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EXHIBIT 2.5.11
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AMENDED AND RESTATED
MASTER SERVICES AGREEMENT
BY AND BETWEEN
MCI WORLDCOM NETWORK SERVICES, INC.
AND
ABLE TELCOM HOLDING CORP.
CONTRACT NO. C-6734
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TABLE OF CONTENTS
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ARTICLE 1. TERM..................................................................... 1
1.1 TERM.................................................................. 2
1.2 TERMINATION........................................................... 2
1.3 CONTRACT YEAR......................................................... 2
1.4 AMENDED AND RESTATED AGREEMENT........................................ 2
ARTICLE 2 CONTRACTOR SERVICES...................................................... 2
2.1 WORK.................................................................. 2
2.2 WORK ORDERS........................................................... 3
2.3 OTHER WORK............................................................ 3
2.4 REFUSAL OF WORK....................................................... 4
ARTICLE 3 PERFORMANCE OF WORK...................................................... 5
3.1 CONTRACTOR'S FORCES................................................... 5
3.2 SUBCONTRACTORS........................................................ 6
3.3 CONTRACT DOCUMENTS.................................................... 6
3.4 MATERIALS............................................................. 7
3.5 PERMITS AND FEES...................................................... 8
3.6 PROGRESS AND PROCEDURE................................................ 8
3.7 CHANGES............................................................... 10
3.8 COMMENCEMENT AND COMPLETION OF WORK................................... 11
3.9 AS-BUILT DRAWINGS..................................................... 11
3.10 SPECIFICATIONS AND STANDARDS.......................................... 12
3.11 LIEN WAIVERS.......................................................... 12
3.12 TIMING/DELAYS......................................................... 12
3.13 CORRECTIVE ACTION PLAN................................................ 12
ARTICLE 4 PAYMENT AND COSTS........................................................ 13
4.1 PAYMENT............................................................... 13
4.2 COST CONTROL.......................................................... 17
4.3 MOST FAVORED NATION................................................... 17
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4.4 INDEPENDENT CONTRACTOR................................................ 17
4.5 ACCOUNTING SYSTEM..................................................... 18
4.6 PROGRESS PAYMENT...................................................... 19
4.7 LATE PAYMENT.......................................................... 20
4.8 ANNUAL AND AGGREGATE PROJECT SUM...................................... 20
4.9 COMMITMENT FULFILLED.................................................. 20
4.10 CONTRACTOR'S FEE TRUEUP............................................... 20
ARTICLE 5 OWNER'S RESPONSIBILITIES................................................. 21
5.1 AUTHORIZED REPRESENTATIVE............................................. 21
5.2 PROVISION OF DATA..................................................... 21
5.3 OWNER'S OWN FORCES.................................................... 21
5.4 PROMPT REPLY.......................................................... 22
5.5 FAILURE TO PROVIDE INFORMATION........................................ 22
ARTICLE 6 OWNER'S AND CONTRACTOR'S REPRESENTATIONS................................. 22
6.1 CONTRACTOR REPRESENTATIONS AND COVENANTS.............................. 22
6.2 OWNER REPRESENTATIONS AND COVENANTS................................... 22
ARTICLE 7 INSURANCE AND BONDS...................................................... 23
7.1 WORKER'S COMPENSATION AND EMPLOYER'S LIABILITY........................ 23
7.2 WATER OPERATIONS...................................................... 23
7.3 COMMERCIAL GENERAL LIABILITY.......................................... 23
7.4 BUSINESS AUTOMOBILE LIABILITY......................................... 23
7.5 VESSELS OR BARGES..................................................... 24
7.6 DIVING OPERATIONS..................................................... 24
7.7 AIRCRAFT LIABILITY.................................................... 24
7.8 BUILDER'S RISK........................................................ 24
7.9 ERRORS AND OMISSIONS.................................................. 24
7.10 RAILROAD PROTECTIVE................................................... 25
7.11 UMBRELLA EXCESS LIABILITY............................................. 25
7.12 INSURANCE REQUIRED OF SUBCONTRACTORS.................................. 25
7.13 ADDITIONAL INSURED.................................................... 25
7.14 EVIDENCE OF COVERAGE.................................................. 25
7.15 BONDS................................................................. 26
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ARTICLE 8 DEFAULT AND TERMINATION............................................... 26
8.1 DEFAULT............................................................... 26
8.2 DISPUTE RESOLUTION / ARBITRATION...................................... 29
ARTICLE 9 INDEMNIFICATION AND LIABILITY............................................ 30
9.1 INDEMNIFICATION BY CONTRACTOR......................................... 30
9.2 INDEMNIFICATION BY OWNER.............................................. 31
9.3 NOTICE OF CLAIMS...................................................... 31
9.4 LIMITATION OF LIABILITY............................................... 31
ARTICLE 10 WARRANTY................................................................. 31
10.1 WARRANTY.............................................................. 31
10.2 FREE FROM DEFECTS..................................................... 32
10.3 NO OTHER WARRANTIES................................................... 32
ARTICLE 11 HAZARDOUS MATERIALS AND CONCEALED CONDITIONS............................. 32
11.1 HAZARDOUS MATERIALS................................................... 32
11.2 CONCEALED CONDITIONS.................................................. 33
ARTICLE 12 MISCELLANEOUS............................................................ 33
12.1 TITLE................................................................. 33
12.2 ASSIGNMENT............................................................ 33
12.3 SEVERABILITY.......................................................... 33
12.4 WAIVER................................................................ 33
12.5 NOTICES............................................................... 33
12.6 CONFIDENTIALITY....................................................... 35
12.7 COUNTERPARTS.......................................................... 35
12.8 NO CONSTRUCTION AGAINST DRAFTER....................................... 35
12.9 COURSE OF DEALING..................................................... 35
12.10 SURVIVAL.............................................................. 36
12.11 GOVERNING LAW......................................................... 36
12.12 ENTIRE AGREEMENT...................................................... 36
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LIST OF EXHIBITS
EXHIBIT A - LIST OF PROJECTS
EXHIBIT B - SAMPLE WORK ORDER
EXHIBIT C - INTENTIONALLY DELETED
EXHIBIT D - LABOR BURDEN FACTORS
EXHIBIT E - SAMPLE CHANGE ORDER
EXHIBIT F - SAMPLE CERTIFICATE OF COMPLETION
EXHIBIT G - CONTRACTOR'S LABOR POLICY
EXHIBIT H - TERMS AND CONDITIONS FOR SUBCONTRACTORS
EXHIBIT I - TERMS AND CONDITIONS FOR PROFESSIONAL SERVICES
EXHIBIT J - SAMPLE APPLICATION FOR PAYMENT
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AMENDED AND RESTATED
MASTER SERVICES AGREEMENT
CONTRACT NO. C-6734
THIS Amended and Restated Master Services Agreement ("Agreement") is
made as of this 24th day of August, 2000 by and between MCI WORLDCOM NETWORK
SERVICES, INC., a Delaware corporation with offices at 6929 N. Lakewood Avenue,
Tulsa, Oklahoma, 74117, including its affiliates and subsidiaries as
appropriate throughout (collectively referred to herein as "Owner"), Able
Telcom Holding Corp., a Florida corporation with offices at 1000 Holcomb Woods
Parkway, Suite 440, Roswell, Georgia 30076 hereinafter called the "Contractor."
The signatories to this Agreement will be referred to individually as the
"Party" and collectively as the "Parties."
W I T N E S S E T H:
WHEREAS, the Owner is engaged in the business of providing
telecommunications services and intends to obtain services for the design,
engineering, procurement, construction, operation, maintenance, relocation and
replacement of various telecommunications network projects within the United
States (each, a "Project", together, the "Projects");
WHEREAS, Contractor is engaged in the business of providing design,
engineering, procurement, construction, maintenance, relocation and replacement
of telecommunications facilities and desires to design, engineer, procure,
construct, maintain, relocate and replace certain of the Owner's Projects;
WHEREAS, Owner desires Contractor to perform such work as is deemed
necessary by Owner to design, engineer, procure, construct, maintain, relocate
and/or replace each Project as the same shall be agreed by and between Owner
and Contractor;
WHEREAS, Owner and Contractor desire to establish the general terms
and conditions under which each Project will be performed and to establish the
responsibilities of each Party hereto for each Project; and
WHEREAS, Owner desires to engage Contractor for an agreed term and
commitment for Projects as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and other
considerations contained herein, the Parties hereto agree as follows:
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ARTICLE 1.
TERM
1.1 TERM. The term of this Agreement shall be for a period of six
years commencing August 24, 2000 and continuing until August 24, 2006
(hereinafter the "Term").
Provided that Contractor is not in default hereunder, the Contractor
and the Owner agree that on or after August 24, 2004 they will enter into good
faith negotiations to extend the Term of this Agreement. Contractor recognizes
that Owner's dissatisfaction with Contractor's performance would be sufficient
reason to terminate such good faith negotiations.
1.2 TERMINATION. This Agreement may be terminated at any time
upon the mutual written agreement of the Parties. This Agreement may also be
terminated pursuant to Article 8.
1.3 CONTRACT YEAR. A "Contract Year" shall be any twelve month
period beginning on the date of execution of the Agreement as first written
above or any anniversary date thereof.
1.4 AMENDED AND RESTATED AGREEMENT. This Agreement was originally
dated as of July 2, 1998 and the terms of this Agreement as originally in
effect on that date, as heretofore amended, shall be binding on the Parties
hereto (and their predecessors and assignors) through the date hereof. This
Agreement as amended and restated shall be effective commencing on August 24,
2000.
ARTICLE 2.
CONTRACTOR SERVICES
2.1 WORK. The Contractor agrees to provide, as required by Owner,
all the labor, equipment, materials and expertise and to do all things
necessary for the proper performance and completion of each Project (the
"Work"). The Work may, as required by Owner, include but is not limited to,
Local Network Projects, Long Haul Projects, Engineering Services and Other Work
all as hereinafter defined.
2.1.1 LOCAL NETWORK PROJECTS. Local Network Projects may,
as required by Owner, include but are not limited to, design, engineering,
project management, material procurement, inspection, acceptance testing and
construction of local telecommunications network infrastructure which may
consist of both inside and outside plant work, and initial building laterals to
provide intracity or intraexchange telecommunications services to customers
within a local loop (hereinafter referred to as "Local Network Projects").
Local Network Projects do not include construction of isolated laterals or
points of presence ("POPs").
2.1.2 LONG HAUL PROJECTS. Long Haul Projects may, as
required by Owner, include but are not limited to, design, engineering, project
management, material procurement, inspection, acceptance testing and
construction of long distance telecommunications networks which may consist of
both inside and outside plant work, terminal and regen/amplifier facility
construction or expansion to provide intercity, interexchange or interLATA
telecommunications services (hereinafter referred to as "Long Haul Projects").
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2.1.3 ENGINEERING SERVICES. Engineering Services may, as
required by Owner, include but are not limited to, the design, engineering and
procurement of transmission facilities, spaces, nodes and central office
equipment related to Local Network Projects and other special engineering
projects or research. Central office equipment includes, but is not limited to,
optical-electric equipment, cross connect systems, voice and data switching
systems, DC power systems, cabling, racking and ancillary equipment ("Central
Office Equipment"). Due to the unique nature of such Engineering Services,
Owner and Contractor agree that such services shall be performed at the actual
direct salary, subject to adjustments as set forth in Article 4, plus the labor
burden factor set forth in EXHIBIT D attached hereto and incorporated herein
which shall include applicable overhead and benefits. The Parties agree that
Contractor may, not more often than annually, update the labor burden factor
for Engineering Services based upon changes in Contractor's actual costs for
providing such services provided that Owner is given written notice and a
written justification of any change in such labor burden factor. The charges
for Engineering Services set forth herein shall be considered Reimbursable
Costs as defined in Article 4 hereof.
2.1.4 CURRENT PROJECTS. Owner and Contractor agree that
all Work or Projects being performed under a contract executed between
Contractor and Owner before August 24, 2000, which work has been or will be
performed after August 24, 2000, including but not limited to those Projects
set forth in EXHIBIT A, shall be treated in accordance with the terms and
conditions of this Agreement. The Parties agree that any commitments concerning
volume of work or annual payments in any such contracts shall immediately
become void and of no effect due to the Annual Project Sum and Aggregate
Project Sum commitments contained in Article 4 hereof.
2.2 WORK ORDERS. The Work shall be set forth in a detailed Work
Order (each, a "Work Order" or, together the "Work Orders"), for each
individual Local Network Project, Long Haul Project, or Engineering Services
Project executed by Owner (or Owner's affiliate or subsidiary as appropriate)
and Contractor. Where appropriate, Owner and Contractor will enter into a Work
Order to develop a description of Work to be performed, Project Staffing Plan,
Project Budget and Project Schedule for Project development. No Work Order
shall be effective nor shall Owner or Contractor incur any liability hereunder
unless the Work Order is executed by duly authorized representatives of each
Party hereto.
2.2.1 Each Work Order shall be substantially in the form
of and shall contain the information contained in the Sample Work Order
attached hereto as EXHIBIT B. At a minimum, each Work Order shall contain the
Project name, description of the Work to be performed, Project Staffing Plan
(as hereafter defined), Project budget, Project schedules and a list of work to
be subcontracted. Upon execution of a Work Order it shall become a part of and
shall be governed by this Agreement. Each Work Order shall be labeled so that,
for example, the first executed Work Order may be Work Order No. C-6734.001,
the second Work Order shall be Work Order No. C-6734.002 and so on.
2.3 OTHER WORK. In addition to Local Network Projects, Long Haul
Projects and Engineering Services, Owner may enter into agreements with
Contractor to provide, among other things, all the labor, equipment, materials
and expertise and to do all things necessary for the proper performance and
completion of other Projects. Such other Projects may
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include but are not limited to the engineering, procurement or construction of
telecommunications networks or facilities or services required for the
maintenance, expansion or operation of either Local Network Projects or Long
Haul Projects or other Projects not specifically defined in this Agreement,
hereinafter collectively referred to as "Other Work." The Contractor may from
time to time bring projects to the attention of Owner whereby Contractor acting
on behalf of a third party right-of-way or facility owner, is offering for sale
or lease telecommunications facilities. Should Owner elect to enter into an
agreement with Contractor for such facilities such agreement shall not be
subject to this Agreement.
2.3.1. The Contractor may from time to time bring Projects
to the attention of the Owner where the Contractor is the owner of the
right-of-way or of the facilities regarding which there is an offering for sale
or lease telecommunications facilities. In the event Owner elects in its sole
discretion to enter in to an agreement to purchase or lease such facilities
from Contractor, the dollar amount of such purchase or lease shall apply to the
minimum Annual Project Sums so long as the Minimum Local Network Percentage is
awarded under Article 2.4.2. Such Projects will count toward the Minimum Local
Network Percentage.
2.3.2. The details for all Other Work shall be set forth in
an agreement which shall be executed by Owner (or Owner's affiliate or
subsidiary as appropriate) and Contractor. No agreement for Other Work shall be
effective nor shall Owner or Contractor incur any liability hereunder unless
the agreement is executed by duly authorized representatives of each Party
hereto.
2.3.3. Each agreement for Other Work shall become a part of
and shall be governed by this Agreement unless expressly stated in such
agreement for Other Work. In the event of a conflict between this Agreement and
an agreement for Other Work, the agreement for Other Work shall prevail.
Notwithstanding the foregoing, all payments made or due by Owner to Contractor
pursuant to an agreement for Other Work without regard to the terms of such
agreement for Other Work, shall become part of the Aggregate Project Sum as
defined in Article 4. Each agreement for Other Work shall be labeled in the
same manner as Work Orders.
2.3.4. Owner agrees that Contractor shall have the
opportunity to bid without restrictions, as a preferred vendor of Owner, on all
Local, Long Haul or Engineering Services Projects not assigned to Contractor
via a Work Order and offered by Owner for bidding, during the Term (such other
projects referred to hereinafter as "Other Work"). Other Work awarded to
Contractor shall apply to the Annual Project Sum and the Aggregate Project Sum.
Owner shall have sole discretion whether to award Other Work to Contractor or a
third party.
2.4 REFUSAL OF WORK.
2.4.1 During each Contract Year, Contractor shall accept
and execute all Work Orders offered to Contractor by Owner hereunder without
regard to quantity, schedule or cost throughout the Term until such time as the
Annual Project Sum (as defined in Article 4.8 hereof) reaches One Hundred Sixty
Million Dollars ($160,000,000.00) per Contract Year. If Contractor refuses or
fails to accept any Work Order for Work or Other Work as defined in this
Article 2, prior to such time, the value of the Work Order (including the
applicable Contractor's Fee) shall be added as a credit to the Aggregate
Project Sum (as defined in Article 4.8 hereof) as
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if such Work Order had been accepted and performed by Contractor pursuant to
the terms of this Agreement. For the purpose of determining whether such a
credit is due, the Annual Project Sum shall be as calculated at the time
Contractor declines such Work Order.
2.4.2. The Owner agrees to award Contractor a minimum volume
of seventy five percent (75%) of all outside plant work related to Owner's
Local Network Projects. Such percentage hereinafter shall be referred to as the
"Minimum Local Network Percentage." For the purpose of determining this
percentage, the percentage shall include all Local Network Projects that
Contractor declines to perform.
2.4.3. In the event the Annual Project Sum for all Work
Orders and agreements for Other Work reaches One Hundred Sixty Million Dollars
($160,000,000.00) in any year of the Term and Owner offers a Long Haul Project,
Engineering Services or Other Work to Contractor, Contractor may decline to
accept such additional Work, without penalty. This Article 2.4.3. does not
apply to Work Orders and agreements for Other Work related to Owner's Local
Network Projects.
ARTICLE 3.
PERFORMANCE OF WORK
3.1 CONTRACTOR'S FORCES. The Contractor shall perform project
management, supervisory functions, contract and document preparation, drafting,
material procurement, and all portions of the Work which are similar to those
stated herein with its own employees except as mutually agreed by Owner and
Contractor.
3.1.1. Owner and Contractor acknowledge that as part of the
consideration given by Owner to Contractor hereunder, Owner is relying on and
expects to continue to rely upon a high level of experience, skill and
expertise existing in the personnel currently in Contractor's employ.
Contractor shall staff Key Positions only with qualified persons with prior
experience in the position to be filled. For purposes of this Agreement, "Key
Positions" are defined as Project Manager, Construction Manager, Business
Manager and Contract Manager. However, Contractor may propose and Owner may
reasonably approve the use of individuals having no prior experience in a Key
Position.
3.1.2. Contractor agrees to provide Owner with a detailed
plan for the staffing of each Project (hereinafter the "Project Staffing Plan")
Work Order. Each Project Staffing Plan shall identify the individuals who will
fill Key Positions and other positions which will be required for the Project.
Contractor shall provide Owner with relevant employee information upon request.
Contractor shall follow Owner's reasonable recommendations concerning the
Project Staffing Plan for each Work Order. All unscheduled or voluntary changes
by Contractor in the staffing of Key Positions or other Contractor employees on
a Project shall be subject to the prior written approval of Owner, which shall
not be unreasonably withheld.
3.1.3. Owner shall have the right to request in writing that
Contractor remove any of its employees from any Project at any time provided
such request is reasonable,
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lawful and nondiscriminatory. Contractor shall comply with such request
immediately upon receipt of the written request from Owner.
3.2 SUBCONTRACTORS. Unless specifically permitted in a Work Order
or agreement for Other Work and except as set forth in Article 3.2.4, Owner and
Contractor agree that Contractor shall perform all actual construction for all
Projects and Work performed hereunder with unaffiliated third party contractors
hereinafter referred to as "Subcontractors."
3.2.1. As part of the Work performed under a Work Order or
agreement for Other Work, the Contractor shall develop a list of qualified
bidders for each Project and establish bidding schedules. The Owner shall, upon
written notice to Contractor, have the right, in its sole discretion, to
review, approve, disapprove, add to or delete from the list of bidders. Unless
otherwise stated in a Work Order or agreement for Other Work, the Contractor
shall obtain competitive bids from a minimum of three (3) bidders for each
phase or portion of work for a Project or obtain a written waiver of this
requirement before proceeding with less than three (3) bids.
3.2.2. Upon the prior written request of Owner, Owner shall
have the option to pre-approve all bidding documents, addenda and other
documents related to the bidding process at any time prior to Contractor's
award of a subcontract.
3.2.3. The Contractor shall prepare a bid evaluation
analyzing all bids received for a Project and shall notify Owner regarding
selection of the successful bidder. The Contractor shall award the work to be
subcontracted to the lowest priced, qualified, responsive bidder unless written
approval is obtained from Owner approving an award on some other basis. The
Owner shall have the right, upon prior written notice to Contractor, to
determine the successful bidder for any Work subcontracted hereunder. In no
event shall Contractor award a contract to a bidder which exceed the limits set
forth in Article 3.7.1 unless approved in writing by Owner.
3.2.4. Notwithstanding the foregoing provisions of this
Article 3.2, Owner agrees that Contractor (by itself or through an affiliate of
Contractor) shall at the sole discretion of the Owner have the right to perform
the actual construction for all Projects and Work performed hereunder upon
notice to, and acceptance by, Owner ("Self-Performed Work").
3.3 CONTRACT DOCUMENTS. The Contractor shall prepare all
Subcontractor related contracts for the Work (the "Contract Documents"). All
Contract Documents shall conform to all laws and requirements of any
right-of-way providers, permitting authorities and other requirements of the
Work Order or agreement for Other Work.
3.3.1. All Contract Documents shall include the terms and conditions
attached hereto as EXHIBIT H (for Subcontractors) and EXHIBIT I (for
professional services). The content of such Contract Documents shall comply
with generally accepted industry standards. In no event shall any Contract
Document including but not limited to agreements with Subcontractors, expose
Owner to any premium payment for early completion of a Project by
Subcontractor, costs for Subcontractor errors, liquidated damages or other
penalty payments of
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any kinds without the prior written consent of Owner which may be withheld by
Owner in its sole discretion.
3.3.2. The Contractor shall report to Owner any error,
inconsistency or omission in the Contract Documents which may have a material
impact on any Project immediately upon discovery thereof.
3.3.3. Upon written notice to Contractor by Owner prior to
execution of the Contract Documents, Owner shall have the right to approve any
and all Contract Documents. Contractor shall provide Owner with copies of the
documents upon such request and, Owner shall have five (5) business days from
receipt thereof to approve or disapprove said documents. Unless Owner gives
Contractor written notice to the contrary, failure of Owner to approve or
disapprove the Contract Documents within such five (5) day period shall be
deemed approval. Owner shall not be responsible for the completeness, accuracy
or context of the Contract Documents except where such completeness, accuracy
or context is affected by changes to Contract Documents directed, dictated or
otherwise made by Owner. Contractor shall use commercially reasonable efforts
to ensure that all disputes concerning errors, inconsistencies or omissions in
the Contract Documents shall be resolved in favor of Owner.
3.3.4. The Contractor shall maintain copies of all Contract
Documents at the site of each Project in good order and marked reasonably
current to record all changes made during the Work.
3.4 MATERIALS. The Contractor will buy, as the procurement agent
on behalf of Owner, on a competitive-bid basis from the lowest priced,
qualified, responsible provider, in accordance with the same bidding procedure
outlined in Article 3.2 hereof, all major items of construction materials
necessary for the Work. All anticipated purchases, rentals or other contracts
for material shall be described in the applicable Work Order or agreement for
Other Work and included in the appropriate budget for each. Contractor and its
Subcontractors will only purchase and install materials which conform to
Owner's specifications which will be included in the Work Order. For purposes
of economy, Contractor may enter into volume purchase agreements to purchase
major material items, such as fiber optic cable, conduit, manholes, handholes,
duct and innerduct, to be used in multiple projects provided that such volume
purchase agreements are competitively bid at reasonable intervals during the
Term but in no event less frequently than every 18 months. Any material
deviation from Owner's specifications included in the Work Order must be
approved in writing by Owner.
3.4.1. Notwithstanding anything herein to the contrary,
including but not limited to Article 4 hereof, Contractor shall order, as the
procurement agent on behalf of Owner, major material items limited to fiber
optic cable, manholes, duct, innerduct, handholes, and conduit only as
described in and budgeted for in an applicable Work Order or agreement for
Other Work. Contractor shall count all quantities toward its own volume
purchasing agreements with suppliers as appropriate. Contractor shall reimburse
to Owner as a credit, any such volume discounts for such materials received by
Contractor after billing. Owner shall receive all supplier warranties and
guarantees.
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3.4.2. Owner hereby reserves the right, at its sole
discretion, to purchase or provide directly any and all materials necessary for
the Work if deemed necessary by Owner due to its tax status, availability of
surplus material already owned, ordered, or purchased directly by Owner or the
Contractor's inability to secure the materials by the stated due date.
3.4.3. All materials purchases made hereunder, including
payments of Contractor's Fees shall be credited to the Aggregate Project Sum as
defined in Article 4. Notwithstanding the foregoing, the Contractor's fee shall
be reduced from twelve percent (12%) to six percent (6%) only for circumstances
where the Owner reserves the right to purchase material directly pursuant
Article 3.4.2 above. This reduction in Contractor's fee shall not apply
anywhere else in this Agreement. Further, materials moved from one Project to
another Project will not be subject to a second Contractor's Fee.
3.4.4. Contractor shall properly inspect, receive and handle
any materials ordered pursuant to this Article. For Engineering Services
Central Office Equipment projects, Contractor will be responsible for all
material handling and inventory control, will use off-site facilities for
warehousing services prior to the installation start date as designated by
Owner; and will minimize the amount of materials stored on site during the
implementation of the Project.
3.5 PERMITS AND FEES. As required by Owner and specified in the
Work Order, the Contractor shall secure on Owner's behalf and the Owner shall
pay for, as Reimbursable Costs, all permits and governmental fees, licenses and
inspections necessary for the proper execution and completion of the Work which
are customarily secured after execution of the Work Order and which are legally
required.
3.5.1. Where the local law at the site of the building
requires a Certificate or Statement of Occupancy, the Contractor shall obtain
and pay for such Certificate and deliver it to the Owner. Any costs for such
Certificate shall be treated as a Reimbursable Cost pursuant to Article 4
hereof.
3.5.2. Contractor shall not enter into or accept any license
agreement, joint-use agreement, ordinance, resolution, franchise, or other
agreement for the use of public or private right-of-way with any federal,
state, local, public or private entity for any Project without the written
approval of Owner it being agreed that Owner or its duly authorized
representation shall execute any such agreements. Contractor shall immediately
notify Owner if, or when, it discovers any such agreement is required.
3.6 PROGRESS AND PROCEDURE. The Contractor shall, unless otherwise
stated in a Work Order or agreement for Other Work, follow these procedures:
3.6.1. The Contractor will maintain current estimates of
costs and progress schedules. The Contractor shall furnish information
regarding availability of materials, when requested by the Owner, and furnish
any information to the Owner to assist in arriving at the most economical
construction.
3.6.2. The Contractor shall provide administrative,
management, and related services to coordinate scheduled activities and
responsibilities of the Subcontractors with each other and with those of the
Contractor, Owner, or others involved in the Project to use
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commercially reasonable efforts to manage each Project in accordance with the
approved estimate for costs, the Project schedule and the Contract Documents.
3.6.3. Utilizing the Project Schedule, the Contractor shall
update all schedules incorporating the activities of the Subcontractors and
others on the Project including activity sequences and durations, allocation of
labor and materials, processing of shop drawings, product data and samples, and
delivery of materials or equipment requiring long lead time and procurement.
The Project Schedule shall include the Owner's requirements and
responsibilities showing portions of the Project having priority. The
Contractor shall update and reissue each Project Schedule as required by Owner
to show current conditions and percentages of completion. The Contractor shall
keep a daily log containing a record of weather, each Subcontractor on the
site, number of workers, identification of equipment, Work accomplished,
problems encountered, and other similar relevant data as the Owner may require.
If an update indicates that the previously approved Project Schedule may not be
met, the Contractor shall immediately notify Owner and recommend corrective
action. The Contractor shall schedule and conduct meetings to discuss such
matters as progress and scheduling with Owner as set forth in the Work Order or
as requested by Owner.
3.6.4. Consistent with the various bidding documents,
Contract Documents and utilizing information from the Subcontractors, the
Contractor shall coordinate the sequence of construction and assignment of
space in areas where the Subcontractors are performing work.
3.6.4.1 The Contractor shall at all times enforce
strict discipline and good order among its employees and shall not employ on
any Project any person not skilled in the task assigned to him or her. The
Contractor shall be responsible to maintain and observe and to require its
Subcontractors to maintain and observe, sound labor and safety practices and
shall require each Subcontractor to take all steps reasonably necessary to
avoid labor disputes or work stoppages. For Engineering Services Central Office
Equipment projects, Contractor agrees to use personnel and Subcontractors who
have been certified in certain high skill procedures under Owner's mandatory
training program. The expense of obtaining such certification is to be paid by
the Subcontractor for Subcontractor's forces and as a Reimbursable Cost for
Contractor's personnel. Owner shall make such training available at a nominal
cost.
3.6.4.2 The Contractor shall coordinate and
supervise the Work performed by Subcontractors to the end that the Work is
carried out without conflict between trades or jurisdictional disputes and so
that no Subcontractor, at any time, causes delay to the general progress of a
Project. The Contractor and all Subcontractors shall at all times afford each
other Subcontractor, any separate (Sub)contractor, and the Owner, every
reasonable opportunity for the installation of work and the storage of
materials, and shall provide access to and the use of necessary loading dock
and hoist facilities, adequate storage room and necessary utilities and other
services. Wherever the work of a Subcontractor is dependent upon the work of
other Subcontractors, the Contractor shall require the Subcontractor to:
(a) coordinate his work with the
dependent work;
(b) provide necessary dependent data
and requirements;
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(c) supply and/or install items to be
built into dependent work of others;
(d) make provisions for dependent work
of others;
(e) examine dependent drawings and
specifications;
(f) examine previously placed dependent
work;
(g) check and verify dependent
dimensions of previously placed work;
(h) notify Contractor of previously
placed dependent work or dependent dimensions which
are unsatisfactory or will prevent a satisfactory
installation of this Work; and
(i) not proceed with this Work until
the unsatisfactory dependent condition has been
corrected.
3.6.4.3 The Contractor shall develop and implement
procedures for the review and processing of applications by Subcontractor for
progress and final payments.
3.6.4.4 Based on the Contractor's observations and
evaluations of each Subcontractor's application for payment, the Contractor
shall review, certify and pay the amounts due the respective Subcontractor.
3.6.5. The Contractor shall manage the performance of each
of the Subcontractors with all due diligence to ensure that the requirements of
the Contract Documents are met. The Contractor shall take appropriate action
against Subcontractor(s) when requirements of a Contract Document are not being
fulfilled and shall take commercially reasonable steps to assure compliance
with the Contract Documents.
3.7 CHANGES. The Owner may, at any time, by written change order
("Change Order"), make changes in the drawings, specifications, schedule or
other aspects of a Project. The Contractor may also, through the course of
performance of Work, recommend changes to the design, schedule or budget for
any Project for approval by Owner. Contractor will utilize commercially
reasonable efforts to minimize the effect on costs and schedules in
accommodating such change. The purpose of a Change Order is to provide control
in changes in Work, Project configuration, budget and/or schedules on a formal
basis. No changes shall be made to any Project without an appropriate Change
Order. All Change Orders shall be in the form attached hereto as EXHIBIT E and
executed by both Parties. The time and schedule for completion of the Project
affected shall be extended as reasonably required to complete the Work so
changed. If the changes desired change the Work contemplated including, but not
limited to: (a) changes in, substitutions for, additions to or deletions of any
Work; (b) changes in the specifications or drawings, (c) changes in the
schedule or acceleration, deceleration or suspension of performance of any
Work; and (d) substantial changes in the location, alignment, dimensions or
design of items in the Work and/or if the Owner requests the Contractor to
perform added Work outside the scope of such Project, then, prior to the
performance of such
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additional Work an equitable adjustment in the Project Schedule, Project Budget
and Project Staffing Plan will be negotiated by the Parties for such Work and
included in the applicable Change Order.
3.7.1. In the event the estimated costs of a Work Order or
agreement for Other Work exceed or are likely to exceed the total budget for
the Project or one hundred ten percent (110%) of the budget for any individual
budget line item, the Contractor will promptly notify Owner of such condition
so the appropriate action can be taken by Owner in response to the variance.
3.8 COMMENCEMENT AND COMPLETION OF WORK. The Contractor shall
commence Work on the commencement date reasonably set by Owner in the Work
Order and shall complete the Work and turn the Project over to the Owner (after
final inspection and testing) ready for acceptance by Owner no later than the
date specified for completion in the applicable Work Order, except as this date
may be changed pursuant to a Change Order or to delays beyond the reasonable
control of Contractor.
3.8.1. FINAL INSPECTION, TESTING AND ACCEPTANCE:
3.8.1.1 Upon completion of construction of any
Project hereunder, Contractor shall conduct acceptance testing, in accordance
with the requirements of the Work Order, to demonstrate that the Work has been
performed in accordance with the specification of the Work Order, including a
review of all Contract Documents, drawings, specifications and other related
documents. Owner reserves the right to attend and observe all final inspections
and testing. After completion of acceptance testing, Contractor shall forward
to Owner one copy of all test results for approval.
3.8.1.2 Upon completion of all Project requirements,
Contractor shall provide Owner with a Certificate of Completion that signifies
the Project is completed and shall assist the Owner with the final inspection
of the Project. Once the Owner has completed the final inspection and accepted
the test results and as-builts, Owner shall signify its final acceptance of the
Project by approving a Certificate of Completion in the form attached hereto as
EXHIBIT F.
3.8.1.3 The Certificate of Completion shall identify
all currently known and outstanding liabilities, charges, claims made by
Subcontractors and potential financial obligations that have not been resolved
at the time of final completion.
3.8.1.4 Notwithstanding anything to the contrary in
this Agreement, acceptance of any Work performed by Contractor for Owner
hereunder shall not affect the warranties set forth in Article 10 hereof.
3.9 AS-BUILT DRAWINGS. Drawings showing all facilities and
elements as built by Contractor for Owner for a Project ("As-Builts") shall
meet Owner specifications as set forth in the Work Order and shall be prepared
in a computerized format acceptable to Owner. Contractor shall turn over within
thirty (30) calendar days after completion of testing, two (2) hard copies and
one (1) soft electronic copy of the entire set of As-Builts for each Project.
For a period of three (3) years after Notice of Acceptance, Contractor will
also maintain a full set of
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As-Builts in both hard copy and soft electronic copy in its files for each
Project. Final acceptance of any Project shall be subject to Owner's acceptance
of As-Builts from Contractor.
3.10 SPECIFICATIONS AND STANDARDS. All Work for any Work Order or
agreement for Other Work performed hereunder shall be performed in addition to
all requirements and specifications set forth in the Work Order or agreement
for Other Work, in accordance with the requirements and specifications of the
National Electric Code, the National Electric Safety Code (both as they
currently exist or are amended) and any other requirements imposed by any
governmental authority or agency having jurisdiction.
3.11 LIEN WAIVERS. Unless otherwise prohibited by law, Contractor
will waive all rights to place any lien and will require all Subcontractors to
waive all rights to place any lien against the equipment, materials, or other
property used in a Project and shall provide a written statement in the
Contract Documents evidencing such waivers to Owner prior to the commencement
of any Work hereunder. Any failure by Contractor to secure such waivers which
are not otherwise prohibited by law, without the written consent of Owner shall
be promptly corrected at Contractor's expense. Contractor may, at its option,
correct by bonding over its failure to receive such waivers.
3.12 TIMING/DELAYS.
3.12.1. Time shall be of the essence for Owner and Contractor
in the performance of this Agreement.
3.12.2. It is specifically agreed that neither Contractor nor
Owner shall be held responsible or liable for any loss, damage, detention or
delay ("Loss"), arising from causes beyond the control and without the fault or
negligence of the Contractor or Owner, including but not limited to acts of
God, acts of the public enemy, acts of another contractor in the performance of
a contract with the Owner which is not performed pursuant to a Work Order
hereunder, fires, floods, epidemics, quarantine restrictions, strikes, freight
embargoes, or unusually severe weather or delays of Subcontractors or
suppliers. Contractor shall not be held responsible or liable for any Loss
resulting from suspension of Work by or acts or neglect of Owner. In the event
of such Loss, Contractor or Owner shall promptly give written notice to the
other Party and the time and/or cost for performance of each affected Project,
shall be adjusted by Change Order pursuant to Article 3.7 hereof.
3.13 CORRECTIVE ACTION PLAN. If Contractor consistently fails to
comply with any non-material provision of the Agreement, any Work Order or any
agreement for Other Work, Owner may, at its sole discretion and with sufficient
written description of the failure, direct that Contractor produce a corrective
action plan to remedy such failure within fifteen (15) days of receipt of such
request. In the event that such corrective action plan performed by Contractor
does not remedy such failure, Owner may escalate the issue in accordance with
the provisions of Article 8.2 of this Agreement.
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ARTICLE 4.
PAYMENT AND COSTS
4.1 PAYMENT. The Parties intend for this Agreement to be a "Cost
Plus" Agreement and that, except as otherwise provided herein, Contractor shall
not be obligated to incur any costs which will not be reimbursed by Owner as
set forth herein nor shall Contractor charge Owner any costs not directly
related to a Work Order. For each Work Order, the Owner shall pay the
Contractor the Project Sum, which shall be comprised of the reimbursable costs
("Reimbursable Costs") as defined below, and a fee ("Contractor's Fee"), which
shall be twelve percent (12%) of the total of the Reimbursable Costs for such
Project.
4.1.1. REIMBURSABLE COSTS. The Reimbursable Costs shall be
all actual direct costs necessarily incurred and paid by the Contractor for
Owner in the proper performance of the Work for a Work Order. Such Reimbursable
Costs allowable under this Agreement shall be the costs and expenses which are
actually incurred by the Contractor in the performance of a Project pursuant to
a Work Order hereunder. Reimbursable Costs shall include but shall not be
limited to all actual direct costs incurred by the Project office, Project
staff, and other items directly related to a specific Project performed
hereunder, including prorated costs for general liability, worker's
compensation and other insurance coverage required for Owner's Work which
insurance is carried at a corporate level by Contractor. Failure to mention any
item of Reimbursable Costs herein shall not bear upon a determination of its
allowability. All Reimbursable Costs must be documented and copies of invoices
including a detailed summary of charges shall be sent to Owner prior to the
making of any payment by Owner therefor.
4.1.1.1 LABOR AND LABOR-RELATED ITEMS.
(a) Labor cost shall be the actual
direct cost of Project staff, including salary or
wages, benefits, payroll insurance and payroll
taxes. The positions included as Reimbursable Cost
are limited to those positions listed in the Project
Staffing Plan. Other positions such as any corporate
office support staff and other corporate level
supervisory personnel are considered to be overhead
to the Project and are, therefore, explicitly not
Reimbursable Cost. Vacation, personal day pay,
holiday pay, sick leave pay, bonus and rest and
relaxation ("R&R") pay shall be charged as incurred.
Owner shall have the right on an annual basis and at
Owner's expense to conduct an independent audit of
Project timesheets and payroll records to determine
whether a materially disproportionate amount of
vacation pay, personal day pay, holiday pay, sick
leave pay, bonus and R&R pay is being charged to
Owner's Projects. In the event such an audit
discloses such a disproportionate charge, Owner
shall be entitled to an equitable adjustment to
charges for labor costs and associated Contractor's
Fees. If the disproportionate charge is three
percent (3%) or more than what should be charged to
Owner's projects hereunder then Contractor shall
reimburse Owner for the actual direct cost of such
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audit. Contractor agrees that during its normally
scheduled annual review process it shall determine
the average annual salary paid in the previous year
for its field employees. Contractor further agrees
that the change in salary or wages over a Contract
year shall not increase on a percentage basis more
than the percentage increase in the Consumer's Price
Index for all urban consumers (CPIU), unless such a
change in salary or wages is made in response to
remain competitive with any increase in salary and
wages or other remuneration for comparable personnel
in the marketplace. Owner will be provided with
written documentation prior to such increase
becoming effective. In the event the Contractor
desires to change salary or wages of its Project
Staff in excess of the CPIU percentage increase for
any Contract Year, then Contractor shall provide
notice and justification for such increase to Owner.
Owner shall promptly review such information and
shall not unreasonably withhold its consent to such
request. Bonus amounts paid to Contractor employees
assigned to Owner's Projects will be consistent with
Bonus amounts paid to all of Contractor's employees
in comparable positions.
(b) Cost of Living Adjustment ("COLA")
applied to labor costs where applicable will be
consistent with Contractor's policy set forth in
EXHIBIT G.
(c) The cost of moving supervisory and
administrative employees who are assigned to the
Work for a specific Project from their last place of
employment in accordance with the Contractor's
current moving policy which is attached hereto and
incorporated herein as part of EXHIBIT G shall be a
Reimbursable Cost. Owner shall not pay relocation
costs for the movement of any Contractor employee
from Owner's Project Site. However, Owner shall pay
the costs of demobilization for a Project if the
project is canceled or substantially reduced in
scope prior to completion.
(d) Travel Expenses in connection with
the following shall be reimbursable costs:
(i) Trips included in
Contractor's current R&R policy attached
hereto and incorporated herein as part of
EXHIBIT G;
(ii) Trips to various
fabricating plants, Subcontractor or
material supplier locations to inspect
their facilities and/or financial condition
in regard to the Work on a Project which
Work is approved by Owner via a Work Order
and trips to various fabricating plants,
Subcontractor
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or material supplier locations to inspect
the progress of the Work being prepared for
a Project and to consult on methods of
fabrication, shipment, etc.;
(iii) Trips for Project
Management Staff for training purposes
including training courses, Project
Management Meetings to be held not more
often than once per calendar quarter not to
exceed One Hundred Fifty Thousand Dollars
($150,000.00) per Contract Year provided
such training is directly related to the
improvement of the Project Management
Staff's skills in the performance of Work
for Owner's Projects; and/or
(iv) Trips conducted as part of
the relocation provisions of Article
4.1.1.1(b) above.
(e) In order to reduce the number of
personnel assigned to the job site or to expedite
the performance of the Work hereunder, Contractor
may, as agreed to and stated in the applicable Work
Order, perform off-job site engineering, drafting
clerical and/or accounting work, in which case the
costs of such Work shall be charged to the Project
based on actual labor costs marked up by the
percentages in EXHIBIT D, supported by time cards,
expense reports, and expense vouchers. These charges
shall be considered Reimbursable Costs as defined in
Article 4.
4.1.1.2 MATERIALS AND MATERIAL-RELATED ITEMS.
Reimbursable materials and material-related items shall include:
(a) The cost of all permanent
materials, equipment and supplies directly related
to a Work Order. Credit shall be given the Owner for
all trade or quantity discounts obtained from
vendors by Contractor for the purchase of materials,
equipment or supplies for a Project.
(b) The actual cost of all temporary
and other expendable services, materials and
supplies, including, fuel, oil and grease, which are
normally consumed in performance of the Work. Any
such expendable materials and supplies for which the
Contractor has been reimbursed by the Owner and
which remain after completion of the Work will be
disposed of as directed by the Owner.
(c) The cost of all necessary
inspections, tests, loading, handling, permits,
transportation and insurance of whatever character
or description paid by the Contractor for materials
and supplies used in the construction of a Project.
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(d) All materials, equipment
and supplies shall be delivered, handled,
stored, installed protected and disposed of
in such a manner to prevent damage in
accordance with current practice in the
industry, in accordance with manufacturer's
specifications and recommendations, in
accordance with the Work Order requirements
and in accordance with all laws. The
Contractor will haul and store packaged
materials and equipment in their original
and sealed containers, marked with the brand
and manufacturer's name, until ready for
use, and haul and deliver such materials and
equipment in ample time to facilitate
inspections and tests prior to installation.
The "delivery" in reference to any item
specified or indicated means the unloading
and storing with proper protection at the
Project site. Damaged materials or equipment
will be rejected and removed from the site
by the Contractor.
4.1.1.3 EQUIPMENT AND EQUIPMENT RELATED
ITEMS. Reimbursable equipment and equipment-related items shall include:
The cost of rental of all equipment
including but not limited to vehicles required for the Work. The cost of rental
of equipment charged to Owner for equipment owned by the Contractor for a
Project shall be consistent with the current market rate for renting or leasing
similar items from nationally recognized third party rental companies. The cost
of rental of equipment charged to Owner for use by Contractor from third parties
shall be the actual rental rate charged. The actual rental rate for the
equipment shall be consistent with the current market rates for renting or
leasing similar items from a nationally recognized third party rental company.
As part of any Work Order or agreement for Other Work, the Contractor shall
prepare a utilization chart listing all equipment to be used on the Project,
together with the corresponding fully maintained (excluding consumable items
such as oil, grease and fuel) rental rates for such equipment, and submit same
to the Owner for its approval.
4.1.1.4 MISCELLANEOUS. Reimbursable
miscellaneous items shall include:
(a) For any Contractor Project
office supporting more than one Project or
in conjunction with a third party's project,
direct actual costs for such Project office
shall be prorated to each Project or project
based on a methodology specified in the Work
Order.
(b) The budgeted fees of any
consultants engaged in a professional
capacity pursuant to a Work Order.
(c) Losses and expenses, not
compensated by insurance or otherwise and
actual, direct costs associated with the
recovery or collection of such Losses and
expenses, including but not limited to the
deductible amount of any insurance required
by Article 7 sustained by the Contractor in
connection with the Work
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provided they have resulted from causes
other than the fault or negligence of the
Contractor, its Subcontractors, agents or
employees.
(d) All federal, state and
local sales taxes, use taxes, excise taxes,
personal property taxes or special
assessments, except taxes on Contractor's
income, in connection with the Work or
materials to be performed pursuant to a Work
Order or agreement for Other Work.
(e) Such other items properly
chargeable to the cost of the Project to
which Owner and Contractor have previously
agreed to as part of an executed Work Order.
4.2 COST CONTROL. The Contractor recognizes the
relationship of trust and confidence established between it and the Owner by
this Agreement and agrees to furnish its best skill and judgment and to
cooperate with the Owner. Contractor agrees to furnish efficient business
administration and superintendence, and to use commercially reasonable efforts
to minimize expense to the Owner, to keep upon the location for each Project at
all times an adequate supply of qualified workers as specified in the Project
Staffing Plan, tools, equipment and materials and to promote the progress of the
work in the most expeditious and economical manner consistent with the interests
of the Owner.
4.3 MOST FAVORED NATION. The cost basis for labor and
associated cost items and equipment rental rates charged to Owner under this
Agreement or any Work Order or agreement for Other Work (except for charges by
Subcontractors or other third parties not employees of Contractor, or any
Self-Performed Work) shall be no greater than the lowest cost basis charged for
similar work or services to other customers (including Contractor's subsidiaries
and affiliates) of Contractor. Owner shall have the right to audit Contractor's
records periodically to ensure compliance with this Article 4.3.
4.4 INDEPENDENT CONTRACTOR. It is the intention of this
Agreement that the Contractor shall be and remain an independent contractor and
nothing herein is intended to be construed as inconsistent with that status.
Contractor and Owner, expressly intending that no employment, partnership, or
joint venture relationship is created by this Agreement, hereby agree as
follows:
(a) Contractor shall act at all times as an
independent contractor hereunder;
(b) Neither Contractor nor anyone employed by or
acting for or on behalf of Contractor shall ever be construed
as an employee of Owner and Owner shall not be liable for
employment or withholding taxes respecting Contractor or any
employee of Contractor;
(c) Except as otherwise provided herein,
Contractor shall determine when, where and how Contractor
shall perform the Work;
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(d) Contractor shall take all steps to ensure
that Contractor and Contractor's employees are treated as
independent contractors of Owner;
(e) Owner shall have the right to conduct
inspections and reviews of, and determine satisfactory
performance of, the Contractor's services;
(f) Contractor shall provide Contractor's own
materials, tools and equipment in performing the services;
(g) Contractor shall, as an allocated cost,
maintain workers compensation insurance for Contractor and for
all others employed by or acting for or on behalf of
Contractor only to the extent and in the amounts required by
law;
(h) Contractor shall be free to contract with,
and provide Contractor's services to, Parties other than Owner
during the term of this Agreement, subject to the
confidentiality restrictions delineated herein;
(i) Contractor shall not make any commitment or
incur any charge or expense in the name of Owner without the
prior written approval of Owner; and
(j) Contractor, for Contractor and for anyone
claiming through Contractor, waives any and all rights to any
consideration, compensation or benefits, except as provided
for herein.
4.5 ACCOUNTING SYSTEM. The Contractor shall keep accurate
and detailed books of account for all Work performed for each Project for the
duration of this Agreement, and for a period of five (5) years after completion
of each project, at its offices in Omaha, Nebraska or Atlanta, Georgia, open to
the inspection of the Owner at reasonable times and frequency during Contractors
regular business hours to verify all Reimbursable Costs, and Contractor's Fees
due to Contractor hereunder. Contractor shall make its books and records
available at Owner's election, to an independent certified public accountant
reasonably acceptable to Contractor for the purpose of auditing the Reimbursable
Cost including the labor burden factors as shown on EXHIBIT D, and Contractor's
Fees. Contractor shall keep such full and detailed accounts and Project costs as
may be necessary for proper financial management by the Contractor under this
Agreement in a manner and pursuant to methods which are reasonably satisfactory
to the Owner. Owner shall have the right to request other reports as are deemed
necessary by Owner and Contractor shall comply with such request. Owner shall be
responsible for and shall reimburse Contractor for any direct costs associated
with such requested reports. The Contractor shall also monitor the approved cost
estimate for each Project and shall show actual costs for activities in progress
and estimates for uncompleted tasks by way of comparison with such approved
estimate. In the event the results of any audit show Contractor's costs to be in
error to the material detriment of Owner, Contractor shall credit to Owner any
such differentials and Contractor shall also reimburse Owner for the costs of
the audit.
Contractor shall at all times act in good faith and to the
best advantage of the Owner in the purchase of materials, in the employment of
labor, and in all its conduct and activities relative to any work on Projects
performed pursuant to this Agreement.
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4.6 PROGRESS PAYMENT. As soon as is possible after the
first of each month, the Contractor shall submit to the designated office of the
Owner an application for payment for the Work performed for each Project in the
preceding month less any retainage held for Contractor's Subcontractors.
Contractor may, subject to approval of Owner, submit an aggregate progress
payment application for Projects or a separate application for each Project, but
in any event, costs for each Project shall be separately stated.
4.6.1. Monthly payments to the Contractor for the
Work performed to such date will be made within thirty (30) days after receipt
of each invoice by the Owner. Such applications for payment shall be submitted,
in a form satisfactory to the Owner which form is attached hereto as EXHIBIT J
and shall be accompanied by documentation of all Reimbursable Costs including
but not limited to weekly payrolls and time sheets, showing the amounts paid to
each worker or employee, and allocation of each employee's time to the Project
and bills for materials delivered to each Project site and payments made or due
to Subcontractors. Contractor and Owner shall use commercially reasonable
efforts to resolve any disputed items within five (5) business days after the
payment due date. Any disputes not resolved within this time frame shall be
handled in accordance with Article 8.2 hereof. Owner may withhold payment for
any disputed items until all such issues relating thereto are resolved, but
shall pay all undisputed amounts promptly in accordance with the provisions of
this Agreement. Owner shall act in good faith and not in an arbitrary or
capricious manner in disputing any amount. The basis for disputed amounts shall
be documented to Contractor. As used in this Article 4.6.1, "amount" shall be
defined as a specific line item or items in a relevant invoice, not the total
amount of the invoice, unless all line items in the invoice are reasonably
disputed. Monthly payments to the Contractor shall, in addition to payment for
Reimbursable Costs for Work Performed, include the Contractor's Fee to be paid
to the Contractor for such Work performed in the applicable month.
Notwithstanding the foregoing, until such time as Contractor's Current Ratio of
current assets to current liabilities is 1.7:1 or its Quick Ratio (defined as
cash, cash equivalents and receivables divided by current liabilities) is 1:1,
Owner agrees to make Progress Payments, that would otherwise be due monthly
under this Article 4.6.1, such that eighty percent (80%) of Contractor's
approved application for payment shall be paid upon presentation of the
documentation required hereunder and the balance as set forth above.
4.6.2. The Contractor's application for payment
shall constitute a representation to the Owner, based on its determinations at
the Project site, that to the best of the Contractor's knowledge, information
and belief, the Work has progressed to the point indicated and the quality of
the Work is in accordance with the Work Order. The foregoing representations are
subject to an evaluation of the Work for conformance with the Work Order upon
substantial completion, the results of subsequent tests and inspections, to
minor deviations from the Work Order correctable prior to acceptance.
4.6.3. ADVANCES. At Owner's sole discretion, in
order to facilitate Contractor's performance of the Work on Owner's Projects,
Owner may make non-interest bearing advances ("MSA Advances") to be applied to
payment for Work to be performed hereunder. Subject to consents required from
Sureties, if any, Owner shall have the right to deduct MSA Advances from any
Progress Payments upon ninety (90) days notice to Contractor.
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4.7 LATE PAYMENT. Any payment not made by Owner to
Contractor within forty-five (45) days after the date of invoice shall bear
interest on a monthly basis from the date due until the date paid at the rate of
the sum of the prime rate then current as published in the Wall Street Journal
plus four percent (4%) divided by twelve (12). Any payment not made by Owner to
Contractor with ninety (90) days after the date of the invoice shall bear
interest on a monthly basis beginning on the 90th day at the rate of the sum of
the prime rate then current as published in the Wall Street Journal plus eight
percent (8%) divided by twelve (12) but in no event shall this amount be greater
than the maximum interest amount allowed by applicable laws. Payment shall be
deemed made on the date received by Contractor. Owner shall also pay
Contractor's actual costs incurred for collection of any late payment or fees
due hereunder, including reasonable attorneys' fees. Interest or collection
costs paid hereunder shall not be applied to the Aggregate Project Sum. Any
failure by Owner to make payments when due within ninety (90) days of the date
of invoice three (3) or more times during each Contract Year may be an Event of
Default pursuant Article 8 hereof.
4.8 ANNUAL AND AGGREGATE PROJECT SUM. Owner hereby agrees
to execute sufficient Work Orders and agreements for Other Work with Contractor
under this Agreement so that the Annual Project Sum shall total no less than
Fifty-Five Million Dollars ($55,000,000.00) per Contract Year and the Aggregate
Project Sum shall total no less than Three Hundred Ninety Million Dollars
($390,000,000.00) during the Term. The Annual Project Sum shall be defined as
the sum of all payments due by Owner to Contractor for Work actually performed
by Contractor during a Contract Year including Reimbursable Costs and
Contractor's Fees for each Project (hereinafter "Annual Project Sum"). The
Aggregate Project Sum shall be defined the sum of all payments paid or due by
Owner to Contractor for Work actually performed by Contractor hereunder
including Reimbursable Costs and Contractor's Fee for each Project (hereinafter
"Aggregate Project Sum") for all Work Orders and agreements for Other Work
executed during the Term. Both the Annual Project Sum and the Aggregate Project
Sum shall include any Contractor's Fee Trueup amounts as set forth in Article
4.10. Contractor releases Owner from any annual and aggregate requirements, and
minimum percentage volume requirements in effect prior to August 24, 2000.
4.9 COMMITMENT FULFILLED. Owner and Contractor agree that
Owner shall have met the Annual Project Sum commitment when the total Annual
Project Sum is Fifty-Five Million Dollars ($55,000,000.00). Owner and Contractor
agree that Owner shall have met the Aggregate Project Sum Commitment when the
total Aggregate Project Sum is Three Hundred Ninety Million Dollars
($390,000,000.00) at the end of the Term. Notwithstanding the foregoing, Owner
will have a continuing obligation to provide Minimum Local Network Percentage
pursuant to Article 2.4.2. The Parties agree that the Aggregate Project Sum and
the Annual Project Sum for applicable Contract Years shall include all amounts
for Work performed by Contractor subsequent to August 24, 2000.
4.10 CONTRACTOR'S FEE TRUEUP. In the event Owner fails to
execute Work Orders or commitments for Other Work sufficient to reach the Annual
Project Sum or the Aggregate Project Sum, upon expiration of the Contract Year
or Term, as appropriate, Owner shall pay Contractor, in addition to all other
sums due by Owner to Contractor hereunder the "Contractor's Fee Trueup", which
shall be computed as follows:
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4.10.1. Revenue Shortfall
(a) Annual Project Sum commitment minus
all amounts paid, invoiced or otherwise due by Owner
to Contractor for completed portions of Work Orders
and/or agreements for Other Work during a Contract
Year; and/or
(b) Aggregate Project Sum commitment
minus all amounts paid, invoiced or otherwise due by
Owner to Contractor during the Term minus any amounts
for Work in progress at the end of the Term which
Work is performed and payment is made or due within
twelve (12) months after the end of the Term.
(c) For purposes of computing Revenue
Shortfall, Revenue Shortfall shall equal X, and
Contractor's Fee Trueup shall equal .12X.
4.10.3. The Contractor's Fee Trueup due for each
Contract Year, if any, shall be due within forty-five (45) days after the date
of invoice and late payments shall be treated in accordance with Article 4.7. An
estimated final Contractor's Fee Trueup, if any, shall be due at the end of the
Term within forty-five (45) days after the date of invoice and late payments
shall be treated in accordance with Article 4.7. The final Contractor's Fee
Trueup, if any, shall be invoiced twelve (12) months after the completion of the
Term and shall also be treated in accordance with Article 4.7. The amount of any
Trueup payment shall be reduced by the amount of any unpaid MSA Advance.
ARTICLE 5.
OWNER'S RESPONSIBILITIES
5.1 AUTHORIZED REPRESENTATIVE. The Owner shall designate
a representative authorized to act on the Owner's behalf with respect to each
Project. The Owner, or such authorized representative, shall render decisions in
a timely manner pertaining to documents submitted by the Contractor in order to
avoid unreasonable delay in the orderly and sequential progress of the Work.
5.2 PROVISION OF DATA. Owner shall provide any and all
relevant plans, specifications, facts and other data to the Contractor as agreed
to in the Work Order promptly upon request of Contractor to enable the
Contractor to complete the Work by the completion date specified in the Work
Order.
5.3 OWNER'S OWN FORCES. The Owner reserves the right to
perform construction and operations related to a Project with Owner's own
forces, and to award Contracts in connection with the Project which are not part
of the Contractor's responsibilities pursuant to a Work Order. Owner will notify
Contractor in writing of such election. The Contractor shall notify the Owner if
any such independent action will interfere with the Contractor's
responsibilities under this Agreement and Owner agrees to cooperate reasonably
with Contractor and all Subcontractors.
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5.4 PROMPT REPLY. Information or services under the
Owner's control shall be furnished by the Owner with reasonable promptness to
avoid delay in the orderly progress of the Contractor's services and the
progress of the Work.
5.5 FAILURE TO PROVIDE INFORMATION. If Owner fails to
provide in a timely manner any information or services necessary to the progress
of a Project or makes an election under Article 5.3, Contractor shall be
entitled to an equitable adjustment, by way of a Change Order, in the budget and
schedule for such project.
ARTICLE 6.
OWNER'S AND CONTRACTOR'S REPRESENTATIONS
6.1 CONTRACTOR REPRESENTATIONS AND COVENANTS. Contractor
represents to and covenants with Owner as follows:
(a) Contractor is duly organized and validly
existing and Contractor has the authority to execute this
Agreement and has access to sufficient personnel and expertise
to perform its obligations hereunder;
(b) Contractor will use its commercially
reasonable efforts, in good faith, to keep all required
authorities in full force and effect during the Term and to
obtain any additional authorities, permissions or
certifications which may be required in connection with this
Agreement; and
(c) There are no pending, or to Contractor's
knowledge threatened, claims, actions, suits, audits,
investigations or proceedings by or against Contractor which
would have a material adverse effect on Contractor's
performance under or ability to comply with this Agreement.
6.2 OWNER REPRESENTATIONS AND COVENANTS. Owner represents
to and covenants with Contractor as follows:
(a) Owner is duly organized and validly existing
and Owner has the authority to execute this Agreement and
perform its obligations hereunder;
(b) Owner will use its commercially reasonable
efforts, in good faith, to keep all required authorizations in
full force and effect during the Term and to obtain any
additional authorizations, permissions or certifications which
may be required in connection with this Agreement; and
(c) Other than as set forth in Contractor's
filings with the SEC, there are no pending, or to Owner's
knowledge threatened, claims, actions, suits, audits,
investigations or proceedings by or against Owner which would
have a material adverse effect on Owner's performance under or
ability to comply with this Agreement.
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ARTICLE 7.
INSURANCE AND BONDS
Prior to commencement of any Work for any Project hereunder,
Contractor shall procure and maintain, with insurers reasonably acceptable to
the Owner, the following insurance protecting the Owner, Contractor and all
other Parties required by the Owner against liability from damages because of
injuries, including death, to persons, and liability for damages to property
arising from Contractor's operations, including its employees, agents,
Subcontractors and suppliers operations, in connection with the performance of
this Agreement. This insurance shall be kept in good standing during the term of
this Agreement. Owner reserves the right to have an Owner-controlled Insurance
Program for all Work performed by Contractor and Contractor agrees to cooperate
reasonably with such efforts. Additional insurance requirements, if any,
required by third parties shall be set forth in the applicable Work Order or
agreement for Other Work. The cost of insurance (including co-insurance and
deductibles paid) shall be a Reimbursable Cost hereunder and coverage for the
Projects shall be provided as follows:
7.1 WORKER'S COMPENSATION AND EMPLOYER'S LIABILITY.
Contractor shall procure and maintain Worker's Compensation insurance complying
with the laws of the state or states of operation, whether or not such coverage
is required by law, and Employer's Liability insurance with limits of $1,000,000
each accident, including occupational disease coverage with a limit of
$1,000,000 each employee and $1,000,000 disease policy limit. If Work is to be
performed in Nevada, North Dakota, Ohio, Wyoming, Washington or West Virginia,
Contractor will purchase Worker's Compensation in the State Fund established in
the respective States. Stop Gap Coverage or Employers Overhead coverage will be
purchased by Contractor.
7.2 WATER OPERATIONS. When any Work Order calls for water
operations, Contractor shall procure and maintain Longshoreman's and Harbor
Worker's Compensation insurance, Jones Act, and Maritime Coverage providing for
transportation, wages, maintenance and cure, with the limits of $500,000 each
employee ($500,000 more than one employee, shall be included). An endorsement
shall be attached evidencing that a claim "in rem" shall be treated as a claim
against the employer.
7.3 COMMERCIAL GENERAL LIABILITY. Contractor shall
procure and maintain Commercial General Liability insurance with a combined
single limit for bodily injury and property damage of $2,000,000 each occurrence
and $4,000,000 annual aggregate. Annual aggregate shall apply on a per Project
basis. Such policy shall include coverage for all operations of Contractor,
including products and completed operations coverage, blanket contractual
liability and independent contractor coverage, and will be endorsed to delete
exclusion for work, construction or demolition within 50 feet of railroad
trackage. This policy shall include no modifications that reduce the standard
coverages provided under a Commercial Guaranty Liability policy form.
7.4 BUSINESS AUTOMOBILE LIABILITY. Contractor shall
procure and maintain Business Automobile Liability insurance with a combined
single bodily injury and
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property damage single limit of $2,000,000 each occurrence. This policy shall
include coverage for owned, non-owned, and hired vehicles.
7.5 VESSELS OR BARGES. When vessel(s) or barge(s) are
used by the Contractor for the performance of Work, Contractor shall procure and
maintain protection and indemnity, collision and towers liability insurance if
applicable, on such vessel(s) or barge(s) both owned and non-owned, in a single
limit of not less than $5,000,000 or the value of the vessel(s) or barge(s),
whichever is greater, shall be provided.
When vessel or barges are used, the Contractor will provide
hull insurance in amounts to the full value of the vessel(s) or barge(s) owned
and/or operated by or for the Contractor.
7.6 DIVING OPERATIONS. In the event Contractor conducts
diving operations, with the divers who are employees, agents or servants of
Contractor, from Owner's vessels, Contractor's vessels or any other marine
equipment, they shall only do so at the express written request of the Owner
Representative. Contractor agrees to indemnify and save Owner harmless from any
liability, loss, cost or damage, including cost of defense, arising from or
connected with such diving operations.
Seaworthiness of Owner's vessel(s) used herein for such diving
operations is acknowledged and agreed to by Contractor, and neither Contractor
nor its insurance carrier shall contest this.
7.7 AIRCRAFT LIABILITY. When aircraft is used by the
Contractor for performance of the Work, the Contractor shall procure and
maintain Aircraft Liability insurance on both owned and non-owned aircraft,
including helicopters, with combined single limit of $1,000,000 per seat for
bodily injury and property damage, including passenger legal liability.
When any aircraft is used by the Contractor for the
performance of the Work, Aircraft Hull insurance in amounts to the full value of
each aircraft will be maintained by the Contractor on such aircraft owned and/or
operated by or for the Contractor.
7.8 BUILDER'S RISK. As requested by Owner, Contractor
shall procure and maintain during the term of a Work Order or an agreement for
Other Work, an all risk builders' risk insurance policy protecting the Owner,
Contractor and all Subcontractors, as their interests may appear, from loss due
to damage to the Work or to any equipment supplies or material including any
such items directly provided by Owner pursuant to Article 4 hereof going into
the Work, while at the Project site, or while in transit to or from the Project
site. The limit of liability of this insurance shall be no less than the greater
of the value of the Project after the Work has been performed or the approved
Project Budget estimate in the applicable Work Order per occurrence and shall
contain a deductible of no more than $500,000 per occurrence. If coverage is
requested by Owner, cost for builder's risk insurance shall be a Reimbursable
Cost.
7.9 ERRORS AND OMISSIONS. If requested in writing by
Owner, Contractor shall procure and maintain during the term of a Work Order or
agreement for Other Work insurance against the errors or omissions of Contractor
or any of Contractor's employees, agents or subcontractors performing Work
hereunder with limits satisfactory to Owner. If
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coverage is requested by Owner, cost for Errors and Omissions insurance shall be
a Reimbursable Cost. If coverage is written on a "claims made" basis, all
renewals during the life of this Agreement will include "prior acts coverage."
7.10 RAILROAD PROTECTIVE. If requested in writing by
Owner, Contractor shall procure and maintain during the term of a Work Order or
agreement for Other Work, Railroad Protective Insurance protecting Owner,
Contractor and Subcontractor and in such limits as specified in the applicable
Work Order.
7.11 UMBRELLA EXCESS LIABILITY. Contractor shall procure
and maintain Umbrella or Excess Liability Insurance applying in excess of
Articles 7.1 through 7.10 above subject to a limit of $5,000,000. The
maintenance of insurance by the Contractor and the limits of coverage required
shall in no way limit or affect the extent of the Contractor's liability. Limits
required above may be obtained through various primary and umbrella structures.
7.12 INSURANCE REQUIRED OF SUBCONTRACTORS. Except as may
be waived or modified by Owner in writing, the Contractor shall require all
Subcontractors to provide and maintain the insurance required above subject to
all requirements set forth in this Article 7, provided however, that Builder's
Risk, Errors and Omissions, Railroad Protective, Owners Contractors Protective
Liability and Contractors Pollution Liability insurance shall only be required
of Subcontractors if requested by Owner as part of the Work Order agreement for
Other Work or if required pursuant to Article 3.5 hereof. Contractor and Owner
shall be listed as additional insureds on Subcontractor's policies. Owner's
approval of any Subcontractor shall be conditioned upon a Subcontractor having
the required insurance coverage. Except as may be waived or modified by Owner in
writing, each Subcontractor shall also require its subcontractors, if any, to
provide and maintain insurance as required above.
7.13 ADDITIONAL INSURED. Owner shall be listed as an
additional insured on Contractor's and Subcontractor's policies. Contractor
hereby waives its right, and agrees to require its underwriter and any and all
Subcontractors to waive all such rights, of subrogation against Owner, its
officers, directors, agents, and employees thereof, and corporate shareholders
and officers, directors, agents and employees thereof. Such waiver shall also
extend to all companies and other legal entities that control, are controlled
by, are subsidiaries of, or are affiliated with Owner (each an "Affiliate"), and
the respective officers, directors, agents, employees and shareholders of such
companies or entities. Contractor's insurance is understood to be primary as
respects the interest of additional insureds.
7.13.1. Neither Owner or its Affiliates shall be
required to insure or be responsible for any loss or damage to property of any
kind owned or leased by Contractor or its employees, servants, and agents. Any
policy of insurance covering the property owned or leased by Contractor against
loss by physical damage shall provide that the underwriters have given their
permission to waive their rights of subrogation against Owner, its Affiliates
and their directors, officers, and employees, as well as their subsidiaries and
affiliates, including directors, officers, and employees thereof.
7.14 EVIDENCE OF COVERAGE. Certificates of insurance or
certified copies of the insurance policies will be provided to the Owner prior
to Contractor beginning any Work
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under this Agreement. Such certificate shall contain a provision that the
insurer will give the Owner at least thirty (30) days prior written notice of
any material changes, reductions, non-renewal or cancellation of the coverage.
Contractor shall obtain certificates from its Subcontractor(s) and deliver them
to Owner, if requested to do so. In the event of any failure by Contractor to
comply with the provisions of this paragraph, Owner may, at its option on notice
to Contractor, suspend the affected Work Orders or agreement for Other Work
until there is full compliance with this paragraph or contract for such
insurance at Contractor's expense.
7.15 BONDS. A payment bond from the Contractor shall be
required for each Work Order executed hereunder. The cost shall be a
Reimbursable Cost of the Project, and such bond shall be delivered to the Owner
prior to the performance of any Work. The amount of each bond shall be set by
Owner but in no event shall such amount exceed the amount of the Work Order. The
Owner may waive this bond requirement or, if a bond cannot be obtained for a
Work Order, require a letter of credit or other form of security as an
alternative in its sole discretion for any Work Order performed hereunder. In
lieu of individual bonds for each Project, Contractor and Owner may mutually
agree to elect to provide Owner a blanket payment bond in a face amount to be
determined.
7.15.1. Unless and only if Owner waives in writing
the requirement of Article 7.15 for a bond, the Contractor will require payment
bonds of all Subcontractors. Upon Owner's request, copies of all such bonds
shall be provided to Owner for review. The costs of such bonds shall be included
in the Subcontractor's bid price and as such are a Reimbursable Cost. In the
event that Owner waives this requirement for a bond from a Subcontractor, Owner
shall be responsible for any payment default of such unbonded Subcontractor
which is not otherwise cured by legal or equitable remedies.
ARTICLE 8.
DEFAULT AND TERMINATION
8.1 DEFAULT. The following events shall constitute an
Event of Default hereunder.
8.1.1 CONTRACTOR DEFAULT. The Contractor shall be
in default of the Agreement if:
8.1.1.1 Contractor becomes insolvent, is
adjudged a bankrupt, or makes a general assignment for the benefit of its
creditors, or becomes a subject of any proceeding (voluntary or involuntary)
commenced under any statute or law for the relief of debtors, or a receiver,
trustee or liquidator of any of the property or income of Contractor shall be
appointed which judgment, assignment, proceeding or receivership is not
dismissed or discharged within ninety (90) days of the date of notice thereof.
8.1.1.2 Contractor refuses or fails to
prosecute the Work in accordance with the Work Order or agreement for Other
Work, or this Agreement in any material respect; or
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8.1.1.3 Contractor fails in any material
respect to observe any other terms, provisions, conditions, covenants,
representations, warranties or agreements in this Agreement, any Work Order or
any agreement for Other Work to be observed and performed on the part of the
Contractor ("Material Default"). A Material Default under Articles 8.1.1.2 and
8.1.1.3 may include but is not limited to the following:
(a) Failure by Contractor to
make proper payment to Subcontractors or
others for undisputed amounts due for
services, materials or labor (provided Owner
shall have paid to Contractor any payments
for such Work for which payment is demanded
by Subcontractor); or
(b) Failure by Contractor to
comply with laws, ordinances, rules and
regulations or orders of any public
authority having jurisdiction of which
Contractor has or should have knowledge
after making reasonably diligent inquiries
and except as directed by Owner and which
failure has a material adverse effect on a
Project; or
(c) Failure to use
commercially reasonable efforts to prosecute
the Work in compliance with the budget or
scheduling requirements, set forth in a Work
Order or agreement for Other Work subject to
any equitable adjustments in the budget or
schedule as provided herein; or
(d) Failure to correct any
incomplete or unacceptable items during any
final inspection and testing which failure
has a materially adverse effect on the
Project.
8.1.2 OWNER'S REMEDIES. Owner shall notify
Contractor in writing when Contractor has committed an Event of Default as
defined in Article 8.1.1 and its subsection ("Default Letter"). If, thirty (30)
calendar days after the date of the Default Letter, Owner believes that
Contractor has not cured the Event of Default or that Contractor has not made
good faith efforts to cure the Event of Default, Owner may send Contractor
written notification of such failures ("Failure to Cure Letter"). Owner may then
resort to the remedies available in Articles 8.1.2.1, 8.1.2.2 and/or 8.1.2.3,
unless Contractor provides written notification to Owner within fifteen (15)
days of the date of the Failure to Cure Letter that Contractor disputes the
assertions in the Failure to Cure Letter ("Dispute Letter"). If Contractor
provides a timely Dispute Letter, Owner shall submit the dispute to arbitration
pursuant to Article 8.2.2 of this Agreement. Upon determination by the
arbitrator that an Event of Default has not been corrected or that Contractor
has not used good faith efforts to cure such Event of Default, such default
shall be considered "a strike" for purposes of Article 8.1.3 and Owner may
without prejudice to any other right or remedy:
8.1.2.1 With or without terminating a Work
Order or agreement for Other Work, take over and/or subcontract such Work or any
portion thereof and furnish such materials and/or employ such workers as may be
necessary to remedy the noncompliance.
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Notwithstanding the foregoing, all costs expended by Owner hereunder, including
the value of the Contractor's Fee applicable thereto, shall be applied to the
Annual Project Sum and Aggregate Project Sum;
8.1.2.2 Terminate the Work Order for the
Project in default and/or agreement for Other Work in default, and have only the
obligation to pay Contractor payments due for portions of Work completed
pursuant to the requirements set forth in the applicable Work Order or
agreements for Other Work up to the date of termination; and/or
8.1.2.3 Make a claim against Contractor's
or Subcontractor's bond or other security.
8.1.3 CONTRACTOR'S THREE STRIKES. Owner's right to
terminate the Agreement may be exercised only if Contractor is insolvent and is
petitioned into bankruptcy; or Contractor commits three (3) Events of Default
pursuant to Article 8.1.1 and its subsections.
8.1.4 OWNER DEFAULT. The Owner shall be in
default of the Agreement if:
8.1.4.1 Owner fails to make any payment due
to Contractor hereunder three (3) or more times during a Contract Year within
ninety (90) days after the date of invoice, unless such nonpayment is the
subject of a good faith dispute; or
8.1.4.2 Owner becomes insolvent, is
adjudged a bankrupt, or makes a general assignment for the benefit of creditors,
or becomes the subject of any proceeding (voluntary or involuntary) commenced
under any statute or law for the relief of debtors, or a receiver, trustee or
liquidator of any of the property or income of Contractor shall be appointed,
which judgment, assignment, proceeding or receivership is not dismissed or
discharged within ninety (90) days of the date of notice thereof.
8.1.5 CONTRACTOR'S REMEDIES. Contractor shall
notify Owner in writing when Owner has committed an Event of Default as defined
in Article 8.1.4 and its subsections ("Default Letter"). If, thirty (30)
calendar days after the date of the Default Letter, Contractor believes that
Owner has not cured the Event of Default or that Owner has not made good faith
efforts to cure the Event of Default, Contractor may send Owner written
notification of such failures ("Failure to Cure Letter"). If Owner disputes the
assertions in the Failure to Cure Letter, Owner shall provide written
notification to Contractor of such dispute within fifteen (15) days of the date
of the Failure to Cure Letter ("Dispute Letter"). If Owner provides a timely
Dispute Letter, Contractor shall submit the dispute to arbitration pursuant to
Article 8.2.2 of this Agreement. Upon determination by the arbitrator that an
Event of Default has not been corrected or that Owner has not used good faith
efforts to cure such Event of Default, such default shall be considered "a
strike" for purposes of Article 8.1.6 of this Agreement and Contractor may
without prejudice to any other right or remedy:
8.1.5.1 Terminate the applicable Work Order
or agreement for Other Work for default, without terminating this Agreement, in
which case Owner shall be
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responsible for all payments due to Contractor as of the date of termination of
the affected Work Order or agreement for Other Work; or
8.1.5.2 Terminate this Agreement for
default, but only if Article 8.1.6 hereof has been satisfied.
8.1.6 OWNER'S THREE STRIKES. Contractor's right
to terminate this Agreement may be exercised only if Owner is insolvent and is
petitioned into bankruptcy; or Owner commits three (3) Events of Default
pursuant to Article 8.1.4 and its subsections.
8.1.7 In the event of a termination of any Work
Order or agreement for Other Work for default pursuant to Article 8.1.5,
Contractor shall be entitled to receive reimbursement of all costs for Work
performed prior to the date of termination.
8.1.8 In the event of a termination of this
Agreement for default pursuant to Articles 8.1.5 and 8.1.6, Contractor shall be
entitled to receive reimbursement of all costs for Work performed prior to the
date of termination, including the entire minimum Contractor's Fee Trueup due
for the balance of the Term pursuant to Article 4 hereof.
8.1.9 In no event shall Contractor suspend its
performance for any Work under any Work Order or agreement for Other Work prior
to termination of the applicable Work Order, or agreement for Other Work or this
Agreement, as applicable.
8.2 DISPUTE RESOLUTION / ARBITRATION
8.2.1. MANAGEMENT MEETINGS. Except with respect to
payments of undisputed amounts due to Contractor by Owner, in the event of a
dispute, claim or other matter arising out of or relating to this Agreement or
breach thereof, the Parties agree that in addition to the remedies available to
each Party as outlined above, the Parties may contemporaneously provide the
other Party with a written notice outlining the nature of the dispute. Within
five (5) business days of the receipt of such notice the Contractor's Project
Manager and Owner's designee shall meet in a good faith effort to resolve the
dispute. If the dispute cannot be resolved at such meeting, the Parties agree
that within twenty (20) business days of the initial meeting, a second meeting
shall take place with a Vice President or person with similar decision making
authority representing each of the Contractor and Owner. If the dispute remains
unresolved after such second meeting and the Parties have used good faith
efforts to otherwise resolve the dispute, then the Parties shall participate in
Arbitration as set forth below.
8.2.2. ARBITRATION. All claims, disputes and other
matters in question arising out of, or relating to, this Agreement or the breach
thereof which are not resolved pursuant to Article 8.2.1 above, shall be decided
by expedited arbitration in accordance with the Construction Industry
Arbitration Rules of the American Arbitration Association then in effect unless
the Parties mutually agree in writing otherwise. This agreement to arbitrate
shall be specifically enforceable under the prevailing arbitration law. The
award rendered by the arbiters shall be final, and judgment may be entered upon
it in accordance with applicable law in any court having jurisdiction thereof.
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8.2.2.1 Notice of demand for arbitration
shall be filed in writing with the other Party and with the American Arbitration
Association. The demand for arbitration shall be made within a reasonable time
after the claim, dispute or other matter in question has arisen, and in no event
shall it be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in questions would be
barred by the applicable statute of limitations. The Contractor shall carry on
the Work and maintain the progress schedule during any arbitration proceedings
(provided Owner is not otherwise in breach of this Agreement) and Owner shall
continue to pay any undisputed sums to Contractor.
8.2.2.2 The foregoing notwithstanding,
either Party may seek injunctive relief from a court of competent jurisdiction
which may be necessary to protect its rights under this Agreement without being
required to show any actual damages or to post an injunction bond.
8.2.2.3 The laws of the State of Delaware
shall apply to any dispute, between the Parties, resolved by arbitration,
irrespective of Delaware's choice of law rules.
ARTICLE 9.
INDEMNIFICATION AND LIABILITY
9.1 INDEMNIFICATION BY CONTRACTOR. Contractor shall be
liable for and shall defend, indemnify and hold harmless the Owner and its
officers, directors, agents and employees from and against any and all claims,
demands, causes of action, losses, damages, costs and expenses (including
reasonable attorneys' fees) of every kind and character arising in favor of any
person including Contractor, Owner's employees, Contractor's employees,
Subcontractors or other persons on account of personal injuries or death or
damage to any property (hereinafter "Claims") in any way incident to, arising
out of, or claimed to have arisen out of, occurring in, in connection with, or
relating to the services performed by Contractor hereunder (including Claims in
any way incident to, arising out of, or claimed to have arisen out of, occurring
in, in connection with, or relating to the services performed by any and all
Subcontractors), except if directly or indirectly due to Owner's or Owner's
employees' negligence. Owner shall have a direct right of action against
Contractor in the event Contractor fails to perform under this Article 9.1 and
Owner may recover all of the reasonable costs of such action, including
reasonable attorneys' fees. Contractor shall obtain a written agreement from
anyone (including Subcontractors) retained or employed by Contractor which shall
include this indemnification in favor of Owner.
9.1.1. Contractor further agrees to indemnify and
hold Owner harmless against the payment of any and all penalties, interest,
liens or indebtedness or claims against Owner's property, or for work performed,
or materials furnished, or measured by the work performed, growing out of or
incident to Contractor's operations hereunder. Contractor agrees to reimburse
Owner and Owner's employees for each and every reasonable cost or charge,
including court costs, all expenses of litigation and reasonable attorneys'
fees, if any, which Owner, its successors, assigns or employees, may incur in
defending against or prosecuting any
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such claims, demands, causes of action or suits brought pursuant to services
performed under this Agreement.
9.1.2. Contractor shall release, indemnify, and
hold the Owner harmless from and against any and all claims arising from or
relating to any loss or damage to property of any kind owned or leased by
Contractor or its employees, servants, agents and Subcontractors unless directly
or indirectly due to Owner's or Owner's employee's negligence.
9.1.3. All obligations to assume, protect, defend,
indemnify, and save the Owner harmless shall extend to the Owner's officers,
directors, employees, agents, shareholders, and to companies and other legal
entities that control, are controlled by, are subsidiaries of, or are affiliated
with Owner and the respective officers, directors, agents, and employees of such
companies or entities and shall continue for so long as any of the named
indemnities may be subjected to claims or suits calling for such obligations,
notwithstanding the completion, acceptance or payment for the Work.
9.2 INDEMNIFICATION BY OWNER. Owner shall be liable for
and shall defend, indemnify and hold harmless the Contractor and its officers,
directors, agents and employees from and against any Claims to the extent they
arise from the negligence and/or willful misconduct of the Owner, its employees
or agents.
9.3 NOTICE OF CLAIMS. Each Party shall notify the other
promptly of written Claims or demands of which the other Party is responsible
hereunder. The indemnifying Party shall have the right to defend the Claim with
counsel of its own choosing but no settlement or compromise of any Claims
hereunder shall be completed without the consent of the indemnified Party.
9.4 LIMITATION OF LIABILITY. In no event shall either
Party hereto be liable for any consequential, incidental, special, indirect or
remote damages including, but not limited to, loss of use, lost revenues or
profits (except for Contractor's Fee Trueup payable under Article 4.10 hereof)
or interest on borrowed funds, arising out of or in connection with its
performance of this Agreement whether arising in contract, warranty, tort
(including negligence) or strict liability.
ARTICLE 10.
WARRANTY
10.1 WARRANTY. Any equipment, materials, and services
supplied by Contractor, its agents, employers, suppliers, or Subcontractors, are
warranted by Contractor or its suppliers or Subcontractors as appropriate, to be
of good quality and workmanship and will be properly installed by Contractor or
its Subcontractors as appropriate. To the extent possible, Contractor shall also
assign to Owner all manufacturers, suppliers or Subcontractor's warranties for
any services, equipment and materials. All warranties made hereunder shall be
for a minimum period of one (1) year following Owner's acceptance of the Work
for such Project unless otherwise specified in a Work Order, provided however,
that any warranty for materials or services not provided directly by Contractor
shall be the warranty of the Subcontractor or
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supplier which Contractor shall pass through to Owner. Where a Certificate of
Occupancy is issued by Contractor to Owner, the warranty period shall commence
upon the date the Certificate of Occupancy is issued for equipment, materials,
or services which are directly related to such Certificate of Occupancy.
Contractor shall not be obligated to continue these warranty obligations for any
equipment (including software), materials and/or services which have been
improperly repaired or altered, abused, misused or improperly handled by Owner
unless such repair or alteration was necessitated by an act or omission of
Contractor, Subcontractor or their respective employees or agents.
Notwithstanding the foregoing, all fiber optic cable purchased by Contractor for
Owner hereunder shall have a minimum three (3) year warranty assignable to Owner
unless otherwise agreed to in a Work Order.
10.2 FREE FROM DEFECTS. The Contractor warrants to the
Owner that all materials and equipment furnished under this Agreement will be
new unless otherwise specified in a Work Order or agreement for Other Work, free
from faults and defects and in conformance with the Work Order, agreement for
Other Work and/or this Agreement. All Work not conforming to these requirements,
including substitutions not properly approved and authorized, may be considered
defective and must be cured by Contractor at Contractor's expense. If required
by the Owner, Contractor shall furnish satisfactory evidence as to the kind and
quality of materials and equipment furnished hereunder.
10.3 NO OTHER WARRANTIES. EXCEPT AS OTHERWISE PROVIDED
HEREIN, THE FOREGOING WARRANTIES AND THOSE CONTAINED IN ANY WORK ORDER OR
AGREEMENT FOR OTHER WORK CONSTITUTE THE ONLY WARRANTIES WITH RESPECT TO THE WORK
PERFORMED HEREUNDER, OR ANY STATEMENT OF WORK, THERE BEING NO OTHER WARRANTIES,
EXPRESSED OR IMPLIED, INCLUDING NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
ARTICLE 11.
HAZARDOUS MATERIALS AND CONCEALED CONDITIONS
11.1 HAZARDOUS MATERIALS. In the event Contractor
encounters toxic or hazardous materials in performance of any Project, any
resulting delays and costs shall be considered to be beyond its control, without
its fault and outside the scope of such Project unless such encounter is due to
the gross negligence or willful misconduct of Contractor, its employees,
officers or directors or Subcontractors. Such toxic or hazardous materials shall
be removed or otherwise dealt with by Owner or by the appropriate government
agency, organization or third party. Contractor shall have no obligation,
responsibility or liability with respect to such materials. Notwithstanding the
foregoing, Contractor agrees that it will be responsible for the cleanup or any
other cost, damage or liability arising from any toxic or hazardous materials
generated or used by Contractor, its employees or Subcontractors in the course
of its performance of any Work under this Agreement. Contractor agrees in any
event to cooperate fully with Owner and to perform reasonable and customary
investigations as to the existence of hazardous materials prior to the
performance of any Work hereunder.
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11.2 CONCEALED CONDITIONS. The Contractor shall promptly,
upon discovery, and before any such conditions are disturbed, notify the Owner
in writing of: (1) subsurface or latent physical conditions at the site of Work
differing materially from those indicated in the Contract Documents, or (2)
unknown physical conditions at such site, of an unusual nature, differing
materially from those ordinarily encountered and generally recognized as
inherent in work of the character provided for in this Agreement. The Contractor
shall, at Owner's direction, promptly investigate the conditions, and if it
finds that such conditions do materially so differ and cause an increase or
decrease in the Contractor's cost of, or the time for, performance of any part
of the Work under the applicable Work Order an equitable adjustment of time
shall be made and the Work Order modified accordingly. Owner and Contractor
acknowledge that all costs incurred in investigating the conditions and
performing such Work are Reimbursable Costs.
ARTICLE 12.
MISCELLANEOUS
12.1 TITLE. Title to all Work completed pursuant to a Work
Order or agreement for Other Work hereunder and to all materials and supplies on
account of which payment in full has been made by Owner shall be and vest in the
name of Owner.
12.2 ASSIGNMENT. Owner may not transfer, assign or
otherwise delegate its obligations under this Agreement without the express
written consent of the Contractor which consent shall not be unreasonably
withheld; provided, however, that Owner may assign its rights, including the
obligation of payment to Contractor and Owner's rights under any Work Order or
agreement for Other Work, under this Agreement to its subsidiaries, affiliates
or successors in interest without prior written consent of Contractor.
Contractor may not transfer, assign or otherwise delegate its obligations under
this Agreement without the express written consent of Owner which may be
withheld by Owner in its sole discretion. Any assignment by any Party hereunder
shall not release the assigning Party from its obligations under this Agreement.
12.3 SEVERABILITY. If any provision of this Agreement is
adjudicated to be invalid or unenforceable, the remainder shall be valid and
enforceable, and the Parties shall negotiate in good faith to recreate such
provision in a valid and enforceable form to provide for the intent of such
provision.
12.4 WAIVER. Failure of Owner or Contractor at any time to
require strict performance of any provision of this Agreement shall not
constitute a waiver of that provision nor in any way limit enforcement of that
provision.
12.5 NOTICES. Except as otherwise set forth herein, when
any notice or other communication is required or authorized to be given
hereunder, such notice shall, for all purposes, be in writing and either
delivered personally to the addressee, by telex or facsimile transmission
followed by mailing, or sent by registered or certified mail return receipt
requested, or by express mail, postage prepaid and shall be deemed given when so
delivered personally, when such telex or facsimile transmission is received or,
if mailed, five (5) days after the date of mailing to the address of the
respective Parties at the following addresses:
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(i) If sent by Owner to Contractor, addressed as follows:
Adesta Communications, Inc.
1200 Landmark Center
Suite 1300
Omaha, NE 68102
Attn: Vice President, Operations
With a copy to:
Able Telcom Holding Corp.
1601 Forum Place
Suite 1110
West Palm Beach, FL 33401
Attn: President With a copy to:
Able Telcom Holding Corp.
1643 North Harrison Parkway
Sunrise, Florida 33323
Attn: General Counsel
(ii) If sent by Contractor to Owner, addressed as follows:
MCI WORLDCOM Network Services, Inc.
Purchasing & Contracts
MD 1.1-131F
6929 N. Lakewood Avenue
Tulsa, OK 74117
Attn: Contract Administrator
With a copy to:
MCI WORLDCOM Network Services, Inc.
6929 N. Lakewood Avenue
Tulsa, OK 74117
Attn: Vice President, Construction and Facilities
and
WorldCom, Inc.
1133 19th Street, NW
Washington, DC 20036
Attn: Senior Commercial Counsel
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12.6 CONFIDENTIALITY
12.6.1. Owner and Contractor agree to hold and will
use their commercially reasonable efforts to cause their respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning this Agreement and any Work or Project performed
hereunder, except to the extent that such information can be shown to have been
(i) in the public domain through no fault of the receiving Party, or (ii) later
lawfully acquired by the receiving Party from third parties without an
obligation of confidentiality. The obligation of Owner and Contractor to hold
any such information in confidence shall be satisfied if it exercises the same
care with respect to such information as it would take to preserve the
confidentiality of its own similar information.
12.6.2. The drawings, specifications and other
documents are instruments of service through which the Work to be performed by
the Contractor is described. The Contractor may retain one record set. The
Contractor shall not own or claim a copyright or any other right in the
drawings, specifications and other documents. All copies of them, except the
record set, shall be returned to Owner on request upon completion of the
Project. The drawings, specifications and other documents and copies thereof
furnished to the Contractor, are for use solely with respect to a Project. They
are not to be used by the Contractor on other projects without the specific
written consent of the Owner. The Contractor is granted a limited license to use
and reproduce applicable portions of the drawings, specifications and other
documents prepared for a Project appropriate to and for use in the performance
of the Contractor's services under this Agreement. All drawings, specifications
and other documents relating to the Project are owned by the Owner, including
drawings, specifications and other documents generated by Contractor for Owner
or used to perform work for Owner prior to the date of this Agreement.
12.6.3. Subject to the confidentiality requirements
stated herein, neither Party shall reference or use any part of this Agreement
or the names of the Parties hereto in any press release, marketing, advertising
or other sales or promotional materials without the express written consent of
the other Party, which will not be unreasonably withheld or delayed.
12.7 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
12.8 NO CONSTRUCTION AGAINST DRAFTER. The Parties
acknowledge that this Agreement and all the terms and conditions contained
herein have been fully reviewed and negotiated by the Parties and that each
Party has been represented by counsel. Having acknowledged the foregoing, the
Parties agree that any principle of construction or rule of law that provides
that, in the event of any inconsistency or ambiguity, an agreement shall be
construed against the drafter of the agreement shall have no application to the
terms and conditions of this Agreement.
12.9 COURSE OF DEALING. The Parties acknowledge that due
to the previous relationship between Contractor and Owner, the sequence of
previous acts and conduct
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between Contractor and Owner related to the Work to be performed pursuant to
this Agreement and any Work Orders or agreements for Other Work executed
hereunder, is fairly to be regarded as establishing a common basis of
understanding for interpreting each Party's expressions and other conduct as
further described in the Uniform Commercial Code.
12.10 SURVIVAL. The provisions of Articles 9, 10, 11 and 12
shall survive the expiration or termination of the Agreement and Owner and
Contractor each agree to be bound thereto as appropriate.
12.11 GOVERNING LAW. The Agreement, and all the rights and
duties of the Parties arising from or relating in any way to the subject matter
of this Agreement or the transaction(s) contemplated by it, shall be governed
by, construed, and enforced in accordance with the laws of the State of
Delaware, irrespective of Delaware's choice of law rules.
12.12 ENTIRE AGREEMENT. This Agreement and all Exhibits and
Schedules attached hereto constitute the entire agreement between the Parties
with respect to the subject matter hereof. This Agreement shall be binding upon
the Parties hereto and their permitted successors and assigns.
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IN WITNESS WHEREOF, the Parties hereto have executed this
instrument, through their authorized officers, effective as of the date first
above written.
OWNER:
MCI WORLDCOM NETWORK SERVICES, INC.
By:
--------------------------------------
Title:
-----------------------------------
CONTRACTOR:
ABLE TELCOM HOLDING CORP.
By:
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Title:
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