions and program in
connection with the performance of the Contract.
10.1.2 In the event the Contractor encounters on the site
material reasonably believed to be asbestos or polychlorinated
biphenyl (PCB) which has not been rendered harmless, the
Contractor shall immediately stop Work in the area affected and
report the condition to the Owner and Architect in writing. The
Work in the affected area shall not thereafter be resumed except
by written agreement of the Owner and Contractor if in fact the
material is asbestos or polychlorinaccil biphenyl (PCB) and has
not been rendered harmless. The Work in the affected area shall
be resumed in the absence of asbestos or polychlorinate biphenyl
(PCB), or when it has been rendered harmless, by written
agreement of the Owner and Contractor, or in accordance with
final determination by the Architect on which arbitration has not
been demanded, or by arbitration under Article 4.
10.1.3 The Contractor shall not be required pursuant to Article 7
to perform without consent any Work relating to asbestos or
polychlorinated biphenyl (PCB).
10.1.4 To the fullest cxtent permitted by law, the Owner shall
indemnify and hold harmless the Contractor, Architect,
Architect's Consultants and agents and employees of any of them
from and against claims. damages, losses and expenses, including
but not limited to attorneys' fees, arising out of or resulting
from performance of the Work in the affected area if in fact the
material is asbestos or polychlorinated biphenyl (PCB) and has
not been tendered harmless, 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 in whole or in
part by negligent acts or omissions of the Owner, anyone directly
or indirectly employed by the Owner or anyone for whose acts the
Owner 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
Subparagraph 10.1.4.
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:
.1 employees on 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 Contractor or the Contractor's
Subcontractors or Sub-subcontraactors; and
.3 other property at the site or adjacent thereto, such is trees,
shrubs, lawns, walks, pavements, roadways, structures and
utilities not designated for removal, relocation or replacement
in the course of construction.
10.2.2 The Contractor shall give notices and comply with
applicable laws, ordinances, rules, regulations and lawful orders
of public authorities bearing on safety of persons or property or
their protection from damage, injury or loss.
10.2.3 The Contractor shall erect and maintain, as required by
existing conditions and performance of the 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 property
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 either of them 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
Contraactor's organization at the site whose duty shall be the
prevention of accidents. This person shall be the Contractor's
superintendent unless otherwise designated by the Contractor in
writing to the Owner and Architect.
10.2.7 The Contractor shall not load or permit any part of the
construction or site to be loaded so as to endanger its safety.
10.3 Emergencies
10.3.1 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.
Article 11
Insurance and Bonds
11.1 Contractor's Liability Insurance
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 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' or workmen's compensation, disability
benefit and other similar employee benefit acts which are
applicable to the Work to be performed;
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.2 claims for damages because of bodily injury, occupational
sickness or disease, or death of the Contractor's employees;
.3 claim for damages because of bodily injury, sickness or
disease, or death of any person other than the Contractor's
employees;
.4 claims for damages insured 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 Contractor, or (2) by another person;
.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 Contractor's obligations under Paragraph 3.18.
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 cancelled 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 shall be furnished
by the Contractor with reasonable promptness in accordance with
the Contraactor'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. Optionally,
the Owner may purchase and maintain other insurance for self-
protection against claims which may arise from operations under
the Contract. The Contractor shall not be responsible for
purchasing and maintaining this optional Owner's liability
insurance unless specifically required by the Contract Documents.
11.3 Property Insurance
11.3.1 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 in the amount of the initial Contract Sum as
well as subsequent modifications thereto for the entire Work at
the site on a replacement cost basis without voluntary
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 11.3 to be covered, whichever is earlier. This
insurance shall include interests of the Owner, the Contractor,
Subcontractors and Sub-subcontractors in the Work.
11.3.1.1 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 reasonble compensation for Architect's services
and expenses required as a result of such insured loss. Coverage
for other perils shall not be required unless otherwise provided
in the Contract Documents.
11.3.1.2 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, then the Owner shall bear all reasonable costs
properly attributable thereto.
11.3.1.3 If the property insurance requires minimum deductibles
and such deductibles are identified in the Contract Documents,
the Contractor shall pay costs not covered because of such
deductibles. If the Owner or insurer increases the required
minimum deductibles above the amounts so identified or if the
owner elects to purchase this insurance with voluntary deductible
amounts, the Owner shall be responsible for payment of the
additional costs not covered because of such increased or
voluntary deductibles. If deductibles are not identified in the
Contract Documents, the Owner shall pay costs not covered because
of deductibles.
11.3.1.4 Unless otherwise provided in the Contract Documents,
this property insurance shall cover portions of the Work stored
off the site after written approval of the Owner at the value
established inn the approval, and also portions of the Work in
transit.
11.3.2 Boiler and Machinery Insurance. The Owner shall purchase
and maintain boiler and machinery insurance required by the
Contract Documents 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,
Contractor, Subcontractors and Sub-subcontractors in the Work,
and the Owner and Contractor shall be named Insureds.
11.3.3 Loss of Use 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.
11.3.4 If the Contractor 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, include such insurance, and the cost thereof
shall be charged to the Contractor by appropriate Change Order.
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1.3.5 If during the project construction period the Owner insures
properties, real or personal or both, adjoining or adjacent to
the site by property insurance under policies separate from those
insuring the Project, or if after final payment property
insurance is to be provided on the completed Project through a
policy or policies other than those insuring the Project during
the construction period, the Owner shall waive all rights in
accordance with the terms of Subparagraph 11.3.7 for damages
caused by fire or other perils covered by this separate property
insurance. All Separate policies shall provide this waiver of
subrogation by endorsement or otherwise.
11.3.6 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 11.3. 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 cancelled
or allowed to expire until at least 30 days' prior written notice
has been given to the Contractor.
11.3.7 Waivers of Subrogation. The Owner and Contractor waive all
rights against (1) each other and any of their subcontractors,
sub-subcontractors, 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 sub-contractors,
sub-subcontractors, agents and employees, for damages caused by
fire or other perils to the extent covered by property insurance
obtained pursuant to this Paragraph 11.3 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 require 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 indirectiv, and whether or not the person or entity
had an insurable interest in the property damaged.
11.3.8 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 mortgage clause and of
Subparagraph 11.3.10. 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.
11.3.9 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 4.5. If after such loss no
other special agreement is made, replacement of damaged property
shall be covered by appropriate Change Order.
11.3.10 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 be made,
arbitrators shall be chosen as provided in Paragraph 4.5. The
Owner as fiduciary shall, in that cCase, make settlement with
insurers in accordance with directions of such arbitrators. If
distribution of insurance proceeds by arbitration is required,
the arbitrators will direct such distribution.
11.3.11 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 Performance Bond and Payment Bond
11.4.1 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.
11.4.2 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.
Article 12
Uncovering and Correction of Work
12.1 Uncovering of Work
12.1.1 If a portion of the Work is covered contrary to the
Architect's request or to requirements specifically expressed in
the Contract Documents, it must, if required in writing by the
Architect, be uncovered for the Architect's observation and be
replaced at the Contractor's expense without change in the
Contract Time.
12.1.2 If a portion of the Work has been covered which the
Architect has not specifically requested to observe prior to its
being covered, the Architect may request to see such Work and it
shall be uncovered by the Contractor. If such Work is in
accordance with the Contract Documents, costs of uncovering and
replacement shall, by appropriate Change Order, be charged to the
Owner. If such Work is not in accordance with the Contract
Documents, the Contractor shall pay such costs unless the
condition was caused by the Owner or a separate contractor in
which event the owner shall be responsible for payment of such
costs.
12.2 Correction of Work
12.2.1 The Contractor shall promptly correct Work rejected by the
Architect 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 Contractor shall bear costs of correcting such rejected Work,
including additional testing and inspections and compensation for
the Architect's services and expenses made necessary thereby.
12.2.2 If, within one year after the date of Substantial
Completion of the Work or designated portion thereof, or after
the date
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Construction - Fourteenth Edition - AIA - Copyright 1987 - The
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Washington, D.C. 20006 A201-1987 21
<PAGE>
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. This
period of one year 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. This obligation under this Subparagraph 12.2.2 shall
survive acceptance of the Work under the Contract and termination
of the Contract. The Owner shall give such notice promptly after
discovery of the condition.
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 If the Contractor fails to correct nonconforming Work
within a reasonable time, the Owner may correct it in accordance
with Paragraph 2.4. If the Contractor does not proceed with
correction of such nonconforming Work within a reasonable time
fixed by written notice from the Architect, the Owner may remove
it and store the salvable materials or equipment at the
Contractor's expense. If the Contractor does not pay costs of
such removal and storage within ten days after written notice,
the Owner may upon ten additional days' written notice sell such
material and equipment at auction or at private sale and shall
account for the proceeds thereof, after deducting costs and
damages that should have been borne by the Contractor, including
compensation for the Architect's services and expenses made
necessary thereby. If such proceeds of sale do not cover costs
which the Contractor should have borne, the Contract Sum shall be
reduced by the deficiency. If payments then or thereafter due the
Contractor are not sufficient to cover such amount, the
Contractor shall pay the difference to the Owner.
12.2.5 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.
12.2.6 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 time period of one year
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 be reduced as appropriate and
equitable. Such adjustment shall be effected whether or not final
payment has been made.
Article 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. 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.
13.3 Written Notice
13.3.1 Written notice shall be deemed to have been duly served if
delivered in person to the individual or a member of the firm or
entity or to an officer of the corporation for which it was
intended, or if delivered at or sent by registered or certified
mail to the last business address known to the party giving
notice.
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 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, Architect or
Contractor shall constitute a waiver of a right or dury 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 Tests, inspections and approvals of portions of the Work
required by the Contract Documents or by laws, ordinances, rules,
regulations or orders of public authorities having jurisdiction
shall be made at an appropriate time. Unless otherwise provided,
the Contractor shall make arrangements for 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 Architect timely
notice of when and where tests and inspections are to be made so
the Architect may observe 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 Architect, 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 Architect will, upon written
authorization from the Owner, instruct the Contractor to make
arrangements for such additional testing, inspection or approval
by an entity acceptable to the Owner, and the Contractor shall
give timely notice to the Architect of when and where tests and
inspections are to be made so the Architect may observe such
procedures.
________________________________________________________________
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Construction - Fourteenth Edition - AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A201-1987 22
<PAGE>
The Owner shall bear such costs except as provided in
Subparagraph 13.5.3.
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, the Contractor shall bear all costs made
necessary by such failure including those of repeated procedures
and compensation for the Architect's services and expenses.
13.5.4 Required certificates of testing, inspection or approval
shall, unless otherwise required by the Contract Documents, be
secured by the Contractor and promptly delivered to the
Architect.
13.5.5 If the Architect is to observe tests, inspections or
approvals required by the Contract Documents, the Architect will
do so promptly and, where practicable, at the normal place of
testing.
13.5.6 Tests or inspections conducted pursuant to the Contract
Documents shall be made promptly to avoid unreasonable delay in
the Work.
13.6 Interest
13.6.1 Payments due and unpaid under the Contract Documents Shall
bear interest from the date payment is due at such rate as the
parties may agree upon in writing or, in the absence thereof, at
the legal rate prevailing from time to time at the place where
the Project is located.
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 die 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 failurs 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
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 for 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 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.
Article 14
Termination or Suspension of the Contract
14.1 Termination by the Contractor
14.1.1 The Contractor may terminate the Contract if the Work is
stopped for a period of 30 days through no act or fault of the
Contractor or a Subcontractor, Sub-subcontractor or their agents
or employees or any other persons performing portions of the Work
under conuuct with the Contractor, for any of the following
reasons:
.1 issuance of an order of a court or other public authority
having jurisdiction;
.2 an act of government, such as a declaration of national
emergency, making material unavilable;
.3 because the Architect has not issued a Certificate for Payment
and has not notified the Contractor of the reason for withholding
certification as provided in Subparagraph 9.4.1, or because the
Owner has not made payment on a Certificate for Payment within
the time stated in the Contract Documents;
.4 if repeated suspensions. delays or interruptions by the Owner
as described in Paragraph 14.3 constitute in the aggregate more
than 100 percent of the total numbcr of days scheduled for
completion, or 120 days in any 365-day period, whichever is less;
or
.5 the Owner has failed to furnish to the Contractor promptly,
upon the Contractor's request, reasonable evidence as required by
Subparagraph 2.2.1.
14.1.2 If one of the above reasons exists, the Contractor may,
upon seven additional 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.
14.1.3 If the Work is stopped for a period of 60 days through no
act or fault of the Contractor or a Subcontractor or their agents
or employees or any other persons performing portion 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
days' written notice to the Owner and the Architect, terminate
the Contract and recover from the Owner as provided in
Subparagraph 14.1.2.
14.2 Termination by the Owner for Cause
14.2.1 The Owner may terminate the Contract if the Contractor:
.1 persistently or repeatedly refuses or fails to supply enough
properly skilled workers or proper materials;
.2 fails to make payment to Subcontractors for materials or
labor in accordance with the respective agreements between the
Contractor and the Subcontractors;
.3 persistently disregards laws, ordinances, or rules,
regulations or orders of a public authority having jurisdiction;
or
.4 otherwise is guilty of substantial breach of a provision of
the Contract Documents.
14.2.2 When any of the above reasons exist, the Owner, upon
certification by the Architect that sufficient cause exists to
jus-
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AIA Document A201 - General Conditions of the Contract for
Construction - Fourteenth Edition - AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A201-1987 23
<PAGE>
tify such action, 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 rights of the surety:
.1 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 pursuanE to Paragraph 5.4;
and
.3 finish the Work by whatever reasonable method the Owner may
deem expedient.
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, including compensation for the Architect's
scrviccs and expenses made necessary thereby, such excess shall
be paid to the Contractor. If such costs exceed the unpaid
balance, the Contractor shall pay the difference to the owner.
The amount to be paid to the Contractor or Owner, as the case may
be, shall be, certified by the Architect, upon application, and
this obligation for payment shall survive termination of the
Contract.
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 An adjustment shall be made for increases in the cost of
performance of the Contract, including profit on the increased
cost of performance, caused by suspension, delay or interruption.
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 this Contract.
14.3.3 Adjustments made in the cost of performance may have a
mutually agreed fixed or percentage fee.
________________________________________________________________
AIA Document A201 - General Conditions of the Contract for
Construction - Fourteenth Edition - AIA - Copyright 1987 - The
American Institute of Architects, 1735 New York Avenue, N.W.,
Washington, D.C. 20006 A201-1987 24
Exhibit 11
Statements re: Computation of Earnings per Share
Brenton Banks, Inc.
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
1999 1998 1999 1998
____ ____ ____ ____
</CAPTION>
<S> <C> <C> <C> <C>
Basic EPS Computation
Numerator:
Net income $12,309,262 15,010,296 3,501,794 5,295,756
========== ========== ========== ==========
Denominator:
Average common shares
outstanding 20,530,231 20,918,778 20,462,200 20,818,340
========== ========== ========== ==========
Basic EPS $0.60 $0.72 $0.17 $0.26
========== ========== ========== ==========
Diluted EPS Computation
Numerator:
Net income $12,309,262 15,010,296 3,501,794 5,295,756
========== ========== ========== ==========
Denominator:
Average common shares
outstanding 20,530,231 20,918,778 20,462,200 20,818,340
Average stock options 326,133 467,016 326,133 467,016
__________ __________ __________ __________
20,856,364 21,385,794 20,788,333 21,285,356
========== ========== ========== ==========
Diluted EPS $0.59 $0.70 $0.17 $0.25
========== ========== ========== ==========
<FN>
Note: 1998 amounts are restated for the 10 percent common stock dividend
effective in June 1999.
</TABLE>
