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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 Quarter Ended September 30, 1995
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or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 0-18444
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YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
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North Carolina 56-1560476
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(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
12201 Steele Creek Road Charlotte, North Carolina 28273
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(Address of principal executive office) (Zip code)
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(704) 588-4074
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(Registrant's telephone number, including area code)
(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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
This document contains 27 pages. The Exhibit Index is located on page 7.
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PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
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<CAPTION>
September 30, December 31,
1995 1994
ASSETS (Unaudited) (Note)
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<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 47,979 $ 107,906
Accounts receivable, tenant 37,698 45,604
Prepaid expenses 1,103 223
---------- ----------
Total current assets 86,780 153,733
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INVESTMENTS AND NONCURRENT RECEIVABLES
Securities available for sale 154,804 105,255
Properties on operating leases and properties held
for lease, net of accumlated depreciation
1995 $1,018,404; 1994 $897,160 6,519,342 6,580,839
Accrued rent receivable 60,407 26,038
OTHER ASSETS
Deferred charges, net of accumulated amortization
1995 $34,434; 1994 $29,977 11,666 16,123
Deferred leasing commissions, net of accumulated
amortization 1995 $15,512; 1994 $6,494 63,574 69,454
---------- ----------
$6,896,573 $6,951,442
========== ==========
LIABILITIES AND PARTNERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 117,042 $ 109,921
Accounts payable 49,633 12,879
Accrued expenses 104,950 136,234
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Total current liabilities 271,625 259,034
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LONG-TERM DEBT, less current maturities 4,127,208 4,220,469
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COMMITMENT AND CONTINGENCY (Note 4)
PARTNERS' EQUITY
General partners 1,640 1,497
Limited partners 2,490,100 2,475,747
Unrealized gain(loss) on investment securities 6,000 (5,305)
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2,497,740 2,471,939
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$6,896,573 $6,951,442
========== ==========
</TABLE>
Note: The Condensed Balance Sheet at December 31, 1994 has been taken from the
audited financial statements at that date. See Notes to Condensed
Financial Statements.
2
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YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS
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<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
1995 1994 1995 1994
--------- --------- --------- ---------
(Unaudited) (Unaudited)
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Rental income $ 280,397 $ 247,149 $ 891,472 $ 836,757
Operating expenses:
Wages and contract labor $ 11,890 $ 7,503 32,257 23,846
Depreciation and amortization 45,063 45,000 134,718 128,534
Repairs and maintenance 35,286 35,108 99,475 87,547
Management fees 11,073 9,886 34,592 35,991
Utilities 42,297 44,701 116,862 120,153
Professional fees 13,687 (546) 52,107 17,898
Property taxes 22,095 20,316 66,905 61,616
Miscellaneous 8,572 1,920 23,464 17,815
--------- --------- --------- ---------
$ 189,763 $ 163,888 560,380 493,400
--------- --------- --------- ---------
Operating income $ 90,634 $ 83,261 331,092 343,357
--------- --------- --------- ---------
Nonoperating income (expense):
Interest and dividend income $ 2,505 $ 2,344 6,233 5,482
Interest expense (105,236) (107,547) (317,421) (325,932)
Other ----- ------ (5,409) ------
--------- --------- --------- ---------
$(102,731) $(105,203) (316,597) (320,450)
--------- --------- --------- ---------
Net income $ 12,097 $ (21,942) $ 14,495 $ 22,907
========= ========= ========= =========
Net income per limited
partnership unit $ 1.90 $ (3.44) $ 2.28 $ 3.60
========= ========= ========= =========
</TABLE>
See Notes to Condensed Financial Statements.
3
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YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
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<CAPTION>
Nine Months Ended
September 30,
-----------------------
1995 1994
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(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 14,495 $ 22,907
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 134,718 128,534
Loss on sale of securities available for sale 5,409 ---
Changes in assets and liabilities:
(Increase) in prepaids, deferrals (27,343) (71,886)
and other receivables
Increase (Decrease) in accounts payable
and accrued expenses 5,470 (14,141)
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Net cash provided by operating activities 132,749 65,414
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Sale of securities available for sale 105,152 ---
Purchase of securities available for sale (148,804) (2,395)
Disbursements for deferred leasing commissions (3,138) ---
Purchase of investment property (59,746) (29,208)
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Net cash (used) in investing activities (106,536) (31,603)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on long-term borrowings (86,140) (79,434)
--------- --------
Net cash (used) in financing activities (86,140) (79,434)
Net (decrease) in cash and cash equivalents (59,927) (45,623)
Cash and cash equivalents:
Beginning 107,906 191,159
--------- --------
Ending $ 47,979 $145,536
========= ========
</TABLE>
See Notes to Condensed Financial Statements.
4
<PAGE> 5
YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. Nature of Business:
The Partnership was formed in July 1986 to acquire, operate, hold for
investment and sell real estate. The two properties currently owned are
the UCB Building in Greenville, South Carolina, and the EastPark Executive
Center in Charlotte, North Carolina.
2. Opinion of Management:
In the opinion of management, the accompanying unaudited condensed
financial statements contain all adjustments (all which were normal
recurring accruals) necessary for a fair presentation. The results of
operations for the interim periods are not necessarily indicative of the
results which may be expected for an entire year.
3. Statement of Cash Flows:
For purposes of reporting the statements of cash flows, the Limited
Partnership includes all cash accounts, which are not subject to
withdrawal restrictions or penalties, and all highly liquid debt
instruments purchased with a maturity of three months or less as cash and
cash equivalents on the accompanying condensed balance sheets.
4. Priority Return:
At December 31, 1994, the cumulative unpaid priority return to the unit
holders was $1,438,481 compared to $1,195,697 one year prior. This
increase resulted from no distributions being made to partners during the
year and the pro rata share due partners pursuant to the Limited
Partnership Agreement. Based on the current and projected commercial real
estate market conditions, the General Partners believe that it is unlikely
that a sale of the Partnership properties would produce net sale proceeds
sufficient to pay any portion of the priority return. Furthermore, the
General Partners believe that it is unlikely that the Partnership's
operating income or any refinancing of Partnership debt would generate
sufficient funds to pay any portion of the priority return.
5
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YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Changes in financial condition
There have not been any significant changes in financial condition from
December 31, 1994 to September 30, 1995. Accrued rent receivable has increased
since year end due to the monthly adjustment to straight-line the rental
concession given to Metropolitan Life Insurance Company ("MetLife") at the UCB
building. The accrued rent receivable peaked in July 1995; thereafter the
receivable will be adjusted down each month until it reaches zero at the end
of the MetLife lease in July 1999. Accrued liabilities are down from year-end
due to real property taxes being paid in January 1995. The Partnership
continues to accrue monthly for the 1995 taxes to be paid in January 1996;
therefore accrued expenses will continue to increase for the remainder of 1995.
Liquidity and Capital Resources
During the quarter ended September 30, 1995, the Partnership continued to fund
working capital requirements, although the working capital deficit increased
from December 31, 1994 primarily due to investing cash and cash equivalents
into equity securities. These securities are excluded from the working capital
calculation; however, these investments may be converted to cash to meet
working capital demands. No distributions were paid to the limited partners
this quarter, resulting in an increase to their cumulative unpaid priority
return. (See note 4 of the condensed financial statements.)
The Partnership has contracted with Price Davis Construction, Inc. (contract
attached) to commence the upfitting of the space leased by the General Services
Administration ("GSA") at the EastPark Executive Center. The current estimated
cost to upfit the GSA space is $1,065,000 as opposed to the original estimate
of $750,000. The increase in the estimated cost can be attributed primarily
to the following factors: an increase in labor and material costs from 1993 to
1995, the original estimate was not based on specific plans and specifications
but on general specifications by the GSA, and the power distribution system as
finally required by the GSA was approximately $150,000 more than the original
budget amount. The increased amount due to the power distribution system was
factored into the increase in rental rates that the GSA will pay under the
lease agreement. The Partnership has secured a $750,000 loan with First Union
National Bank of North Carolina in connection with this upfit. The $750,000
loan is due on May 10, 1996 with interest at the Bank's prime rate. The
General Partners believe that the same lender will provide additional financing
needed at similar terms. The General Partners also believe that the note term
may be extended, if necessary, under substantially similar terms.
Results of operations
Net income for the nine months ended September 30, 1995 is down approximately
$8,400 compared to the same period of the prior year. Although rental income
has increased by approximately $55,000, expenses have increased by almost
$63,000 thereby resulting in the decreased net income. Increased professional
fees, relating to the potential sale of the partnership's properties, comprises
the greatest increase in the expenses. The remaining expense increase can be
attributed to increased repairs, maintenance, depreciation and amortization.
These same factors can be attributed to the decrease in net income for the
quarter ended September 30, 1995. Occupancy rates are currently 100% at the
UCB building and 88% at the EastPark Building. In accordance with the GSA
lease at EastPark, the remaining 12% is reserved for temporary use by the
tenant until the GSA upfitting is completed.
Status of Sales Efforts; Future Matters
As previously reported, the Partnership's two properties were listed with a
Charlotte-based commercial real estate broker during the first quarter of 1995.
The Partnership received a non-binding offer on the EastPark Executive Center
from a qualified buyer. The proposed buyer has informed the partnership that it
has not been able to secure financing; accordingly, the General Partners will
seek to list the property with a Charlotte-based commercial real estate broker.
6
<PAGE> 7
The listing agreement on the UCB building has expired without an offer from a
qualified buyer which contains acceptable terms to the General Partners. The
General Partners believe that it would be more advantageous to list the
building with a real estate broker in the local Greenville, South Carolina
market. The General Partners expect to sign a contract with a new broker in
the near future.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is not engaged in any legal
proceedings of a material nature at the present time.
Item 6. Exhibit Index
(a) Exhibits:
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Designation
Number Under
Exhibit Item 601 of Page
Number Regulation S-K Exhibit Description Number
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1. 4 Instrument defining rights of security holders - set forth in the
Limited Partnership agreement which is contained in the
Prospectus of the Partnership, dated December 1, 1987,
Registration Number 33-07056-A (hereinafter "Prospectus")
and incorporated herein by reference.
2. 10 Limited Partnership Agreement - contained in the Prospectus
incorporated herein by reference.
3. 10.1 Loan Agreement with First Union National Bank of North Carolina
dated May 10, 1995. 9
4. 10.2 Partnership Contract with Price Davis Construction, Inc. dated
October 9, 1995. 11
27 Financial Data Schedule (for SEC use only)
</TABLE>
(b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the
three months ended September 30, 1995.
7
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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.
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YAGER/KUESTER PUBLIC FUND
LIMITED PARTNERSHIP
(Registrant)
By: DRY Limited Partnership,
General Partner of Registrant
Date 11/14/95 By: /s/ Dexter R. Yager, Sr.
-------------------------- ------------------------------------------------
Dexter R. Yager, Sr.
General Partner
Date 11/14/95 By: /s/ Alison L. Hawk
-------------------------- ------------------------------------------------
Alison L. Hawk
Controller
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8
<PAGE> 1
EXHIBIT 10.1
[FIRST UNION LOGO] $750,000.00 MAY 10, 1995
(Date of Execution and Delivery)
LENDER: FIRST UNION NATIONAL BANK OF NORTH CAROLINA (hereinafter termed
"LENDER"), CHARLOTTE PRIVATE, North Carolina
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BORROWER($) YAGER/KUESTER PUBLIC FUND LIMITED PARTNERSHIP
---------------------------------------------
C/O A.L. HAWK INTERNET SERVICES 12201 STEELE CREEK ROAD CHARLOTTE MECKLENBURG NC 28273-3731
----------------------------------------------------------------------------------------------------------
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FOR VALUE RECEIVED: to wit, money loaned, undersigned
BORROWER(S) (hereinafter collectively termed "BORROWER"), jointly and severally
(if more than one BORROWER), promises(s) to pay to the order of LENDER at its
office in the above city, or wherever else LENDER may specify, the sum of SEVEN
HUNDRED, FIFTY THOUSAND DOLLARS AND NO/100 ($750,000.00) DOLLARS, with interest
until paid,
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<S> <C> <C>
CONTRACT [ ] at the rate of percent (____%);
RATE OF [X] at the rate of LENDER'S PRIME RATE Plus zero percent (0.000%) as that rate
INTEREST may change from time to time with changes to occur on the date the LENDER'S PRIME RATE changes;
[ ] at the rate of__________________________________________________________________________________
to be adjusted____________________________________________beginning_____________________________:
[X] payable in full on May 10, 1996.
with interest payable Monthly commencing on June 1, 1995, and each Month thereafter;
TERMS [ ] payable in consecutive ________________ payments of principal; commencing on
OF ________________ , in ______ equal payments of $_________
PAYMENT plus an irregular payment of $ _________ due on _________,
with interest payable __________ commencing on _____, and each ________ thereafter;
[ ] payable in consecutive _________ payments of principal and interest commencing on
___________, in ___ equal payments of $____________
plus an irregular payment of all remaining principal and interest commencing on ___________;
[ ] see attached Schedule "B", terms of which are incorporated herein by reference;
</TABLE>
(TERMS ABOVE NOT COMPLETED ARE DELETED)
together with a late charge of four percent (4%) of each payment past due for
fifteen (15) or more days. If BORROWER fails to make a payment when due,
subsequent payments shall be first applied to the past due payment. If
BORROWER resumes making payments but has not paid all past due payments, then
LENDER will impose a separate late payment charge for each payment that becomes
due until the default is cured.
Further, upon BORROWER'S Default (as hereinafter defined) and where
LENDER deems it necessary or proper to employ an Attorney to enforce collection
of any unpaid balance hereunder, then BORROWER agrees to pay LENDER'S
reasonable Attorney's fees and collection costs. Liability for reasonable
Attorneys fees and costs shall exist whether or not any suit or proceeding is
commenced; BORROWER agrees and stipulates that reasonable Attorney's fees shall
be deemed to be fifteen percent (15%) of the sum of all unpaid principal and
interest due as permitted under the law of the state of LENDER'S office as set
forth herein.
In addition to all other rights contained herein, if the original
principal amount of the loan is more than Three Hundred Thousand and no/100
Dollars ($300,000) the contract rate during any period while the loan is in
Default shall be the interest rate set out above plus three percent (3%)
commencing with and continuing for as long as the loan or any portion thereof
is in Default.
The contract rate of interest shall apply until the Note or any
judgement thereon shall be paid in full.
Interest is computed on the basis of a 360 day year for the actual
number of days in the interest period (Actual/360 Computation) unless indicated
below.
DEFINITION OF LENDER'S PRIME RATE AND COMPUTATION FORMULAE APPEAR ON OTHER SIDE
All payments received during normal banking hours after 2:00 P.M.
shall be deemed received at the opening of the next banking day.
BORROWER'S payment will increase if the scheduled payment amount is
insufficient to pay accrued interest. If the scheduled payment amount is
insufficient to pay accrued interest, the scheduled payment amount shall be
immediately increased as is necessary to pay all accruals of interest for the
period and all accruals of unpaid interest from previous periods. Such
adjustments to the scheduled payment amount shall remain in effect for as long
as the interest accruals shall exceed the original scheduled payment amount and
shall be further adjusted upward or downward to reflect changes in the variable
interest rate. In no event shall the scheduled payment amount be reduced below
the original scheduled payment specified herein.
All payments received during normal banking hours after 2:00 P.M.
shall be deemed received at the opening of the next banking day.
BORROWER'S payment will increase if the scheduled payment amount is
insufficient to pay accrued interest. If the scheduled payment amount is
insufficient to pay accrued interest, the scheduled payment amount shall be
immediately increased as is necessary to pay all accruals of interest for the
period and all accruals of unpaid from previous interest from previous periods.
Such adjustments to the scheduled payment amount shall remain in effect for as
long as the interest accruals shall exceed the original scheduled payment
amount and shall be further adjusted upward or downward to reflect changes in
the variable interest rate. In no event shall the scheduled payment amount be
reduced below the original scheduled payment specified herein.
Each of the undersigned, whether BORROWER, Sureties, or endorsers, and
all others who may become liable for all or any part of the obligations
evidenced and secured hereby, do hereby, jointly and severally: waive
presentment, demand, protest, notice of protest and/or of dishonor, and also
notice of acceleration of maturity on default or otherwise. Further, they
agree that LENDER may, from time to time, extend, modify, amend or renew this
Note for any period (whether or not longer than the original period of the
Note) and grant any releases, compromises or indulgences with respect to the
Note or any extensions, modifications, amendments or renewals thereof or any
security therefor, or to any party liable thereunder or hereunder, all without
notice to or consent of any of the undersigned and without affecting the
liability of the undersigned hereunder.
If this Note is subject to the terms of a Commitment Letter and/or
Loan Agreement, LENDER may advance and readvance under this Note pursuant to
its terms and/or the terms of such other contractual obligations between the
parties, and at the request of BORROWER, LENDER in its sole discretion may make
other advances and readvances under this Note pursuant thereto.
THIS PROMISSORY NOTE IS SUBJECT TO THE ADDITIONAL PROVISIONS, TERMS,
UNDERTAKINGS AND RIGHTS SET FORTH ON THE REVERSE SIDE HEREOF, THE SAME BEING
INCORPORATED HEREIN BY REFERENCE.
IN WITNESS WHEREOF, the Borrower, on the day and year first written
above, has caused this Note to be executed under seal by (i) if a corporation,
adoption of the facsimile seal printed hereon for such special occasion and
purpose (or if an impression seal appears hereon by affixing such impression
seal) by its duly authorized officer(s) or, (ii) if by individuals, hereunto
setting their hand and seals.
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CORPORATE BORROWER [SEAL] Name of Corporation
BY:_____________________________________________ By:______________________________________
INDIVIDUAL BORROWER(S), PROPRIETORSHIPS, PARTNERSHIPS By:______________________________________
YAGER, KUESTER PUBLIC FUND LIMITED PARTNERSHIP
/s/ Faison S. Kuester, Jr. (Seal) ____________________________________(Seal)
--------------------------------------------
FSK Limited Partnership, General Partner
Faison S. Kuester, Jr. General Partner of FSK Limited Partnership
/s/ Dexter R. Yager (Seal) ____________________________________(Seal)
--------------------------------------------
DRY Limited Partnership, General Partner
Dexter R. Yager, Sr., General Partner of
Dry Limited Partnership TAXPAYER IDENTIFICATION NUMBER(S)________
</TABLE>
9
<PAGE> 2
ADDITIONAL PROVISIONS
BORROWER HEREBY FURTHER WARRANTS, COVENANTS, AND AGREES, AS FOLLOWS:
(continued from Front Side hereof):
Anything contained herein to the contrary notwithstanding, if for any
reason the effective rate of interest on this Note should exceed the maximum
lawful rate, the effective rate shall be deemed reduced to and shall be such
maximum lawful rate and any suits of interest which have been collected in
excess of such maximum lawful rate shall be applied as a credit against the
unpaid balance due hereunder.
If the interest provision contained herein refers to "LENDER'S PRIME
RATE" the LENDER'S PRIME RATE shall be that rate announced by LENDER from time
to time as its prime rate and is one of several interest rate bases used by the
LENDER. The LENDER lends at rates both above and below LENDER'S PRIME RATE,
and BORROWER acknowledges that LENDER'S PRIME RATE is not represented or
intended to be the lowest or most favorable rate of interest offered by LENDER.
LENDER'S Actual/360 or 365/360 computation determines the annual
effective interest yield by taking the stated (nominal) interest rate for a
year's period and then dividing said rate by 360 to determine the daily
periodic rate to be applied for each day in the interest period. Application
of such computation produces an annualized effective interest rate exceeding
that of the nominal rate.
BORROWER warrants to LENDER that all balance sheets, financial
statements; profit and loss statements and all other information now or
hereafter furnished to LENDER are and will be true and correct and fairly
reflect the financial condition of BORROWER as of the dates thereof, and that
the most recently provided financial information fairly reflects the current
financial condition of BORROWER.
Each BORROWER waives all claims, direct or indirect, absolute or
contingent, against any other BORROWER, guarantor, endorser or surety arising
from or relating to this Note or such BORROWER's performance hereunder.
Without limiting the foregoing, each BORROWER waives all rights of
reimbursement, exoneration, indemnification and/or contribution from any other
BORROWER, guarantor, endorser or surety under or relating to this NOTE and
waives all right of subrogation to the claims of Bank which may otherwise arise
from such payment.
At LENDER's option, any repayments of this Note, other than by U.S.
currency, will not be credited to the outstanding loan balance until LENDER
receives collected funds.
Upon the occurrence of any of the "EVENTS OF DEFAULT", as hereinafter
defined, LENDER is herewith expressly authorized to exercise its right of
Set-Off or Bank Lien as to any monies deposited in demand, checking, time,
savings or other accounts of any nature maintained in and with it by any of the
undersigned, without advance notice.
BORROWER WILL IMMEDIATELY NOTIFY LENDER in writing of any: (1) change
in BORROWER'S Principal Place of Business and/or Residence; (2) change in the
BORROWER'S name or identity; (3) change in BORROWER'S Corporate Structure; or
(4) material adverse change in BORROWER'S financial statements or financial
affairs.
EVENTS OF DEFAULT
BORROWER shall be in default under this Note, upon the happening of
any of the following events, circumstances or conditions; namely:
(1) Default in the payment or performance of any of the obligations
provided hereunder or in connection herewith or any general partner of BORROWER
or any endorser, guarantor or surety for BORROWER to LENDER or any affiliate of
LENDER, howsoever created primary or secondary, whether direct or indirect,
absolute or contingent, now or hereafter existing, due or to become due, or of
any other covenant, warranty or undertaking expressed herein, therein, or in
any other document establishing said endorsement, guaranty, or surety; or
(2) Any warranty, representation or statement made or furnished to
LENDER by or on behalf of BORROWER, or any Guarantor, in connection with this
Note or to induce LENDER to make a loan or extension or renewal thereof to
BORROWER which was false in any material respect when made or furnished or has
become materially false, if such warranty of BORROWER was ongoing in nature; or
(3) Death, dissolution, termination of existence, insolvency,
business failure, appointment of a receiver, custodian, or trustee for any
part of the property of, assignment for the benefit of creditors by, or the
commencement of any proceeding under any bankruptcy or insolvency laws by or
against BORROWER or any endorser, guarantor, or surety for or any general
partner or majority shareholder of BORROWER; or
(4) The acquisition of substantially all of the business or assets
of BORROWER, or guarantor, endorser, or surety for BORROWER, or a material
portion of such business or assets if such a sale is outside BORROWER'S or
guarantor's, endorser's or surety's ordinary course of business, or more than
50% of its outstanding stock or voting power in a single transaction or a
series of transactions, or acquire substantially all of the business or assets
or more than 50% of the outstanding stock or voting power of any other entity,
or enter into any transaction of merger or consolidation without prior written
consent of LENDER; or
(5) Failure of a corporate BORROWER or endorser, guarantor, or
surety for said BORROWER to maintain its corporate existence in good standing;
or
(6) Upon the entry of any monetary judgment or the assessment
and/or filing of any tax lien against BORROWER or any endorser, surety, or
guarantor; or upon the issuance of any writ of garnishment, judicial seizure
of, or attachment against any property of, debts due or rights of BORROWER or
any endorser, surety or guarantor, to specifically include commencement of any
action or proceeding to seize monies of BORROWER or any endorser, surety or
guarantor on deposit in any bank account with LENDER or
(7) Any BORROWER, endorser, guarantor or surety shall be a debtor,
either voluntarily or involuntarily, under (and as the term debtor is defined
in) the Bankruptcy Code or should any BORROWER, endorser, guarantor or surety be
generally not paying their respective debts as such debts become due; or
(8) Failure of said BORROWER, endorser, guarantor, or sureties to
furnish financial statements or other financial information reasonably
requested by LENDER; or
(9) The assertion or making of any seizure, vesting or
intervention by or under authority of any government by which the management
of BORROWER, or endorser, guarantor or surety is displaced of its authority in
the conduct of its business(es) or its business(es) is curtailed.
Upon the occurrence of any or the foregoing events, circumstances or
conditions of default, all of the obligations evidenced herein and secured
hereby shall, at the option of the LENDER, immediately be due and
payable, without notice.
No waiver, amendments or modifications shall be valid unless in
writing. Further, this Note shall be governed by and construed under the laws
of North Carolina.
BORROWER irrevocably agrees to submit to personal jurisdiction in the
State of North Carolina. Service of process on BORROWER arising out of or
relating to this Promissory Note shall be effective if mailed to BORROWER at
the address first above given or, if applicable, at that address provided to
LENDER pursuant to the terms hereof.
All terms and expressions contained herein which are defined in
Articles 1, 3, or 9 of the Uniform Commercial Code of the State of the
LENDER'S office set forth herein shall have the same meaning herein as in said
Articles of said Code. No waiver by LENDER of any default(s) shall operate as
a waiver of any other default or the same default on a future occasion. All
rights of LENDER hereunder shall inure to the benefit of its successors and
assigns; and all obligations of BORROWER shall bind his heirs, executors,
administrators, successors and/or assigns. If more than one person has signed
this instrument, such parties are jointly and severally obligated hereunder.
Further, use of the masculine pronoun herein shall include the feminine and
neuter and also the plural. If any provision of this instrument shall be
prohibited or invalid under applicable law, such provision shall be ineffective
but only to the extent of such prohibition of invalidity, without invalidating
the remainder of such provision or the remaining provisions of this Note. In
the case of conflict between the terms of this Note and any Commitment Letter
and/or Loan Agreement issued in connection herewith, the priority of
controlling terms shall be first this Note, then the Loan Agreement, then the
Commitment Letter.
(SEE OTHER SIDE FOR SIGNATURES AND SEALS)
10
<PAGE> 1
EXHIBIT 10.2
THE AMERICAN INSTITUTE OF ARCHITECTS
[LOGO]
________________________________________________________________________________
AIA Document A107
ABBREVIATED FORM OF AGREEMENT
BETWEEN OWNER AND CONTRACTOR
For CONSTRUCTION PROJECTS OF LIMITED SCOPE where
the Basis of Payment is a STIPULATED SUM
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH
AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.
This document includes abbreviated General Conditions and should not be used
with other general conditions.
It has been approved and endorsed by The Associated General Contractors of
America.
________________________________________________________________________________
<TABLE>
<S> <C> <C>
AGREEMENT
made as of the 9th day of October in the year of
Nineteen Hundred and Ninety-Five
BETWEEN the Owner: Yager Kuester Public Fund Limited Partnership
(Name and address) 700 East Morehead St., Suite 200
Charlotte, NC 28202-2703
and the Contractor: Price Davis Construction, Inc.
(Name and address) 1800 East Blvd.
Charlotte, NC 28202
The Project is: Internal Revenue Service
(Name and location) Eastpark Executive Center
Charlotte, NC
The Architect is: Shook Design Group
(Name and address) The Atherton Mill
200 South Blvd., Suite 510
Charlotte, NC 28203
</TABLE>
The Owner and Contractor agree as set forth below.
________________________________________________________________________________
Copyright 1936, 1951, 1958, 1961, 1963, 1966, 1974, 1978, (C)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.
________________________________________________________________________________
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<PAGE> 2
ARTICLE 1
THE WORK OF THIS CONTRACT
1.1 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, or as follows:
As delineated in the attached Price Davis letter of September 6, 1995 to Mr.
Donald J. Wroble, Yager Construction Company, Inc. and the covered Bid Form of
the same date, as well as the attached Price Davis letter of October 20th, 1995
to Mr. Jerry Moore, the Kuester Companies.
ARTICLE 2
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
2.1 The date of commencement is the date from which the Contract Time of
Paragraph 2.2 is measured, and shall be the date of this Agreement, as first
written above, unless a different date is stated below or provision is made for
the date to be fixed in a notice to proceed issued by the Owner.
(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.)
1 day following completion of the Swing Space Phase I in Building I currently
being performed by others.
2.2 The Contractor shall achieve Substantial Completion of the entire Work
not later than May 14, 1996.
(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 3
CONTRACT SUM
3.1 The Owner shall pay the Contractor in current funds for the
Contractor's performance of the Contract the Contract Sum of Five Hundred
Sixteen Thousand Two Hundred Ninety Dollars ($516,290.00), subject to additions
and deductions as provided in the Contract Documents.
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<PAGE> 3
3.2 The Contract Sum 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. 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.)
N/A
3.3 Unit prices, if any, are as follows:
N/A
ARTICLE 4
PROGRESS PAYMENTS
4.1 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. The period covered
by each Application for Payment shall be one calendar month ending on the 1st
day of the month, or as follows:
Invoice by 25th; Payment due 15th of following month.
4.2 Payments due and unpaid under the Contract shall bear interest from
the date payment is due at the rate stated below, or in the absence thereof, at
the legal rate prevailing from time to time at the place where the Project is
located.
(Insert rate of interest agreed upon, if any.)
12% per annum.
(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations at the owner's and
Contractors 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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<PAGE> 4
ARTICLE 5
FINAL PAYMENT
5.1 Final payment, constituting the entire unpaid balance of the Contract
Sum, shall be made by the Owner to the Contractor when the Work has been
completed, the Contract fully performed, and a final Certificate for Payment
has been issued by the Architect.
ARTICLE 6
ENUMERATION OF CONTRACT DOCUMENTS
6.1 The Contract Documents are listed in Article 7 and, except for
Modifications issued after execution of this Agreement, are enumerated as
follows:
6.1.1 The Agreement is this executed Abbreviated Form of Agreement Between
Owner and Contractor, AIA Document A107, 1987 Edition.
6.1.2 The Supplementary and other Conditions of the Contract are those
contained in the Project Manual dated August 14, 1995 , and are as
follows: All listed in Section 00005.
DOCUMENT TITLE PAGES
None in addition to those noted above.
6.1.3 The Specifications are those contained in the Project Manual dated as in
Subparagraph 6.1.2, and are as follows:
(Either list the Specifications here or refer to an exhibit attached to this
Agreement.)
SECTION TITLE PAGES
See Section 00005 of Project Manual notes in 6.1.2.
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<PAGE> 5
<TABLE>
<S> <C>
6.1.4 The Drawings are as follows, and are dated (see below) unless a different date is shown below:
(Either list the Drawings here or refer to an exhibit attached to this agreement.)
</TABLE>
<TABLE>
<CAPTION>
NUMBER TITLE DATE
<S> <C> <C>
G001 14 August 1995
a100 Site Plan 14 August 1995
A001 Schedules & Details 14 August 1995
A100 Building One Floor Plan 14 August 1995
A101 Building Two (6635) Floor Plan 14 August 1995
A160 Enlarged Plans & Details 14 August 1995
A500 Building One Reflected Ceiling Plan 14 August 1995
A501 Building Two Reflected Ceiling Plan 14 August 1995
A600 Building One Furniture Plan 14 August 1995
A601 Building Two Furniture Plan 14 August 1995
M100 Building One Floor Plan 26 July 1995
M101 Building Two Floor Plan 20 April 1995
M102 Schedules & Details 26 July 1995
P100 Building One Floor Plan 14 August 1995
P101 Building Two Floor Plan 14 August 1995
P102 Specifications & Details 14 August 1995
E1 Building One Lighting Plan 11 August 1995
E2 Building One Power Plan 11 August 1995
E3 Building Two Lighting Plan 11 August 1995
E4 Building Two Power Plan 11 August 1995
E5 Building One Schedules & Details 11 August 1995
E6 Building Two Schedules & Details 11 August 1995
</TABLE>
Portions of Addenda relating to bidding requirements are not part of the
Contract Documents unless the bidding requirements are also enumerated in this
Article 6.
6.1.6 Other documents, if any, forming part of the Contract Documents are as
follows:
(List any additional documents which are intended to form part of the Contract
Documents.)
See Article 1.1
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<PAGE> 6
GENERAL CONDITIONS
ARTICLE 7
CONTRACT DOCUMENTS
7.1 The Contract Documents consist of this Agreement with Conditions of
the Contract (General, Supplementary and other Conditions), Drawings,
Specifications, addenda issued prior to the execution of this Agreement, other
documents listed in this Agreement and Modifications issued after execution of
this Agreement. The intent of the Contract Documents is to include all items
necessary for the proper execution and completion of the Work by the
Contractor. The Contract Documents are complementary, and what is required by
one shall be as binding as if required by all; performance by the Contractor
shall be required only to the extent consistent with the Contract Documents and
reasonably inferable from them as being necessary to produce the intended
results.
7.2 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.
7.3 Execution of the Contract by the Contractor is a representation that
the Contractor has visited the site and become familiar with the local
conditions under which the Work is to be performed.
7.4 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.
ARTICLE 8
OWNER
8.1 The Owner shall furnish surveys and a legal description of the site.
8.2 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 the
construction, use or occupancy of permanent structures or permanent changes in
existing facilities.
8.3 If the Contractor fails to correct Work which is not in accordance
with the requirements of the Contract Documents or persistently fails to carry
out the Work in accordance with the Contract Documents, the Owner, by a written
order, 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.
ARTICLE 9
CONTRACTOR
9.1 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.
9.2 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 the proper execution and completion of
the Work, whether temporary or permanent and whether or not incorporated or to
be incorporated in the Work.
9.3 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.
9.4 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 requirements, including substitutions not properly
approved and authorized, may be considered defective. The Contractor's
warranty excludes remedy for damage or defect caused by abuse, modifications
not executed by the Contractor, improper or insufficient maintenance, improper
operation, or normal wear and tear under normal usage. If required by the
Architect, the Contractor shall furnish satisfactory evidence as to the kind
and quality of materials and equipment.
9.5 Unless otherwise provided in the Contract Documents, the Contractor
shall pay sales, consumer, use, and other similar taxes which are legally
enacted when bids are received or negotiations concluded, whether or not yet
effective or merely scheduled to go into effect, and 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.
9.6 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. The Contractor shall promptly notify the Architect
and Owner if the Drawings and Specifications are observed by the Contractor to
be at variance therewith.
9.7 The Contractor shall be responsible to the Owner for the 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.
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<PAGE> 7
9.8 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. The Work shall be in accordance with
approved submittals. When professional certification of performance criteria
of materials, systems or equipment is required by the Contract Documents, the
Architect shall be entitled to rely upon the accuracy and completeness of such
certifications.
9.9 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.
9.10 The Contractor shall provide the Owner and Architect access to the
Work in preparation and progress wherever located.
9.11 The Contractor shall pay all royalties and license fees; shall defend
suits or claims for infringement of patent rights and shall hold the Owner
harmless from loss on account thereof, but shall not be responsible for such
defense or loss when a particular design, process or product of a particular
manufacturer or manufacturers is required by the Contract Documents unless the
Contractor has reason to believe that there is an infringement of patent.
9.12 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 in 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 9.12.
9.12.1 In claims against any person or entity indemnified under this Paragraph
9.12 by an employee of the Contractor, a Subcontractor, anyone directly or
indirectly employed by them or anyone for whose acts they may be liable, the
indemnification obligation under this Paragraph 9.12 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.
9.12.2 The obligations of the Contractor under this Paragraph 9.12 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,
Construction Change Directives, 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 10
ADMINISTRATION OF THE CONTRACT
10.1 The Architect will provide administration of the Contract 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 18.1
10.2 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.
10.3 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 Paragraphs
9.1 and 16.1. The Architect will not be responsible for the Contractor's
failure to carry out the Work in accordance with the Contract Documents.
10.4 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.
10.5 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 will make initial decisions on all
claims, disputes or other matters in question between the Owner and Contractor,
but will not be liable for results of any interpretations or decisions rendered
in good faith. The Architect's decisions in matters relating to aesthetic
effect will be final if consistent with the intent expressed in the Contract
Documents. All other decisions of the Architect, except those which have been
waived by making or acceptance of final payment, shall be subject to
arbitration upon the written demand of either party.
10.6 The Architect will have authority to reject Work which does not
conform to the Contract Documents.
10.7 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 the design concept expressed in the Contract Documents.
10.8 All claims or disputes between the Contractor and the Owner arising
out or relating to the Contract, or the breach thereof, shall 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 and subject to an initial presentation of the claim or
dispute to the Architect as required under Paragraph 10.5. Notice of the
demand for arbitration shall be filed in writing with the other party to this
Agreement and with the American Arbitration Association and shall be made
within a reasonable time after the dispute has arisen. The award rendered by
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<PAGE> 8
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.
Except by written consent of the person or entity sought to be joined, no
arbitration arising out of or relating to the Contract Documents shall include,
by consolidation, joinder or in any other manner, any person or entity not a
party to the Agreement under which such arbitration arises, unless it is shown
at the time the demand for arbitration is filed that (1) such person or entity
is substantially involved in a common question of fact or law, (2) the presence
of such person or entity is required if complete relief is to be accorded in
the arbitration, (3) the interest or responsibility of such person or entity in
the matter is not insubstantial, and (4) such person or entity is not the
Architect or any of the Architect's employees or consultants. The agreement
herein among the parties to the Agreement and any other written agreement to
arbitrate referred to herein shall be specifically enforceable under applicable
law in any court having jurisdiction thereof.
ARTICLE 11
SUBCONTRACTS
11.1 A Subcontractor is a person or entity who has a direct contract with
the Contractor to perform a portion of the Work at the site.
11.2 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 the Subcontractors for each of the principal portions of the Work. The
Contractor shall not contract with any Subcontractor to whom the Owner or
Architect has made reasonable and timely objection. The Contractor shall be
required to contract with anyone to whom the Contractor has made reasonable
objection. Contracts between the Contractor and Subcontractors shall (1)
require each Subcontractor, to the extent of the Work to be performed by the
Subcontractor, to be bound to the Contractor by the terms of the Contract
Documents, and to assume toward the Contractor all the obligations and
responsibilities which the Contractor, by the Contract Documents, assumes
toward the Owner and Architect, and (2) allow to the Subcontractor the benefit
of all rights, remedies and redress afforded to the Contractor by these
Contract Documents.
ARTICLE 12
CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS
12.1 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.
12.2 The Contractor shall afford the Owner and separate contractors
reasonable opportunity for the 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.
12.3 Costs caused by delays, improperly timed activities or defective
construction shall be borne by the party responsible therefor.
ARTICLE 13
CHANGES IN THE WORK
13.1 The Owner, without invalidating the Contract, may order changes in the
Work consisting of additions, deletions or modifications, the Contract Sum and
Contract Time being adjusted accordingly. Such changes in the Work shall be
authorized by written Change Order signed by the Owner, Contractor and
Architect, or by written Construction Change Directive signed by the Owner and
Architect.
13.2 The Contract Sum and Contract Time shall be changed only by Change
Order.
13.3 The cost or credit to the Owner from a change in the Work shall be
determined by mutual agreement.
ARTICLE 14
TIME
14.1 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.
14.2 The date of Substantial Completion is the date certified by the
Architect in accordance with Paragraph 15.3.
14.3 If the Contractor is delayed at any time in progress of the Work by
changes ordered in the Work, by labor disputes, fire, unusual delay in
deliveries, abnormal adverse weather conditions not reasonably anticipatable,
unavoidable casualties or any causes beyond the Contractor's control, or by
other causes which the Architect determines may justify delay, then the
Contract Time shall be extended by Change Order for such reasonable time as the
Architect may determine.
ARTICLE 15
PAYMENTS AND COMPLETION
15.1 Payments shall be made as provided in Articles 4 and 5 of this
Agreement.
15.2 Payments may be withheld on account of (1) defective Work not
remedied, (2) claims filed by third parties, (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.
15.3 When the Architect agrees that the Work is substantially complete, the
Architect will issue a Certificate of Substantial Completion.
15.4 Final payment shall not become due until the Contractor has delivered
to the Owner a complete release of all liens arising out of this Contract or
receipts in full covering all labor, materials and equipment for which a lien
could be filed, or a bond satisfactory to the Owner to indemnify the Owner
against such
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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.
15.5 The making of final payments 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.
Acceptance of final payment by the Contractor, a Subcontractor or material
supplier shall constitute a waiver of claims by that payee except those
previously made in writing and identified by that payee as unsettled at the
time of final Application for Payment.
ARTICLE 16
PROTECTION OF PERSONS AND PROPERTY
16.1 The Contractor shall be responsible for initiating, maintaining, and
supervising all safety precautions and programs in connection with the
performance of the Contract. The Contractor shall take reasonable precautions
for safety of, and shall provide reasonable protection to prevent damage,
injury or loss:
.1 employees on the Work and other persons who may be affected
thereby;
.2 the Work and materials and equipment to be incorporated
therein; and
.3 other property at the site or adjacent thereto.
The Contractor shall give notices and comply with applicable laws, ordinances,
rules, regulations and lawful orders of public authorities bearing on safety of
persons and property and their protection from damage, injury or loss. The
Contractor shall promptly remedy damage and loss to property at the site caused
in whole or in part by the Contractor, a Subcontractor, a Sub-subcontractor, or
anyone directly or indirectly employed by any of them, or by anyone for whose
acts they may be liable and for which the Contractor is responsible under
Subparagraphs 16.1.2 and 16.1.3, except for damage or loss attributable to acts
or omissions of the Owner or Architect 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 9.12.
16.2 The Contractor shall not be required to perform without consent any
Work relating to asbestos or polychlorinated biphenyl (PCB).
ARTICLE 17
INSURANCE
17.1 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 insurance for protection from claims under workers' or
workmen's compensation acts and other employee benefit acts which are
applicable, claims for damages because of bodily injury, including death, and
from claims for damages, other than to the Work itself, to property which may
arise out of or result from the Contractor's operations under the Contract,
whether such operations be by the Contractor or by a Subcontractor or anyone
directly or indirectly employed by any of them. This insurance shall be
written for not less than limits of liability specified in the Contract
Documents or required by law, whichever coverage is greater, and shall include
contractual liability insurance applicable to the Contractor's obligations
under Paragraph 9.12. Certificates of such insurance shall be filed with the
Owner prior to the commencement of the Work.
17.2 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.
17.3 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 upon the entire Work at the
site to the full insurable value thereof. This insurance shall be on an
all-risk policy form and shall include interests of the Owner, the Contractor,
Subcontractors and Sub-subcontractors in the Work and shall insure against the
perils of fire and extended coverage and physical loss or damage including,
without duplication of coverage, theft, vandalism and malicious mischief.
17.4 A loss insured under Owner's property insurance shall be adjusted with
the Owner and made payable to the Owner as fiduciary for the insureds, as their
interests may appear, subject to the requirements of any applicable mortgagee
clause.
17.5 The Owner shall file a copy of each policy with the Contractor before
an exposure to loss may occur. 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.
17.6 The Owner and Contractor waive all rights against each other and the
Architect, Architect's consultants, separate contractors described in Article
12, if any, and any of their subcontractors, sub-subcontractors, agents and
employees, for damages caused by fire or other perils to the extent covered by
property insurance obtained pursuant to this Article 17 or any other property
insurance applicable to the Work, except such rights as they may have to the
proceeds of such insurance held by the Owner as fiduciary. The Contractor
shall require similar waivers in favor of the Owner and the Contractor by
Subcontractors and Sub-subcontractors. The Owner shall require similar waivers
in favor of the Owner and Contractor by the Architect, Architect's consultants,
separate contractors described in Article 12, if any, and the subcontractors,
sub-subcontractors, agents and employees of any of them.
ARTICLE 18
CORRECTION OF WORK
18.1 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, and shall correct any Work found to be not in
accordance with the requirements of the Contract Documents within a period of
one year from the date of Substantial Com-
19
<PAGE> 10
pletion of the Contract or by terms of an applicable special warranty required
by the Contract Documents. The provisions of this Article 18 apply to Work
done by Subcontractors as well as to Work done by direct employees of the
Contractor.
18.2 Nothing contained in this Article 18 shall be construed to establish a
period of limitation with respect to the obligations which the Contractor might
have under the Contract Documents. Establishment of the time period of one
year as described in Paragraph 18.1 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.
ARTICLE 19
MISCELLANEOUS PROVISIONS
19.1 The Contract shall be governed by the law of the place where the
Project is located.
19.2 As between the Owner and the Contractor, any applicable statute of
limitations shall commence to run and any alleged cause of action shall be
deemed to have accrued:
.1 not later than the date of Substantial Completion for acts or
failures to act occurring prior to the relevant date of
Substantial Completion;
.2 not later than the date of issuance of the final Certificate
for Payment for acts or failures to act occurring subsequent
to the relevant date of Substantial Completion and prior to
issuance of the final Certificate for Payment; and
.3 not later than the date of the relevant act or failure to act
by the Contractor for acts or failures to act occurring after
the date of the final Certificate for Payment.
ARTICLE 20
TERMINATION OF THE CONTRACT
20.1 If the Architect fails to recommend payment for a period of 30 days
through no fault of the Contractor, or if the Owner fails to make payment
thereon for a period of 30 days, the Contractor may, upon seven additional
days' written notice to the Owner and the 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 applicable to the
Project.
20.2 If the Contractor defaults or persistently fails or neglects to carry
out the Work in accordance with the Contract Documents or fails to perform a
provision of the Contract, the Owner, after seven days' written notice to the
Contractor and without prejudice to any other remedy the Owner may have, may
make good such deficiencies and may deduct the cost thereof, including
compensation for the Architect's services and expenses made necessary thereby,
from the payment then or thereafter due the Contractor. Alternatively, at the
Owner's option, and upon certification by the Architect that sufficient cause
exists to justify such action, the Owner may terminate the Contract and take
possession of the site and of all materials, equipment, tools, and construction
equipment and machinery thereon owned by the Contractor and may finish the Work
by whatever method the Owner may deem expedient. If the unpaid balance of the
Contract Sum exceeds costs of finishing the Work, including compensation for
the Architect's services and expenses made necessary thereby, such excess shall
be paid to the Contractor, but if such costs exceed such unpaid balance, the
Contractor shall pay the difference to the Owner.
20
<PAGE> 11
ARTICLE 21
OTHER CONDITIONS OR PROVISIONS
This Agreement entered into as of the day and year first written above.
OWNER CONTRACTOR
/s/ Faison S. Kuester, Jr. /s/ David Comstock
- - -------------------------------------- ----------------------------------
(Signature) (Signature)
Faison S. Kuester, Jr. General Partner David C. Comstock Project Manager
- - -------------------------------------- ----------------------------------
(Printed name and title) (Printed name and title)
21
<PAGE> 12
[PRICE DAVIS CONSTRUCTION, INC LETTERHEAD]
September 6, 1995
Mr. Donald J. Wroble
Project Manager
Yager Construction Company, Inc.
600 Towne Centre Blvd.
Suite 110
Pineville, NC 28134
Re: Internal Revenue Service
Eastpark Executive Center
Dear Don:
Please find enclosed our bid form on the above referenced project. In addition
to our bid, we would like to offer the following as clarification:
1) Per conversations with Owners, ceiling will be replaced as
required; not replaced entirely as called out on bid
documents.
2) Building Owner expressed interest in reusing doors as would be
practical. However, specifications call for doors to be
factory finished. Therefore, all new doors have been priced.
Additionally, existing doors may have compatibility problem
with specified hardware.
3) Existing storefront has been discontinued. However, we have
priced comparable product "to match".
4) After making several attempts to contact Powerflor to solicit
information about their product, we have assumed the
installation to be similar to normal carpet in that it would
occur after the construction of walls.
5) It is our understanding that Powerflor will be handled
directly by Yager Construction.
6) Paint finish is not specified and is assumed to be flat latex.
22
<PAGE> 13
Mr. Donald Wroble
Page Two
7) In the absence of a profile or wood species for chairrail,
paint or stain grade, 3" birch was used for estimating
purposes.
8) There is a premium charge for the specified non-stock color
for the access flooring. If a color other than gray matrix is
chosen, some savings could be generated in this area.
9) It is assumed that blinds will remain in the building and are
not part of this contract. If this assumption is incorrect, a
price can be obtained readily.
10) The fire protection system in the computer room, as drawn,
shows no indication of a preaction type system. This type
system is common in similar applications and may want to be
considered by Owner or tenant.
Thank you very much for allowing us the opportunity to bid this job. Should
you have any further questions, please do not hesitate to call.
Sincerely,
PRICE DAVIS CONSTRUCTION, INC.
/s/ Skeeter Davis
Skeeter Davis
SD:ph
enclosure
23
<PAGE> 14
BID FORM
Yager Construction Company, Inc.
600 Towne Centre Blvd., Suite 110
Pineville, N.C. 28134
Gentlemen:
The undersigned bidder, having carefully examined the Bidding Requirements,
Conditions of the Contract, Drawings, Specifications, and all subsequent
Addenda as prepared by Shook Design Group, visited the site, and being familiar
with all conditions and requirements of the work, hereby agrees to furnish all
material, labor, equipment and services including all allowances to complete
the construction of:
I.R.S. Renovations
East Park Executive Center
Charlotte, N.C.
In accordance with the Plans, Specifications and Contract Documents, prepared
by Shook Design Group for the sum of:
Five Hundred Sixteen Thousand Dollars ($516,290.00)
- - ----------------------------- ----------
Two Hundred Ninety Dollars
The following companies shall execute subcontracts for the portions of the work
indicated. If a portion of the work indicated will be performed by the bidder,
state "Bidder":
Plumbing Construction (Company Name & License No.) N/A
------------------------
HVAC Construction (Company Name & License No.) N/A
----------------------------
Electrical Construction (Company Name & License No.) N/A
----------------------
TIME OF COMPLETION
The bidder further proposes and agrees hereby to commence work under this
contract on a date specified in a written order of the designer and shall
complete work on or before January 18, 1996.
24
<PAGE> 15
CONTRACTOR'S LICENSE
The undersigned further states that he is a duly licensed Contractor for the
type of work proposed in the State of North Carolina and that all fees, permits,
etc. pursuant to the submission of this proposal paid in full.
Respectfully submitted the 6th day of Sept. , 1995.
----- -------- --
Price Davis Construction, Inc.
- - --------------------------------------------------------
(Name of Firm or Corporation making Bid)
WITNESS: By:
---------------------------------
Title: President
---------------------------------
(Owner/Partner/President/Vice President)
Address: 1800 East Blvd.
-------------------------------
Charlotte, NC 28203
-------------------------------
Phone: 704/342-1025
-------------------------------
License: NC #23402
-------------------------------
Federal I.D. No: 56-1585325
------------------------
Attest:
By: (Affix Corporate Seal Here)
----------------------------------
Title: Corporate Secretary/VP
------------------------------
(Corp. Sec. or Ass't Sec Only)
Addenda Received and used in preparing proposal.
<TABLE>
<S> <C> <C>
Addendum No (1) 8/30/95 Addendum No (4)
----------------- ---------------
Addendum No (2) Addendum No (5)
----------------- ---------------
Addendum No (3) Addendum No (6)
----------------- ---------------
</TABLE>
END OF BID FORM
25
<PAGE> 16
[PRICE DAVIS CONSTRUCTION, INC. LETTERHEAD]
October 20, 1995
Mr. Jerry Moore
The Kuester Companies
711 East Morehead Street, Suite 200
Charlotte, NC 28202-2703
Re: Clarification of scope
IRS @ Eastpark Executive Center
Dear Jerry:
With the start of the project and the formalization of a contract, we would
like to take this opportunity to clarify any discrepancies that might exist
between the contract documents as drawn and specified and what is contained in
our bid. This list supplements our letter of September 6, 1995 to Yager
Construction, covering our bid. The items listed below have been discussed
previously, and to the best of our knowledge are acceptable.
DIVISION 1: The SUBMITTAL requirements as specified have the potential to
delay the work. We suggest a meeting with the Architect to determine
which submittals are essential and to schedule those submittals both for
production and review. This might be done at the required
pre-construction meeting.
DIVISION 6: The WOOD TRIM is priced as birch, paint grade or
stain grade depending on its use.
DIVISION 8: HOLLOW METAL FRAMES are priced per the door schedule
as knock-down except where rating requires welded. The frames are a
painted finish, semi-gloss latex, color of your choice.
WOOD DOORS are priced as shop finished stain grade
birch (based on current Building Standard) as opposed to Red Oak-stained,
Birch-painted in the specifications.
The replacement STOREFRONT is not as specified as the product
in-place currently is out of production. The new storefront is
priced "to match."
DIVISION 9: Per the request of the Architect, we are pricing an
alternate to use a pre-finished Muras wall system. The price in the
contract utilizes gypsum wall board.
The ACOUSTIC CEILING SYSTEM is priced to utilize as much of the
existing grid and tile as possible.
Wall PAINT is flat latex.
26
<PAGE> 17
Letter to Mr. Jerry Moore
October 20, 1995
Page 2
DIVISION 10: The RAISED FLOOR SYSTEM specified requires a
production lead of 6 to 8 weeks. The raised flooring priced is a standard
computer room specification (all-steel panel, designed for 1000 #
concentrated loading, bolted grid understructure, in gray tone (std 61)
high pressure laminate finish) which if released immediately will be
available to meet the schedule.
The POWERFLOR SYSTEM, by separate contract, must be
coordinated with our construction immediately to ensure that the schedule
may be met.
DIVISION 15: The FIRE PROTECTION SYSTEM is priced per the plans. We do not
include a preaction type system in the computer room.
DIVISION 16: ELECTRICAL WIRING is terminated in the walls with wiring and
hook up to the devices to be completed under the separate Powerflor
contract.
This letter is attached to the following contract and is intended to be a part
of that contract. Please review this letter and the contract and call me with
any questions or concerns. If both are satisfactory, please sign both original
contracts, and return one for our records.
We very much appreciate the opportunity to be of service and look forward to
the successful completion of this project.
Sincerely,
PRICE-DAVIS CONSTRUCTION, INC.
/s/ Dave Comstock
- - -----------------
David C. Comstock
Project Manager
Copy: Greg Long
Skeeter Davis
27
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