SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 3, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-20109
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Kronos Incorporated
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(Exact name of registrant as specified in its charter)
Massachusetts 04-2640942
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 Fifth Avenue, Waltham, MA 02451
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(Address of principal executive offices) (Zip Code)
(781) 890-3232
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(Registrant's telephone number, including area code)
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(Former name,former address and former fiscal year,if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
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As of May 1, 1999, 12,521,928 shares of the registrant's Common Stock,
$.01 par value, were outstanding.
<PAGE>
KRONOS INCORPORATED
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Statements of Income for the Three
Months and Six Months Ended April 3, 1999 and April 4, 1998 1
Condensed Consolidated Balance Sheets at April 3, 1999
and September 30, 1998 2
Condensed Consolidated Statements of Cash Flows for the Six
Months Ended April 3, 1999 and April 4, 1998 3
Notes to Condensed Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 6
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
Signatures
Exhibit Index
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
<TABLE>
<CAPTION>
KRONOS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share amounts)
UNAUDITED
Three Months Ended Six Months Ended
-------------------------------- ---------------------------------
April 3, April 4, April 3, April 4,
1999 1998 1999 1998
--------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C>
Net revenues:
Product ..................................... $ 40,643 $ 30,111 $ 73,823 $ 59,872
Service ..................................... 21,043 16,361 40,978 31,173
--------------- -------------- --------------- ---------------
--------------- ---------------
61,686 46,472 114,801 91,045
--------------- -------------- --------------- ---------------
Cost of sales:
Product ..................................... 9,474 7,743 17,313 14,783
Service ..................................... 12,744 10,494 24,857 20,623
--------------- -------------- --------------- ---------------
22,218 18,237 42,170 35,406
--------------- -------------- --------------- ---------------
Gross profit 39,468 28,235 72,631 55,639
Expenses:
Sales and marketing .......................... 21,676 15,878 40,364 31,929
Engineering, research and development ........ 6,625 4,557 12,628 8,881
General and administrative ................... 3,842 3,317 7,216 6,412
Other (income) expense, net .................. 561 (184) 465 (186)
--------------- -------------- --------------- ---------------
32,704 23,568 60,673 47,036
--------------- -------------- --------------- ---------------
Income before income taxes ............... 6,764 4,667 11,958 8,603
Provision for income taxes ......................... 2,213 1,783 4,197 3,287
--------------- -------------- --------------- ---------------
Net income ............................... $ 4,551 $ 2,884 $ 7,761 $ 5,316
=============== ============== =============== ===============
Net income per common share:
Basic .................................... $ 0.36 $ 0.23 $ 0.62 $ 0.43
=============== ============== =============== ===============
Diluted .................................. $ 0.35 $ 0.23 $ 0.60 $ 0.42
=============== ============== =============== ===============
Average common and common
equivalent shares outstanding:
Basic .................................... 12,595,809 12,412,413 12,541,659 12,348,763
=============== ============== =============== ===============
Diluted .................................. 13,069,640 12,791,786 13,019,653 12,726,728
=============== ============== =============== ===============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
UNAUDITED
April 3, September 30,
1999 1998
-------------- --------------
ASSETS
<S> <C> <C>
Current assets:
Cash and equivalents ........................................................ $ 17,481 $ 29,888
Marketable securities ....................................................... 21,817 17,501
Accounts receivable, less allowances for doubtful accounts of $1,535
at April 3, 1999 and $1,268 at September 30, 1998 ........................ 50,655 50,904
Deferred income taxes ....................................................... 5,188 5,188
Other current assets ........................................................ 10,175 8,171
-------------- --------------
Total current assets ................................................. 105,316 111,652
Equipment, net ................................................................. 15,542 15,816
Marketable securities .......................................................... 24,350 4,445
Excess of cost over net assets of businesses acquired .......................... 12,045 13,731
Deferred software development costs, net ....................................... 10,922 9,541
Other assets ................................................................... 9,395 8,676
-------------- --------------
Total assets ......................................................... $ 177,570 $ 163,861
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable ............................................................ $ 7,661 $ 6,427
Accrued compensation ........................................................ 14,556 14,503
Accrued expenses and other current liabilities .............................. 17,226 18,570
Deferred maintenance revenues ............................................... 31,986 27,065
-------------- --------------
Total current liabilities ............................................ 71,429 66,565
Deferred income taxes .......................................................... 911 911
Deferred maintenance revenues .................................................. 11,597 8,830
Other liabilities .............................................................. 279 352
Shareholders' equity:
Preferred Stock, par value $1.00 per share: authorized 1,000,000 shares,
no shares issued and outstanding
Common Stock, par value $.01 per share: authorized 20,000,000 shares,
12,634,728 shares and 12,465,719 shares issued at April 3, 1999 and
September 30, 1998, respectively ......................................... 126 83
Additional paid-in capital .................................................. 29,962 29,617
Retained earnings ........................................................... 67,526 59,765
Equity adjustment from translation .......................................... (564) (1,162)
Cost of Treasury Stock (138,956 shares and 45,861
shares at April 3, 1999 and September 30, 1998, respectively)............. (3,696) (1,100)
-------------- --------------
Total shareholders' equity ........................................... 93,354 87,203
-------------- --------------
Total liabilities and shareholders' equity ........................... $ 177,570 $ 163,861
============== ==============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
KRONOS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
UNAUDITED
<TABLE>
<CAPTION>
Six Months Ended
--------------------
April 3, April 4,
1999 1998
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<S> <C> <C>
Operating activities:
Net income ................................................................ $ 7,761 $ 5,317
Adjustments to reconcile net income to net cash and equivalents
provided by operating activities:
Depreciation ....................................................... 4,105 3,571
Amortization of deferred software development costs and
excess of cost over net assets of businesses acquired ........... 4,711 3,010
Changes in certain operating assets and liabilities:
Accounts receivable, net ........................................ 257 1,637
Deferred maintenance revenues ................................... 7,736 4,791
Accounts payable, accrued compensation
and other liabilities ........................................ 648 (2,837)
Other .............................................................. (2,594) (1,751)
-------- ---------
Net cash and equivalents provided by operating activities .... 22,624 13,738
Investing activities:
Purchase of equipment ..................................................... (3,982) (3,000)
Capitalization of software development costs .............................. (4,159) (3,023)
Increase in marketable securities ......................................... (24,221) (8,921)
Acquisitions of businsesses ............................................... (489) (4,360)
-------- ---------
Net cash and equivalents used in investing activities ........ (32,851) (19,304)
Financing activities:
Net proceeds from exercise of stock option and employee stock
purchase plans ......................................................... 2,140 1,463
Purchase of treasury stock ................................................ (4,347) (27)
-------- ---------
Net cash and equivalents provided by financing actities ...... (2,207) 1,436
Effect of exchange rate changes on cash and equivalents ........................ 27 (51)
-------- ---------
Decrease in cash and equivalents .............................................. (12,407) (4,181)
Cash and equivalents at the beginning of the period ............................ 29,888 20,698
-------- ---------
Cash and equivalents at the end of the period ..................................$ 17,481 $ 16,517
======== =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
KRONOS INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - General
The accompanying unaudited condensed consolidated financial statements include
all adjustments, consisting of normal recurring accruals, that management
considers necessary for a fair presentation of the Company's financial position
and results of operations as of and for the interim periods presented pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
the disclosures in these financial statements are adequate to make the
information presented not misleading. These condensed consolidated financial
statements should be read in conjunction with the Company's audited financial
statements for the fiscal year ended September 30, 1998. The results of
operations for the three and six month periods ended April 3, 1999 are not
necessarily indicative of the results for a full fiscal year. Certain amounts
have been reclassified in fiscal 1998 to permit comparison with fiscal 1999.
NOTE B - Fiscal Quarters
The Company utilizes a system of fiscal quarters. Under this system, the first
three quarters of each fiscal year end on a Saturday. However, the fourth
quarter of each fiscal year will always end on September 30. Because of this,
the number of days in the first quarter (94 days in fiscal 1999 and 95 days in
fiscal 1998) and fourth quarter (89 days in fiscal 1999 and 88 days in fiscal
1998) of each fiscal year varies from year to year. The second and third
quarters of each fiscal year will be exactly thirteen weeks long. This policy
does not have a material effect on the comparability of results of operations
between quarters.
NOTE C - Software Revenue Recognition
In November 1997, the Accounting Standards Executive Committee (AcSEC) issued
Statement of Position (SOP) 97-2, "Software Revenue Recognition", which the
Company adopted in the first quarter of fiscal 1999. The adoption of SOP 97-2
did not have a material effect on the Company's financial statements.
<PAGE>
NOTE D - Comprehensive Income
In September 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
No. 130), which the Company adopted in the first quarter of fiscal 1999. SFAS
No. 130 establishes standards for reporting comprehensive income and its
components. Comprehensive income is defined as the change in equity of a
business enterprise during a period from transactions and other events and
circumstances from non-owner sources and includes all changes in equity during a
period except those resulting from investments by owners and distributions to
owners.
For the three and six months ended April 3, 1999 and April 4, 1998, the
Company's comprehensive income was as follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
April 3, April 4, April 3, April 4,
1999 1998 1999 1998
--------- ---------- --------- --------
<S> <C> <C> <C> <C>
Comprehensive income:
Net income $ 4,551 $ 2,884 $ 7,761 $ 5,316
Cumulative translation adjustment 499 (73) 598 (435)
--------- ---------- --------- ---------
Total comprehensive income $ 5,050 $ 2,811 $ 8,359 $ 4,881
========= ========== ========= =========
</TABLE>
During the quarter ended April 3, 1999, the Company sold its South African
subsidiary to an unrelated third party. As a result of the transaction, the
cumulative equity adjustment from translation of the subsidiary's financial
statements in the amount of $.5 million was included as a charge to pretax
income.
NOTE E - Stock Split
The Company's Board of Directors approved a three-for-two stock split effected
in the form of a 50% stock dividend that was paid on March 9, 1999 to
stockholders of record on February 23, 1999. Accordingly, the presentation of
shares outstanding and amounts per share have been restated for all periods
presented to reflect the split. The par value of the additional shares was
transferred from additional paid-in capital to Common Stock.
On November 17, 1995, the Company's Board of Directors adopted a Rights
Agreement. Under the Agreement, the Company distributed to stockholders a
dividend of one Right for each outstanding share of Common Stock. As a result of
the stock split, each stockholder has forty four-hundreds of a Right for each
share of Common Stock held as of the Record Date.
6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Forward Looking Statements
This discussion includes certain forward-looking statements about the
Company's business and its expectations. Any such statements are subject to risk
that could cause the actual results to vary materially from expectations. For a
further discussion of the various risks that may affect the Company's business
and expectations, see "Certain Factors That May Affect Future Operating Results"
at the end of Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
Revenues. Revenues for the second quarter of fiscal 1999 amounted to
$61.7 million as compared to $46.5 million for the second quarter of the prior
year. Revenues for the first six months of fiscal 1999 were $114.8 million as
compared to $91.0 million for the first six months of the prior year. Revenue
growth was 33% and 26% in the three and six month periods ended April 3, 1999,
respectively, as compared to 18% and 19% for each of the comparable periods of
the prior year. The revenue growth in the three and six month periods ended
April 3, 1999 was principally driven by customer demand in all distribution
channels.
Product revenues for the second quarter of fiscal 1999 amounted to $40.6
million as compared to $30.1 million for the second quarter of the prior year.
Product revenues for the first six months of fiscal 1999 were $73.8 million as
compared to $59.9 million for the first six months of the prior year. Product
revenue growth of 35% and 23% in the three and six month periods ended April 3,
1999, respectively, increased from 15% in each of the comparable periods of the
prior year. Product revenue growth in the three and six month periods ended
April 3, 1999 was principally driven by sales of the Company's products to new
customers as well as sales into the Company's existing customer base in the
second quarter. Contributing significantly to this growth were software revenues
that increased 58% in the three month period ended April 3, 1999 as compared to
34% in the comparable period of the prior year.
Service revenues for the second quarter of fiscal 1999 amounted to $21.0
million as compared to $16.4 million for the second quarter of the prior year.
Service revenues for the first six months of fiscal 1999 were $41.0 million as
compared with $31.2 million for the first six months of the prior year. Service
revenue growth of 29% and 31% in the three and six month periods ended April 3,
1999, respectively, increased from 23% and 26% for comparable periods of the
prior year. The growth in service revenues in the three and six month periods
ending April 3, 1999 reflects an increase in maintenance revenue from the
expansion of the installed base and an increase in the level of maintenance
contracts and professional services accompanying sales to new customers and
sales to the Company's existing customer base.
Gross Profit. Gross profit as a percentage of revenues was 64% and 62% in
the three and six month periods ended April 3, 1999, respectively, as compared
with 61% in the comparable periods of the prior year. The improvement in gross
profit was evidenced in both product and service gross profit.
Product gross profit as a percentage of product revenues was 77% and 76%
in the three and six month periods ended April 3, 1999, respectively, increasing
from 74% and 75% for the comparable periods of the prior year. The improvement
in product gross profit in both periods is primarily attributable to an
increased proportion of product revenues generated by software, which typically
generates higher gross profit than other products. The software component of
product sales increased to 48% and 47% in the three and six month periods ended
April 3, 1999, respectively, as compared to 41% and 44% for each of the
comparable periods of the prior year. Service gross profit as a percentage of
service revenues was 39% in the three and six month periods ended April 3, 1999,
respectively, increasing from 36% and 34%, respectively, for comparable periods
of the prior year. The increase in service gross profit in both periods is
primarily attributable to the growth in service revenues without a proportionate
increase in service expenses. This has been accomplished by more fully
leveraging service resources and improving the efficiency in the delivery of
services. The Company anticipates that service gross profit as a percentage of
service revenues should be approximately 38% to 40% over the remainder of fiscal
1999.
Expenses. Total operating expenses as a percentage of revenues were 53%
in each of the three and six month periods ended April 3, 1999, as compared to
51% and 52%, respectively, in the comparable periods of the prior year. Sales
and marketing expenses as a percentage of revenues were 35% in the three and six
month periods ended April 3, 1999 as compared to 34% and 35% in the comparable
periods of the prior year. Engineering expenses as a percentage of revenues were
11% in each of the three and six month periods ended April 3, 1999, as compared
to 10% in the comparable periods of the prior year. Engineering expenses of $6.6
million and $4.6 million in the second quarter of fiscal 1999 and 1998,
respectively, are net of capitalized software development costs of $2.2 million
and $1.6 million, respectively. Engineering expenses of $12.6 million and $8.9
million in the first six months of fiscal 1999 and 1998, respectively, are net
of capitalized software development costs of $4.2 million and $3.0 million,
respectively. The growth in engineering, research and development expenses
results primarily from the development of new products in the client/server and
Windows environments.
General and administrative expenses as a percentage of revenues were 6%
in the three and six month periods ended April 3, 1999 as compared to 7% in the
comparable periods of the prior year. Other (income) expense, net amounted to
less than 1% of revenues for all periods presented. Other (income) expense, net
is composed primarily of amortization of intangible assets related to
acquisitions made by the Company which is offset by interest income earned on
its investments. In the second quarter of fiscal 1999, other (income) expense,
net also includes an immaterial charge resulting from the Company's sale of its
South African subsidiary. This charge relates to the write off of the cumulative
equity adjustment from the translation of the subsidiary's financial statements.
Income Taxes. The provision for income taxes as a percentage of pretax
income was 33% and 35% in the three and six month periods ended April 3, 1999,
respectively, as compared to 38% in each of the comparable periods of the prior
year. The reduction in the Company's effective income tax rate in both periods
is primarily attributable to tax benefits resulting from the Company's sale of
its South African subsidiary as well as utilization of foreign net operating
loss carryforwards. The Company anticipates the effective income tax rate should
be approximately 35% for the remainder of the fiscal year.
Liquidity and Capital Resources
Working capital as of April 3, 1999, amounted to $33.9 million as
compared with $45.1 million at September 30, 1998. The decline in working
capital is primarily attributable to the Company's investment of $19.9 million
of its cash and equivalents in long term marketable securities. Cash and
equivalents and marketable securities increased to $63.6 million as of April 3,
1999 as compared to $51.8 million at September 30, 1998. Cash generated from
operations increased to $22.6 million in the first six months of fiscal 1999
from $13.7 million in the first six months of the prior year, principally due to
increased earnings and deferred maintenance revenues as well as increases in
depreciation and amortization charges. The Company's increase of approximately
$1.0 million in its investment in equipment in the first six months of the
fiscal year as compared to the same period of the prior year is principally due
to increased investments in the Company's engineering and service organizations
as well as investments related to the planned relocation of the Company's world
headquarters. Cash generated from operations was more than sufficient to fund
investments in equipment and capitalized software development costs. In April
1999, the Company acquired a parcel of land located in Chelmsford, Massachusetts
for the construction of a new approximately 129,000 square foot world
headquarters facility. The Company anticipates it will spend approximately $18.0
million in the construction of the facility over the next 12 months. The Company
is also assessing several acquisition opportunities that may be completed over
the next three months, although there can be no assurance that these
acquisitions will be completed.
The Company expects to fund its investments in equipment, software development
costs and acquisitions over the remainder of its fiscal year as well as costs
related to the construction of the new facility with available cash and
investments and operating cash flow.
Certain Factors That May Affect Future Operating Results
Except for historical matters, the matters discussed in this Quarterly
Report on Form 10-Q are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "Act"). The Company
desires to take advantage of the safe harbor provisions of the Act and is
including this statement for the express purpose of availing itself of the
protection of the safe harbor with respect to all forward looking statements
that involve risks and uncertainties.
The Company's actual operating results may differ from those indicated
by forward looking statements made in this Quarterly Report on Form 10-Q and
presented elsewhere by management from time to time because of a number of
factors including the potential fluctuations in quarterly results, timing and
acceptance of new product introductions by the Company and its competitors,
competitive pricing pressures, the dependence on alternate distribution
channels, potential effects of the century change, the ability to attract and
retain sufficient technical personnel, and the dependence on the Company's time
and attendance product line and on key vendors, as further described below and
in the Company's Annual Report on Form 10-K for the fiscal year ended September
30, 1998, which factors are specifically incorporated by reference herein.
Potential Fluctuations in Quarterly Results. The Company's quarterly
operating results may fluctuate as a result of a variety of factors, including
the timing of the introduction of new products and product enhancements by the
Company and its competitors, market acceptance of new products, mix of products
sold, the purchasing patterns of its customers, competitive pricing pressure and
general economic conditions. The Company historically has realized a relatively
larger percentage of its annual revenues and profits in the fourth quarter and a
relatively smaller percentage in the first quarter of each fiscal year, although
there can be no assurance that this pattern will continue. In addition, while
the Company has contracts to supply systems to certain customers over an
extended period of time, substantially all of the Company's product revenue and
profits in each quarter result from orders received in that quarter. If
near-term demand for the Company's products weakens or if significant
anticipated sales in any quarter do not close when expected, the Company's
revenues for that quarter will be adversely affected. The Company believes that
its operating results for any one period are not necessarily indicative of
results for any future period.
Product Development and Technological Change. Continual change and
improvement in computer software and hardware technology characterize the
markets for frontline labor management systems. The Company's future success
will depend largely on its ability to enhance its existing product lines and to
develop new products and interfaces to third party products on a timely basis
for the increasingly sophisticated needs of its customers. Although the Company
is continually seeking to further enhance its product offerings and to develop
new products and interfaces, there can be no assurance that these efforts will
succeed, or that, if successful, such product enhancements or new products will
achieve widespread market acceptance, or that the Company's competitors will not
develop and market products which are superior to the Company's products or
achieve greater market acceptance.
Competition. The frontline labor management industry is highly
competitive. Competition is increasing as competitors in related industries,
such as human resources management, payroll processing and enterprise resource
planning (ERP) enter the market. Advances in software development tools have
accelerated the software development process and, therefore, can allow
competitors to penetrate certain of the Company's markets. Maintaining the
Company's technological and other advantages over competitors will require
continued investment by the Company in research and development and marketing
and sales programs. There can be no assurance that the Company will have
sufficient resources to make such investments or be able to achieve the
technological advances necessary to maintain its competitive advantages.
Increased competition could adversely affect the Company's operating results
through price reductions and/or loss of market share.
Dependence on Alternate Distribution Channels. The Company markets and
sells its products through its direct sales organization, independent dealers
and OEMs. For the fiscal year ended September 30, 1998, approximately 20% of the
Company's revenue was generated through sales to dealers and OEMs. Reduction in
the sales efforts of the Company's major dealers and/or OEMs, or termination or
changes in their relationships with the Company, could have a material adverse
effect on the results of the Company's operations.
Year 2000. The Company has an executive level steering committee to
identify and resolve Year 2000 issues associated with the Company's internal
systems (both information technology ("IT") and non-IT), the Company's own
products and services, the status of third party products distributed by the
Company to its customers as well as the Year 2000 readiness of the Company's
suppliers. The Company has completed an assessment of all of its principal IT
systems, which include manufacturing, distribution, customer service and
financial systems. The Company has, with the assistance of an outside
consultant, tested its principal internal enterprise resource planning (ERP)
system and believes it to be year 2000 compliant. This ERP system includes order
entry, material resource planning, master production scheduling, purchasing,
shipping and financial systems. The Company has identified Year 2000 issues in
other less significant IT systems, and expects to resolve those issues, by
replacements and/or upgrades, by mid-1999. The Company is currently performing
an assessment of certain non-IT systems and expects that assessment to be
completed by mid-1999. Examples of these non-IT systems include the
Company's telephone systems. The Company will replace prior to the end of
October, 1999, certain stand alone shop floor test equipment to ensure
year 2000 compliance. The Company does not plan to
assess specifically its facility management systems, or the external forces such
as utility or transportation Year 2000 compliance failures that might generally
affect industry and commerce. Although the Company is not currently aware of any
material operational issues or costs associated with preparing its internal IT
and non-IT systems for the Year 2000, the Company may experience material
unanticipated problems and costs caused by undetected errors or defects in these
internal systems.
The Company's Year 2000 compliance plan includes designing its current
products to meet the Company's definition of "Year 2000 Compliant" and testing
the most recent versions of its current products to determine whether they meet
that definition. Testing of products currently manufactured by the Company is
approximately 95% completed and is expected to be finished by the end of June
1999. The Company has warranted, and may in the future warrant to certain
customers that its products will work in the Year 2000 and beyond. Generally,
for products that have been identified to date as needing upgrades/new versions
to address Year 2000 issues, the Company has those upgrades/new versions
available to customers for purchase or under maintenance agreements. One of the
Company's products, which was sold in low volumes, has a Year 2000 deficiency
for which there is no upgrade/new version currently available, but the Company
intends to correct that deficiency in the product's next
maintenance release. Some of the
Company's customers are using products and/or product versions that the Company
has not tested, and does not support, for Year 2000 compliance. The Company is
encouraging these customers to migrate to current products/versions that meet
the Company's Year 2000 compliance definition. It is possible that the Company
may experience increased expenses in addressing migration issues for these
customers. In addition, the Company does not intend to test any of its custom
software products for Year 2000 compliance.
For third party products that the Company distributes with its
products, the Company has sought information and assurances from the
manufacturers concerning those products' Year 2000 compliance status. As a
result, the Company has identified certain third party products that will
require an upgrade to be Year 2000 compliant and is currently notifying affected
customers and encouraging them to upgrade. The Company expects to complete its
assessment of those third party products by mid-1999.
Despite the testing of its own products and efforts to obtain
assurances on third party products, errors or defects in such products could
result in delay or loss of revenue, diversion of development resources, damage
to the Company's reputation, or increased service and warranty costs, any of
which could materially affect the Company's business, results of operations, or
financial condition. In addition, the unprecedented nature of potential
litigation regarding Year 2000 compliance issues makes it uncertain whether the
Company will be affected by such litigation.
The Company has completed its systematic inquiry of key suppliers to
assess their Year 2000 readiness. The Company is not aware of any problems that
would materially affect its business, results of operations or financial
condition, but the Company has no means of ensuring that assurances received
from such suppliers are accurate. The inability of such suppliers to meet Year
2000 requirements could materially impact the ability of the Company to procure
material from these suppliers and to meet its obligations to supply products to
its customers.
The Company does not currently have any information concerning the Year
2000 compliance status of its customers. As with other similarly situated
companies, if the Company's current or future customers fail to achieve Year
2000 compliance or if they divert expenditures to address Year 2000 compliance
problems, the Company's business, results of operations, or financial condition
could be materially affected.
The Company has not yet developed a contingency plan on Year 2000
readiness. The Company is currently assessing the need for such a plan and
anticipates completing that assessment by mid-1999.
The costs associated with the Company's Year 2000 plan have been funded
from operating cash flows and have been charged to operations. To date, the
Company has incurred approximately $.8 million of incremental costs and expects,
on a cumulative basis, total costs to be approximately $1.2 million to address
its internal IT and non-IT systems and to address Year 2000 compliance problems
in its own products and in third party products distributed with its
products. The Company does not separately track the
internal costs associated with its Year 2000 plan, which are primarily payroll
costs for its information systems employees, support and technical personnel and
the Year 2000 steering committee. The costs described herein, and the costs to
accomplish the other elements of the Company's Year 2000 plan, have not been and
are not expected to be material to the Company's financial position, results of
operations or cash flows. The cost of completing the Year 2000 plan and the date
on which the Company believes the plan will be complete are based upon
management's best estimates derived by using numerous assumptions of future
events, including the continued availability of certain resources. There can be
no guarantee that these estimates will be achieved and the actual results may
differ materially from those anticipated. Specific factors that might cause
these differences include without limitation, the availability and cost of
personnel trained in this area, the ability to make timely and appropriate
adjustments to all relevant computer codes and similar uncertainties.
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The 1999 Annual Meeting of Stockholders of Kronos Incorporated was held on
January 29, 1999.
(b) At the Annual Meeting, Messrs. D. Bradley McWilliams and Lawrence
Portner were elected as Class I Directors for three-year terms expiring
in 2002. In addition, the Directors whose terms of office continue
after the meeting are three Class III Directors: Messrs. Mark S. Ain,
Richard J. Dumler and Samuel Rubinovitz and one Class II Director:
Messr. W. Patrick Decker. The tabulation of votes for each Director
nominee was as follows:
FOR WITHHELD
D. Bradley McWilliams 7,499,050 6,230
Lawrence Portner 7,498,993 6,287
(c) The other item voted upon at the meeting was as follows:
<TABLE>
<CAPTION>
BROKER
FOR AGAINST ABSTAIN NON-VOTES
<S> <C> <C> <C> <C>
Ratification of the selection of
Ernst & Young LLP 7,488,945 14,983 1,352 -----
</TABLE>
Item 6. Exhibits and Report on Form 8-K
(a) Exhibit
10.1 Lease Agreement Between W/9TIB Real Estate Limited
Partnership, as Landlord, and Kronos Incorporated, as Tenant
Dated February 26, 1999.
10.2 Contruction Agreement Between Cranshaw Construction of
New England Limited Partnership and Kronos, Inc. Dated
March 10, 1999.
10.3 Agreement of Purchase and Sale By and Between W/9TIB
Real Estate Limited Partnership and Kronos Incorporated
Dated March 29, 1999.
27 Financial Data Schedule
(b) Reports of Form 8-K
There were no reports on Form 8-K filed during the fiscal quarter
ended April 3, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KRONOS INCORPORATED
By /s/ Paul A. Lacy
Paul A. Lacy
Vice President of Finance
and Administration
(Duly Authorized Officer and
Principal Financial Officer)
May 18, 1999
<PAGE>
KRONOS INCORPORATED
EXHIBIT INDEX
Exhibit
Number Description
10.1 Lease Agreement Between W/9TIB Real Estate Limited
Partnership, as Landlord, and Kronos Incorporated, as Tenant
Dated February 26, 1999.
10.2 Contruction Agreement Between Cranshaw Construction of
New England Limited Partnership and Kronos, Inc. Dated
March 10, 1999.
10.3 Agreement of Purchase and Sale By and Between W/9TIB
Real Estate Limited Partnership and Kronos Incorporated
Dated March 29, 1999.
27 Financial Data Schedule
DS2.369722.6
Execution Copy
LEASE AGREEMENT BETWEEN
W9/TIB REAL ESTATE LIMITED PARTNERSHIP, AS LANDLORD, AND
KRONOS INCORPORATED, AS TENANT
DATED February 26, 1999
<PAGE>
v
TABLE OF CONTENTS
1. Lease Grant.........................................................1
2. Term................................................................1
3. Rent................................................................1
(a) Basic Rent.................................................1
(b) Payment....................................................2
(c) Operating Costs............................................2
4. Delinquent Payment; Handling Charges................................5
5. Security Deposit....................................................5
6. Landlord's Obligations..............................................6
(a) Services...................................................6
(b) Landlord's Maintenance Obligations.........................8
(c) Excess Utility Use.........................................8
(d) Restoration of Services; Abatement.........................9
(e) Taxes......................................................9
(f) Landlord's Insurance.......................................9
7. Improvements; Alterations; Repairs; Maintenance.....................9
(a) Improvements; Alterations..................................9
(b) Repairs; Maintenance......................................10
(c) Performance of Work.......................................11
(d) Mechanic's Liens..........................................11
(e) Utilities.................................................11
(f) Floor Load; Heavy Machinery...............................11
8. Use................................................................12
9. Assignment and Subletting..........................................12
(a) Transfers; Consent........................................12
(b) Cancellation..............................................13
(c) Additional Compensation...................................13
10. Insurance; Waivers; Subrogation; Indemnity.........................14
(a) Insurance.................................................14
(b) Waiver of Negligence; No Subrogation......................14
(c) Indemnity.................................................14
11. Subordination; Attornment; Notice to Landlord's Mortgagee..........15
(a) Subordination.............................................15
(b) Attornment................................................15
(c) Notice to Landlord's Mortgagee............................15
(d) Landlord's Mortgagee's Protection Provisions..............15
12. Rules and Regulations..............................................16
13. Condemnation.......................................................16
(a) Total Taking..............................................16
(b) Partial Taking -Tenant's Rights...........................16
(c) Partial Taking -Landlord's Rights.........................16
(d) Award.....................................................17
14. Fire or Other Casualty.............................................17
(a) Repair Estimate...........................................17
(b) Landlord's and Tenant's Rights............................17
(c) Landlord's Rights.........................................17
(d) Repair Obligation.........................................18
15. Personal Property Taxes............................................18
16. Events of Default..................................................18
17. Remedies...........................................................19
18. Payment by Tenant; Non-Waiver......................................20
(a) Payment by Tenant.........................................20
(b) No Waiver.................................................20
19. Landlord's Lien....................................................20
20. Surrender of Premises..............................................21
21. Holding Over.......................................................21
22. Certain Rights Reserved by Landlord................................21
23. [Intentionally Omitted]............................................22
24. Miscellaneous......................................................22
(a) Landlord Transfer.........................................22
(b) Landlord's Liability......................................22
(c) Force Majeure.............................................22
(d) Brokerage.................................................22
(e) Estoppel Certificates.....................................23
(f) Notices...................................................23
(g) Separability..............................................23
(h) Amendments; and Binding Effect............................23
(i) Quiet Enjoyment...........................................23
(j) No Merger.................................................23
(k) No Offer..................................................24
(l) Entire Agreement..........................................24
(m) Waiver of Jury Trial......................................24
(n) Governing Law.............................................24
(o) Joint and Several Liability...............................24
(p) Financial Reports.........................................24
(q) Landlord's Fees...........................................24
(r) Telecommunications........................................25
(s) General Definitions.......................................25
(t) Confidentiality...........................................25
(u) Hazardous Materials.......................................25
(v) List of Exhibits..........................................26
(w) Time of Essence...........................................26
(x) Notice of Lease...........................................26
(y) First Amendment to Lease..................................26
(z) Corporate Approval........................................27
(aa) Building Signage..........................................27
(bb) Rooftop Equipment.........................................27
(cc) Access....................................................28
(dd) Arbitration...............................................28
(ee) Campus Setting............................................29
(ff) Termination Agreement with Sun Microsystems...............30
(gg) Termination of 6 Omni Way Lease...........................30
25. Other Provisions...................................................31
<PAGE>
LEASE
THIS LEASE AGREEMENT (this "Lease") is entered into as of February 26,
1999, between W9/TIB REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited
partnership ("Landlord"), and KRONOS INCORPORATED, a Massachusetts corporation
("Tenant").
1. Lease Grant. Subject to the terms of this Lease, Landlord leases to
Tenant, and Tenant leases from Landlord, real property located at 2 Omni Way,
Chelmsford, Massachusetts together with all improvements located thereon
including the office building located thereon containing approximately 82,228
rentable square feet (the "Premises"), as shown on the site plan attached hereto
as Exhibit A. The office building located on the Premises shall hereinafter be
referred to as the "Building"). The legal description of the Premises is
attached hereto as Exhibit B.
2. Term. The term of this Lease shall commence on the earlier of (i)
the date which is one hundred twenty (120) days after the date upon which
Landlord provides to Tenant written notice of availability of the Premises or
(ii) the date upon which Tenant occupies the Premises for the Permitted Use, but
in no event shall such date be later than July 1, 1999 (the "Commencement
Date"), and expiring on the last day of the month in which the thirteenth (13th)
anniversary of the Commencement Date occurs (the "Term", which definition shall
include all renewals of the initial Term). If the Premises are not delivered to
Tenant on the Commencement Date, then (a) Tenant's obligation to pay Basic Rent
and Additional Rent (as defined in Section 3) shall be waived until Landlord
tenders possession of the Premises to Tenant, (b) Landlord shall not be in
default hereunder or be liable for damages therefor, and (c) Tenant shall accept
possession of the Premises when Landlord tenders possession thereof to Tenant.
Use and occupancy of the Premises by Tenant prior to the Commencement Date shall
be subject to all of the provisions of this Lease excepting only those requiring
the payment of Basic Rent.
3. Rent.
(a)......Basic Rent. "Basic Rent" (herein so called) shall be the following
amounts for the following periods of time:
------------------------------------- -------------------------------------
Time Period Annual Basic Rent Monthly Basic Rent
Lease Years 1-2 $657,824.00 $54,818.67
Lease Years 3-5 $945,622.00 $78,801.83
Lease Years 6-8 $986,736.00 $82,228.00
Lease Years 9-13 $1,068,964.00 $89,080.33
<PAGE>
33
The term "Lease Year" shall mean any period of twelve (12) months
commencing on the first day of the first full month of the Term or any
anniversary of such date or, if fewer than twelve (12) months remain in the Term
after any such anniversary period, commencing on such anniversary date through
the last day of the Term.
(b)......Payment. Tenant shall timely pay to Landlord Basic
Rent and all additional sums to be paid by Tenant to Landlord under this Lease
(collectively, the "Rent"), without notice, deduction or set off, except as
otherwise provided herein, at Landlord's address provided for in this Lease or
as otherwise specified by Landlord. Basic Rent, adjusted as herein provided,
shall be payable monthly in advance, and shall be accompanied by all applicable
state and local sales or use taxes. Basic Rent shall be payable on the first day
of each month beginning on the first day of the first full calendar month of the
Term. The monthly Basic Rent for any partial month at the beginning of the Term
shall equal the product of 1/365 of the annual Basic Rent in effect during the
partial month and the number of days in the partial month from and after the
Commencement Date, and shall be due on the Commencement Date.
(c)......Operating Costs.
(1)......Tenant shall pay, as "Additional Rent", the
Operating Costs (defined below). Landlord may make a good faith
estimate of the Additional Rent to be due by Tenant for any calendar
year or part thereof during the Term, and Tenant shall pay to Landlord,
on the Commencement Date and on the first day of each calendar month
thereafter, an amount equal to the estimated Additional Rent for such
calendar year or part thereof divided by the number of months therein.
From time to time, but not more often than twice in any twelve (12)
month period, Landlord may estimate and re-estimate the Additional Rent
to be due by Tenant and deliver a detailed line item copy of the
estimate or re-estimate to Tenant. Thereafter, the monthly installments
of Additional Rent payable by Tenant shall be appropriately adjusted in
accordance with the estimations so that, by the end of the calendar
year in question, Tenant shall have paid all of the Additional Rent as
estimated by Landlord. Any amounts paid based on such an estimate shall
be subject to adjustment as herein provided when actual Operating Costs
are available for each calendar year.
<PAGE>
(2)......The term "Operating Costs" shall mean all
expenses and disbursements (subject to the limitations set forth below)
that Landlord incurs in connection with the ownership, operation, and
maintenance of the Premises, determined in accordance with generally
accepted accounting principles ("GAAP") consistently applied,
including, but not limited to, the following costs: (A) wages and
salaries (including management fees) of all employees engaged in the
operation, maintenance, and security of the Premises, including taxes,
insurance and benefits relating thereto; (B) all supplies and materials
used in the operation, maintenance, repair, replacement, and security
of the Premises; (C) costs for improvements made to the Premises which,
if capital in nature, shall be amortized over the useful economic life
of such improvements as determined by Landlord in its reasonable
discretion; (D) cost of all utilities, except the cost of utilities
paid directly by Tenant or reimbursable to Landlord by Tenant other
than pursuant to a provision similar to this Section 3.(c); (E)
insurance expenses; (F) repairs, replacements, and general maintenance
of the Premises; and (G) service or maintenance contracts with
independent contractors for the operation, maintenance, repair,
replacement, or security of the Premises (including, without
limitation, alarm service, window cleaning, and elevator maintenance).
Operating Costs shall not include costs for (i) repair,
replacements and general maintenance paid by proceeds of insurance or
by Tenant or other third parties; (ii) interest, amortization or other
payments on loans to Landlord; (iii) depreciation; (iv) leasing
commissions; (v) legal expenses for services, other than those that
benefit Tenant (e.g., tax disputes); (vi) Taxes (defined below); (vii)
federal income taxes imposed on or measured by the income of Landlord
from the operation of the Premises; (viii) any cost or expense to the
extent to which Landlord is paid or reimbursed (other than as a payment
for Operating Costs), including but not necessarily limited to, (1)
work or service performed for any tenant (including Tenant) at such
tenant's costs, (2) the cost of any item for which Landlord is paid or
reimbursed by insurance warranties, service contracts, condemnation
proceeds or otherwise, (3) charges (including applicable taxes) for
electricity, water and other utilities for which Landlord is entitled
to reimbursement pursuant to other provisions of this Lease, and (4)
the cost of any HVAC, janitorial or other services provided to tenants
on an extra-cost basis after regular business hours as defined in the
Lease; (ix) the cost of correcting initial defects in the design,
construction or equipment of the Building; (x) salaries and bonuses of
officers and executives of Landlord; (xi) any cost included in
Operating Costs representing an amount paid to a person, firm,
corporation or other entity related to Landlord which is in excess of
the amount which would have been paid on an arms length basis in the
absence of such relationship; (xii) any capital cost necessary to cure
any violation of any law, ordinance or regulation applicable to the
Building existing as of the Commencement Date or to remediate any
environmental condition (existing as of the date of the Lease) provided
Tenant in no way exacerbates any such condition; (xiii) the cost of
acquiring sculptures, paintings and other objects of art in excess of
$2,000 per item; and (xiv) the cost of advertising or promotion for the
Building.
<PAGE>
(3)......Tenant shall also pay the Taxes for each
year and partial year falling within the Term, in the same manner as
provided above for Additional Rent with regard to Operating Costs.
"Taxes" shall mean taxes, assessments, and governmental charges whether
federal, state, county or municipal, and whether they be by taxing
districts or authorities presently taxing or by others, subsequently
created or otherwise, and any other taxes and assessments attributable
to the Building (or its operation), excluding, however, penalties and
interest thereon and federal and state taxes on income (if the present
method of taxation changes so that in lieu of the whole or any part of
any Taxes, there is levied on Landlord a capital tax directly on the
rents received therefrom or a franchise tax, assessment, or charge
based, in whole or in part, upon such rents for the Building, then all
such taxes, assessments, or charges, or the part thereof so based,
shall be deemed to be included within the term "Taxes" for purposes
hereof). Tenant shall, at its sole cost and expense and upon prior
written notice to Landlord, have the right to seek an abatement of the
Taxes provided that Tenant shall promptly provide Landlord with copies
of all papers filed with various authorities in connection with seeking
such an abatement and with copies of all papers received from other
parties relating to any such abatement. Taxes shall include the costs
of consultants retained in an effort to lower taxes and all costs
incurred in disputing any taxes or in seeking to lower the tax
valuation of the Building. The following items shall be excluded from
Taxes: (A) inheritance taxes; (B) gift taxes; (C) transfer taxes; (D)
franchise taxes; (E) excise taxes; (F) income taxes; (G) profit taxes;
and (H) late payment charges and penalties provided Tenant is not in
default of any of its payment obligations under this Lease. Subject to
the provisions of the next succeeding sentence, any real estate related
betterment assessments shall be payable over the longest period of time
permitted by law. If Landlord elects to pay any such assessments over a
shorter period of time, Tenant shall only be required to pay during any
given period of time that portion of any given assessment that would
have been required to be paid during such period of time if such
assessment had been paid over the longest period of time permitted by
law.
(4)......By April 1 of each calendar year, or as soon
thereafter as practicable, Landlord shall furnish to Tenant a statement
of Operating Costs for the previous year, adjusted as provided in
Section 3.(c)(6), and of the Taxes for the previous year (the
"Operating Costs and Tax Statement"). If the Operating Costs and Tax
Statement reveals that Tenant paid more for Operating Costs than the
actual amount for the year for which such statement was prepared, or
more than its actual share of Taxes for such year, then Landlord shall
promptly credit or reimburse Tenant for such excess; likewise, if
Tenant paid less than the actual Additional Rent or Taxes due, then
Tenant shall promptly pay Landlord such deficiency within thirty (30)
days after receiving written notice from Landlord of the amount of such
deficiency. Any such Operating Costs and Tax Statement furnished by
Landlord shall be binding and conclusive upon Tenant unless Tenant
shall notify Landlord that Tenant disputes the correctness of such
Operating Costs and Tax Statement within one hundred eighty (180) days
after the submission thereof by Landlord. If Tenant disputes such
Operating Cost and Tax Statement as aforesaid, and Tenant is not in
default of its monetary obligations under this Lease, Tenant shall have
the right to audit Landlord's books used to determine said Operating
Cost and Tax Statement within one hundred eighty (180) days after
submission thereof by Landlord, which right Tenant agrees not to
exercise more than once annually. Access to said Operating Cost and Tax
Statement books shall be provided within thirty (30) days of Tenant's
request. Any information obtained by Tenant pursuant to the provisions
of this Section 3(d)(4) shall be treated as confidential. If any such
audit discloses Tenant paid in excess of Tenant's proportionate share
of Operating Costs or Tax Escalation, Landlord shall promptly reimburse
such excess to Tenant within thirty (30) days after Tenant's demand
therefor. Landlord shall maintain its books used to determine the
Operating Cost and Tax Statement in a manner consistent with reputable
professional standards used to maintain the books of comparable
properties.
<PAGE>
4. Delinquent Payment; Handling Charges. All payments past due by five
(5) days beyond the due date required of Tenant hereunder shall bear interest
from the fifth (5th) day beyond the date due until paid at the lesser of 18% per
annum (the "Interest Rate") or the maximum lawful rate of interest. In no event,
however, shall the charges permitted under this Section 4 or elsewhere in this
Lease, to the extent they are considered to be interest under law, exceed the
maximum lawful rate of interest.
5. Security Deposit. Contemporaneously with the execution of this
Lease, Tenant shall pay to Landlord $160,000.00 (the "Security Deposit"), which
shall be held by Landlord to secure Tenant's performance of its obligations
under this Lease. The Security Deposit is not an advance payment of Rent or a
measure or limit of Landlord's damages upon an Event of Default (defined in
Section 16). Landlord may, from time to time and without prejudice to any other
remedy, use all or a part of the Security Deposit to perform any obligation
Tenant fails to perform hereunder. Following any such application of the
Security Deposit, Tenant shall pay to Landlord on demand the amount so applied
in order to restore the Security Deposit to its original amount. Provided that
Tenant has performed all of its obligations hereunder, Landlord shall, within
thirty (30) days after the Term ends, return to Tenant the portion of the
Security Deposit which was not applied to satisfy Tenant's obligations. The
Security deposit may be commingled with other funds, and no interest shall be
paid thereon. If Landlord transfers its interest in the Premises and the
transferee assumes Landlord's obligations under this Lease, then Landlord may
assign the Security Deposit to the transferee and Landlord thereafter shall have
no further liability for the return of the Security Deposit.
<PAGE>
In lieu of a cash Security Deposit, simultaneously with the execution
and delivery of this Lease, Tenant may deliver to Landlord an irrevocable and
unconditional standby letter of credit made payable to Landlord, its successors
and assigns, in the sum of $160,000.00 (the "Letter of Credit"), substantially
in the form of the sample letter of credit attached hereto as Exhibit F or in
such other form as is reasonably acceptable to Landlord, which shall secure the
performance by Tenant of all obligations on the part of Tenant hereunder. The
issuer of the Letter of Credit shall be a banking institution with at least a
rating of A and otherwise reasonably acceptable to Landlord. Although Landlord
shall only have the right to draw under the Letter of Credit as set forth
herein, under the terms of the Letter of Credit, the sole condition to
Landlord's draw upon the Letter of Credit shall be presentment to the issuer
thereof, prior to or on the expiration date, of a demand for payment. The Letter
of Credit shall be self-renewing from year to year during the Term of this Lease
so as to expire no earlier than thirty (30) days following the Lease expiration
date and shall contain such other customary terms as Landlord requires in its
reasonable discretion. It is agreed: (i) that the Letter of Credit may be drawn
upon to cure any Event of Default that may exist, without prejudice to any other
remedy or remedies which Landlord may have on account thereof, and upon
Landlord's demand, Tenant shall reimburse the issuer for the amount so drawn so
that the Letter of Credit will be restored to its original amount; (ii) subject
to the provisions of clause (iv) below, that the Letter of Credit may be drawn
upon if the Letter of Credit has not been extended or renewed without amendment
at least forty-five (45) days prior to any then-current expiration date thereof;
(iii) that if the rating of the issuer of the Letter of Credit at any time drops
below A, then, within sixty (60) days of Landlord's demand, Tenant shall replace
the Letter of Credit with another Letter of Credit in a form reasonably
acceptable to Landlord and with an issuer with a rating of at least an A and
otherwise reasonably acceptable to Landlord; Landlord may draw on the existing
Letter of Credit if, after Landlord requests that Tenant replace the Letter of
Credit as aforesaid, Landlord is not provided with a substitute Letter of Credit
in a form, and from an issuer, satisfactory to Landlord as provided above at
least fifteen (15) days prior to the then-current expiration date of the Letter
of Credit; (iv) if at any time, but in any event, at least sixty (60) days prior
to the expiration of the Letter of Credit, Tenant may seek Landlord's consent to
switch issuers of the Letter of Credit provided the prospective issuer has a
rating of at least an A and is otherwise reasonably acceptable to Landlord and
the new form of Letter of Credit satisfies the requirements of Landlord
hereunder and is otherwise reasonably acceptable to Landlord; Landlord may draw
on the existing Letter of Credit if, after Tenant requests Landlord's consent to
switch issuers as aforesaid, Landlord is not provided with a substitute Letter
of Credit in a form, and from an issuer, satisfactory to Landlord in its sole
and absolute discretion at least forty-five (45) days prior to the then-current
expiration date of the Letter of Credit; (v) that should the Premises be
conveyed by Landlord, the Letter of Credit or any portion thereof shall be
assigned to Landlord's grantee, and if the same be assigned as aforesaid, Tenant
hereby releases Landlord from any and all liability with respect to the Letter
of Credit and its application or return, and Tenant agrees to look to such
grantee for such application or return, provided such grantee assumes Landlord's
obligations under this Lease (including this Section 5); and (vi) that the
Letter of Credit shall be returned to Tenant upon the later of (a) thirty (30)
days after the expiration of the Term or any renewal or extension thereof, or
(b) the date Tenant has vacated the Premises and surrendered possession thereof
to Landlord at the expiration of the Term or any extension thereof as provided
herein and has paid Landlord all sums due and owing under this Lease.
If Tenant initially provides Landlord with a cash Security Deposit,
Tenant may replace such cash Security Deposit with a Letter of Credit in
accordance with the provisions of the preceding paragraph. Upon Landlord's
receipt of a Letter of Credit satisfying the terms and conditions of the
preceding paragraph, Landlord shall promptly return the cash Security Deposit to
Tenant.
For the purposes of this Section 5, a rating of at least A (or its
equivalent) shall mean that such issuer has a rating of at least A (or its
equivalent) from two (2) of the following four (4) rating agencies: Fitch
Investors Service, Moody's Investor Service, Standard & Poor's Corporation and
Duff & Phelps.
6. Landlord's Obligations.
<PAGE>
(a)......Services. Landlord shall furnish to Tenant the
following services (the cost of which services shall be considered Operating
Costs): (1) hot and cold water at bathroom sinks provided for general use of
tenants of the Building; (2) heated and refrigerated air conditioning as
appropriate, at such temperatures and in such amounts as are standard for
comparable buildings in the vicinity of the Building; (3) janitorial service
(which janitorial service shall include service to the interior and exterior of
the Building and the Premises and shall include the services customarily
provided to comparable properties by reputable professional management
companies, including, without limitation, maintenance, repairs and replacement
of (u) the parking area associated with the Building and located on the
Premises, (v) all grass, shrubbery and other landscape treatments on the
Premises, (w) the exterior of the Building (including painting), (x) sprinkler
systems and sewage lines, and (y) any other maintenance, repair or replacement
items normally associated with the foregoing) to the Premises on weekdays, other
than the holidays enumerated on Exhibit I attached hereto (collectively,
"Building Holidays"), for Building-standard installations and such window
washing as may from time to time be reasonably required but not less than twice
a year; (4) elevators for ingress and egress to the floors of the Building,
provided that Landlord may reasonably limit the number of operating elevators
during non-business hours and holidays; and (5) electrical current during normal
business hours for equipment that does not require more than 110 volts and whose
electrical energy consumption does not exceed normal office usage. While Tenant
is the sole occupant of the Building, Tenant may, with Landlord's prior written
consent (which consent shall not be unreasonably withheld or delayed),
substitute at Tenant's expense any of the providers of the services described in
this Section 6.(a) with reputable, licensed third party service providers
located in the area in which the Building is located; provided, however, Tenant
shall provide Landlord with copies of all contracts with any such service
provider and said contracts shall be in form and substance reasonably
satisfactory to Landlord. If, in accordance with the provisions of the preceding
sentence, Tenant engages (at its own cost) providers for all of the services to
be provided by Landlord under this Section 6.(a), the management fee included in
Operating Costs shall be reduced to the greater of (i) $1,300.00 per month or
(ii) one and one-quarter percent (1 1/4%) of the gross revenues derived by
Landlord from the Premises. If Tenant engages providers of the services set
forth in this Section 6.(a) as aforesaid and any such services are provided, in
Landlord's reasonable discretion, at an unsatisfactory level as would
customarily be provided to comparable buildings, Landlord may, upon prior
written notice to Tenant, elect to provide such services and the management fee
shall no longer be reduced. If Landlord is providing the services set forth in
this Section 6.(a) and Tenant desires any of the services specified in Section
6.(a)(2): (A) at any time other than between 8:00 a.m. and 6:00 p.m. on weekdays
(excluding Building Holidays), or (B) on Saturday, Sunday or Building Holidays,
then such services shall be supplied to Tenant upon the written request of
Tenant delivered to Landlord before 3:00 p.m. on the business day preceding such
extra usage, and Tenant shall pay to Landlord the cost of such services within
ten (10) days after Landlord has delivered to Tenant an invoice therefor. The
costs incurred by Landlord in providing after-hour HVAC service to Tenant shall
include costs for electricity, water, sewage, water treatment, labor, metering,
filtering, and maintenance reasonably allocated by Landlord to providing such
service.
Landlord and Tenant hereby acknowledge and agree that, as of the
Commencement Date, Tenant shall engage providers of the services set forth in
this Section 6.(a). However, upon sixty (60) days prior written notice to
Landlord, Tenant may elect to have Landlord provide such services.
<PAGE>
If, during the last two (2) years of the Term (inclusive of the
five-year extension if Tenant elects to exercise the same in accordance with the
provisions of Exhibit G) and during a time when Tenant is engaging providers of
the services set forth in this Section 6.(a), Tenant elects to make a capital
improvement to the Base Building (as hereinafter defined) because that portion
of the Base Building fails to operate (as opposed to operates less efficiently),
Landlord agrees to pay the unamortized cost of any such capital improvement on
the following terms and conditions provided such failure is not a result of any
act, omission, fault, negligence or neglect of Tenant, its agents, employees,
invitees or contractors: (i) Landlord and Tenant agree in writing on the cost of
any such capital improvement and the useful life over which any such capital
improvement shall be amortized prior to the installation of any such capital
improvement (ii) to the extent capital improvements are devoted to Building
systems, the Building systems shall not be in excess of standard building design
for comparable buildings in the 495 North market; and (iii) Landlord agrees to
pay the unamortized cost of any such capital improvement as previously agreed to
in writing by the parties within sixty (60) days after the later of the
expiration of this Lease or the date Tenant surrenders the Premises in
accordance with this Lease provided Tenant is not in default hereunder, this
Lease does not terminate prior to the stated expiration date and Tenant has
maintained and repaired any such capital improvement in accordance with the
provisions of this Lease.
For the purposes of this Lease, the "Base Building" shall mean the
roof, foundation, structural columns and Building systems to the extent any of
the foregoing have not been altered or improved by Tenant in any manner.
(b)......Landlord's Maintenance Obligations. This Lease is
intended to be a net lease; accordingly, Landlord's maintenance obligations are
limited to the repair, maintenance and replacement of the Building's roof and
the repair, maintenance and replacement of the foundation and structural members
of exterior walls (the "Building's Structure"); Landlord shall not be
responsible for (1) any such work until Tenant notifies Landlord of the need
therefor in writing, (2) for alterations to the Building's Structure required by
applicable law because of Tenant's use of the Premises (which alterations shall
be Tenant's responsibility), (3) any such work caused by Tenant's negligence or
its failure to comply with the provisions of this Lease, or (4) any costs
incurred by Landlord in connection with the repair and maintenance of the roof,
which repair and maintenance costs shall be considered an Operating Cost and
paid by Tenant in accordance with Section 3 above. The Building's Structure does
not include skylights, windows, glass or plate glass, doors, special fronts, or
office entries, all which shall be maintained by Tenant. Landlord's liability
for any defects, repairs, replacements or maintenance for which Landlord
specifically is responsible for under this Lease shall be limited to the cost of
performing the work.
<PAGE>
(c)......Excess Utility Use. Landlord shall not be required to
furnish electrical current for equipment that requires more than the electrical
capacity currently provided in the Building (the "Base Building Electrical
Capacity"). If Tenant's requirements for or consumption of electricity exceed
the Base Building Electrical Capacity, Landlord shall, at Tenant's expense, make
reasonable efforts to supply such service through the then-existing feeders and
risers serving the Building, and Tenant shall pay to Landlord the cost of such
service within ten (10) days after Landlord has delivered to Tenant an invoice
therefor. Landlord may determine the amount of such additional consumption and
potential consumption by any verifiable method, including installation of a
separate meter in the Premises installed, maintained, and read by Landlord, at
Tenant's expense. Tenant shall not install any electrical equipment requiring
special wiring or requiring voltage in excess of the Base Building Electrical
Capacity unless approved in advance by Landlord. The use of electricity in the
Premises shall not exceed the capacity of existing feeders and risers to or
wiring in the Building. Any risers or wiring required to meet Tenant's excess
electrical requirements shall, upon Tenant's written request, be installed by
Landlord, at Tenant's cost, if, in Landlord's judgment, the same are necessary
and shall not cause permanent damage to the Building or the Premises, cause or
create a dangerous or hazardous condition, entail excessive or unreasonable
alterations, repairs, or expenses, or interfere with or disturb other tenants of
the Building. If Tenant uses machines or equipment in the Building which affect
the temperature otherwise maintained by the air conditioning system or otherwise
overload any utility, Landlord may install supplemental air conditioning units
or other supplemental equipment in the Building, and the cost thereof, including
the cost of installation, operation, use, and maintenance, shall be paid by
Tenant to Landlord within ten (10) days after Landlord has delivered to Tenant
an invoice therefor.
(d)......Restoration of Services; Abatement. Landlord shall
use reasonable efforts to restore any service required of it that becomes
unavailable; however, such unavailability shall not render Landlord liable for
any damages caused thereby, be a constructive eviction of Tenant, constitute a
breach of any implied warranty, or, except as provided in the next sentence,
entitle Tenant to any abatement of Tenant's obligations hereunder. If, however,
Tenant is prevented from using the Premises for ten (10) consecutive business
days because of the unavailability of any such service, then Tenant shall, as
its exclusive remedy be entitled to a reasonable abatement of Rent for each
consecutive day (after such ten (10) day period) that Tenant is so prevented
from using the Premises.
(e)......Taxes. Provided Tenant is not in default of any of
its monetary obligations under this Lease, Landlord shall pay promptly when due
to the taxing authority having jurisdiction all taxes, rates, duties, levies and
assessments whatsoever, whether municipal, state, Federal or otherwise, levied,
imposed or assessed against the Building or upon Landlord in respect thereof or
from time to time levied, imposed or assessed in the future in lieu thereof,
including those levied, imposed or assessed for education, schools and local
improvements.
(f)......Landlord's Insurance. Landlord shall carry
throughout the Term of this Lease fire and extended coverage
---------------------
insurance on the Building for the full replacement value.
7. Improvements; Alterations; Repairs; Maintenance.
<PAGE>
(a)......Improvements; Alterations. Improvements to the
Premises shall be installed at Tenant's expense only in accordance with plans
and specifications which have been previously submitted to and approved in
writing by Landlord. No alterations or physical additions in or to the Premises
may be made without Landlord's prior written consent, which shall not be
unreasonably withheld or delayed; however, Landlord may withhold its consent to
any alteration or addition that would affect the Building's structure or its
HVAC, plumbing, electrical, or mechanical systems. Notwithstanding the
foregoing, Tenant may from time to time make alterations, additions or
improvements to the Premises, without the consent of Landlord and without
Landlord's approval of plans, provided: (i) the cost thereof shall not exceed
Fifty Thousand Dollars ($50,000.00) in the aggregate in any consecutive
twelve-month period; (ii) Tenant shall, prior to commencing any such
alterations, additions and/or improvements in the Premises in connection
therewith, furnish Landlord with a complete set of plans and specifications for
any such alterations, additions and/or improvements; (iii) such alterations,
additions and/or improvements shall not involve or affect the exterior or the
structure of the Building or any of the mechanical, electrical or plumbing
systems of the Building; and (iv) Tenant shall comply with all requirements of
this Lease with respect to such alterations, additions and/or improvements other
than obtaining the prior approval of Landlord. Tenant shall not paint or install
lighting or decorations, signs, window or door lettering, or advertising media
of any type on or about the Premises which might affect the appearance of the
exterior of the Building or any other portion of the Premises other than the
interior of the Building without the prior written consent of Landlord, which
shall not be unreasonably withheld or delayed; however, Landlord may withhold
its consent to any such painting or installation which would affect the
appearance of the exterior of the Building or of any common areas of the
Building. All alterations, additions, or improvements made in or upon the
Premises shall be removed by Tenant prior to the end of the Term (and Tenant
shall repair all damage caused thereby) if Landlord conditioned its consent to
the initial installation of any such alterations, additions or improvements upon
such removal; otherwise, in the absence of such a removal condition with respect
to each and every alteration, addition or improvement, all such alterations,
additions or improvements (excluding moveable partitions) shall remain on the
Premises at the end of the Term without compensation to Tenant. All alterations,
additions, and improvements shall be constructed, maintained, and used by
Tenant, at its risk and expense, in accordance with all Laws; Landlord's
approval of the plans and specifications therefor shall not be a representation
by Landlord that such alterations, additions, or improvements comply with any
Law.
<PAGE>
(b)......Repairs; Maintenance. Tenant shall maintain the
Premises in a clean safe, and operable condition consistent with the operation
of a first class office building, and shall not permit or allow to remain any
waste or damage to any portion of the Premises. If Tenant elects to engage
providers for all services in accordance with Section 6.(a) above, Tenant shall
enter into preventative maintenance/service contract(s) with maintenance
contractor(s) approved by Landlord for servicing the landscaping of the Premises
and all air conditioning, heating and ventilating equipment, elevators and other
equipment located within or serving the Premises. All preventative
maintenance/service contracts shall be in form and substance reasonably
satisfactory to Landlord and shall provide that the maintenance contractor shall
provide Landlord with quarterly reports respecting the maintenance of the
subject equipment. Tenant shall provide Landlord with copies of all such
preventative maintenance/service contracts maintained by Tenant. Irrespective of
whether or not Tenant elects not to engage providers for all services in
accordance with Section 6.(a) above, Tenant shall repair or replace, subject to
Landlord's reasonable direction and supervision, any improvement or system
installed by Tenant within the Premises and any damage to the Building caused by
Tenant, Tenant's transferees, or their respective agents, contractors, or
invitees. If Tenant fails to make such repairs or replacements within thirty
(30) days (or such shorter period of time required to prevent any damage from
occurring to the Premises) after the occurrence of such damage, then Landlord
may make the same at Tenant's cost.
(c)......Performance of Work. All work described in this
Section 7 shall be performed only by Landlord or by contractors and
subcontractors reasonably approved in writing by Landlord and Tenant. Tenant
shall cause all contractors and subcontractors to procure and maintain insurance
coverage naming Landlord as an additional insured against such risks, in such
amounts, and with such companies as Landlord may reasonably require. All such
work shall be performed in accordance with all Laws and in a good and
workmanlike manner so as not to damage the Premises, the Building, or the
components thereof.
Tenant shall provide the names, addresses and copies of contracts for
all contractors, and upon completion of any work shall promptly furnish Landlord
with full and final waivers of lien covering all labors and materials included
in the work in question.
(d)......Mechanic's Liens. Tenant shall not permit any
mechanic's liens to be filed against the Premises or the Building for any work
performed, materials furnished, or obligation incurred by or at the request of
Tenant. If such a lien is filed, then Tenant shall, within ten (10) days after
Landlord has delivered notice of the filing thereof to Tenant, either pay the
amount of the lien or diligently contest such lien and deliver to Landlord a
bond or other security reasonably satisfactory to Landlord. If Tenant fails to
timely take either such action, then Landlord may pay the lien claim, and any
amounts so paid, including expenses and interest, shall be paid by Tenant to
Landlord within ten days after Landlord has invoiced Tenant therefor.
(e)......Utilities. Tenant shall obtain and pay for all water,
gas, electricity, heat, telephone, sewer, sprinkler charges and other utilities
and services used at the Premises, together with all taxes, penalties,
surcharges, and maintenance charges pertaining thereto. Landlord shall not be
liable for any interruption or failure of utility service to the Premises unless
caused by Landlord's gross negligence. To the extent Tenant is not billed
directly for any such utilities, any amounts payable by Tenant under this
Section shall be due within ten (10) days after Landlord has invoiced Tenant
therefor.
(f)......Floor Load; Heavy Machinery. (i) Tenant shall not
place a load upon any floor in the Building exceeding the floor load per square
foot of area which such floor was designed to carry or which is allowed by law.
Landlord reserves the right to prescribe the weight and position of all business
machines and mechanical equipment, including safes, which shall be placed so as
to distribute the weight. Business machines and mechanical equipment shall be
placed and maintained by Tenant at Tenant's expense in settings sufficient, in
Landlord's judgment, to absorb and prevent vibration, noise and annoyance.
Tenant shall not move any safe, heavy machinery and/or heavy equipment into or
out of the Building without Landlord's prior consent, which consent may include
a requirement to provide insurance, naming Landlord as an insured, in such
amounts as Landlord may deem reasonable.
<PAGE>
(ii).....If such safe, machinery, equipment,
freight, bulky matter or fixtures requires special handling,
Tenant agrees that all work in connection therewith shall comply with applicable
laws and regulations. Any such moving shall be at the sole risk and hazard of
Tenant, and Tenant will exonerate, indemnify and save Landlord harmless against
and from any liability, loss, injury, claim or suit resulting directly or
indirectly from such moving.
8. Use. Tenant shall continuously occupy and use the Premises only for
general office, research and development, manufacturing, training, sales,
service and engineering use (the "Permitted Use"), provided the Permitted Use
complies with all applicable laws, and shall comply with all Laws relating to
the use, condition, access to, and occupancy of the Premises. The Premises shall
not be used for any use which is disreputable, creates extraordinary fire
hazards, or results in an increased rate of insurance on the Premises, the
Building or its contents, or for the storage of any hazardous materials or
substances. If, because of a Tenant Party's acts, the rate of insurance on the
Building or its contents increases, then such acts shall be an Event of Default,
Tenant shall pay to Landlord the amount of such increase on demand, and
acceptance of such payment shall not waive any of Landlord's other rights.
Tenant shall conduct its business and control each other Tenant Party so as not
to create any nuisance or unreasonably interfere with Landlord in its management
of the Building.
9. Assignment and Subletting.
<PAGE>
(a)......Transfers; Consent. Tenant shall not, without the
prior written consent of Landlord, (1) assign, transfer, or encumber this Lease
or any estate or interest herein, whether directly or by operation of law, (2)
permit any other entity to become Tenant hereunder by merger, consolidation, or
other reorganization, (3) if Tenant is an entity other than a corporation whose
stock is publicly traded, permit the transfer of an ownership interest in Tenant
so as to result in a change in the current control of Tenant, (4) sublet any
portion of the Premises, (5) grant any license, concession, or other right of
occupancy of any portion of the Premises, or (6) permit the use of the Premises
by any parties other than Tenant (any of the events listed in Section 9.(a)(1)
through 9.(a)(6) being a "Transfer"). If Tenant requests Landlord's consent to a
Transfer, then Tenant shall provide Landlord with a written description of all
terms and conditions of the proposed Transfer, copies of the proposed
documentation, and the following information about the proposed transferee: name
and address; reasonably satisfactory information about its business and business
history; its proposed use of the Premises; banking, financial, and other credit
information; and general references sufficient to enable Landlord to determine
the proposed transferee's creditworthiness and character. Landlord shall not
unreasonably withhold or delay its consent to any assignment or subletting of
the Premises, provided that the proposed transferee (A) is creditworthy, (B) has
a good reputation in the business community, and (C) is not a person or entity
with whom Landlord is negotiating to lease space in an Affiliated Building;
otherwise, Landlord may withhold its consent in its sole discretion.
Concurrently with Tenant's notice of any request for consent to a Transfer,
Tenant shall pay to Landlord a fee of $500.00 to defray Landlord's expenses in
reviewing such request, and Tenant shall also reimburse Landlord immediately
upon request for its reasonable attorneys' fees incurred in connection with
considering any request for consent to a Transfer. If Landlord consents to a
proposed Transfer, then the proposed transferee shall deliver to Landlord a
written agreement whereby it expressly assumes Tenant's obligations hereunder;
however, any transferee of less than all of the space in the Premises shall be
liable only for obligations under this Lease that are properly allocable to the
space subject to the Transfer for the period of the Transfer. No Transfer shall
release Tenant from its obligations under this Lease, but rather Tenant and its
transferee shall be jointly and severally liable therefor. Landlord's consent to
any Transfer shall not waive Landlord's rights as to any subsequent Transfers.
If an Event of Default occurs while the Premises or any part thereof are subject
to a Transfer, then Landlord, in addition to its other remedies, may collect
directly from such transferee all rents becoming due to Tenant and apply such
rents against Rent. Tenant authorizes its transferees to make payments of rent
directly to Landlord upon receipt of notice from Landlord to do so. Tenant shall
pay for the cost of any demising walls or other improvements necessitated by a
proposed subletting or assignment. Notwithstanding any provisions of this
Section 9(a) to the contrary, Tenant may assign or sublet, without Landlord's
prior written consent, to any entity into or with which Tenant is merged or
consolidated or to which all or substantially all of Tenant's assets are
transferred or to any entity which controls or is controlled by Tenant or is
under common control with Tenant ("Affiliate of Tenant"), provided that (i) the
assignee agrees directly with Landlord, by written instrument in form
satisfactory to Landlord, to be bound by all obligations of Tenant hereunder,
including, without limitation, the covenant against further Transfer, (ii)
Tenant provides Landlord with notice of and information (reasonably satisfactory
to Landlord) regarding any such Affiliate of Tenant and such assignment to such
Affiliate of Tenant before the effective date thereof, (iii) Tenant shall remain
fully liable for all obligations of Tenant hereunder, and (iv) the Affiliate of
Tenant has a net worth equal to or greater than the greater of (A) ninety-five
percent (95%) of Tenant's net worth as of the date hereof or (B) ninety-five
percent (95%) of Tenant's net worth at the time of the Transfer.
(b)......Cancellation. Landlord may, within thirty (30) days
after submission of Tenant's written request for Landlord's consent to an
assignment or subletting (except for an assignment or sublease to an Affiliate
of Tenant), cancel this Lease as to the portion of the Premises proposed to be
sublet or assigned as of the date the proposed Transfer is to be effective,
unless, and subject to the provisions of the succeeding sentence, Tenant
withdraws its request for Landlord's consent within ten (10) days after
Landlord's notice to Tenant of Landlord's cancellation of this Lease as to a
portion of such Premises. Tenant shall only have the right to withdraw its
request for Landlord's consent if it pertains to a sublease of a portion of the
Building or a sublease of the Premises for less than the remainder of the Term.
If Landlord cancels this Lease as to any portion of the Premises (assuming
Tenant does not withdraw its request as aforesaid), then this Lease shall cease
for such portion of the Premises and Tenant shall pay to Landlord all Rent
accrued through the cancellation date relating to the portion of the Premises
covered by the proposed Transfer. Thereafter, Landlord may lease such portion of
the Premises to the prospective transferee (or to any other person) without
liability to Tenant.
<PAGE>
(c)......Additional Compensation. Tenant shall pay to
Landlord, immediately upon receipt thereof, the excess of (1) all compensation
received by Tenant for a Transfer less the costs reasonably incurred by Tenant
with unaffiliated third parties in connection with such Transfer (i.e.,
brokerage commissions, tenant finish work, and the like) over (2) the Rent
allocable to the portion of the Premises covered thereby.
10. Insurance; Waivers; Subrogation; Indemnity.
(a)......Insurance. Tenant shall maintain throughout the Term
the following insurance policies: (1) commercial general liability insurance in
amounts of $5,000,000 per occurrence or such other amounts as Landlord may from
time to time reasonably require, insuring Tenant, Landlord, Landlord's agents
and their respective affiliates against all liability for injury to or death of
a person or persons or damage to property arising from the use and occupancy of
the Premises, (2) insurance covering the full value of Tenant's property and
improvements, and other property (including property of others) in the Premises,
(3) contractual liability insurance sufficient to cover Tenant's indemnity
obligations hereunder, (4) worker's compensation insurance, and (5) business
interruption insurance. Tenant's insurance shall provide primary coverage to
Landlord when any policy issued to Landlord provides duplicate or similar
coverage, and in such circumstance Landlord's policy will be excess over
Tenant's policy. Tenant shall furnish to Landlord certificates of such insurance
and such other evidence satisfactory to Landlord of the maintenance of all
insurance coverages required hereunder, and Tenant shall obtain a written
obligation on the part of each insurance company to notify Landlord at least
thirty (30) days before cancellation or a material change of any such insurance
policies. All such insurance policies shall be in form, and issued by companies,
reasonably satisfactory to Landlord.
(b)......Waiver of Negligence; No Subrogation. Landlord and
Tenant each waives any claim it might have against the other for any injury to
or death of any person or persons or damage to or theft, destruction, loss, or
loss of use of any property (a "Loss"), to the extent the same is insured
against under any insurance policy that covers the Building, the Premises,
Landlord's or Tenant's fixtures, personal property, leasehold improvements, or
business, or, in the case of Tenant's waiver, is required to be insured against
under the terms hereof, regardless of whether the negligence of the other party
caused such Loss; however, Landlord's waiver shall not include any deductible
amounts on insurance policies carried by Landlord. Each party shall cause its
insurance carrier to endorse all applicable policies waiving the carrier's
rights of recovery under subrogation or otherwise against the other party.
(c)......Indemnity. Subject to Section 10.(b), Tenant shall
defend, indemnify, and hold harmless Landlord and its representatives and agents
from and against all claims, demands, liabilities, causes of action, suits,
judgments, damages, and expenses (including attorneys' fees) arising from (1)
any Loss arising from any occurrence on the Premises (other than any Loss
arising out of a breach of Tenant's obligations under Section 24.(u), which
shall be subject to the indemnity in such section) or (2) Tenant's failure to
perform its obligations under this Lease, unless caused solely by the negligence
or fault of Landlord or its agents. This indemnity provision shall survive
termination or expiration of this Lease. If any proceeding is filed for which
indemnity is required hereunder, Tenant agrees, upon request therefor, to defend
the indemnified party in such proceeding at its sole cost utilizing counsel
satisfactory to the indemnified party.
<PAGE>
(d)......Landlord's Indemnity. Subject to Section 10(b),
Landlord shall defend, indemnify, and hold harmless Tenant from and against all
claims, demands, liabilities, causes of action, suits, judgments and expenses
(including attorneys' fees) for any Loss arising from any occurrence at the
Premises caused or materially contributed to by Landlord's gross negligence in
acting or failing to act, and which Loss was not contributed to in any way by
Tenant's actions or omissions. This indemnity shall survive the expiration or
termination of this Lease.
11. Subordination; Attornment; Notice to Landlord's Mortgagee.
(a)......Subordination. This Lease shall be subordinate to any
deed of trust, mortgage, or other security instrument, or any ground lease,
master lease, or primary lease (any such security instrument or lease, a
"Mortgage"), that now or hereafter covers all or any part of the Premises (the
mortgagee under any such mortgage or the lessor under any such lease is referred
to herein as a "Landlord's Mortgagee"). Any Landlord's Mortgagee may elect, at
any time, unilaterally, to make this Lease superior to its mortgage, ground
lease, or other interest in the Premises by so notifying Tenant in writing.
Tenant shall execute agreements confirming the subordination or superiority of
this Lease to any Mortgage upon Landlord or Landlord's Mortgagee's reasonable
request.
(b)......Attornment. Tenant shall attorn to any party
succeeding to Landlord's interest in the Premises, whether by purchase,
foreclosure, deed in lieu of foreclosure, power of sale, termination of lease,
or otherwise, upon such party's request, and shall execute such agreements
confirming such attornment as such party may reasonably request.
(c)......Notice to Landlord's Mortgagee. Tenant shall not seek
to enforce any remedy it may have for any default on the part of Landlord
without first giving written notice by certified mail, return receipt requested,
specifying the default in reasonable detail, to any Landlord's Mortgagee whose
address has been given to Tenant, and affording such Landlord's Mortgagee a
reasonable opportunity to perform Landlord's obligations hereunder.
<PAGE>
(d)......Landlord's Mortgagee's Protection Provisions. If
Landlord's Mortgagee shall succeed to the interest of Landlord under this Lease,
Landlord's Mortgagee shall not be: (1) liable for any act or omission of any
prior lessor (including Landlord); (2) bound by any rent or additional rent or
advance rent which Tenant might have paid for more than the current month to any
prior lessor (including Landlord), and all such rent shall remain due and owing,
notwithstanding such advance payment; (3) bound by any security or advance
rental deposit made by Tenant which is not delivered or paid over to Landlord's
Mortgagee and with respect to which Tenant shall look solely to Landlord for
refund or reimbursement; (4) bound by any termination, amendment or modification
of this Lease made without Landlord's Mortgagee's consent and written approval,
except for those terminations, amendments and modifications permitted to be made
by Landlord without Landlord's Mortgagee's consent pursuant to the terms of the
loan documents between Landlord and Landlord's Mortgagee; (5) subject to the
defenses which Tenant might have against any prior lessor (including Landlord);
and (6) subject to the offsets which Tenant might have against any prior lessor
(including Landlord) except for those offset rights which (A) are expressly
provided in this Lease, (B) relate to periods of time following the acquisition
of the Premises by Landlord's Mortgagee, and (C) Tenant has provided written
notice to Landlord's Mortgagee and provided Landlord's Mortgagee a reasonable
opportunity to cure the event giving rise to such offset event. Landlord's
Mortgagee shall have no liability or responsibility under or pursuant to the
terms of this Lease or otherwise after it ceases to own an interest in the
Premises. Nothing in this Lease shall be construed to require Landlord's
Mortgagee to see to the application of the proceeds of any loan, and Tenant's
agreements set forth herein shall not be impaired on account of any modification
of the documents evidencing and securing any loan.
(e)......Subordination, Non-Disturbance and Attornment
Agreement. Simultaneously upon Tenant's execution of this Lease, Tenant shall
execute a Subordination, Non-Disturbance and Attornment Agreement in the form
attached hereto as Exhibit J. Landlord shall return a fully executed
Subordination, Non-Disturbance and Attornment Agreement in the form attached
hereto as Exhibit J from the Lender named therein to Tenant as soon as
reasonably possible. Landlord shall use reasonable efforts to obtain a so-called
"nondisturbance agreement" from any further Landlord's Mortgagee.
12. Rules and Regulations. Tenant shall comply with the rules and
regulations of the Building which are attached hereto as Exhibit C. Landlord
may, from time to time, change such rules and regulations for the safety, care,
or cleanliness of the Building and related facilities, provided that such
changes will not unreasonably interfere with Tenant's use of the Premises.
Tenant shall be responsible for the compliance with such rules and regulations
by each Tenant Party.
13. Condemnation.
(a)......Total Taking. If the entire Building or Premises
are taken by right of eminent domain or conveyed in lieu
------------
thereof (a "Taking"), this Lease shall terminate as of the date of the Taking.
------
(b)......Partial Taking - Tenant's Rights. If any part of the
Building becomes subject to a Taking and such Taking will prevent Tenant from
conducting its business in the Premises in a manner reasonably comparable to
that conducted immediately before such Taking for a period of more than one
hundred eighty (180) days, then Tenant may terminate this Lease as of the date
of such Taking by giving written notice to Landlord within thirty (30) days
after the Taking, and Rent shall be apportioned as of the date of such Taking.
If Tenant does not terminate this Lease, then Rent shall be abated on a
reasonable basis as to that portion of the Premises rendered untenantable by the
Taking.
<PAGE>
(c)......Partial Taking - Landlord's Rights. If any material
portion, but less than all, of the Building becomes subject to a Taking, or if
Landlord is required to pay at least $50,000.00 of any of the proceeds received
for a Taking to a Landlord's Mortgagee, then Landlord may terminate this Lease
by delivering written notice thereof to Tenant within thirty (30) days after
such Taking, and Rent shall be apportioned as of the date of such Taking. If
Landlord does not so terminate this Lease, then this Lease will continue, but if
any portion of the Premises has been taken, Rent shall abate as provided in the
last sentence of Section 13.(b). For the purposes of this Section 13 and Section
14, the term "material portion" shall be deemed to mean at least twenty percent
(20%) of the rentable square feet of the Building.
(d)......Award. If any Taking occurs, then Landlord shall
receive the entire award or other compensation for the land on which the
Building is situated, the Building, and other improvements taken, and Tenant may
separately pursue a claim (to the extent it will not reduce Landlord's award)
against the condemnor for the value of Tenant's personal property which Tenant
is entitled to remove under this Lease, moving costs, loss of business, and
other claims it may have.
14. Fire or Other Casualty.
(a)......Repair Estimate. If the Premises or the Building are
damaged by fire or other casualty (a "Casualty"), Landlord shall, within 90 days
after such Casualty, deliver to Tenant a good faith estimate (the "Damage
Notice") of the time needed to repair the damage caused by such Casualty.
(b)......Landlord's and Tenant's Rights. If a material portion
of the Building is damaged by Casualty such that Tenant is prevented from
conducting its business in the Premises in a manner reasonably comparable to
that conducted immediately before such Casualty and Landlord reasonably
estimates that the damage caused thereby cannot be repaired within fifteen (15)
months after the Casualty (as such period may be extended by the number of days
lost as a result of force majeure events up to a maximum of one hundred eighty
(180) days), then Tenant may terminate this Lease by delivering written notice
to Landlord of its election to terminate within thirty (30) days after the
Damage Notice has been delivered to Tenant. If Tenant does not so timely
terminate this Lease, then (subject to Section 14.(c)) Landlord shall repair the
Building as provided below, and Rent for the portion of the Building rendered
untenantable by the damage shall be abated on a reasonable basis from the date
of damage until the completion of the repair, unless a Tenant Party caused such
damage, in which case, Tenant shall continue to pay Rent without abatement.
(c)......Landlord's Rights. If a Casualty damages a material
portion of the Building during the last three (3) years of the Term (as the Term
may be extended pursuant to the provisions of Exhibit G), and Landlord makes a
good faith determination that restoring the Building would be uneconomical, or
if Landlord is required to pay at least $50,000.00 of any insurance proceeds
arising out of the Casualty to a Landlord's Mortgagee, then Landlord may
terminate this Lease by giving written notice of its election to terminate
within thirty (30) days after the Damage Notice has been delivered to Tenant,
and Basic Rent and Additional Rent shall be abated as of the date of the
Casualty.
<PAGE>
(d)......Repair Obligation. If neither party elects to
terminate this Lease following a Casualty, then Landlord shall, within a
reasonable time after such Casualty, begin to repair the Building and shall
proceed with reasonable diligence to restore the Building to substantially the
same condition as it existed immediately before such Casualty; however, Landlord
shall not be required to repair or replace any of the furniture, equipment,
fixtures, and other improvements which may have been placed by, or at the
request of, Tenant or other occupants in the Building or the Premises, and
Landlord's obligation to repair or restore the Building or Premises shall be
limited to the extent of the insurance proceeds actually received by Landlord
for the Casualty in question.
15. Personal Property Taxes. Tenant shall be liable for all taxes
levied or assessed against personal property, furniture, or fixtures placed by
Tenant in the Premises. If any taxes for which Tenant is liable are levied or
assessed against Landlord or Landlord's property and Landlord elects to pay the
same, or if the assessed value of Landlord's property is increased by inclusion
of such personal property, furniture or fixtures and Landlord elects to pay the
taxes based on such increase, then Tenant shall pay to Landlord, upon demand,
the part of such taxes for which Tenant is primarily liable hereunder; however,
Landlord shall not pay such amount if Tenant notifies Landlord that it will
contest the validity or amount of such taxes before Landlord makes such payment,
and thereafter diligently proceeds with such contest in accordance with law and
if the non-payment thereof does not pose a threat of loss or seizure of the
Building or interest of Landlord therein or impose any fee or penalty against
Landlord.
16. Events of Default. Each of the following occurrences shall be an
"Event of Default":
(a)......Tenant's failure to pay Rent within five (5) days
after Landlord has delivered written notice to Tenant that the same is due;
however, an Event of Default shall occur hereunder without any obligation of
Landlord to give any notice if Landlord has given Tenant written notice under
this Section 16.(a) on two (2) occasions during the twelve (12) month interval
preceding such failure by Tenant;
(b)......For more than thirty (30) consecutive days or more
than thirty (30) days in a ninety (90) day period, Tenant (1) abandons or
vacates the Building or more than twenty-five percent (25%) thereof, or (2)
fails to continuously operate its business in the Building for the Permitted Use
set forth herein;
(c)......Tenant fails to provide any estoppel certificate
within the time period required under Section 24.(e) and such failure shall
continue for five (5) days after written notice thereof from Landlord to Tenant;
<PAGE>
(d)......Tenant's failure to perform, comply with, or observe
any other agreement or obligation of Tenant under this Lease and the continuance
of such failure for a period of more than thirty (30) days after Landlord has
delivered to Tenant written notice thereof; provided that if the default is of
such a nature that it may not be reasonably cured within thirty (30) days, then
no Event of Default shall occur hereunder if Tenant commences curing within such
thirty (30) day period and thereafter diligently and continuously pursues such
cure to completion within a period of not more than forty-five (45) days after
the delivery of such notice; and
(e)......The filing of a petition by or against Tenant (the
term "Tenant" shall include, for the purpose of this Section 16.(e), any
guarantor of Tenant's obligations hereunder); (1) in any bankruptcy or other
insolvency proceeding; (2) seeking any relief under any state or federal debtor
relief law; (3) for the appointment of a liquidator or receiver for all or
substantially all of Tenant's property or for Tenant's interest in this Lease;
or (4) for the reorganization or modification of Tenant's capital structure;
however, if such a petition is filed against Tenant, then such filing shall not
be an Event of Default unless Tenant fails to have the proceedings initiated by
such petition dismissed within sixty (60) days after the filing thereof.
17. Remedies. Upon an Event of Default, Landlord may, in addition to
all other rights and remedies afforded Landlord hereunder, take any of the
following actions:
(a)......Terminate this Lease by giving Tenant written notice
thereof, in which event Tenant shall pay to Landlord the sum of (1) all Rent
accrued hereunder through the date of termination, (2) all amounts dues under
Section 18.(a), and (3) an amount equal to (A) the total Rent that Tenant would
have been required to pay for the remainder of the Term plus Landlord's estimate
of aggregate expenses of reletting to the Premises, minus (B) the then present
fair rental rate value of the Premises for such period;
<PAGE>
(b)......Terminate Tenant's right to possess the Premises
without terminating this Lease by giving written notice thereof to Tenant, in
which event Tenant shall pay to Landlord (1) all Rent and other amounts accrued
hereunder to the date of termination of possession, (2) all amounts due from
time to time under Section 18.(a), and (3) all Rent and other net sums required
hereunder to be paid by Tenant during the remainder of the Term, diminished by
any net sums thereafter received by Landlord through reletting the Premises
during such period, after deducting all costs incurred by Landlord in reletting
the Premises. Landlord shall use reasonable efforts to relet the Premises on
such terms as Landlord in its sole discretion may determine (including a term
different from the Term, rental concessions, and alterations to, and improvement
of, the Premises); however, Landlord shall not be obligated to relet the
Premises before leasing space in any building owned by Landlord or any Affiliate
thereof within a one (1) mile radius of the Building (the "Affiliated
Buildings"). Landlord shall not be liable for, nor shall Tenant's obligations
hereunder be diminished because of, Landlord's failure to relet the Premises or
to collect rent due for such reletting. Tenant shall not be entitled to the
excess of any consideration obtained by reletting over the Rent due hereunder.
Reentry by Landlord in the Premises shall not affect Tenant's obligations
hereunder for the unexpired Term; rather, Landlord may, from time to time, bring
an action against Tenant to collect amounts due by Tenant, without the necessity
of Landlord's waiting until the expiration of the Term. Unless Landlord delivers
written notice to Tenant expressly stating that it has elected to terminate this
Lease, all actions taken by Landlord to dispossess or exclude Tenant from the
Premises shall be deemed to be taken under this Section 17.(b). If Landlord
elects to proceed under this Section 17.(b), it may at any time elect to
terminate this Lease under Section 17.(a); and
(c)......Additionally, without notice and provided Landlord
has exercised its rights and remedies set forth in either clause (a) or clause
(b) above, Landlord may alter locks or other security devices at the Premises to
deprive Tenant of access thereto, and Landlord shall not be required to provide
a new key or right of access to Tenant.
Any and all remedies set forth in this Lease: (i) shall be in addition
to any and all other remedies Landlord may have at law or in equity; (ii) shall
be cumulative; and (iii) may be pursued successively or concurrently as Landlord
may elect. The exercise of any remedy by Landlord shall not be deemed an
election of remedies or preclude Landlord from exercising any other remedies in
the future. Notwithstanding the foregoing, Landlord shall only recover its
damages allowed hereunder once.
18. Payment by Tenant; Non-Waiver.
(a)......Payment by Tenant. Upon any Event of Default, Tenant
shall pay to Landlord all costs incurred by Landlord (including court costs and
reasonable attorneys' fees and expenses) in (1) obtaining possession of the
Premises, (2) removing and storing Tenant's or any other occupant's property,
(3) repairing, restoring, altering, remodeling, or otherwise putting the
Premises into condition reasonably acceptable to a new tenant, (4) if Tenant is
dispossessed of the Premises and this Lease is not terminated, reletting all or
any part of the Premises (including brokerage commissions, cost of tenant finish
work, and other costs incidental to such reletting), (5) performing Tenant's
obligations which Tenant failed to perform, and (6) enforcing, or advising
Landlord of, its rights, remedies, and recourses arising out of the Event of
Default. To the full extent permitted by law, Landlord and Tenant agree the
federal and state courts of Massachusetts shall have exclusive jurisdiction over
any matter relating to or arising from this Lease and the parties' rights and
obligations under this Lease.
(b)......No Waiver. Landlord's acceptance of Rent following an
Event of Default shall not waive Landlord's rights regarding such Event of
Default. No waiver by Landlord of any violation or breach of any of the terms
contained herein shall waive Landlord's rights regarding any future violation of
such term. Landlord's acceptance of any partial payment of Rent shall not waive
Landlord's rights with regard to the remaining portion of the Rent that is due,
regardless of any endorsement or other statement on any instrument delivered in
payment of Rent or any writing delivered in connection therewith; accordingly,
Landlord's acceptance of a partial payment of Rent shall not constitute an
accord and satisfaction of the full amount of the Rent that is due.
19. Landlord's Lien. Intentionally omitted, provided that the deletion
of this Section shall not be construed to be a waiver of Landlord's lien rights
provided by law.
<PAGE>
20. Surrender of Premises. No act by Landlord shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept a
surrender of the Premises shall be valid unless it is in writing and signed by
Landlord. At the expiration or termination of this Lease, Tenant shall deliver
to Landlord the Premises with all improvements located therein in good repair
and condition, free of Hazardous Materials placed on the Premises during the
Term, broom-clean, reasonable wear and tear (and condemnation and Casualty
damage not caused by Tenant, as to which Sections 13 and 14 shall control)
excepted, and shall deliver to Landlord all keys to the Premises. Provided that
Tenant has performed all of its obligations hereunder, Tenant may remove all
unattached trade fixtures, furniture, and personal property placed in the
Premises by Tenant, and shall remove such alterations, additions, improvements,
trade fixtures, personal property, equipment, wiring, and furniture as Landlord
may request. Tenant shall repair all damage caused by such removal. All items
not so removed shall be deemed to have been abandoned by Tenant and may be
appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant and without any obligation to account for such items.
The provisions of this Section 20 shall survive the end of the Term.
21. Holding Over. If Tenant fails to vacate the Premises at the end of
the Term, then Tenant shall be a tenant at will and, in addition to all other
damages incurred by Landlord from and after ninety (90) days after the
expiration of this Lease and remedies to which Landlord may be entitled for such
holding over, Tenant shall pay, in addition to the other Rent, a daily Basic
Rent equal to 200% of the daily Basic Rent payable during the last month of the
Term. The provisions of this Section 21 shall not be deemed to limit or
constitute a waiver of any other rights or remedies of Landlord provided herein
or at law. If Tenant fails to surrender the Premises upon the termination or
expiration of this Lease, in addition to any other liabilities to Landlord
accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord
harmless from all loss, costs (including reasonable attorneys' fees) and
liability resulting from such failure, including, without limiting the
generality of the foregoing, any claims made by any succeeding tenant founded
upon such failure to surrender, and any lost profits to Landlord resulting
therefrom.
22. Certain Rights Reserved by Landlord. Provided that the exercise of
such rights does not unreasonably interfere with Tenant's occupancy of the
Premises, Landlord shall have the following rights:
(a)......To decorate and to make inspections, repairs,
alterations, additions, changes, or improvements, whether structural or
otherwise, in and about the Building, or any part thereof; to enter upon the
Premises upon reasonable prior notice to Tenant (except in case of an emergency,
in which case no notice shall be required) and, during the continuance of any
such work, to temporarily close doors, entryways, public space, and corridors in
the Building; to interrupt or temporarily suspend Building services and
facilities; and, to the extent required by governmental authorities, to change
the arrangement and location of entrances or passageways, doors, and doorways,
corridors, elevators, stairs, restrooms, or other public parts of the Building;
<PAGE>
(b)......To take such reasonable measures as Landlord deems
advisable for the security of the Building and its occupants; evacuating the
Building for cause, suspected cause, or for drill purposes; temporarily denying
access to the Building; and closing the Building after normal business hours and
on Sundays and holidays, subject, however, to Tenant's right to enter when the
Building is closed after normal business hours under such reasonable regulations
as Landlord may prescribe from time to time; and
(c)......To enter the Premises at reasonable hours to show
the Premises to prospective purchasers, lenders, or,
during the last twelve (12) months of the Term, tenants.
23. [Intentionally Omitted].
24. Miscellaneous.
(a)......Landlord Transfer. Landlord may transfer any portion
of the Building and any of its rights under this Lease. If Landlord assigns its
rights under this Lease, then Landlord shall thereby be released from any
further obligations hereunder, provided that the assignee assumes Landlord's
obligations hereunder in writing.
(b)......Landlord's Liability. The liability of Landlord to
Tenant for any default by Landlord under the terms of this Lease shall be
limited to Tenant's actual direct, but not consequential, damages therefor and
shall be recoverable only from the interest of Landlord in the Building, and
Landlord shall not be personally liable for any deficiency. This Section shall
not limit any remedies which Tenant may have for Landlord's defaults which do
not involve the personal liability of Landlord.
(c)......Force Majeure. Other than for Tenant's obligations
under this Lease that can be performed by the payment of money (e.g., payment of
Rent and maintenance of insurance), whenever a period of time is herein
prescribed for action to be taken by either party hereto, such party shall not
be liable or responsible for, and there shall be excluded from the computation
of any such period of time, any delays due to strikes, riots, acts of God,
shortages of labor or materials, war, governmental laws, regulations, or
restrictions, or any other causes of any kind whatsoever which are beyond the
control of such party. The provisions of this Section 24(c) shall not apply to
Landlord's obligations to construct the Landlord Work and Tenant Improvements
pursuant to the provisions of this Lease.
(d)......Brokerage. Neither Landlord nor Tenant has dealt with
any broker or agent in connection with the negotiation or execution of this
Lease, other than Grubb & Ellis Management Services, Inc. and Fallon, Hines &
O'Connor, whose commission shall be paid by Landlord. Tenant and Landlord shall
each indemnify the other against all costs, expenses, attorneys' fees, and other
liability for commissions or other compensation claimed by any broker or agent
claiming the same by, through, or under the indemnifying party.
<PAGE>
(e)......Estoppel Certificates. From time to time, Tenant
shall furnish to any party designated by Landlord, within ten (10) business days
after Landlord has made a written request therefor (a copy of which request
shall be simultaneously sent to the Law Department at the Premises), a
certificate signed by Tenant confirming and containing such factual
certifications and representations as to this Lease as Landlord may reasonably
request.
(f)......Notices. All notices and other communications given
pursuant to this Lease shall be in writing and shall be (1) mailed by first
class, United States Mail, postage prepaid, certified, with return receipt
requested, and addressed to the parties hereto at the address specified next to
their signature block, (2) hand delivered to the intended address, or (3) sent
by prepaid telegram, cable, facsimile transmission, or telex followed by a
confirmatory letter. All notices shall be effective upon delivery to the address
of the addressee. The parties hereto may change their addresses by giving notice
thereof to the other in conformity with this provision.
(g)......Separability. If any clause or provision of this
Lease is illegal, invalid, or unenforceable under present or future laws, then
the remainder of this Lease shall not be affected thereby and in lieu of such
clause or provision, there shall be added as a part of this Lease a clause or
provision as similar in terms to such illegal, invalid, or unenforceable clause
or provision as may be possible and be legal, valid, and enforceable.
(h)......Amendments; and Binding Effect. This Lease may not be
amended except by instrument in writing signed by Landlord and Tenant. No
provision of this Lease shall be deemed to have been waived by Landlord or
Tenant unless such waiver is in writing signed by Landlord and Tenant, and no
custom or practice which may evolve between the parties in the administration of
the terms hereof shall waive or diminish the right of Landlord or Tenant to
insist upon the performance by Tenant in strict accordance with the terms
hereof. The terms and conditions contained in this Lease shall inure to the
benefit of and be binding upon the parties hereto, and upon their respective
successors in interest and legal representatives, except as otherwise herein
expressly provided. This Lease is for the sole benefit of Landlord and Tenant,
and, other than Landlord's Mortgagee, no third party shall be deemed a third
party beneficiary hereof.
(i)......Quiet Enjoyment. Provided Tenant has performed all of
its obligations hereunder, Tenant shall peaceably and quietly hold and enjoy the
Premises for the Term, without hindrance from Landlord or any party claiming by,
through, or under Landlord, but not otherwise, subject to the terms and
conditions of this Lease.
(j)......No Merger. There shall be no merger of the leasehold
estate hereby created with the fee estate in the Premises or any part thereof if
the same person acquires or holds, directly or indirectly, this Lease or any
interest in this Lease and the fee estate in the leasehold Premises or any
interest in such fee estate.
<PAGE>
(k)......No Offer. The submission of this Lease to Tenant
shall not be construed as an offer, and neither party
--------
shall have any rights under this Lease until both parties execute a copy of
this Lease.
(l)......Entire Agreement. This Lease constitutes the entire
agreement between Landlord and Tenant regarding the subject matter hereof and
supersedes all oral statements and prior writings relating thereto. Except for
those set forth in this Lease, no representations, warranties, or agreements
have been made by Landlord or Tenant to the other with respect to this Lease or
the obligations of Landlord or Tenant in connection therewith. The normal rule
of construction that any ambiguities be resolved against the drafting party
shall not apply to the interpretation of this Lease or any exhibits or
amendments hereto.
(m)......Waiver of Jury Trial. To the maximum extent
permitted by law, Landlord and Tenant each waive right to
--------------------
trial by jury in any litigation arising out of or with respect to this Lease.
(n)......Governing Law. This Lease shall be governed by and
construed in accordance with the laws of the State in
--------------
which the Premises are located.
(o)......Joint and Several Liability. If Tenant is comprised
of more than one party, each such party shall be jointly and severally liable
for Tenant's obligations under this Lease. If Landlord is comprised of more than
one party, each such party shall be jointly and severally liable for Landlord's
obligations under this Lease.
(p)......Financial Reports. Within fifteen (15) days after
Landlord's request, Tenant will furnish Tenant's most recent audited financial
statements (including any notes to them) to Landlord, or, if no such audited
statements have been prepared, such other financial statements (and notes to
them) as may have been prepared by an independent certified public accountant
or, failing those, Tenant's internally prepared financial statements. Tenant
will discuss its financial statements with Landlord and will give Landlord
access to Tenant's books and records in order to enable Landlord to verify the
financial statements. Landlord will not disclose any aspect of Tenant's
financial statements that Tenant designates to Landlord as confidential except
(1) to Landlord's Mortgagee or prospective purchasers of the Building, (2) in
litigation between Landlord and Tenant, and/or (3) if required by court order.
(q)......Landlord's Fees. Whenever Tenant requests Landlord to
take any action or give any consent required or permitted under this Lease,
Tenant will reimburse Landlord for Landlord's reasonable, actual out-of-pocket
costs incurred in reviewing the proposed action or consent, including without
limitation reasonable attorneys', engineers' or architects' fees, within thirty
(30) days after Landlord's delivery to Tenant of a statement of such costs.
Tenant will be obligated to make such reimbursement without regard to whether
Landlord consents to any such proposed action.
<PAGE>
(r)......Telecommunications. Subject to the provisions of
Section 7 above, Tenant, at its sole cost and expense and with Landlord's prior
written consent (which consent shall not be unreasonably withheld or delayed):
(i) may install underground fiber optic lines within the Premises; and (ii) to
the extent Landlord continues to own the 4 Omni Way Offer Space (as hereinafter
defined) and Tenant leases the 4 Omni Way Offer Space, may use any existing
telecommunications systems (including, without limitation, any existing
underground tunnels and/or conduits) located on the 4 Omni Way Offer Space or
any future telecommunications systems located on such Space and approved by
Landlord. Notwithstanding any provisions of this Section 24(r) to the contrary,
Landlord shall not be deemed to have unreasonably withheld its consent to any
installation that would affect the Building's structure or its HVAC, plumbing,
electrical, or mechanical systems or any other improvements or any of their
respective HVAC, plumbing, electrical or mechanical systems, if any. Tenant
shall promptly repair and restore any damage caused by any such installation
and, upon Landlord's request, at the earlier termination or expiration of this
Lease, Tenant shall restore the Premises and any other affected property to the
condition that existed on the date of this Lease. Any and all such installations
of fiber optic lines shall comply with all applicable Laws. Tenant acknowledges
and agrees that Tenant's right to use any such existing and/or future
telecommunications systems shall not be exclusive and that Landlord is in no way
making any representations or warranties with respect to such telecommunications
systems, including, without limitation, any representations or warranties with
respect to the structural integrity, the adequacy and/or utility of any such
telecommunications systems and/or their compliance with applicable Laws.
(s)......General Definitions. The following terms shall have
the following meanings: "Laws" means all federal, state, and local laws, rules
and regulations, all court orders, all governmental directives and governmental
orders, and all restrictive covenants affecting the Property, and "Law" means
any of the foregoing; "Affiliate" means any person or entity which, directly or
indirectly, controls, is controlled by, or is under common control with the
party in question; "Tenant Party" shall include Tenant, any assignees claiming
by, through, or under Tenant, any subtenants claiming by, through, or under
Tenant, and any agents, contractors, employees, invitees of the foregoing
parties; and "including" means including, without limitation.
(t)......Confidentiality. Tenant acknowledges that the terms
and conditions of this Lease are to remain confidential for Landlord's benefit,
and may not be disclosed by Tenant to anyone, by any manner or means, directly
or indirectly, without Landlord's prior written consent, other than to Tenant's
lender's, accountants, attorneys or other advisors on a need to know basis only
provided such advisors agree to keep the terms and conditions of this Lease
confidential. The consent by Landlord to any disclosures shall not be deemed to
be a waiver on the part of Landlord of any prohibition against any future
disclosure.
<PAGE>
(u)......Hazardous Materials. The term "Hazardous Materials"
means any substance, material, or waste which is now or hereafter classified or
considered to be hazardous, toxic, or dangerous under any Law relating to
pollution or the protection or regulation of human health, natural resources or
the environment, or poses or threatens to pose a hazard to the health or safety
of persons on the Premises or in the Building. Tenant shall not use, generate,
store, or dispose of, or permit the use, generation, storage or disposal of
Hazardous Materials on or about the Premises or the Building except in a manner
and quantity necessary for the ordinary performance of Tenant's business, and
then in compliance with all Laws. If Tenant breaches its obligations under this
Section 24.(u), Landlord may immediately take any and all action reasonably
appropriate to remedy the same, including taking all appropriate action to clean
up or remediate any contamination resulting from Tenant's use, generation,
storage or disposal of Hazardous Materials. Tenant shall defend, indemnify, and
hold harmless Landlord and its representatives and agents from and against any
and all claims, demands, liabilities, causes of action, suits, judgments,
damages and expenses (including attorneys' fees and cost of clean up and
remediation) arising from Tenant's failure to comply with the provisions of this
Section 24.(u). This indemnity provision shall survive termination or expiration
of the Lease. Except as set forth in the Environmental Reports (as hereinafter
defined), to the actual knowledge of Landlord, Landlord represents that there
are no Hazardous Materials on the Premises as of the date of this Lease. For the
purposes hereof, "Environmental Reports" shall mean that certain Phase I
Environmental Site Assessment and Subsurface Investigation Report prepared in
October, 1997 by ENSR in connection with, among other properties, the Premises.
(v)......List of Exhibits. All exhibits and attachments
attached hereto are incorporated herein by this reference.
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Exhibit A -.......Site Plan of Premises
Exhibit B -.......Legal Description of Building
Exhibit C -.......Premises Rules and Regulations
Exhibit D - Landlord Work and Tenant Improvements
Exhibit E - Parking
Exhibit F - Sample Letter of Credit
Exhibit G - Renewal Option
Exhibit H - First Amendment to Lease
Exhibit I - Building Holidays
Exhibit J - Form of Subordination, Non-disturbance and
Attornment Agreement
Exhibit K - Right of First Offer Re: 4 Omni Way
(w)......Time of Essence. Time is of the essence of this
Lease and each and all of its provisions.
---------------
(x)......Notice of Lease. Tenant agrees not to record this
Lease and, subject to the provisions of Section 24(t) above, to keep the terms
of this Lease confidential, but each party hereto agrees, at the request of the
others to execute a so-called Notice of Lease in recordable form complying with
applicable law and reasonably satisfactory to Landlord's attorneys. In no event
shall such document set forth the Rent or other charges payable by Tenant
hereunder.
<PAGE>
(y)......First Amendment to Lease. Tenant agrees that, within
ten (10) business days of Landlord's request, it will execute and deliver to
Landlord the First Amendment to Lease attached hereto as Exhibit H setting
forth, among other things, the actual Commencement Date and the date upon which
the Term expires.
(z)......Corporate Approval. Concurrently with its execution
of the Lease, each of Tenant and Landlord shall provide the other party with
duly authorized and executed corporate resolutions (in form and substance
reasonably satisfactory to the other party's counsel) authorizing the entering
into and consummation of the transactions contemplated by this Lease and
designating the corporate or other officer or officers to execute this Lease on
behalf of the applicable party.
(aa).....Building Signage. Subject to Landlord's prior written
consent (which shall not be unreasonably withheld or delayed), compliance with
all Laws and at the Tenant's sole cost and expense, Tenant may erect exterior
building signage.
<PAGE>
(bb).....Rooftop Equipment. Tenant may install, at Tenant's
risk and expense and to be used solely by Tenant, a dish style antennae of no
more than five (5) feet in diameter (the "Rooftop Equipment") on the roof of the
Building at a location approved by Landlord. Before installing the Rooftop
Equipment, Tenant shall submit to Landlord for its approval plans and
specifications which (A) specify in detail the design, location and size of the
Rooftop Equipment (and, with respect to the Rooftop Equipment, such
specifications shall also contain the frequency of such equipment) and (B) are
sufficiently detailed to allow for the installation of the Rooftop Equipment in
a good and workmanlike manner and in accordance with all Laws. None of the
Rooftop Equipment shall protrude more than five (5) feet above the elevation of
the roof on which it is installed and all such equipment must be painted in a
color reasonably acceptable to Landlord to minimize visibility. If Landlord
approves of such plans (which approval shall not be unreasonably withheld or
delayed unless the installation of any Rooftop Equipment penetrates the roof,
affects the Building's structure or any of its HVAC, mechanical, electrical and
plumbing equipment, or violates or in any way compromises any roof warranty),
Tenant shall install (in a good and workmanlike manner), maintain and use the
Rooftop Equipment in accordance with all Laws and shall obtain all consents and
permits required for the installation and operation thereof; copies of all such
permits and evidence of such consents must be submitted to Landlord before
Tenant begins to install the Rooftop Equipment. Tenant shall thereafter maintain
all permits necessary for the maintenance and operation of the Rooftop Equipment
while it is on the Building. Landlord may require that Tenant screen the Rooftop
Equipment with a parapet or other screening device acceptable to Landlord. All
electrical usage for the Rooftop Equipment shall be separately metered or, at
Landlord's election, shall be placed on the same electrical meter as the
Premises. Tenant shall maintain the Rooftop Equipment and screening device in
good repair and condition. Landlord may relocate the Rooftop Equipment to
another location on the roof of the Building at its sole cost and expense upon
prior written notice to Tenant so long as the new location does not materially
interfere with Tenant's reception received by the satellite or antennae. Upon
reasonable prior notice to Landlord, Tenant shall, at its risk and expense,
remove the Rooftop Equipment (including all wiring related thereto), within five
(5) days after the occurrence of any of the following events: (i) the
termination of Tenant's right to possess the Premises; (ii) the termination of
the Lease; (iii) the expiration of the Term; or (iv) the Premises shall be
vacated by Tenant and any and all assignees and/or sublessees approved by
Landlord hereunder. If Tenant fails to do so, Landlord may remove all or any
part of the Rooftop Equipment and store or dispose of it in any manner Landlord
deems appropriate without liability to Tenant; Tenant shall reimburse Landlord
for all costs incurred by Landlord in connection therewith within ten (10) days
after Landlord's request therefor. Tenant shall repair any damage to the
Building caused by or relating to the Rooftop Equipment, including that which is
caused by its installation, maintenance, use, or removal and shall indemnify
Landlord against all liabilities, losses, damages, and costs arising from the
installation, maintenance, use, or removal of the Rooftop Equipment (unless the
liabilities, losses, damages, and costs in question were caused by Landlord's
sole or gross negligence or wilful misconduct). All work relating to the Rooftop
Equipment shall, at Tenant's expense, be coordinated with Landlord's roofing
contractor so as not to affect any warranty for the Building's roof and shall
not penetrate the roof.
(cc).....Access. Tenant shall have twenty-four (24) hour access to the
Premises seven (7) days a week (subject to
force majeure, emergency, etc.).
(dd).....Arbitration. (1) In any case in which it is
specifically provided by the terms of this Lease that a matter shall be
determined by arbitration, such arbitration shall be conducted pursuant to
applicable statutes of The Commonwealth of Massachusetts at the time in effect
and, to the extent permitted by said statutes, in the manner specified in this
Section 24(dd) and, to the extent not inconsistent with said statutes and this
Section 24(dd), in accordance with the Commercial Arbitration Rules at the time
in effect of the American Arbitration Association; provided that all arbitrators
selected hereunder shall be persons of recognized competence who are
unaffiliated with either party (either by direct or indirect relationship or
significant business relationship) and shall have at least ten (10) years'
experience as a commercial real estate broker or appraiser in the Greater Boston
area.
(2) The party desiring such arbitration shall give written notice to
that effect to the other party and, in such notice, shall specify the nature of
the dispute to be arbitrated and shall appoint one of the arbitrators in
accordance with the requirements of Section 24(dd)(1). Within fifteen (15) days
thereafter, the other party shall by written notice to the original party
appoint a second person as an arbitrator in accordance with the requirements of
this Section 24(dd)(1). The arbitrators thus appointed, within fifteen (15) days
of the appointment of the second such arbitrator, shall appoint a third person
in accordance with the requirements of Section 24(dd)(1), and such three (3)
arbitrators shall determine such matter as promptly as possible; provided that:
(A)......if the second arbitrator shall not have been appointed as aforesaid,
the first arbitrator shall proceed to
determine the matter; and
<PAGE>
(B)......if the two (2) arbitrators appointed by the parties
shall be unable to agree within fifteen (15) days after the
appointment of the second arbitrator upon the appointment of a
third arbitrator, they shall give written notice of such
failure to agree to the parties, and, if the parties fail to
agree upon the selection of such third arbitrator within
fifteen (15) days after the arbitrators appointed by the
parties given notice as aforesaid, then within ten (10) days
thereafter either of the parties upon written notice to the
other party, may request such appointment by the then
Governing Board of the New England Chapter of the American
Institute of Real Estate Appraisers (or any organization that
may be successor thereto) or, in its absence, refusal, failure
or inability to act, may apply for such appointment to any
Court of The Commonwealth of Massachusetts having general
equity powers or to any other court having jurisdiction and
exercising functions similar to such court.
(3) The arbitrator or arbitrators shall have the right only to
interpret and apply the terms of this Lease, and may not change any such terms
or deprive any party to this Lease of any right or remedy expressly or impliedly
provided in this Lease. Landlord and Tenant each shall be entitled to present
evidence and arguments to the arbitrators.
(4) The determination of the majority of the arbitrators or of the sole
arbitrator, as the case may be, shall be final and binding in accordance with
the provisions of M.G.L. c. 241. The arbitrators shall give written notice of
their determination to Landlord and Tenant and shall furnish to each a signed
copy of such determination.
(5) The fees and expenses of all arbitrators shall be borne equally by
Landlord and Tenant.
(6) In the event of the failure, refusal or inability of any arbitrator
to act, a new arbitrator shall be appointed in his stead, which appointment
shall be made in the same manner as hereinbefore provided for the appointment of
the arbitrator so failing, refusing or unable to act, or to continue to act.
(7) During any period of arbitration under this Section 24(dd) of any
matter stated in this Lease to be specifically subject to arbitration, neither
Landlord nor Tenant shall be deemed to be in default with respect to the
performance of any covenant, duty or obligation relating to such matter, and any
grace period or permitted delay in such performance otherwise provided for in
this Lease shall be automatically extended by such period of arbitration.
(ee).....Campus Setting. At Tenant's request and sole cost and
expense, Landlord shall use reasonable efforts to assist Tenant in creating a
campus environment; provided, however, (i) any alterations to the Premises by
Tenant shall be subject to the provisions of this Lease, including without
limitation, Section 7, (ii) Landlord shall not be required to render any such
assistance on a matter which would adversely affect the Premises in any manner,
(iii) Landlord shall only render such assistance with respect to the Premises,
and (iv) nothing in this Lease is intended to permit Tenant to make any
alterations to any property other than the Premises.
<PAGE>
(ff).....Termination Agreement with Sun Microsystems. This
Lease is subject to and contingent upon the execution and delivery of a mutually
acceptable termination agreement by and between Landlord and Sun Microsystems,
Inc. respecting that certain Lease dated June 29, 1992 by and between Teachers
Realty Corporation (the successor of which is Landlord) and Tenant respecting
the Premises ("Sun Microsystems Termination Agreement"). If, for whatever
reason, Landlord and Sun Microsystems, Inc. do not enter into the Sun
Microsystems Termination Agreement, then this Lease shall not be effective,
Tenant shall have no rights pursuant to this Lease, and Landlord shall have no
obligations to Tenant hereunder.
(gg).....Termination of 6 Omni Way Lease. The Lease dated
October 28, 1993 by and between Teachers Realty Corporation (the successor of
which is Landlord) and Tenant (the "6 Omni Way Lease") for the property known
and numbered as 6 Omni Way, Chelmsford, Massachusetts (the "6 Omni Way
Premises") shall be automatically terminated and, subject to the provisions of
this Section 24(gg), of no further force and effect upon the date ("Termination
Date") that each of the following has occurred:
(i) the Commencement Date (as herein defined) has
occurred;
(ii) Tenant is using and occupying the Premises (as
herein defined) for the Permitted Use; (iii)
[intentionally omitted]; (iv) Tenant has paid rent
and all other amounts due and payable by Tenant to
Landlord for the period
up through and including the Termination
Date under the 6 Omni Way Lease (including,
without limitation, all Taxes and Operating
Expenses due and owing up through and
including the Termination Date which may be
adjusted after the Termination Date;
provided however, adjustments to Taxes and
Operating Expenses may be paid after the
Termination Date provided such Taxes and
Operating Expenses are paid in accordance
with the provisions of the 6 Omni Way
Lease), which obligations shall survive the
early termination of the 6 Omni Way Lease;
and
.........(v) within sixty (60) days after the
Commencement Date (as herein defined) (the "Scheduled Termination Date"),
Tenant has vacated and surrendered the 6 Omni Way Premises in an as-is
broom-clean condition (except that Tenant shall disconnect and remove the
two (2) ground based HVAC units located on the 6 Omni Way Premises and bring
the power source back to its original location and shall restore the ground
covered by such HVAC units to the condition which existed prior to the
installation of such HVAC units) and in accordance with the provisions of
the 6 Omni Way Lease, including, without limitation, Sections 7.2, 14.21 and
14.27 thereof.
<PAGE>
If Tenant fails to surrender the 6 Omni Way Premises in accordance with clause
(v) above, Landlord shall have all rights and remedies afforded Landlord under
the 6 Omni Way Lease, at law and in equity as if the Scheduled Termination Date
were the expiration date of the term of the 6 Omni Way Lease. After the
Termination Date, Tenant shall perform all obligations under the 6 Omni Way
Lease which expressly survive the expiration or termination of such Lease,
including, without limitation, the provisions of Sections 10.1, 10.5 and 14.25
thereof. Except as set forth herein and provided that Tenant surrenders the 6
Omni Way Premises in accordance with this Section 24(gg), all rights and
obligations of the parties under the 6 Omni Way Lease shall cease as of the
Termination Date.
25. Other Provisions.
LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE PREMISES
ARE SUITABLE FOR TENANT'S INTENDED COMMERCIAL PURPOSE AND, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, TENANT'S OBLIGATION TO PAY RENT HEREUNDER IS NOT
DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE PERFORMANCE BY LANDLORD OF
ITS OBLIGATIONS HEREUNDER, AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN,
TENANT SHALL CONTINUE TO PAY THE RENT, WITHOUT ABATEMENT, SETOFF OR DEDUCTION,
NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS DUTIES OR OBLIGATIONS HEREUNDER,
WHETHER EXPRESS OR IMPLIED.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, and in consideration of the mutual entry into this
Lease and for other good and valuable consideration, and intending to be legally
bound, each party hereto has caused this Lease Agreement to be duly executed as
a Massachusetts instrument under seal as of the day and year first above
written.
TENANT:
KRONOS INCORPORATED, a Massachusetts corporation
By: /x/ Paul Lacy
Name: Paul Lacy
Title: Vice President Finance & Admin
Address: Prior to the Commencement Date:
400 Fifth Avenue
Waltham, MA 02151
Telecopy: (781) 622-3950
As of the Commencement Date:
400 Fifth Avenue
Waltham, MA 02151
Telecopy: (781) 622-3950
<PAGE>
LANDLORD:
W9/TIB REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: W9/TIB Gen-Par, Inc., a Delaware
corporation, its general partner
By: /s/ Stephen M. Abelman
Name: Stephen M. Abelman
Title: Assistant Vice President
Address: c/o Archon Group, L.P.
1275 K Street NW, Suite 900
Washington, DC 20005
Telecopy: (202) 216-5801
<PAGE>
A-1
EXHIBIT A
SITE PLAN OF PREMISES
[Map of Area Plot Plans]
<PAGE>
B-1
EXHIBIT B
LEGAL DESCRIPTION OF PREMISES
Lot 2A as shown on that certain plan entitled "Plan of Land of
Billerica Road Site, Chelmsford, MA", which plan is recorded with the Middlesex
North District Registry of Deeds in Plan Book 143 as Plan 143.
<PAGE>
C-1
EXHIBIT C
PREMISES RULES AND REGULATIONS
The following rules and regulations shall apply to the Premises, the
Building, the parking garage associated therewith, and the appurtenances
thereto:
1. Sidewalks, doorways, vestibules, halls, stairways, and other similar
areas shall not be obstructed by Tenant or used by Tenant for purposes other
than ingress and egress to and from the Building and for going from one to
another part of the Building.
2. Plumbing, fixtures and appliances shall be used only for the
purposes for which designed, and no sweepings, rubbish, rags or other unsuitable
material shall be thrown or deposited therein. Damage resulting to any such
fixtures or appliances from misuse by Tenant or its agents, employees or
invitees, shall be paid by Tenant.
3. No signs, advertisements or notices shall be painted or affixed on
or to any windows or doors or other part of the Building without the prior
written consent of Landlord. No nails, hooks or screws shall be driven or
inserted in any part of the Building except by Building maintenance personnel.
No curtains or other window treatments shall be placed between the glass and the
Building standard window treatments.
4. Landlord may prescribe weight limitations and determine the
locations for safes and other heavy equipment or items, which shall in all cases
be placed in the Building so as to distribute weight in a manner acceptable to
Landlord which may include the use of such supporting devices as Landlord may
require. All damages to the Building caused by the installation or removal of
any property of Tenant, or done by Tenant's property while in the Building,
shall be repaired at the expense of such tenant.
5. Tenant shall not make or permit any vibration or improper,
objectionable or unpleasant noises or odors in the Building.
6. Tenant shall not use or keep in the Building any flammable or
explosive fluid or substance, except that Tenant may keep flammable cleaning
supplies secured in a fireproof cabinet or locker and otherwise in accordance
with all applicable Laws.
7. Tenant shall not conduct any activity on or about the Premises or
Building which will draw pickets, demonstrators, or the like.
<PAGE>
D-2
EXHIBIT D
LANDLORD WORK AND TENANT IMPROVEMENTS
1. Except as set forth in this Exhibit, Tenant accepts the Premises in
their "AS-IS" condition on the date that this Lease is entered into.
2. Landlord shall have no obligation to perform any work therein except
for the following (collectively, the "Landlord Work"): (i) Landlord will clean
the carpets in the Building; (ii) Landlord will repair any holes in the interior
walls of the Building; and (iii) the HVAC and mechanical systems shall be
delivered in good working order.
3. Tenant shall provide to Landlord for its approval final working
drawings, prepared by an architect that has been approved by Landlord (which
approval shall not unreasonably be withheld), of all improvements that Tenant
proposes to install in the Premises; such working drawings shall include the
partition layout, ceiling plan, electrical outlets and switches, telephone
outlets, drawings for any modifications to the mechanical and plumbing systems
of the Building, and detailed plans and specifications for the construction of
the improvements called for under this Exhibit in accordance with all applicable
governmental laws, codes, rules, and regulations. If any of Tenant's proposed
construction work will affect the Building's HVAC, electrical, mechanical, or
plumbing systems, then the working drawings pertaining thereto must be approved
by the Building's engineer of record. Landlord's approval of such working
drawings shall not be unreasonably withheld, provided that (a) they comply with
all laws, rules, and regulations, (b) such working drawings are sufficiently
detailed to allow construction of the improvements in a good and workmanlike
manner, and (c) the improvements depicted thereon conform to the rules and
regulations promulgated from time to time by the Landlord for the construction
of tenant improvements (a copy of which has been delivered to Tenant). As used
herein, "Working Drawings" shall mean the final working drawings approved by
Landlord, as amended from time to time by any approved changes thereto, and
"Work" shall mean all improvements to be constructed in accordance with and as
indicated on the Working Drawings. Landlord's approval of the Working Drawings
and/or review of any of the Work shall not be a representation or warranty of
Landlord that such drawings and/or any Work, as applicable, are adequate for any
use or comply with any law, but shall merely be the consent of Landlord thereto.
Landlord shall, at Tenant's request, sign the Working Drawings to evidence its
review and approval thereof. All changes in the Work must receive the prior
written approval of Landlord, and in the event of any such approved change
Tenant shall, upon completion of the Work, furnish Landlord with an accurate,
reproducible "as-built" plan of the improvements as constructed.
<PAGE>
4. The Work shall be performed only by contractors and subcontractors
approved in writing by Landlord, which approval shall not be unreasonably
withheld. All contractors and subcontractors shall be required to procure and
maintain insurance against such risks, in such amounts, and with such companies
as Landlord may reasonably require. Certificates of such insurance, with paid
receipts therefor, must be received by Landlord before the Work is commenced.
Promptly upon Landlord's approval of the Working Drawings, Tenant shall commence
the construction of the Work and diligently and continuously pursue the
completion of the same. The Work shall be performed in a good and workmanlike
manner free of defects, shall conform strictly with the Working Drawings. All
contractors and subcontractors shall contact Landlord and schedule time periods
during which they may use Building facilities in connection with the Work (e.g.,
elevators, excess electricity, etc.).
5. The entire cost of performing the Work (including, without
limitation, design of the Work and preparation of the Working Drawings, costs of
construction, labor and materials, electrical usage during construction,
additional janitorial services, general tenant signage, related taxes and
insurance costs, all of which costs are herein collectively called the "Total
Construction Costs") in excess of the Construction Allowance (as hereinafter
defined) shall be paid by Tenant.
6. Landlord shall provide to Tenant a construction allowance (the
"Construction Allowance") equal to the lesser of (a) $10.00 per rentable square
foot in the Premises or (b) the Total Construction Costs, as adjusted for any
approved changes to the Work.
Subject to the terms and conditions of this Lease, Landlord shall pay
the Construction Allowance to Tenant for the purpose of financing a portion of
the Work. As conditions to Tenant's right to receive the Construction Allowance:
(i) Tenant shall not be in default under the Lease; (ii) the Lease shall be in
full force and effect; (iii) the Work shall be, in Landlord's reasonable
discretion, substantially complete; and (iv) Tenant shall furnish to Landlord:
(A) a Certificate of Occupancy respecting the Premises; and (B) such evidence as
Landlord may reasonably require to evidence that all persons furnishing or
supplying labor and materials in connection with the construction of the Work
have been paid and that no lien exists of record with respect thereto. Landlord
shall fund the Construction Allowance within twenty (20) business days from
Tenant's written request for the same provided that Tenant has complied with the
requirements set forth in the preceding sentence. Upon paying the full amount of
the Construction Allowance to Tenant in accordance with the provisions hereof,
Landlord shall have no further obligation to extend any credit to Tenant.
7. In consideration for Landlord's management and supervision of
services performed in connection with the Work, Tenant shall pay to Landlord,
within ten (10) business days after demand therefor, the actual costs incurred
by Landlord to review the Working Drawings and/or any drafts and/or
modifications thereto and to review the construction of the Work.
<PAGE>
E-1
EXHIBIT E
PARKING
Landlord shall provide, and Tenant may use three hundred one (301)
undesignated parking spaces in the parking garage/area associated with the
Building (the "Parking Area") during the initial Term at no additional charge.
After the initial Term, Tenant may use such parking spaces and pay for the use
of such parking spaces at such rates and subject to such terms, conditions and
regulations as are from time to time charged or applicable to patrons of the
Parking Area or similar parking areas. If, for any reason, Tenant is unable to
use all or any portion of the parking spaces to which it is entitled hereunder,
then Tenant's obligations to pay for such spaces shall be abated for so long as
Tenant does not have the use thereof; this abatement shall be in full settlement
of all claims that Tenant might otherwise have against Landlord because of
Landlord's failure or inability to provide Tenant with such parking spaces.
<PAGE>
F-4
EXHIBIT F
SAMPLE LETTER OF CREDIT
Beneficiary/Landlord: Issuance Date:
W9/TIB Real Estate Limited Partnership , 1998
-----------------------------------
c/o Archon Group, L.P.
1275 K Street NW, Suite 900 Irrevocable Standby Letter
Washington, DC 20005 of Credit No.
--------------------
Applicant/Accountee/Tenant: Credit Amount: USD $160,000.00
Kronos Incorporated Up to an Aggregate Thereof
Date and Place of Expiry:
, 1998
At Our Counters in Boston, MA
Ladies and Gentlemen:
We hereby issue our irrevocable standby letter of credit in your favor
for the account of the applicant for an aggregate amount not to exceed ONE
HUNDRED SIXTY THOUSAND US DOLLARS available for payment by presentation of your
draft(s) drawn on ourselves at sight, and accompanied by the following
documents:
1. Your statement/certificate, on your letterhead, signed by a person
purporting to be your authorized officer/representative, appropriately completed
in the following form:
A. "The undersigned, an authorized officer/representative of W9/TIB
Real Estate Limited Partnership (the "Landlord"), hereby certifies with regard
to __________ standby letter of credit no. __________ that Kronos Incorporated
(the "Tenant") is in default relative to the Lease Agreement dated
________________, 1998 (the "Lease") by and between Landlord and Tenant and such
default has continued uncured beyond all applicable notice and grace periods."
OR
B. "We are in receipt of _______________ Notice of Non-Extension of its
letter of credit no. _______________ and Kronos Incorporated (the "Tenant") has
failed to provide a replacement letter of credit reasonably acceptable to us as
of the date of our drawing and the Tenant remains liable to us pursuant to the
Lease."
2. The original of this letter of credit (for endorsement of drawing),
which will be returned unless the credit is fully utilized.
Partial drawings are permitted.
<PAGE>
Draft(s) must indicate the name of the issuing bank, the letter of
credit number and must be presented at this office (the address specified
below).
It is a condition of this letter of credit that it shall be deemed
automatically extended without amendment for an additional period of one year
from the present or each future expiration date hereof, but not beyond
_________________ [NOTE: 30 days after expiration of Lease], unless at least
forty-five (45) days prior to any such expiration date we notify you by
certified mail, that we elect not to so extend this letter of credit for any
such additional period. Upon receipt by you of such notice, you may draw
hereunder your draft(s) at sight on ourselves for the then full amount of this
letter of credit accompanied by your statement as specified above.
This letter of credit is transferable in its entirety, but not in part,
to any successor landlord under the Lease and may be successively transferred.
If it is your intention to transfer your interest hereunder, kindly return the
letter of credit to us for appropriate endorsement and furnish us with your
instructions. Please note your signature on your request for transfer must be
authenticated by your bank. (Transfer form is attached.) In the event of
transfer all required documents are to be signed by the transferee.
This letter of credit sets forth in full the terms of our obligations
to you, and our undertaking shall not in any way be amended or amplified by
reference to any documents, instruments or any agreement referred to herein or
to which this letter of credit related, and such reference, if any, shall not be
deemed to incorporate herein by reference any document, instrument or agreement.
Except as otherwise expressly stated herein, this letter of credit is
subject to the "Uniform Customs and Practice for Documentary Credits,
International Chamber of Commerce, Publication N. 500 (1993 Revision)".
We engage with you that all draft(s) drawn under and in compliance with
the terms and conditions of this letter of credit shall be duly honored on
presentation to us at our office at _______________, Boston, MA _______, Attn:
_______________, ____ Floor on or before the expiring date as specified above or
any automatically extended date herein before set forth.
Very truly yours,
By:
Name:
Title:
<PAGE>
TRANSFER
This form is to be used where a Letter of Credit is
transferred in its entirety and no substitution of
invoices is involved.
Date
Re: Credit issued or advised by
-----------------------------
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably transfers to:
(Name of Second Beneficiary)
(Address)
(Name of Advising Bank)
(Address)
all rights of the undersigned beneficiary to draw under the above Letter of
Credit in its entirety.
1. By this transfer, all rights of the undersigned beneficiary in such Letter of
Credit are transferred to the Second Beneficiary and the Second Beneficiary
shall have the sole rights as beneficiary thereof, including sole rights
relating to any amendment, whether increases or extensions or other amendments
and whether now existing or hereafter made. All amendments are to be advised
direct to the Second Beneficiary without necessity of any consent of or notice
to the undersigned beneficiary.
<PAGE>
The advice of such Letter of Credit is returned herewith, and we ask
you to endorse the transfer on the reverse thereof, and forward it direct to the
Second Beneficiary with your customary notice of transfer, or advise the letter
of credit to the Second Beneficiary by telex/SWIFT.
SIGNATURE AUTHENTICATED Very truly yours,
(Bank)
By: ______________________________
(Authorized Signature) Name:
Title:
<PAGE>
G-2
EXHIBIT G
RENEWAL OPTION
Provided no Event of Default exists at the time Tenant exercises its
option to extend this Lease and at the time the extension Term commences and
Tenant is occupying at least seventy-five percent (75%) of the Premises at the
time of such election, Tenant may renew this Lease for one (1) additional period
of five (5) years, by delivering written notice of the exercise thereof not
later than ten (10) months before the expiration of the Term. On or before the
commencement date of the extended Term in question, Landlord and Tenant shall
execute an amendment to this Lease extending the Term on the same terms provided
in this Lease, except as follows:
(a) The Basic Rent payable for each month during each such
extended Term shall be the Fair Market Rental Value, at the commencement of such
extended Term, for space of equivalent quality, size, utility and location, with
the length of the extended Term and the credit standing of Tenant to be taken
into account;
(b) Tenant shall have no further renewal options unless
expressly granted by Landlord in writing; and
(c) Landlord shall lease to Tenant the Premises in their
then-current condition, and Landlord shall provide to Tenant mutually agreed
upon allowances (e.g., moving allowance, construction allowance, and the like)
or other tenant inducements.
Tenant's rights under this Exhibit shall terminate if (1) this Lease or
Tenant's right to possession of the Premises is terminated, (2) Tenant assigns
any of its interest in this Lease or sublets more than twenty-five percent (25%)
of the Premises or (3) Tenant fails to timely exercise its option under this
Exhibit, time being of the essence with respect to Tenant's exercise thereof.
For purposes of this Lease, the term "Fair Market Rental Value" shall
mean the fair market rental value of the Premises as of the commencement of the
extension Term and/or expansion space (as applicable), as agreed by the parties
hereto. In the event that Landlord and Tenant are unable to agree on the Fair
Market Rental Value of the Premises for purposes hereof within sixty (60) days
following Tenant's notice of its election to extend this Lease or to lease the
expansion space, then the same shall be determined by binding arbitration in
accordance with Section 24(dd).
The arbitrators, as chosen pursuant to Section 24(dd), shall make their
respective determinations based upon the following assumptions and directions,
and the arbitrators shall be so instructed and duty bound with respect thereto:
(i) the space is available in the then rental market for
single tenant buildings of comparable office buildings in the
495 North markets;
<PAGE>
(ii) Landlord has had a reasonable time to locate a tenant for
such space who rents with the knowledge of the uses to which
the space can be utilized;
(iii) neither Landlord nor the prospective tenant is under a
compulsion to rent;
(iv) such space is to be rented as a whole to a single tenant
for general office use for a term of at least five (5) years,
taking into consideration such market factors and other lease
provisions as may then customarily be in effect and applicable
to the rental of such space in that location;
(v) current face rents (i.e., face rents on new leases
executed within the prior twelve (12) months of such
determination or rents for extension terms of older leases
where the rents were agreed upon or determined within the
prior twelve (12) months thereof, in either case (1) as stated
on the face of such lease or as determined by such lease with
respect to an extension option set forth therein, (2) adjusted
so that such face rents include all real estate taxes and
operating costs for such building for the calendar year next
immediately prior to the year in which such extension option
is to become effective, and (3) without regard to rental
concessions of any kind, such as free rent periods, rent
abatements, build-out allowances or the like) then being
obtained by Landlord for space in the Affiliated Buildings
shall be a factor in determining fair market rental value;
(vi) all Operating Costs and Taxes payable by Tenant under the
terms of this Lease shall be payable on the same basis as set
forth in this Lease; and
(vii) the space shall be considered as if rented "as-is".
<PAGE>
H-2
EXHIBIT H
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT made this day of , 199__, by and between W9/TIB
REAL ESTATE LIMITED PARTNERSHIP(hereinafter referred to as "Landlord") and
KRONOS INCORPORATED (hereinafter referred to as "Tenant").
WITNESSETH:
WHEREAS, Landlord and Tenant did enter into that certain Lease
Agreement, dated ____________, 1998 (hereinafter the "Lease") for the demise of
certain property located at 2 Omni Way, Chelmsford, Massachusetts and all
improvements located thereon (the "Premises"), which Premises and any and all
improvements located thereon are more particularly described therein;
WHEREAS, all terms defined in the Lease shall have the same meanings
when referred to herein;
WHEREAS, Landlord has requested that Tenant acknowledge the
"Commencement Date" of the Lease, pursuant to and in accordance with Section 2
thereof, and Landlord has further requested Tenant to acknowledge and confirm
(i) its obligations attendant upon such Commencement Date, (ii) the date upon
which the Term of the Lease expires (the "Expiration Date"), pursuant to and in
accordance with Section 2 thereof, and (iii) that the Landlord Work has been
completed in accordance with the provisions of the Lease; and
WHEREAS, Tenant has agreed to acknowledge the Commencement Date and the
Expiration Date of the Lease.
NOW, THEREFORE, in consideration of the premises and the mutual
promises and covenants contained herein and in the Lease, Landlord and Tenant
hereby agree as follows:
1. The Commencement Date of the Lease shall be _______________
and the Expiration Date of the Lease shall be , and such
respective dates of commencement and expiration of the Lease
shall, if different from the dates designated in Section 2 of
the Lease, be substituted therefor. It is understood and
agreed by Landlord and Tenant that any and all of Tenant's
covenants and obligations as by the Lease provided shall
become effective as of the Commencement Date.
2. The Landlord Work has been completed in accordance with the
provisions of the Lease, and Tenant has received the
Construction Allowance from Landlord.
<PAGE>
EXCEPT as hereby modified and amended, all other terms, provisions,
covenants and conditions of the Lease are ratified and confirmed and shall
remain and in full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have caused this First
Amendment to be executed by their duly authorized representatives on the day and
year above written.
WITNESS: LANDLORD:
W9/TIB REAL ESTATE LIMITED
PARTNERSHIP, a Delaware
limited Partnership
By:9/TIB Gen-Par, Inc., a Delaware
corporation, its managing general partner
By:
Name: Name:
Title:
WITNESS: TENANT:
KRONOS INCORPORATED, a Massachusetts
corporation
By:
Name: Name:
Title:
<PAGE>
I-1
EXHIBIT I
BUILDING HOLIDAYS
New Year's Day, President's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, the day after Thanksgiving Day, and Christmas Day (and the
following day when any such day occurs on Sunday).
<PAGE>
J-9
EXHIBIT J
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
This AGREEMENT is made and entered into as of ___________________, 1999, by
and among LaSalle National Bank, as Trustee for GS Mortgage Securities
Corporation II Commercial Mortgage Pass-Through Certificates, Series 1998-GSFL1
("Lender"), W9/TIB Real Estate Limited Partnership ("Landlord") and Kronos
Incorporated ("Tenant").
1. RECITALS.
1.1 Mortgage. Lender is the holder of a Promissory Note dated
________________, 19____, in the original principal amount of $_________________
of Landlord, which is secured, inter alia, by a Mortgage and Security Agreement
(the "Mortgage") and Assignment of Lease and Rents (the "Lease Assignment")
covering premises more particularly described in the Mortgage (the "Premises").
1.2 Lease. Landlord and Tenant entered into a Lease dated January __,
1999 (the "Lease"), whereby Landlord demised to Tenant a portion of the Premises
(the "Demised Premises").
2. CONSIDERATION. The terms of the Lease constitute a material inducement
to Lender's consent thereto and entering into and performing this Agreement.
3. SUBORDINATION OF THE LEASE. This Lease shall be and is hereby made
subject and subordinate to the Mortgage.
4. NON-DISTURBANCE. Lender shall not, in the exercise of any right, remedy,
or privilege granted by the Mortgage or the Lease Assignment, or otherwise
available to Lender at law or in equity, disturb Tenant's possession under the
Lease so long as:
(a) Tenant is not in default under any provision of the Lease or this
Agreement beyond any applicable notice and/or cure periods at the time Lender
exercises any such right, remedy or privilege; and
(b) The Lease at that time is in force and effect according to its original
terms, or with such amendments or modifications as Lender shall have approved,
if such approval is required by the terms of the Mortgage or the Lease
Assignment; and
(c) Tenant thereafter continues to fully and punctually perform all of its
obligations under the Lease without default thereunder beyond any applicable
cure period; and
(d) Tenant attorns to or at the direction of Lender, as provided in
Paragraph 5.
<PAGE>
Without limiting the foregoing, and so long as the foregoing conditions are met,
Lender agrees that (i) Tenant will not be named as a party to any foreclosure or
other proceeding instituted by Lender to enforce the terms of the Mortgage or
the Lease Assignment; (ii) any sale or other transfer of the Demised Premises or
of the Landlord's interest in the Lease, pursuant to foreclosure or any
voluntary conveyance or other proceeding in lieu of foreclosure, will be subject
and subordinate to Tenant's possession under the Lease; and (iii) the Lease will
continue in force and effect according to its original terms, or with such
amendments as Lender shall have approved, if such approval is required by the
terms and conditions of the Mortgage or the Lease Assignment.
5. ATTORNMENT. Tenant shall attorn to Lender, to any receiver or similar
official for the Demised Premises appointed at the instance and request, or with
the consent, of Lender and to any person who acquires the Demised Premises, or
the Landlord's interest in the Lease, or both, pursuant to Lender's exercise of
any right, remedy or privilege granted by the Mortgage, or otherwise at law or
in equity. Without limitation, Tenant shall attorn to any person or entity that
acquired the Demised Premises pursuant to foreclosure of the Mortgage, or by any
proceeding or voluntary conveyance in lieu of such foreclosure, or from Lender,
whether by sale, exchange or otherwise. Any attornment to anyone other than
Lender shall be conditioned upon Tenant receiving a non-disturbance from such
entity.
Upon any attornment under this Paragraph 5, the Lease shall continue in
full force and effect as a direct lease between Tenant and the person or entity
to whom Tenant attorns, except that such person or entity shall not be:
(i) liable for any breach, act or omission of any prior landlord; or
(ii) subject to any offsets, claims or defenses which Tenant might have
against any prior landlord; or
(iii)bound by any rent or additional rent or other payment in lieu of rent
which Tenant might have paid to any prior landlord more than 30 days in advance
of its due date under the Lease or which such person or entity has physical
possession of; or
(iv) bound by any amendment or modification of the Lease made without
Lender's written consent, where such consent is required by the Mortgage; or
(v) bound by any notice given by Tenant to Landlord, whether or not such
notice is given pursuant to the terms of the Lease, unless a copy thereof was
then also given to Lender; or
(vi) be liable for any security deposit or other sums held by any prior
landlord, unless actually received.
<PAGE>
The person or entity to whom Tenant attorns shall be liable to Tenant under the
Lease only during such person or entity's period of ownership, and such
liability shall not continue or survive as to the transferor after a transfer by
such person or entity of its interest in the Lease and the Demised Premises.
6. REPRESENTATIONS AND WARRANTIES.
6.1 Landlord and Tenant each hereby represent and warrant to Lender as
follows regarding the Lease:
(a) A true and correct copy of the Lease (inclusive of all riders and
exhibits thereto) is attached to the counterpart of this Agreement being
delivered to Lender. There are no other oral or written agreements,
understandings or the like between Landlord and Tenant relating to the Demised
Premises or the Lease transaction.
(b) The term of the Lease is expected to commence on or about August 1,
1999.
(c) Under the Lease, Tenant shall be obligated to pay rent without present
right of defense or offset, at the rate of $54,818.67 per month. Rent is paid
through and including N/A , 19__. No rent has been paid more than 30 days in
advance, and Tenant has no claim against the Landlord for any deposits or other
sums.
(d) The Lease has not been modified, altered or amended in any respect.
(e) All of the improvements contemplated by the Lease have been entirely
completed as required therein.
(f) The addresses for notices to be sent to Tenant and Landlord are as set
forth in the Lease.
(g) To Tenant's knowledge, Tenant has no right of first refusal, option or
other right to purchase the Premises or any part thereof, including, without
limitation, the Demised Premises.
6.2 Several. Landlord and Tenant severally represent and warrant to Lender
with respect to themselves, but not with respect to the other:
(a) The execution of the Lease was duly authorized, the Lease was properly
executed and is in full force and effect and is valid, binding and enforceable
against Tenant and Landlord and there exists no monetary default or, to the best
of their knowledge, no non-monetary default, nor state of facts which with
notice, the passage of time, or both, could ripen into a default, on the part of
either Tenant or Landlord.
(b) There has not been filed by or against nor, to the best of the
knowledge and belief of the representing party, is there threatened against or
contemplated by, Landlord or Tenant, a petition in bankruptcy, voluntary or
otherwise, any assignment for the benefit of creditors, any petition seeking
reorganization or arrangement under the bankruptcy laws of the United States or
of any state thereof, or any other action brought under said bankruptcy laws.
<PAGE>
(c) There has not been any assignment, hypothecation or pledge of the Lease
or rents accruing under the Lease, other than pursuant to the Mortgage and the
Lease Assignment. Tenant makes the representation set forth in this subparagraph
only to its best knowledge and belief.
7. RENTS. Landlord and Tenant jointly and severally acknowledge that the
Lease Assignment provides for the direct payment to Lender of all rents and
other monies due and to become due to Landlord under the Lease upon the
occurrence of certain conditions as set forth in the Lease Assignment without
Lender's taking possession of the Demised Premises or otherwise assuming
Landlord's position or any of Landlord's obligations under the Lease. Upon
receipt from Lender of written notice to pay all such rents and other monies to
or at the direction of Lender, Landlord authorizes and directs Tenant thereafter
to make all such payments to or at the direction of Lender, releases Tenant of
any and all liability to Landlord for any and all payment so made, and shall
defend, indemnify and hold Tenant harmless from and against any and all claims,
demands, losses, or liabilities asserted by, through or under Landlord (except
by Lender) for any and all payments so made. Upon receipt of such notice, Tenant
thereafter shall pay all monies then due and becoming due from Tenant under the
Lease to or at the direction of Lender, notwithstanding any provision of the
Lease to the contrary. Tenant agrees that neither Lender's demanding or
receiving any such payments, nor Lender's exercising any other right, remedy,
privilege, power or immunity granted by the Mortgage or the Lease Assignment,
will operate to impose any liability upon Lender for performance of any
obligation of Landlord under the Lease unless and until Lender elects otherwise
in writing. Such payments shall continue until Lender directs Tenant otherwise
in writing.
Tenant agrees not to pay any rent under the Lease more than 30 days in
advance without Lender's consent. The provisions of this Paragraph 7 will apply
from time to time throughout the term of the Lease.
8. CURE. If Tenant becomes entitled to terminate the Lease or offset,
withhold or abate rents because of any default by Landlord, then Tenant shall
give Lender written notice specifying Landlord's default. Lender then shall have
the right, but not the obligation, to cure the specified default within the
following time periods:
(a) Fifteen days after receipt of such notice with respect to defaults that
can be cured by the payment of money; or
(b) Thirty days after receipt of such notice with respect to any other
default; unless the cure requires Lender to obtain possession of the Demised
Premises, in which case such thirty day period shall not commence until Lender
acquires possession, so long as Lender proceeds promptly to acquire possession
of the Demised Premises with due diligence, by foreclosure of the Mortgage or
otherwise.
<PAGE>
Nothing contained in this Paragraph 8 shall require Lender to commence or
continue any foreclosure or other proceedings, or, if Lender acquires possession
of the Demised Premises, to continue such possession, if all defaults specified
by Tenant in its notice are cured. Possession by a receiver, or other similar
official appointed at the instance, or with the consent, of Lender shall
constitute possession by Lender for all purposes under this Paragraph 8.
9. ESTOPPEL LETTERS. Whenever reasonably requested by Lender, Landlord and
Tenant from time to time shall severally execute and deliver to or at the
direction of Lender, and without charge to Lender, one or more written
certifications of all of the matters as set forth in Paragraph 6, whether Tenant
has exercised any renewal option or options and any other information the Lender
may reasonably require to confirm the current status of the Lease, including,
without limitation, a confirmation that the Lease is and remains subordinated as
provided in this Agreement.
10. CASUALTY AND EMINENT DOMAIN. Landlord and Tenant jointly and severally
agree that the Mortgage permits Lender, at its option, to apply to the
indebtedness from time to time secured by the Mortgage any and all insurance
proceeds payable with respect to any casualty loss at the Demised Premises and
any and all awards or other compensation that may be payable for the
condemnation of all or any portion of the Demised Premises, or any interest
therein, or by way of negotiated settlement or conveyance in lieu of
condemnation; and Landlord and Tenant jointly and severally consent to any such
application by Lender. Notwithstanding the foregoing, Landlord and Lender agree
that any and all insurance or condemnation proceeds payable with respect to
Tenant's property or the interruption or relocation of Tenant's business (except
for rental loss insurance proceeds) will be paid to Tenant, so long as they do
not reduce the proceeds otherwise payable to Lender.
11. NOTICES. All notices, demands, and other communications that must or
may be given or made in connection with this Agreement must be in writing and,
unless receipt is expressly required, will be deemed delivered or made 5 days
after having been mailed by registered or certified mail, return receipt
requested, or by express mail, in any event with sufficient postage affixed, and
addressed to the parties as follows:
TO LENDER: c/o AMRESCO Services, L.P.
235 Peachtree Street, N.E., Suite 900
Atlanta, Georgia 30303
Attn.: Private Sector Servicing
TO LANDLORD:W9/TIB Real Estate Limited Partnership
c/o Archon Group, L.P.
1275 K Street NW, Suite 900
Washington, DC 20005
TO TENANT: Kronos Incorporated
400 Fifth Avenue
Waltham, MA 02151
<PAGE>
Such addresses may be changed by notice pursuant to this Paragraph 11; but
notice of change of address is effective only upon receipt. Landlord and Tenant
jointly and severally agree that they will furnish Lender with copies of all
notices relating to the Lease. All communications to Lender shall reference
"AMRESCO Loan No.: __________ ".
12. SUCCESSORS AND ASSIGNS. As used in this Agreement, the word "Tenant"
shall mean Tenant and any subsequent holder or holders of an interest under the
Lease, as the text may require, provided that the interest of such holder is
acquired in accordance with the terms and provisions of the Lease and the word
"Lender" shall mean Lender or any other subsequent holder or holders of the
Mortgage or any party acquiring title to the Demised Premises by purchase at a
foreclosure sale, by deed of the Lender, or otherwise. Subject to the foregoing,
this Agreement shall bind and inure to the benefit of Landlord, Tenant and
Lender, their legal representatives, successors and assigns. The terms Lease,
Mortgage and Lease Assignment shall include any and all amendments,
modifications, replacements, substitutions, extensions, renewals and supplements
thereto.
13. FURTHER ASSURANCES. Landlord and Tenant from time to time shall execute
and deliver at Lender's request all instruments that may be necessary or
appropriate to evidence their agreement hereunder provided such instrument
neither increases Tenant's obligations or decreases its rights under the Lease.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all such
counterparts shall constitute one and the same instrument.
15. SEVERABILITY. A determination that any provision of this Agreement is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision, and any determination that the application of any provision of
this Agreement to any person or to any person or to particular circumstances is
illegal or unenforceable shall not affect the enforceability or validity of such
provision as it may apply to other persons or circumstances.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
LENDER:
LASALLE NATIONAL BANK, as Trustee for GS Mortgage Securities Corporation II
Commercial Mortgage Pass-Through Certificates, Series
1998-GSFL1
By: AMRESCO Services, L.P.,
its authorized agent
By: AMRESCO Mortgage Capital, Inc.,
its general partner
By:_____________________________
Name:___________________________
Title: Servicing Officer
LANDLORD:
W9/TIB REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: W9/TIB Gen-Par, Inc., a Delaware
corporation, its general partner
By:
Name:
Title:
TENANT:
KRONOS INCORPORATED, a Massachusetts corporation
By:
Name:
Title:
<PAGE>
STATE OF ____________ )
)
COUNTY OF __________ ) _____________ ___, 1999
Then personally appeared the above-named
_________________________________, __________________________________ of AMRESCO
Mortgage Capital, Inc., as general partner of AMRESCO Services, L.P., as
authorized agent for LaSalle National Bank, as Trustee for GS Mortgage
Securities Corporation II Commercial Mortgage Pass-Through Certificates, Series
1998-GSFL1, and acknowledged the foregoing instrument to be his/her free act and
deed and the free act and deed of Bankers Trust Company of California, N.A.,
before me,
------------------------------------
(Seal)
Notary Public
My commission expires:
STATE OF ____________ )
)
COUNTY OF __________ ) _____________ ___, 1999
Then personally appeared the above-named
_________________________________, __________________________________ of W9/TIB
Gen-Par, Inc., as General Partner of W9/TIB Real Estate Limited Partnership, and
acknowledged the foregoing instrument to be his/her free act and deed, the free
act and deed of W9/TIB Gen-Par, Inc., and the free act and deed of W9/TIB Real
Estate Limited Partnership, before me,
------------------------------------
(Seal)
Notary Public
My commission expires:
STATE OF ____________ )
)
COUNTY OF __________ ) _____________ ___, 1999
Then personally appeared the above-named
_________________________________, __________________________________ of Kronos
Incorporated, and acknowledged the foregoing instrument to be his/her free act
and deed and the free act and deed of Kronos Incorporated, before me,
------------------------------------
(Seal)
Notary Public
My commission expires:
<PAGE>
K-3
EXHIBIT K
RIGHT OF FIRST OFFER RE 4 OMNI WAY
Subject to the rights of existing tenants to continue to occupy their
respective premises and to any now or hereafter arising extension or expansion
options of other tenants, provided no Event of Default then exists, and provided
Tenant has a net worth equal to or greater than ninety-five percent (95%) of
Tenant's net worth as of the date hereof, Landlord shall, after receiving a
formal request for proposal to which Landlord elects to respond (other than from
the then-current tenant therein), first offer to lease to Tenant the space
designated on page 2 of this Exhibit (the "4 Omni Way Offer Space"); such offer
shall be in writing and specify the market lease terms for the 4 Omni Way Offer
Space, including a lease term of at least five (5) years, the Fair Market Rental
Value (as determined in accordance with Exhibit G above) to be paid for the 4
Omni Way Offer Space and the date on which the 4 Omni Way Offer Space shall be
available for lease (the "4 Omni Way Offer Notice"). Tenant shall notify
Landlord in writing whether Tenant elects to lease the entire 4 Omni Way Offer
Space on the terms set forth in the 4 Omni Way Offer Notice, within seven (7)
business days after Landlord delivers to Tenant the 4 Omni Way Offer Notice. If
Tenant timely elects to lease the 4 Omni Way Offer Space, then Landlord and
Tenant shall, at Landlord's sole discretion, execute a new lease agreement for
the 4 Omni Way Offer Space or an amendment to this Lease within thirty (30) days
after Tenant's election, effective as of the date the 4 Omni Way Offer Space is
available for lease, on the terms set forth in the 4 Omni Way Offer Notice and,
to the extent not inconsistent with the 4 Omni Way Offer Notice terms, the terms
of this Lease.
If Tenant fails or is unable to timely exercise its right hereunder,
then such right shall lapse, time being of the essence with respect to the
exercise thereof, and Landlord may lease all or a portion of the 4 Omni Way
Offer Space to third parties on such terms as Landlord may elect.
Notwithstanding the foregoing, if Landlord leases less than one-half of the 4
Omni Way Offer Space to a third party, Tenant's right of first offer granted
under this Exhibit shall continue with respect to the remainder of the 4 Omni
Way Offer Space not leased to such third party; provided, however, if Tenant
fails or is unable to timely exercise its rights hereunder with respect to the
remainder of the 4 Omni Way Offer Space, then such right to lease the remainder
of the 4 Omni Way Offer Space shall lapse, time being of the essence with
respect to the exercise thereof, and Landlord may lease all or a portion of the
remainder of the 4 Omni Way Offer Space to third parties on such terms as
Landlord may elect. Further, but subject to the provisions of the preceding
sentence, Tenant's right of first offer granted under this Exhibit with respect
to the 4 Omni Way Offer Space shall continue during the initial Term on the same
terms and conditions set forth herein to the extent the 4 Omni Way Offer Space
again becomes available during the initial Term.
<PAGE>
Tenant may not exercise its rights under this Exhibit if an Event of
Default exists, if Tenant is not then occupying at least seventy-five percent
(75%) of the Premises, or if Tenant has a net worth that is less than
ninety-five percent (95%) of Tenant's net worth as of the date hereof. For
purposes hereof, if a 4 Omni Way Offer Notice is delivered for less than all of
the 4 Omni Way Offer Space but such notice provides for an expansion, right of
first refusal, or other preferential right to lease some of the remaining
portion of the 4 Omni Way Offer Space, then such remaining portion of the 4 Omni
Way Offer Space shall thereafter be excluded from the provisions of this
Exhibit.
Tenant's rights under this Exhibit shall terminate if (a) this Lease or
Tenant's right to possession of the Premises is terminated, (b) Tenant assigns
any of its interest in this Lease or sublets more than twenty-five percent (25%)
of the Premises, or (c) the initial Term expires.
Notwithstanding any provisions of this Lease to the contrary, if the
fee title to the 4 Omni Way Offer Space is held by an entity other than Landlord
or any Affiliate of Landlord and such entity fails to comply with the provisions
of this Exhibit K, Tenant shall have no recourse, rights or remedies against
Landlord if such entity fails to comply with the provisions of this Exhibit K
and Tenant shall continue to comply with the provisions of this Lease.
<PAGE>
DEPICTION OF 4 OMNI WAY OFFER SPACE
(4 Omni Way, Chelmsford, MA)
Lot 2B as shown on that certain plan entitled "Plan of Land of Billerica Road
Site, Chelmsford, MA", which plan is recorded with the Middlesex North District
Registry of Deeds in Plan Book 143 as Plan 143.
<PAGE>
vi
LIST OF DEFINED TERMS
Page
Additional Rent.............................................................2
Affiliate 25
Affiliate of Tenant.........................................................13
Affiliated Buildings........................................................19
AS-IS D-1
Base Building Electrical Capacity............................................8
Basic Rent 1
Building 1
Building Holidays 7
Building's Structure.........................................................8
Casualty 17
Commencement Date 1
Construction Allowance.....................................................D-2
Damage Notice 17
Environmental Reports...................................................26, 30
Event of Default 18
Fair Market Rental Value...................................................G-1
GAAP 2
Hazardous Materials.........................................................25
including 25
Interest Rate 5
Landlord 1
Landlord's Mortgagee........................................................15
Law 25
Laws 25
Lease 1
Lease Year 1
Letter of Credit 5
Loss 14
Mortgage 15
Offer Notice K-1
Offer Space K-1
Operating Costs 2
Operating Costs and Tax Statement............................................4
Parking Area E-1
Permitted Use 12
Premises 1
Rent 2
Rooftop Equipment 27
Security Deposit 5
<PAGE>
Taking......................................................................16
Taxes 3
Tenant 1, 19
Tenant Party 25
Term 1
Total Construction Costs...................................................D-2
Transfer 12
Work D-1
Working Drawings D-1
[GRAPHIC OMITTED][GRAPHIC OMITTED]
Standard Form of Agreement Between Owner and
Contractor where the basis for payment is the COST OF THE
WORK PLUS A FEE with a negotiated Guaranteed Maximum Price
AlA Document A111 -1997
1997 Edition - Electronic Format
This document has important legal consequences. Consultation with an
attorney is encouraged with respect to its completion or
modification. AUTHENTICATION
OF THIS ELECTRONICALLY DRAFTED ALA DOCUMENT MAY BE MADE BY USING ALA DOCUMENT
D401.
This document is not intended for use in competitive bidding.
ALA Document A20 1-1997, General Conditions of the Contract for Construction, is
adopted in this document by reference.
This document has been approved and endorsed by The Associated General
Contractors of America.
Copyright 1920, 1925, 1951, 1958, 1961, 1963, 1967, 1974, 1978, 1987,0 1997 by
The American Institute of Architects. Reproduction of the material herein or
substantial quotation of its provisions without written permission of the ALA
violates the copyright laws of the United States and will subject the violator
to legal
AGREEMENT made as of the 10th day of March in the year 1999.
(In words, indicate day, month and year)
BETWEEN the Owner:
(Name, address and other information)
Kronos Inc., 300 Billerica Road, Chelmsford, MA 01824
and the Contractor:
(Name, address and other information)
Cranshaw Construction of New England Limited Partnership.2310 Washington Street
Newton Lower Falls, MA 02462
The Project is:
(Name and location)
The Kronos Corporate Headquarters Building, 297 Billerica Road, Chelmsford,
Massachusetts
The Architect is:
(Name, address and other information)
Spagnolo/Gisness & Associates, 129 Portland Street, Boston, MA 02114, with
respect to base building (core and shell) Pisani & Associates, 374 Congress
Street, Boston, MA 02210, with respect to tenant improvements
The Owner and Contractor agree as follows.
ARTICLE 1 THE CONTRACT DOCUMENTS
The Contract Documents consist of this Agreement, Conditions of the
Contract (General, Supplementary and other Conditions), Drawings,
Specifications, Addenda issued prior to execution of this Agreement, other
documents listed in this Agreement and Modifications issued after execution
of this Agreement; these form the Contract, and are as fully a part of the
Contract as if attached to this Agreement or repeated herein. The Contract
represents the entire and integrated agreement between the parties hereto
and supersedes prior negotiations, representations or agreements, either
written or oral. An enumeration of the Contract Documents, other than
Modifications, appears in Article 15. If anything in the other Contract
Documents is inconsistent with this Agreement, this Agreement shall govern.
ARTICLE 2 THE WORK OF THIS CONTRACT
The Contractor shall fully execute the Work described in the Contract
Documents, except to the extent specifically indicated in the Contract
Documents to be the responsibility of others.
ARTICLE 3 RELATIONSHIP OF THE PARTIES
The Contractor accepts the relationship of trust and confidence established
by this Agreement without, however. undertaking any fiduciary role or
responsibility and covenants with the Owner to cooperate with the Architect
and exercise the Contractor's skill and judgment in furthering the
interests of the Owner; to furnish efficient business administration and
supervision; to furnish at all times an adequate supply of workers and
materials; and to perform the Work in an expeditious and economical manner
consistent with the Owners interests. The Owner agrees to furnish and
approve, in a timely manner, information required by the Contractor and to
make payments to the Contractor in accordance with the requirements of the
Contract Documents.
ARTICLE 4 DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
4.1 The date of commencement of the Work shall be the date of this
Agreement unless a different date is stated below or provision is made for
the date to be fixed in a notice to proceed issued by the Owner. (Insert
the date of commencement, if it differs from the date of this Agreement or,
if applicable. state that the date will be fixed in a notice to proceed.)
Commencement of the work shall occur upon receipt of a notice to proceed
from the Owner. which shall occur no later than June 1. 1999. and upon
issuance of a permit to build issued by the Town of Chelmsford.
If, prior to commencement of the Work, the Owner requires time to file
mortgages, mechanic's liens and other security interests, the Owner's time
requirement shall be as follows:
4.2 The Contract Time shall be measured from the date of commencement.
4.3 The Contractor shall achieve Substantial Completion of the entire Work
not later than twelve (12) months from a notice to proceed from the Owner.
(Insert number of calendar days. Alternatively, a calendar date may be used
when coordinated with the date of commencement. Unless stated elsewhere in
the Contract Documents, insert any requirements for earlier Substantial
Completion of certain portions of the Work)
, subject to adjustments of this Contract Time as provided in the Contract
Documents.
(Insert provisions, if any, for liquidated damages relating to failure
to complete on time, or for bonus payments for early
completion of the Work)
ARTICLE 5 BASIS FOR PAYMENT
5.1 CONTRACT SUM
5.1.1 The Owner shall pay the Contractor the Contract Sum in current funds
for the Contractor's performance of the Contract. The Contract Sum is the
Cost of the Work as defined in Article 7 plus the Contractor's Fee.
5.1.2 The Contractor's Fee is: Three and one-half percent (3.5%) of the
Cost of the Work plus seven and one-half percent (7.5%) for General
Conditions. which shall be fixed percentages that do not vary with
adjustments in the Guaranteed Maximum Price. Contractor's Fee shall be five
percent (5%) of the Cost of the Work for changes in the Work above the
first $100,000. (State a lump sum, percentage of Cost of the Work or other
provision for determining the Contractor's Fee, and describe the method of
adjustment of the Contractor's Fee for changes in the Work)
5.2 GUARANTEED MAXIMUM PRICE
5.2.1 The sum of the Cost of the Work and the Contractor's Fee is
guaranteed by the Contractor not to exceed Dollars ($), subject to
additions and deductions by Change Order as provided in the Contract
Documents. Such maximum sum is referred to in the Contract Documents as the
Guaranteed Maximum Price. Costs which would cause the Guaranteed Maximum
Price to be exceeded shall be paid by the Contractor without reimbursement
by the Owner. (Insert specific provisions if the Contractor is to
participate in any savings.) The Guaranteed Maximum Price for the base
building (core and shell) and tenant work will be established within 30
days of receipt of design development documents and confirmed within 30
days of receipt of the Contract Documents. The Contractor shall submit
Guaranteed Maximum Price Pricing within three weeks of receiving design
development drawings. If savings occur in the Guaranteed Maximum Price they
shall be shared 35 percent to the Contractor and 65 percent to the Owner.
5.2.2 The Guaranteed Maximum Price is based on the following alternates, if
any, which are described in the Contract Documents and are hereby accepted
by the Owner: (State the numbers or other identification of accepted
alternates. If decisions on other alternates are to be made by the Owner
subsequent to the execution of this Agreement, attach a schedule of such
other alternates showing the amount/or each and the date when the amount
expires.)
5.2.3 Unit prices, if any, are as follows:
5.2.4 Allowances, if any, are as follows:
(Identify and state the amounts of any allowances, and state whether they
include labor, materials, or both.) winter conditions, schedule
acceleration and contingency, as set forth in the Guaranteed Maximum Price.
5.2.5 Assumptions, if any, on which the Guaranteed Maximum Price is based
are as follows:
5.2.6 To the extent that the Drawings and Specifications are anticipated to
require further development by the Architect, the Contractor has provided
in the Guaranteed Maximum Price for such further development consistent
with the Contract Documents and reasonably inferable therefrom. Such
further development does not include such things as changes in scope,
systems, kinds and quality of materials, finishes or equipment, all of
which, if required, shall be incorporated by Change Order.
ARTICLE 6 CHANGES IN THE WORK
6.1 Adjustments to the Guaranteed Maximum Price on account of changes in
the Work may be determined by any of the methods listed in Subparagraph
7.3.3 of AlA Document A201-1997.
6.2 In calculating adjustments to subcontracts (except those awarded with
the Owner's prior consent on the basis of cost plus a fee), the terms
"cost" and "fee" as used in Clause 7.3.3.3 of AlA Document A201-1997 and
the terms "costs" and "a reason able allowance for overhead and profit" as
used in Subparagraph 7.3.6 of MA Document A201-1997 shall have the meanings
assigned to them in AlA Document A20 1-1997 and shall not be modified by
Articles 5, 7 and 8 of this Agreement. Adjustments to subcontracts awarded
with the Owner's prior consent on the basis of cost plus a fee shall be
calculated in accordance with the terms of those subcontracts.
6.3 In calculating adjustments to the Guaranteed Maximum Price, the terms
"cost" and "costs" as used in the above-referenced provisions of AlA
Document A201-1997 shall mean the Cost of the Work as defined in Article 7
of this Agreement and the terms "fee" and "a reasonable allowance for
overhead and profit" shall mean the Contractor's Fee as defined in
Subparagraph 5.1.2 of this Agreement.
ARTICLE 7 COSTS TO BE REIMBURSED
7.1 COSTOFTHE WORK
The term Cost of the Work shall mean costs necessarily incurred by the
Contractor in the proper performance of the Work. Such costs shall be at
rates not higher than the standard paid at the place of the Project except
with prior consent of the Owner. The Cost of the Work shall include only
the items set forth in this Article 7.
7.2 LABOR COSTS
7.2.1 Wages of construction workers directly employed by the Contractor to
perform the construction of the Work at the site
<PAGE>
or, with the Owner's approval, at off-site workshops.
7.2.2 Wages or salaries of the Contractor's supervisory and administrative
personnel when stationed at the site with the Owner's approval. (I/it is
intended that the wages or salaries of certain personnel stationed at the
Contractor's principal or other offices shall be included in the Cost of
the Work, identify in Article 14 the personnel to be included and
whether/or all or only part of their time, and the rates at which their
time will be charged to the Work)
7.2.3 Wages and salaries of the Contractor's supervisory or administrative
personnel engaged, at factories, workshops or on the road, in expediting
the production or transportation of materials or equipment required for the
Work, but only for that portion of their time required for the Work, when
stationed at the site with the Owner's approval. which shall be included
within the 7.5 percent general conditions fee.
7.2.4 Costs paid or incurred by the Contractor for taxes, insurance,
contributions, assessments and benefits required by law or collective
bargaining agreements and, for personnel not covered by such agreements,
customary benefits such as sick leave, medical and health benefits,
holidays, vacations and pensions, provided such costs are based on wages
and salaries included in the Cost of the Work under Subparagraphs 7.2.1
through 7.2.3.
7.3 SUBCONTRACT COSTS
7.3.1 Payments made by the Contractor to Subcontractors in accordance with
the requirements of the subcontracts.
7.4 COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED
CONSTRUCTION
7.4.1 Costs, including transportation and storage, of materials and
equipment incorporated or to be incorporated in the completed construction.
7.4.2 Costs of materials described in the preceding Subparagraph 7.4.1 in
excess of those actually installed to allow for reasonable waste and
spoilage. Unused excess materials, if any, shall become the Owner's
property at the completion of the Work or, at the Owner's option, shall be
sold by the Contractor. Any amounts realized from such sales shall be
credited to the Owner as a deduction from the Cost of the Work,
7.5 COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES AND
RELATED ITEMS
7.5.1 Costs, including transportation and storage, installation,
maintenance, dismantling and removal of materials, supplies, temporary
facilities, machinery, equipment, and hand tools not customarily owned by
construction workers, that are provided ~ the Contractor at the site and
fully consumed in the performance of the Work; and cost (less salvage
value) of such items if not fully consumed, whether sold to others or
retained by the Contractor. Cost for items previously used by the
Contractor shall' mean fair market value. Items not in the General
Conditions 7.5 percent fee shall be subject to review and approval by the
Owner.
7.5.2 Rental charges for temporary facilities, machinery, equipment, and
hand tools not customarily owned by construction workers that are provided
by the Contractor at the site, whether rented from the Contractor or
others, and costs of transportation, installation, minor repairs and
replacements, dismantling and removal thereof. Rates and quantities of
equipment rented shall be subject to the Owner's prior approval.
7.5.3 Costs of removal of debris from the site.
7.5.4 Costs of document reproductions, facsimile transmissions and
long-distance telephone calls, postage and parcel delivery charges,
telephone service at the site and reasonable petty cash expenses of the
site office.
7.5.5 That portion of the reasonable expenses of the Contractor's personnel
incurred while traveling in discharge of duties connected with the Work.
7.5.6 Costs of materials and equipment suitably stored off the site at a
mutually acceptable location, if approved in advance by the Owner.
7.6 MISCELLANEOUS COSTS
7.6.1 That portion of insurance and bond premiums that can be directly
attributed to this Contract:
7.6.2 Sales, use or similar taxes imposed by a governmental authority that
are related to the Work.
<PAGE>
7.8.3 Fees and assessments for the building permit and for other permits,
licenses and inspections for which the Contractor is required by the
Contract Documents to pay.
7.6.4 Fees of laboratories for tests required by the Contract Documents,
except those related to defective or nonconforming Work for which
reimbursement is excluded by Subparagraph 13.5.3 of AlA Document A201-1997
or other provisions of the Contract Documents, and which do not fall within
the scope of Subparagraph 7.7.3.
7.6.5 Royalties and license fees paid for the use of a particular design,
process or product required by the Contract Documents; the cost of
defending suits or claims for infringement of patent rights arising from
such requirement of the Contract Documents; and payments made in accordance
with legal judgments against the Contractor resulting from such suits or
claims and payments of settlements made with the Owner's consent. However,
such costs of legal defenses, judgments and settlements shall not be
included in the calculation of the Contractor's Fee or subject to the
Guaranteed Maximum Price. If such royalties, fees and costs are excluded by
the last sentence of Subparagraph 3.17.1 of ALA Document A201-1997 or other
provisions of the Contract Documents, then they shall not be included in
the Cost of the Work.
7.6.6 Data processing costs related to the Work.
7.6.7 Deposits lost for causes other than the Contractor's negligence or
failure to fulfill a specific responsibility to the Owner as set forth in
the Contract Documents.
7.6.8 Legal, mediation and arbitration costs, including attorneys' fees,
other than those arising from disputes between the Owner and Contractor,
reasonably incurred by the Contractor in the performance of the Work and
with the Owner's prior written approval; which approval shall not be
unreasonably withheld.
7.7 OTHER COSTS AND EMERGENCIES
7.7.1 Other costs incurred in the performance of the Work if and to the
extent approved in advance in writing by the Owner.
7.7.2 Costs due to emergencies incurred in taking action to prevent
threatened damage, injury or loss in case of an emergency affecting the
safety of persons and property, as provided in Paragraph 10.6 of AlA
Document A201-1997.
7.7.3 Costs of repairing or correcting damaged or nonconforming Work
executed by the Contractor, Subcontractors or suppliers, provided that such
damaged or nonconforming Work was not caused by negligence or failure to
fulfill a specific responsibility of the Contractor and only to the extent
that the cost of repair or correction is not recovered by the Contractor
from insurance, sureties, Subcontractors or suppliers.
ARTICLE 8 COSTS NOT TO BE REIMBURSED
8.1 The Cost of the Work shall not include:
8.1.1 Salaries and other compensation of the Contractor's personnel
stationed at the Contractor's principal office or offices other than the
site office, except as specifically provided in Subparagraphs 7.2.2 and
7.2.3 or as may be provided in Article 14.
8.1.2 Expenses of the Contractor's principal office and offices other than
the site office.
8.1.3 Overhead and general expenses, except as may be expressly included in
Article 7.
8.1.4 The Contractor's capital expenses, including interest on the
Contractor's capital employed for the Work.
8.1.5 Rental costs of machinery and equipment, except as specifically
provided in Subparagraph 7.5.2.
8.1.6 Except as provided in Subparagraph 7.7.3 of this Agreement, costs due
to the negligence or failure to fulfill a specific responsibility of the
Contractor, Subcontractors and suppliers or anyone directly or indirectly
employed by any of them or for
<PAGE>
whose acts any of them may be liable.
8.1.7 Any cost not specifically and expressly described in Article 7.
8.1.8 Costs, other than costs included in Change Orders approved by the
Owner, that would cause the Guaranteed Maximum Price to be exceeded.
ARTICLE 9 DISCOUNTS, REBATES AND REFUNDS
9.1 Cash discounts obtained on payments made by the Contractor shall accrue
to the Owner if (1) before making the payment, the Contractor included them
in an Application for Payment and received payment therefor from the Owner,
or (2) the Owner has deposited funds with the Contractor with which to make
payments; otherwise, cash discounts shall accrue to the Contractor. Trade
discounts, rebates, refunds and amounts received from sales of surplus
materials and equipment shall accrue to the Owner, and the Contractor shall
make provisions so that they can be secured. - The Contractor shall notify
the Owner of any potential discounts the Contractor becomes aware of.
9.2 Amounts that accrue to the Owner in accordance with the provisions of
Paragraph 9.1 shall be credited to the Owner as a deduction from the Cost
of the Work.
ARTICLE 10 SUBCONTRACTS AND OTHER AGREEMENTS
10.1 Those portions of the Work that the Contractor does not customarily
perform with the Contractor's own personnel shall be performed under
subcontracts or by other appropriate agreements with the Contractor. The
Owner may designate specific persons or entities from whom the Contractor
shall obtain bids. The Contractor shall obtain bids from Subcontractors and
from suppliers of materials or equipment fabricated especially for the Work
and shall deliver such bids to the Architect. The Owner shall then
determine, with the advice of the Contractor and the Architect, which bids
will be accepted. The Contractor shall not be required to contract with
anyone to whom the Contractor has reasonable objection.
10.2 If a specific bidder among those whose bids are delivered by the
Contractor to the Architect (1) is recommended to the Owner by the
Contractor; (2) is qualified to perform that portion of the Work; and (3)
has submitted a bid that conforms to the requirements of the Contract
Documents but the Owner requires that another bid be accepted, then the
Contractor may require that a Change Order be issued to adjust the
Guaranteed Maximum Price by the difference between the bid of the person or
entity recommended to the Owner by the Contractor and the amount of the
subcontract or other agreement actually signed with the person or entity
designated by the Owner.
10.3 Subcontracts or other agreements shall conform to the applicable
payment provisions of this Agreement, and shall not be awarded on the basis
of cost plus a fee without the prior consent of the Owner.
ARTICLE 11 ACCOUNTING RECORDS
The Contractor shall keep full and detailed accounts and exercise such
controls as may be necessary for proper financial management under this
Contract, and the accounting and control systems shall be satisfactory to
the Owner. The Owner and the Owner s accountants shall be afforded access
to, and shall be permitted to audit and copy, the Contractor's records,
books, correspondence, instructions, drawings, receipts, subcontracts,
purchase orders, vouchers, memoranda and other data relating to this
Contract, and the Contractor shall preserve these for a period of three
years after final payment, or for such longer period as may be required by
law.
ARTICLE 12 PAYMENTS
12.1 PROGRESS PAYMENTS
12.1.1 Based upon Applications for Payment submitted to the Architect by
the Contractor and Certificates for Payment issued by the Architect, the
Owner shall make progress payments on account of the Contract Sum to the
Contractor as provided below and elsewhere in the Contract Documents.
<PAGE>
12.1.2 The period covered by each Application for Payment shall be one
calendar month ending on the last day of the month, or as follows:
12.1.3 Provided that an Application for Payment is received by the Architect not
later than the 25th day of a month, the Owner shall make payment to the
Contractor not later than the 15th day of the following month. If an
Application for Payment is received by the Architect after the application
date fixed above, payment shall be made by the Owner not later than 21 days
after the Architect receives the Application for Payment.
12.1.4 With each Application for Payment, the Contractor shall submit,
receipted invoices or invoices with check vouchers attached, and any other
evidence required by the Owner or Architect. At the Owner's request and
expense, the Contractor shall furnish back-up documentation for the General
Conditions costs incurred by the Contractor.
12.1.5 Each Application for Payment shall be based on the schedule of
values submitted by the Contractor in accordance with the Contract
Documents. The schedule of values shall allocate the entire Guaranteed
Maximum Price among the various portions of the Work, except that the
Contractor's Fee shall be shown as a single separate item. The schedule of
values shall be prepared in such form and supported by such data to
substantiate its accuracy as the Architect may require. This schedule,
unless objected to by the Architect, shall be used as a basis for reviewing
the Contractor's Applications for Payment.
<PAGE>
12.1.6 Applications for Payment shall show the percentage of completion
of each portion of the Work as of the end of the period covered by the
Application for Payment.
<PAGE>
12.1.7 Subject to other provisions of the Contract Documents, the amount of
each progress payment shall be computed as follows:
.1 take that portion of the Guaranteed Maximum Price properly
allocable to completed Work as determined by multiplying the
percentage of completion of each portion of the Work by the share
of the Guaranteed Maximum Price allocated to that portion of the
Work in the schedule of values. Pending final determination of
cost to the Owner of changes in the Work, amounts not in dispute
shall be included as provided in Subparagraph 7.3.8 of AlA
Document A201-1997;
.2 add that portion of the Guaranteed Maximum Price properly
allocable to materials and equipment delivered and suitably stored
at the site for subsequent incorporation in the Work, or if
approved in advance by the Owner, suitably stored off the site at
a location agreed upon in writing;
.3 add the Contractor's Fee, less retainage of Ten percent (10%)
provided. however that the Contractor's General Conditions fee
shall not be subject to retainage. The Contractor's Fee shall be
computed upon the Cost of the Work described in the two preceding
Clauses at the rate stated in Subparagraph 5.1.2 or, if the
Contractor's Fee is stated as a fixed sum in that Subparagraph,
shall be an amount that bears the same ratio to that fixed-sum fee
as the Cost of the Work in the two preceding Clauses bears to a
reasonable estimate of the probable Cost of the Work upon its
completion; Retainage to be 10% until 50% complete: 0% thereafter.
No retainage on Contractor's fee or General Conditions.
.4 subtract the aggregate of previous payments made by the Owner;
.5 subtract the shortfall, if any, indicated by the Contractor in the
documentation required by Paragraph 12.1.4 to substantiate prior
Applications for Payment, or resulting from errors subsequently
discovered by the Owner's accountants in such documentation; and
.6 subtract amounts, if any, for which the Architect has withheld or
nullified a Certificate for Payment as provided in Paragraph 9.5
of ALA Document A201-1997.
12.1.8 Except with the Owner's prior approval, payments to Subcontractors
shall be subject to retainage of not less than Ten percent (10%) The Owner
and the Contractor shall agree upon a mutually acceptable procedure for
review and approval of payments and retention for Subcontractors.
12.1.9 In taking action on the Contractor's Applications for Payment, the
Architect shall be entitled to rely on the accuracy and completeness of the
information furnished by the Contractor and shall not be deemed to
represent that the Architect has made a detailed examination, audit or
arithmetic verification of the documentation submitted in accordance with
Subparagraph 12.1.4 or other supporting data; that the Architect has made
exhaustive or continuous on-site inspections or that the Architect has made
examinations to ascertain how or for what purposes the Contractor has used
amounts previously paid on account of the Contract. Such examinations,
audits and verifications, if required by the Owner, will be performed by
the Owner's accountants acting in the sole interest of the Owner.
12.2 FINAL PAYMENT
12.2.1 Final payment, constituting the entire unpaid balance of the
Contract Sum, together with any shared savings amounts due in accordance
with Subparagraph 5.2.1 shall be made by the Owner to the Contractor when:
.1 the Contractor has fully performed the Contract except for the
Contractor's responsibility to correct Work as provided in
Subparagraph 12.2.2 of ALA Document A201-1997, and to satisfy
other requirements, if any, which extend beyond final payment;
and
.2 a final Certificate for Payment has been issued by the
Architect.
12.2.2 The Owner's final payment to the Contractor shall be made no later
than 30 days after the issuance of the Architect's final
Certificate for Payment, or as follows:
12.2.3 The Owner's accountants will review and report in writing on the
Contractor's final accounting within 30 days after delivery of the final
accounting to the Architect by the Contractor. Based upon such Cost of the
Work as the Owner's accountants report to be substantiated by the
Contractor's final accounting, and provided the other conditions of
Subparagraph 12.2.1 have been met, the Architect will, within seven days
after receipt of the written report of the Owner's accountants, either
issue to the Owner a final Certificate for Payment with a copy to the
Contractor, or notify the Contractor and Owner in writing of the
Architect's reasons for withholding a certificate as provided in
Subparagraph 9.5.1 of the AlA Document A201-1997. The time periods stated
in this Subparagraph 12.2.3 supersede those stated in Subparagraph 9.4.1 of
the ALA Document A201-1997.
12.2.4 If the Owner's accountants report the Cost of the Work as
substantiated by the Contractor's final accounting to be less than claimed
by the Contractor, the Contractor shall be entitled to demand arbitration
of the disputed amount without a further decision of the Architect. Such
demand for arbitration shall be made by the Contractor within 30 days after
the Contractor's receipt of a copy of the Architect's final Certificate for
Payment; failure to demand arbitration within this 30-day period shall
result in the substantiated amount reported by the Owner's accountants
becoming binding on the Contractor. Pending a final resolution by
arbitration, the Owner shall pay the Contractor the amount certified in the
Architect's final Certificate for Payment.
12.2.5 If, subsequent to final payment and at the Owner's request, the
Contractor incurs costs described in Article 7 and not excluded by Article
8 to correct defective or nonconforming Work, the Owner shall reimburse the
Contractor such costs and the Contractor's Fee applicable thereto on the
same basis as if such costs had been incurred prior to final payment, but
not in excess of the Guaranteed Maximum Price. If the Contractor has
participated in savings as provided in Paragraph 5.2, the amount of such
savings shall be recalculated and appropriate credit given to the Owner in
determining the net amount to be paid by the Owner to the Contractor.
ARTICLE 13 TERMINATION OR SUSPENSION
13.1 The Contract may be terminated by the Contractor, or by the Owner for
convenience, as provided in Article 14 of ALA Document A201-1997. However,
the amount to be paid to the Contractor under Subparagraph 14.1.3 of ALA
Document A201-1997 shall not exceed the amount the Contractor would be
entitled to receive under Paragraph 13.2 below, except that the
<PAGE>
Contractor's Fee shall be calculated as if the Work had been fully
completed by the Contractor, including a reasonable estimate of the Cost of
the Work for Work not actually completed.
13.2 The Contract may be terminated by the Owner for cause as provided in
Article 14 of AlA Document A20 1-1997. The amount, if any, to be paid to
the Contractor under Subparagraph 14.2.4 of AlA Document A201-1997 shall
not cause the Guaranteed Maximum Price to be exceeded, nor shall it exceed
an amount calculated as follows:
13.2.1 Take the Cost of the Work incurred by the Contractor to the date
of termination;
13.2.2 Add the Contractor's Fee computed upon the Cost of the Work to the
date of termination at the rate stated in Subparagraph 5.1.2 or, if the
Contractor's Fee is stated as a fixed sum in that Subparagraph, an amount
that bears the same ratio to that fixed-sum Fee as the Cost of the Work at
the time of termination bears to a reasonable estimate of the probable Cost
of the Work upon its completion; and
13.2.3 Subtract the aggregate of previous payments made by the Owner.
13.3 The Owner shall also pay the Contractor fair compensation, either by
purchase or rental at the election of the Owner, for any equipment owned by
the Contractor that the Owner elects to retain and that is not otherwise
included in the Cost of the Work under Subparagraph 13.2.1. To the extent
that the Owner elects to take legal assignment of subcontracts and purchase
orders (including rental agreements), the Contractor shall, as a condition
of receiving the payments referred to in this Article 13, execute and
deliver all such papers and take all such steps, including the legal
assignment of such subcontracts and other contractual rights of the
Contractor, as the Owner may require for the purpose of fully vesting in
the Owner the rights and benefits of the Contractor under such subcontracts
or purchase orders.
13.4 The Work may be suspended by the Owner as provided in Article 14 of
AlA Document A201-1997; in such case, the Guaranteed Maximum Price and
Contract Time shall be increased as provided in Subparagraph 14.3.2 of ALA
Document A20 1-1997 except that the term "profit" shall be understood to
mean the Contractor's Fee as described in Subparagraphs 5.1.2 and Paragraph
6.4 of this Agreement.
ARTICLE 14 MISCELLANEOUS PROVISIONS
14.1 Where reference is made in this Agreement to a provision AlA Document
A201-1997 or another Contract Document, the reference refers to that
provision as amended or supplemented by other provisions of the Contract
Documents.
14.2 Payments due and unpaid under the Contract shall bear interest from
the date payment is due at Prime plus two points. (Insert rate 0/interest
agreed upon, if any.)
(Usury laws and requirements under the Federal Truth in Lending Act,
similar state and local consumer credit laws and other regulations at the
Owner's and Contractor's principal places of business, the location of the
Project and elsewhere may affect the validity of this provision. Legal
advice should be obtained with respect to deletions or modifications. and
also regarding requirements such as written disclosures or waivers.)
14.3 The Owner's representative is:
(Name, address and other information)
Lloyd Bussell, Kronos, Inc., 300 Billerica Road, Chelmsford, MA 01824
14.4 The Contractor's representative is:
(Name, address and other information.)
Robert J. Lyons, Jr., Cranshaw Construction, 2310 Washington Street,
Newton Lower Falls, MA 02462
14.5 Neither the Owner's nor the Contractor's representative shall be
changed without ten days' written notice to the other party.
14.6 Other provisions:
<PAGE>
ARTICLE 15 ENUMERATION OF CONTRACT DOCUMENTS
15.1 The Contract Documents, except for Modifications issued after
execution of this Agreement, are enumerated as follows: See attached
Exhibit B - Plans and Specifications.
15.1.1 The Agreement is this executed 1997 edition of the Standard Form
of Agreement Between Owner and Contractor, AlA Document
Al 11-1997.
15.1.2 The General Conditions are the 1997 edition of the General
Conditions of the Contract for Construction, AlA Document
A201-1997.
15.1.3 The Supplementary and other Conditions of the Contract are those
contained in the Project Manual dated February 22.
1999, and are as follows:
Document Title Pages
15.1.4 The Specifications are those contained in the Project Manual dated
as in Subparagraph 15.1.3, and are as follows:
(Either list the Specifications here or refer to an exhibit attached to
this Agreement.)
Section Title Pages
See attached Exhibit B - Plans and Specifications
15.1.5 The Drawings are as follows, and are dated unless a different date
is shown below:
(Either list the Drawings here or refer to an exhibit attached to this
Agreement.)
Number Title Date
See attached Exhibit B - Plans and Specifications
15.1.6 The Addenda, if any, are as follows:
Number Date Pages
Portions of Addenda relating to bidding requirements are not part of the
Contract Documents unless the bidding requirements are also enumerated in
this Article 15.
15.1.7 Other Documents, if any, forming part of the Contract Documents are
as follows:
(List here any additional documents, such as a list of alternates that are
intended to form part of the Contract Documents. AlA Document A201-1997
provides that bidding requirements such as advertisement or invitation to
bid, Instructions to Bidders, sample forms and the Contractor's bid are not
part of the Contract Documents unless enumerated in this Agreement They
should be listed here only if intended to be part 0/the Contract
Documents.)
ARTICLE 16 INSURANCE AND BONDS
(List required limits of liability for insurance and bonds. AlA Document
A201-1997 gives other specific requirements for insurance and bonds.) As
listed in the Project Manual dated February 22. 1999. The Contractor shall
obtain payment and performance bonds from all subcontractors having a
subcontract value in excess of $100,000 with dual obligee rider in favor of
Owner.
This Agreement is entered into as of the day and year first written above and is
executed in at least three original copies, of which one is to be delivered to
the Contractor, one to the Architect for use in the administration of the
Contract, and the remainder to the Owner.
OWNER (Signature) CONTRACTOR (Signature)
/s/ Lloyd B. Bussell /s/ John Onufrak
Lloyd B. Bussell John Onufrak
Vice President, Manufacturing President
(Printed name and title) (Printed name and title)
<PAGE>
General Conditions of the Contract for Construction
AlA Document A201 - 1997
1997 Edition - Electronic Format
This document has important legal consequences. Consultation with an
attorney is encouraged with respect to its completion or
modification. AUTHENTICATION
OF THIS ELECTRONICALLY DRAFTED AlA DOCUMENT MAY BE MADE BY
USING AlA DOCUMENT
D401.
This document has been approved and endorsed by The Associated General
Contractors of America.
Copyright 1911, 1915, 1918, 1925, 1937, 1951, 1958, 1961, 1963, 1966,1967, 1970,
1976, 1987, 01997 by The American Institute of Architects. Fifteenth Edition.
Reproduction of the material herein or substantial quotation of its provisions
without written permission of the AlA violates the copyright laws of the United
States and will subject the violator to legal prosecution.
TABLE OF ARTICLES
I. GENERAL PROVISIONS
2. OWNER
3. CONTRACTOR
4. ADMINISTRATION OF THE CONTRACT
5. SUBCONTRACTORS
6. CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS
7. CHANGES IN THE WORK
8. TIME
9. PAYMENTS AND COMPLETION
10. PROTECTION OF PERSONS AND PROPERTY
11. INSURANCE AND BONDS
12. UNCOVERING AND CORRECTION OF WORK
13. MISCELLANEOUS PROVISIONS
14. TERMINATION OR SUSPENSION OF THE CONTRACT
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<TABLE>
<CAPTION>
INDEX
<S> <C>
Architect's Administration of the Contract
Acceptance of Nonconforming Work 3.1.3, 4.2, 4.3.4, 4.4, 9.4, 9.5
9.6.6, 9.9.3, 12.3 Architect's Approvals
Acceptance of Work 2.4, 3.1.3, 3.5.1, 3.10.2, 4.2.7
9.6.6, 9.8.2, 9.9.3, 9.10.1, 9.10.3, 12.3 Architect's Authority to Reject Work
Access to Work 3.5.1, 4.2.6, 12.1.2, 12.2.1
3.16, 6.2.1, 12.1 Architect's Copyright
Accident Prevention 1.6
4.2.3, 10 Architect's Decisions
Acts and Omissions 4.2.6, 4.2.7, 4.2.11, 4.2.12, 4.2.13, 4.3.4, 4.4.1, 4.4.5,
4.4.6,
3.2, 3.3.2, 3.12.8, 3.18, 4.2.3, 4.3.8, 4.4.1, 8.3.1, 9.5.1, 4.5, 6.3, 7.3.6,
7.3.8, 8.1.3, 8.3.1, 9.2, 9.4, 9.5.1, 9.8.4, 9.9.1,
10.2.5, 13.4.2, 13.7, 14.1 13.5.2, 14.2.2, 14.2.4
Addenda Architect's Inspections
1.1.1, 3.11 4.2.2,4.2.9, 4.3.4, 9.4.2, 9.8.3, 9.9.2, 9.10.1, 13.5
Additional Costs, Claims for Architect's Instructions
4.3.4,4.3.5, 4.3.6, 6.1.1, 10.3 3.2.3, 3.3.1, 4.2.6,4.2.7, 4.2.8, 7.4.1, 12.1, 13.5.2
Additional Inspections and Testing Architect's Interpretations
9.8.3, 12.2.1, 13.5 4.2.11,4.2.12,4.3.6
Additional Time, Claims for Architect's Project Representative
4.3.4, 4.3.7, 8.3.2 4.2.10
ADMINISTRATION OF THE CONTRACT Architect's Relationship with Contractor
3.1.3,4,9.4,9.5 1.1.2, 1.6, 3.1.3, 3.2.1, 3.2.2, 3.2.3, 3.3.1, 3.4.2, 3.5.1,
3.7.3, Advertisement or Invitation to Bid 3.10, 3.11, 3.12, 3.16, 3.18, 4.1.2,
4.1.3, 4.2, 4.3.4, 4.4.1,
1.1.1 4.4.7, 5.2, 6.2.2, 7, 8.3.1, 9.2, 9.3, 9.4, 9.5, 9.7, 9.8, 9.9,
Aesthetic Effect 10.2.6, 10.3, 11.3, 11.4.7, 12, 13.4.2, 13.5
4.2.13, 4.5.1 Architect's Relationship with Subcontractors
Allowances 1.1.2,4.2.3,4.2.4,4.2.6,9.6.3,9.6.4, 11.4.7
3.8 Architect's Representations
All-risk Insurance 9.4.2, 9.5.1, 9.10.1
11.4.1.1 Architect's Site Visits
Applications for Payment 4.2.2,4.2.5, 4.2.9,4.3.4, 9.4.2, 9.5.1, 9.9.2, 9.10.1,
13.5 4.2.5, 7.3.8, 9.2, 9.3, 9.4, 9.5.1, 9.6.3, 9.7.1, 9.8.5, 9.10, Asbestos
11.1.3, 14.2.4, 14.4.3 10.3.1
Approvals Attorneys' Fees
2.4, 3.1.3, 3.5, 3.10.2, 3.12, 4.2.7, 9.3.2, 13.4.2, 13.5 3.18.1, 9.10.2, 10.3.3
Arbitration Award of Separate Contracts
4.3.3, 4.4, 4.5.1, 4.5.2, 4.6, 8.3.1, 9.7.1, 11.4.9, 11.4.10 6.1.1, 6.1.2
Architect Award of Subcontracts and Other Contracts for Portions of the
4.1 Work
Architect, Definition of 5.2
4. 1 .1 Basic Definitions
Architect, Extent of Authority 1.1
2.4, 3.12.7, 4.2, 4.3.6, 4.4, 5.2, 6.3, 7.1.2, 7.3.6, 7.4, 9.2, Bidding
Requirements 9.3.1, 9.4, 9.5, 9.8.3, 9.10.1, 9.10.3, 12.1, 12.2.1, 13.5.1,
1.1.1, 1.1.7, 5.2.1, 11.5.1 13.5.2, 14.2.2, 14.2.4 Boiler and Machinery
Insurance
Architect, Limitations of Authority and Responsibility 11.4.2
2.1.1, 3.3.3, 3.12.4, 3.12.8, 3.12.10, 4.1.2, 4.2.1,4.2.2, Bonds, Lien
4.2.3, 4.2.6, 4.2.7, 4.2.10, 4.2.12, 4.2.13, 4.4, 5.2.1, 7.4, 9.10.2
9.4.2, 9.6.4, 9.6.6 Bonds, Performance, and Payment
Architect's Additional Services and Expenses 7.3.6.4, 9.6.7, 9.10.3, 11.4.9, 11.5
2.4, 11.4.1.1, 12.2.1, 13.5.2, 13.5.3, 14.2.4 Building Permit
3.7.1
Capitalization
1.3
Certificate of Substantial Completion
9.8.3, 9.8.4, 9.8.5
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Certificates for Payment Concealed or Unknown Conditions 4.2.5, 4.2.9, 9.3.3,
9.4, 9.5, 9.6.1, 9.6.6, 9.7.1, 9.10.1, 4.3.4, 8.3.1, 10.3 9.10.3, 13.7,
14.1.1.3, 14.2.4 Conditions of the Contract
Certificates of Inspection, Testing or Approval 1.1.1, 1.1.7, 6.1.1, 6.1.4
13.5.4 Consent, Written
Certificates of Insurance 1.6, 3.4.2, 3.12.8, 3.14.2, 4.1.2, 4.3.4, 4.6.4,
9.3.2, 9.8.5, 9.10.2, 11.1.3 9.9.1, 9.10.2, 9.10.3, 11.4.1, 13.2, 13.4.2
Change Orders CONSTRUCTION BY OWNER OR BY SEPARATE 1.1.1, 2.4.1, 3.4.2, 3.8.2.3,
3.11.1, 3.12.8, 4.2.8, 4.3.4, 4.3.9, CONTRACTORS 5.2.3, 7.1, 7.2, 7.3, 8.3.1,
9.3.1.1, 9.10.3, 11.4.1.2, 11.4.4, 1.1.4,6 11.4.9, 12.1.2 Construction Change
Directive, Definition of
Change Orders, Definition of 7.3.1
7.2.1 Construction Change Directives
CHANGES IN THE WORK 1.1.1, 3.12.8, 4.2.8, 4.3.9, 7.1, 7.3, 9.3.1.1
3.11, 4.2.8,7, 8.3.1, 9.3.1.1, 11.4.9 Construction Schedules, Contractor's
Claim, Definition of 1.4.1.2, 3.10, 3.12.1, 3.12.2, 4.3.7.2, 6.1.3
4.3.1 Contingent Assignment of Subcontracts
Claims and Disputes 5.4,14.2.2.2
3.2.3, 4.3,4.4,4.5,4.6, 6.1.1, 6.3, 7.3.8, 9.3.3, 9.10.4, Continuing Contract Performance
10.3.3 4.3.3
Claims and Timely Assertion of Claims Contract, Definition of
4.6.5 1.1.2
Claims for Additional Cost CONTRACT, TERMINATION OR SUSPENSION OF THE
3.2.3, 4.3.4, 4.3.5,4.3.6,6.1.1,7.3.8, 10.3.2 5.4.1.1, 11.4.9,14
Claims for Additional Time Contract Administration
3.2.3, 4.3.4, 4.3.7, 6.1.1, 8.3.2, 10.3.2 3.1.3,4, 9.4, 9.5
Claims for Concealed or Unknown Conditions Contract Award and Execution, Conditions Relating to
4.3.4 3.7.1, 3.10, 5.2, 6.1, 11.1.3, 11.4.6, 11.5.1
Claims for Damages Contract Documents, The 3.2.3, 3.18, 4.3.10, 6.1.1, 8.3.3,
9.5.1, 9.6.7, 10.3.3, 11.1.1, 1.1, 1.2 11.4.5, 11.4.7, 14.1.3, 14.2.4
Contract Documents, Copies Furnished and Use of
Claims Subject to Arbitration 1.6, 2.2.5, 5.3
4.4.1, 4.5.1, 4.6.1 Contract Documents, Definition of
Cleaning Up 1.1.1
3.15, 6.3 Contract Sum
Commencement of Statutory Limitation Period 3.8, 4.3.4, 4.3.5, 4.4.5, 5.2.3,
7.2, 7.3, 7.4, 9.1, 9.4.2, 13.7 9.5.1.4, 9.6.7, 9.7, 10.3.2, 11.4.1, 14.2.4,
14.3.2
Commencement of the Work, Conditions Relating to Contract Sum, Definition of
2.2.1, 3.2.1, 3.4.1, 3.7.1, 3.10.1, 3.12.6, 4.3.5, 5.2.1, 5.2.3, 9.1
6.2.2,8.1.2,8.2.2,8.3.1,11.1, 11.4.1,11.4.6, 11.5.1 ContractTime
Commencement of the Work, Definition of 4.3.4, 4.3.7, 4.4.5, 5.2.3, 7.2.1.3, 7.3, 7.4, 8.1.1, 8.2,
8.3.1,
8.1.2 9.5.1, 9.7, 10.3.2, 12.1.1, 14.3.2
Communications Facilitating Contract Administration Contract Time, Definition of
3.9.1, 4.2.4 8.1.1
Completion, Conditions Relating to CONTRACTOR 1.6.1, 3.4.1, 3.11, 3.15, 4.2.2,
4.2.9, 8.2, 9.4.2, 9.8, 9.9.1, 3
9.10, 12.2, 13.7, 14.1.2 Contractor, Definition of
COMPLETION, PAYMENTS AND 3.1, 6.1.2
9 Contractor's Construction Schedules
Completion, Substantial 1.4.1.2, 3.10, 3.12.1, 3.12.2, 4.3.7.2, 6.1.3
4.2.9, 8.1.1, 8.1.3, 8.2.3, 9.4.2, 9.8, 9.9.1, 9.10.3, 9.10.4.2, Contractor's
Employees
12.2, 13.7 3.3.2, 3.4.3, 3.8.1, 3.9, 3.18.2, 4.2.3, 4.2.6, 10.2, 10.3,
Compliance with Laws 11.1.1, 11.4.7, 14.1, 14.2.1.1,
1.6.1, 3.2.2, 3.6, 3.7, 3.12.10, 3.13, 4.1.1, 4.4.8, 4.6.4, 4.6.6,
Contractor's Liability Insurance 9.6.4, 10.2.2, 11.1, 11.4, 13.1, 13.4,
13.5.1, 13.5.2, 13.6, 11.1 14.1.1, 14.2.1.3 Contractor's Relationship with
Separate Contractors and Owner's
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Forces 11.4.5, 11.4.7, 14.1.3, 14.2.4
3.12.5, 3.14.2, 4.2.4, 6, 11.4.7, 12.1.2, 12.2.4 Damages for Delay
Contractor's Relationship with Subcontractors 6.1.1, 8.3.3, 9.5.1.6, 9.7, 10.3.2
1.2.2, 3.3.2, 3.18.1, 3.18.2, 5, 9.6.2, 9.6.7, 9.10.2, 11.4.1.2, Date of
Commencement of the Work, Definition of 11.4.7, 11.4.8 8.1.2
Contractor's Relationship with the Architect Date of Substantial Completion,
Definition of 1.1.2, 1.6, 3.1.3, 3.2.1, 3.2.2, 3.2.3, 3.3.1, 3.4.2, 3.5.1,
3.7.3, 8.1.3 3.10, 3.11, 3.12, 3.16, 3.18, 4.1.2, 4.1.3, 4.2, 4.3.4, 4.4.1,
Day, Definition of 4.4.7, 5.2, 6.2.2, 7, 8.3.1, 9.2, 9.3, 9.4, .5, 9.7, 9.8,
9.9, 8.1.4 10.2.6, 10.3, 11.3, 11.4.7, 12, 13.4.2, 13.5 Decisions of the
Architect
Contractor's Representations 4.2.6, 4.2.7, 4.2.11, 4.2.12, 4.2.13, 4.3.4, 4.4.1, 4.4.5,
4.4.6,
1.5.2, 3.5.1, 3.12.6, 6.2.2, 8.2.1, 9.3.3, 9.8.2 4.5, 6.3, 7.3.6, 7.3.8, 8.1.3, 8.3.1, 9.2, 9.4, 9.5.1, 9.8.4,
9.9.1,
Contractor's Responsibility for Those Performing the Work 13.5.2, 14.2.2, 14.2.4
3.3.2, 3.18, 4.2.3, 4.3.8, 5.3.1, 6.1.3, 6.2, 6.3, 9.5.1, 10 Decisions to
Withhold Certification Contractor's Review of Contract Documents 9.4.1, 9.5,9.7,
14.1.1.3
1.5.2, 3.2, 3.7.3 Defective or Nonconforming Work, Acceptance, Rejection and
Contractor's Right to Stop the Work Correction of
9.7 2.3, 2.4, 3.5.1, 4.2.6, 6.2.5, 9.5.1, 9.5.2, 9.6.6, 9.8.2, 9.9.3,
Contractor's Right to Terminate the Contract 9.10.4, 12.2.1, 13.7.1.3
4.3.10, 14.1 Defective Work, Definition of Contractor's Submittals 3.5.1
3.10,3.11, 3.12, 4.2.7, 5.2.1, 5.2.3, 7.3.6, 9.2, 9.3, 9.8.2, Definitions
9.8.3,9.9.1,9.10.2,9.10.3, 11.1.3,11.5.2 1.1, 2.1.1, 3.1, 3.5.1, 3.12.l,
3.12.2, 3.12.3, 4.l.1, 4.3.1, 5.1, Contractor's Superintendent 6.1.2, 7.2.1,
7.3.1, 7.3.6, 8.1, 9.1, 9.8.1
3.9, 10.2.6 Delays and Extensions of Time
Contractor's Supervision and Construction Procedures 3.2.3, 4.3.1, 4.3.4,
4.3.7, 4.4.5, 5.2.3, 7.2.1, 7.3.1, 7.4.1, 1.2.2, 3.3, 3.4, 3.12.10,
4.2.2,4.2.7, 4.3.3, 6.1.3, 6.2.4, 7.1.3, 7.5.1, 8.3, 9.5.1, 9.7.1, 10.3.2,
10.6.1, 14.3.2 7.3.4, 7.3.6, 8.2, 10,12, 14 Disputes
Contractual Liability Insurance 4.1.4, 4.3, 4.4, 4.5, 4.6, 6.3, 7.3.8 11.1.1.8, 11.2, 11.3
Documents and Samples at the Site
Coordination and Correlation 3.11
1.2, 1.5.2, 3.3.1, 3.10, 3.12.6, 6.1.3, 6.2.1 Drawings, Definition of
Copies Furnished of Drawings and Specifications 1.1.5
1.6, 2.2.5, 3.11 Drawings and Specifications, Use and Ownership of Copyrights
1.1.1, 1.3, 2.2.5, 3.11, 5.3
1.6, 3.17 Effective Date of Insurance Correction of Work 8.2.2, 11.1.2 2.3,
2.4, 3.7.4, 4.2.1, 9.4.2, 9.8.2, 9.8.3, 9.9.1, 12.1.2, 12.2, Emergencies
13.7.1.3 4.3.5, 10.6, 14.1.1.2
Correlation and Intent of the Contract Documents Employees, Contractor's
1.2 3.3.2, 3.4.3, 3.8.1, 3.9, 3.18.2, 4.2.3, 4.2.6, 10.2, 10.3,
Cost, Definition of 11.1.1, 11.4.7, 14.1,14.2.1.1
7.3.6 Equipment, Labor, Materials and
Costs 1.1.3, 1.1.6, 3.4, 3.5.1, 3.8.2, 3.8.3, 3.12, 3.13, 3.15.1,
4.2.6,
2.4, 3.2.3, 3.7.4, 3.8.2, 3.15.2, 4.3, 5.4.2, 6.1.1, 6.2.3, 4.2.7, 5.2.1,
6.2.1, 7.3.6, 9.3.2, 9.3.3, 9.5.1.3, 9.10.2, 10.2.1,
7.3.3.3, 7.3.6, 7.3.7, 7.3.8, 9.10.2, 10.3.2, 10.5, 11.3, 11.4, 10.2.4,
14.2.1.2 12.1, 12.2.1,12.2.4,13.5,14 Execution and Progress of the Work
Cutting and Patching 1.1.3, 1.2.1, 1.2.2, 2.2.3, 2.2.5, 3.1, 3.3, 3.4, 3.5, 3.7,
3.10,
6.2.5, 3.14 3.12, 3.14, 4.2.2, 4.2.3, 4.3.3, 6.2.2, 7.1.3, 7.3.4, 8.2, 9.5,
Damage to Construction of Owner or Separate Contractors 9.9.1, 10.2, 10.3, 12.2,
14.2, 14.3
3.14.2, 6.2.4, 9.2.1.5, 10.2.1.2, 10.2.5, 10.6, 11.1, 11.4, Extensions of Time
12.2.4 3.2.3, 4.3.1, 4.3.4, 4.3.7, 4.4.5, 5.2.3, 7.2.1, 7.3, 7.4.1,
9.5.1,
Damage to the Work 9.7.1, 10.3.2, 10.6.1, 14.3.2
3.14.2, 9.9.1, 10.2.1.2, 10.2.5, 10.6, 11.4, 12.2.4 Failure of Payment
Damages, Claims for 4.3.6, 9.5.1.3, 9.7, 9.10.2, 14.1.1.3, 14.2.1.2, 13.6 3.2.3,
3.18, 4.3.10, 6.1.1, 8.3.3, 9.5.1, 9.6.7, 10.3.3, 11.1.1, Faulty Work
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(See Defective or Nonconforming Work) 9.9.1, 11.4.1.5
Final Completion and Final Payment Insurance Companies, Settlement with
4.2.1, 4.2.9, 4.3.2, 9.8.2, 9.10, 11.1.2, 11.1.3, 11.4.1, 11.4.5, 11.4.10
12.3.1, 13.7, 14.2.4, 14.4.3 Intent of the Contract Documents
Financial Arrangements, Owner's 1.2.1, 4.2.7, 4.2.12, 4.2.13, 7.4
2.2.1, 13.2.2, 14.1.1.5 Interest
Fire and Extended Coverage Insurance 13.6
11.4 Interpretation
GENERAL PROVISIONS 1.2.3, 1.4,4.1.1,4.3.1, 5.1, 6.1.2, 8.1.4
I Interpretations, Written
Governing Law 4.2.11, 4.2.12, 4.3.6
13.1 Joinder and Consolidation of Claims Required
Guarantees (See Warranty) 4.6.4
Hazardous Materials Judgment on Final Award
10.2.4, 10.3, 10.5 4.6.6
Identification of Contract Documents Labor and Materials, Equipment
1.5.1 1.1.3, 1.1.6, 3.4, 3.5.1, 3.8.2, 3.8.3, 3.12, 3.13, 3.15.1, 42.6,
Identification of Subcontractors and Suppliers 4.2.7, 5.2.1, 6.2.1, 7.3.6,
9.3.2, 9.3.3, 9.5.1.3, 9.10.2, 10.2.1,
5.2.1 10.2.4, 14.2.1.2
Indemnification Labor Disputes
3.17, 3.18,9.10.2, 10.3.3, 10.5, 11.4.1.2, 11.4.7 8.3.1
Information and Services Required of the Owner Laws and Regulations
2.1.2, 2.2, 3.2.1, 3.12.4, 3.12.10, 4.2.7, 4.3.3, 6.1.3, 6.1.4, 1.6, 3.2.2,
3.6, 3.7, 3.12.10, 3.13, 4.1.1, 4.4.8, 4.6, 9.6.4, 6.2.5, 9.3.2, 9.6.1,
9.6.4, 9.9.2, 9.10.3, 10.3.3, 11.2, 11.4, 9.9.1, 10.2.2, 11.1, 11.4, 13.1,
13.4, 13.5.1, 13.5.2, 13.6, 14 13.5.1, 13.5.2, 14.1.1.4, 14.1.4 Liens
Injury or Damage to Person or Property 2.1.2, 4.4.8, 8.2.2, 9.3.3, 9.10
4.3.8, 10.2, 10.6 Limitation on Consolidation or Joinder
Inspections 4.6.4 3.1.3, 3.3.3, 3.7.1, 4.2.2, 4.2.6, 4.2.9, 9.4.2, 9.8.2, 9.8.3,
Limitations, Statutes of 9.9.2, 9.10.1, 12.2.1, 13.5 4.6.3, 12.2.6, 13.7
Instructions to Bidders Limitations of Liability
1.1.1 2.3, 3.2.1, 3.5.1, 3.7.3, 3.12.8, 3.12.10, 3.17, 3.18, 4.2.6,
Instructions to the Contractor 4.2.7, 4.2.12, 6.2.2, 9.4.2, 9.6.4, 9.6.7,
9.10.4, 10.3.3,
3.2.3, 3.3.1, 3.8.1, 4.2.8, 5.2.1,7, 12, 8.2.2, 13.5.2 10.2.5, 11.1.2,
11.2.1, 11.4.7, 12.2.5, 13.4.2 Insurance Limitations of Time
3.18.1, 6.1.1, 7.3.6, 8.2.1, 9.3.2, 9.8.4, 9.9.1, 9.10.2, 9.10.5, 2.1.2, 2.2,
2.4, 3.2.1, 3.7.3, 3.10, 3.11, 3.12.5, 3.15.1, 4.2.7,
11 4.3, 4.4, 4.5, 4.6, 5.2, 5.3, 5.4, 6.2.4, 7.3, 7.4, 8.2, 9.2, 9.3.1,
Insurance, Boiler and Machinery 9.3.3, 9.4.1, 9.5, 9.6, 9.7, 9.8, 9.9, 9.10,
11.1.3, 11.4.1.5,
11.4.2 11.4.6, 11.4.10, 12.2, 13.5, 13.7, 14
Insurance, Contractor's Liability Loss of Use Insurance
11.1 11.4.3
Insurance, Effective Date of Material Suppliers
8.2.2, 11.1.2 1.6, 3.12.1, 4.2.4,4.2.6, 5.2.1, 9.3, 9.4.2, 9.6, 9.10.5
Insurance, Loss of Use Materials, Hazardous
11.4.3 10.2.4, 10.3, 10.5
Insurance, Owner's Liability Materials, Labor, Equipment and
11.2 1.1.3, 1.1.6, 1.6.1, 3.4, 3.5.1, 3.8.2, 3.8.23, 3.12, 3.13, Insurance,
Project Management Protective Liability 3.15.1, 4.2.6, 4.2.7, 5.2.1, 6.2.1,
7.3.6, 9.3.2, 9.3.3, 9.5.1.3,
11.3 9.10.2, 10.2.1, 10.2.4, 14.2.1.2
Insurance, Property Means, Methods, Techniques, Sequences and Procedures of
10.2.5, 11.4 Construction
Insurance, Stored Materials 3.3.1, 3.12.10, 4.2.2,4.2.7, 9.4.2
9.3.2, 11.4.1.4 Mechanic's Lien
INSURANCE AND BONDS 4.4.8
11 Mediation
Insurance Companies, Consent to Partial Occupancy 4.4.1, 4.4.5, 4.4.6, 4.4.8, 4.5, 4.6.1, 4.6.2, 8.3.1, 10.5
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Minor Changes in the Work 11.4.3
1.1.1, 3.12.8, 4.2.8, 4.3.6, 7.1, 7.4 Owner's Relationship with
Subcontractors MISCELLANEOUS PROVISIONS 1.1.2, 5.2, 5.3, 5.4, 9.6.4, 9.10.2,
14.2.2
13 Owner's Right to Carry Out the Work
Modifications, Definition of 2.4, 12.2.4. 14.2.2.2
1.1.1 Owner's Right to Clean Up
Modifications to the Contract 6.3
1.1.1, 1.1.2, 3.7.3,3.11,4.1.2,4.2.1,5.2.3,7, 8.3.1, 9.7, Owner's Right to
Perform Construction and to Award Separate 10.3.2, 11.4.1 Contracts
Mutual Responsibility 6.1
6.2 Owner's Right to Stop the Work
Nonconforming Work, Acceptance of 2.3
9.6.6, 9.9.3, 12.3 Owner's Right to Suspend the Work
Nonconforming Work, Rejection and Correction of 14.3
2.3, 2.4, 3.5.1, 4.2.6, 6.2.5, 9.5.1, 9.8.2, 9.9.3, 9.10.4, 12.2.1, Owner's
Right to Terminate the Contract 13.7.1.3 14.2
Notice Ownership and Use of Drawings, Specifications and Other 2.2.1, 2.3, 2.4,
3.2.3, 3.3.1, 3.7.2, 3.7.4, 3.12.9, 4.3, 4.4.8, Instruments of Service 4.6.5,
5.2.1, 8.2.2, 9.7, 9.10, 10.2.2, 11.1.3, 11.4.6, 12.2.2, 1.1.1,
1.6,2.2.5,3.2.1, 3.11.1, 3.17.1, 4.2.12, 5.3 12.2.4, 13.3, 13.5.1, 13.5.2,
14.1, 14.2 Partial Occupancy or Use
Notice, Written 9.6.6, 9.9, 11.4.1.5 2.3, 2.4, 3.3.1, 3.9, 3.12.9, 3.12.10, 4.3,
4.4.8, 4.6.5, 5.2.1, Patching, Cutting and 8.2.2, 9.7, 9.10, 10.2.2, 10.3,
11.1.3, 11.4.6, 12.2.2, 12.2.4, 3.14,6.2.5 13.3,14 Patents
Notice of Testing and Inspections 3.17
13.5.1, 13.5.2 Payment, Applications for
Notice to Proceed 4.2.5, 7.3.8, 9.2, 9.3, 9.4, 9.5.1, 9.6.3, 9.7.1, 9.8.5, 9.10.1,
8.2.2 9.10.3,9.10.5, 11.1.3, 14.2.4, 14.4.3
Notices, Permits, Fees and Payment, Certificates for
2.2.2, 3.7, 3.13, 7.3.6.4, 10.2.2 4.2.5, 4.2.9, 9.3.3, 9.4, 9.5, 9.6.1,
9.6.6, 9.7.1, 9.10.1, Observations, Contractor's 9.10.3, 13.7, 14.1.1.3, 14.2.4
1.5.2, 3.2, 3.7.3, 4.3.4 Payment, Failure of
Occupancy 4.3.6, 9.5.1.3, 9.7, 9.10.2, 14.1.1.3, 14.2.1.2, 13.6
2.2.2, 9.6.6, 9.8, 11.4.1.5 Payment, Final
Orders, Written 4.2.1, 4.2.9, 4.3.2, 9.8.2, 9.10, 11.1.2, 11.1.3, 11.4.1,
11.4.5,
1.1.1, 2.3, 3.9, 4.3.6, 7, 8.2.2, 11.4.9, 12.1, 12.2, 13.5.2, 12.3.1, 13.7,
14.2.4, 14.4.3 14.3.1 Payment Bond, Performance Bond and
OWNER 7.3.6.4, 9.6.7, 9.10.3, 11.4.9,11.5
2 Payments, Progress
Owner, Definition of 4.3.3, 9.3, 9.6, 9.8.5, 9.10.3, 13.6, 14.2.3
2.1 PAYMENTS AND COMPLETION
Owner, Information and Services Required of the 9
2.1.2, 2.2, 3.2.1, 3.12.4, 3.12.10, 4.2.7, 4.3.3, 6.1.3, 6.1.4, Payments to Subcontractors
6.2.5, 9.3.2, 9.6.1, 9.6.4, 9.9.2, 9.10.3, 10.3.3, 11.2, 11.4, 5.4.2,
9.5.1.3, 9.6.2, 9.6.3, 9.6.4, 9.6.7, 11.4.8, 14.2.1.2 13.5.1, 13.5.2,
14.1.1.4, 14.1.4 PCB
Owner's Authority 10.3.1
1.6, 2.1.1, 2.3, 2.4, 3.4.2, 3.8.1, 3.12.10, 3.14.2, 4.1.2, 4.1.3,
Performance Bond and Payment Bond 4.2.4, 4.2.9, 4.3.6, 4.4.7, 5.2.1, 5.2.4,
5.4.1, 6.1, 6.3, 7.2.1, 7.3.6.4, 9.6.7, 9.10.3, 11.4.9, 11.5 7.3.1, 8.2.2,
8.3.1, 9.3.1, 9.3.2, 9.5.1, 9.9.1, 9.10.2, 10.3.2, Permits, Fees and
Notices 11.1.3, 11.3.1, 11.4.3, 11.4.10, 12.2.2, 12.3.1, 13.2.2, 14.3,
2.2.2, 3.7, 3.13, 7.3.6.4, 10.2.2
14.4 PERSONS AND PROPERTY, PROTECTION OF
Owner's Financial Capability 10
2.2.1, 13.2.2, 14.1.1.5 Polychlorinated Biphenyl
Owner's Liability Insurance 10.3.1
11.2 Product Data, Definition of
Owner's Loss of Use Insurance 3.12.2
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Product Data and Samples, Shop Drawings Safety Precautions and Programs 3.11,
3.12, 4.2.7 3.3.1, 4.2.2, 4.2.7, 5.3.1, 10.1, 10.2, 10.6
Progress and Completion Samples, Definition of
4.2.2, 4.3.3, 8.2, 9.8, 9.9.1, 14.1.4 3.12.3
Progress Payments Samples, Shop Drawings, Product Data and
4.3.3, 9.3, 9.6, 9.8.5, 9.10.3, 13.6, 14.2.3 3.11, 3.12,4.2.7
Project, Definition of the Samples at the Site, Documents and
1.1.4 3.11
Project Management Protective Liability Insurance Schedule of Values
11.3 9.2,9.3.1
Project Manual, Definition of the Schedules, Construction
1.1.7 1.4.1.2, 3.10, 3.12.1, 3.12.2, 4.3.7.2, 6.1.3
Project Manuals Separate Contracts and Contractors
2.2.5 1.1.4, 3.12.5, 3.14.2, 4.2.4, 4.2.7, 4.6.4, 6, 8.3.1, 11.4.7, Project
Representatives 12.1.2, 12.2.5
4.2.10 Shop Drawings, Definition of Property Insurance 3.12.1 10.2.5, 11.4
Shop Drawings, Product Data and Samples PROTECTION OF PERSONS AND
PROPERTY 3.11, 3.12,4.2.7
10 Site, Use of
Regulations and Laws 3.13, 6.1.1, 6.2.1
1.6, 3.2.2, 3.6, 3.7, 3.12.10, 3.13, 4.1.1, 4.4.8, 4.6, 9.6.4, Site Inspections
9.9.1, 10.2.2, 11.1, 11.4, 13.1, 13.4, 13.5.1, 13.5.2, 13.6, 14 1.2.2,
3.2.1, 3.3.3, 3.7.1, 4.2, 4.3.4, 9.4.2, 9.10.1, 13.5 Rejection of Work Site
Visits, Architect's
3.5.1, 4.2.6, 12.2.1 4.2.2,4.2.9,4.3.4, 9.4.2, 9.5.1, 9.9.2, 9.10.1, 13.5
Releases and Waivers of Liens Special Inspections and Testing
9.10.2 4.2.6, 12.2.1, 13.5
Representations Specifications, Definition of the
1.5.2, 3.5.1, 3.12.6, 6.2.2, 8.2.1, 9.3.3, 9.4.2, 9.5.1, 9.8.2, 1.1.6
9.10.1 Specifications, The
Representatives 1.1.1, 1.1.6, 1.1.7, 1.2.2, 1.6, 3.11, 3.12.10, 3.17
2.1.1, 3.1.1, 3.9,4.1.1,4.2.1,4.2.10, 5.1.1, 5.1.2, 13.2.1 Statute of Limitations
Resolution of Claims and Disputes 4.6.3, 12.2.6, 13.7
4.4, 4.5, 4.6 Stopping the Work
Responsibility for Those Performing the Work 2.3, 4.3.6, 9.7, 10.3, 14.1 3.3.2,
3.18, 4.2.3, 4.3.8, 5.3.1, 6.1.3, 6.2, 6.3, 9.5.1, 10 Stored Materials
Retainage 6.2.1, 9.3.2, 10.2.1.2, 10.2.4, 11.4.1.4
9.3.1, 9.6.2, 9.8.5, 9.9.1, 9.10.2, 9.10.3 Subcontractor, Definition of
Review of Contract Documents and Field Conditions by 5.1.1
Contractor SUBCONTRACTORS
1.5.2, 3.2, 3.7.3, 3.12.7, 6.1.3 5
Review of Contractor's Submittals by Owner and Architect Subcontractors, Work by
3.10.1, 3.10.2, 3.11, 3.12, 4.2, 5.2, 6.1.3, 9.2, 9.8.2 1.2.2, 3.3.2,
3.12.1, 4.2.3, 5.2.3, 5.3, 5.4, 9.3.1.2, 9.6.7 Review of Shop Drawings, Product
Data and Samples by Subcontractual Relations Contractor 5.3, 5.4, 9.3.1.2, 9.6,
9.10 10.2.1, 11.4.7, 11.4.8, 14.1,
3.12 14.2.1, 14.3.2
Rights and Remedies Submittals
1.1.2, 2.3, 2.4, 3.5.1, 3.15.2, 4.2.6, 4.3.4, 4.5, 4.6, 5.3, 5.4, 1.6, 3.10,
3.11, 3.12, 4.2.7, 5.2.1, 5.2.3, 7.3.6, 9.2, 9.3, 9.8,
6.1, 6.3, 7.3.1, 8.3, 9.5.1, 9.7, 10.2.5, 10.3, 12.2.2, 12.2.4, 9.9.1,
9.10.2, 9.10.3, 11.1.3 13.4, 14 Subrogation, Waivers of
Royalties, Patents and Copyrights 6.1.1, 11.4.5, 11.4.7
3.17 Substantial Completion
Rules and Notices for Arbitration 4.2.9, 8.1.1, 8.1.3, 8.2.3, 9.4.2, 9.8, 9.9.1, 9.10.3,
9.10.4.2,
4.6.2 12.2, 13.7
Safety of Persons and Property Substantial Completion, Definition of
10.2, 10.6 9.8.1
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Substitution of Subcontractors 11.4.6, 11.4.10, 12.2, 13.5, 13.7, 14
5.2.3, 5.2.4 Time Limits on Claims
Substitution of Architect 4.3.2,4.3.4, 4.3.8,4.4,4.5,4.6
4.1.3 Title to Work
Substitutions of Materials 9.3.2, 9.3.3
3.4.2, 3.5.1, 7.3.7 UNCOVERING AND CORRECTION OF WORK
Sub-subcontractor, Definition of 12
5.1.2 Uncovering of Work
Subsurface Conditions 12.1
4.3.4 Unforeseen Conditions
Successors and Assigns 4.3.4, 8.3.1, 10.3
13.2 Unit Prices
Superintendent 4.3.9, 7.3.3.2
3.9, 10.2.6 Use of Documents
Supervision and Construction Procedures 1.1.1, 1.6, 2.2.5, 3.12.6, 5.3
1.2.2, 3.3, 3.4, 3.12.10, 4.2.2, 4.2.7, 4.3.3, 6.1.3, 6.2.4, Use of Site
7.1.3, 7.3.6, 8.2, 8.3.1, 9.4.2, 10, 12, 14 3.13, 6.1.1, 6.2.1
Surety Values, Schedule of
4.4.7, 5.4.1.2, 9.8.5, 9.10.2, 9.10.3, 14.2.2 9.2, 9.3.1
Surety, Consent of Waiver of Claims by the Architect
9.10.2, 9.10.3 13.4.2
Surveys Waiver of Claims by the Contractor
2.2.3. 4.3.10,9.10.5, 11.4.7, 13.4.2
Suspension by the Owner for Convenience Waiver of Claims by the Owner
14.4 4.3.10, 9.9.3, 9.10.3, 9.10.4, 11.4.3, 11.4.5, 11.4.7,
12.2.2.1,
Suspension of the Work 13.4.2, 14.2.4
5.4.2, 14.3 Waiver of Consequential Damages
Suspension or Termination of the Contract 4.3.10, 14.2.4
4.3.6, 5.4.1.1, 11.4.9, 14 Waiver of Liens
Taxes 9.10.2, 9.10.4
3.6, 3.8.2.1, 7.3.6.4 Waivers of Subrogation
Termination by the Contractor 6.1.1, 11.4.5, 11.4.7
4.3.10, 14.1 Warranty
Termination by the Owner for Cause 3.5, 4.2.9, 4.3.5.3, 9.3.3, 9.8.4, 9.9.1, 9.10.4, 12.2.2,
4.3.10, 5.4.1.1, 14.2 13.7.1.3
Termination of the Architect Weather Delays
4.1.3 4.3.7.2
Termination of the Contractor Work, Definition of
14.2.2 1.1.3
TERMINATION OR SUSPENSION OF THE CONTRACT Written Consent
14 1.6, 3.4.2, 3.12.8, 3.14.2, 4.1.2, 4.3.4, 4.6.4, 9.3.2, 9.8.5, Tests and
Inspections 9.9.1, 9.10.2, 9.10.3, 11.4.1, 13.2, 13.4.2
3.1.3, 3.3.3, 4.2.2, 4.2.6, 4.2.9, 9.4.2, 9.8.3, 9.9.2, 9.10.1, Written Interpretations
10.3.2, 11.4.1.1, 12.2.1,13.5 4.2.11,4.2.12,4.3.6
TIME Written Notice
8 2.3, 2.4, 3.3.1, 3.9, 3.12.9, 3.12.10, 4.3, 4.4.8, 4.6.5, 5.2.1, Time,
Delays and Extensions of 8.2.2, 9.7, 9.10, 10.2.2, 10.3, 11.1.3, 11.4.6, 12.2.2,
12.2.4,
3.2.3, 4.3.1, 4.3.4, 4.3.7, 4.4.5, 5.2.3, 7.2.1, 7.3.1, 7.4.1, 13.3, 14
7.5.1, 8.3,9.5.1,9.7.1,10.3.2, 10.6.1, 14.3.2 Written Orders
Time Limits 1.1.1, 2.3, 3.9, 4.3.6, 7, 8.2.2, 11.4.9, 12.1, 12.2, 13.5.2, 2.1.2,
2.2, 2.4, 3.2.1, 3.7.3, 3.10, 3.11, 3.12.5, 3.15.1, 4.2, 14.3.1 4.3, 4.4,
4.5, 4.6, 5.2, 5.3, 5.4, 6.2.4, 7.3, 7.4, 8.2, 9.2, 9.3.1, 9.3.3, 9.4.1, 9.5,
9.6, 9.7, 9.8, 9.9, 9.10, 11.1.3, 11.4.1.5,
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ARTICLE I GENERAL PROVISIONS
1.1 BASIC DEFINITIONS
1.1.1 THE CONTRACT DOCUMENTS
The Contract Documents consist of the Agreement between Owner and
Contractor (hereinafter the Agreement), Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications,
Addenda issued prior to execution of the Contract, other documents listed
in the Agreement and Modifications issued after execution of the Contract.
A Modification is (1) a written amendment to the Contract signed by both
parties, (2) a Change Order, (3) a Construction Change Directive or (4) a
written order for a minor change in the Work issued by the Architect.
Unless specifically enumerated in the Agreement, the Contract Documents do
not include other documents such as bidding requirements (advertisement or
invitation to bid, Instructions to Bidders, sample forms, the Contractor's
bid or portions of Addenda relating to bidding requirements).
1.1.2 THE CONTRACT
The Contract Documents form the Contract for Construction. The Contract
represents the entire and integrated agreement between the parties hereto
and supersedes prior negotiations, representations or agreements, either
written or oral. The Contract may be amended or modified only by a
Modification. The Contract Documents shall not be construed to create a
contractual relationship of any kind (1) between the Architect and
Contractor, (2) between the Owner and a Subcontractor or Sub-subcontractor,
(3) between the Owner and Architect or (4) between any persons or entities
other than the Owner and Contractor. The Architect shall, however, be
entitled to performance and enforcement of obligations under the Contract
intended to facilitate performance of the Architect's duties.
1.1.3 THE WORK
The term "Work" means the construction and services required by the
Contract Documents, whether completed or partially completed, and includes
all other labor, materials, equipment and services provided or to be
provided by the Contractor to fulfill the Contractor's obligations. The
Work may constitute the whole or a part of the Project.
1.1.4 THE PROJECT
The Project is the total construction of which the Work performed under the
Contract Documents may be the whole or a part and which may include
construction by the Owner or by separate contractors.
1.1.5 THE DRAWINGS
The Drawings are the graphic and pictorial portions of the Contract
Documents showing the design, location and dimensions of the Work,
generally including plans, elevations, sections, details, schedules and
diagrams.
1.1.6 THE SPECIFICATIONS
The Specifications are that portion of the Contract Documents consisting of
the written requirements for materials, equipment, systems, standards and
workmanship for the Work, and performance of related services.
1.1.7 THE PROJECT MANUAL
The Project Manual is a volume assembled for the Work which may include the
bidding requirements, sample forms, Conditions of the Contract and
Specifications.
1.2 CORRELATION AND INTENT OF THE CONTRACT DOCUMENTS
1.2.1 The intent of the Contract Documents is to include all items
necessary for the proper execution and completion of the Work by the
Contractor. The Contract Documents are complementary, and what is required
by one shall be as binding as if required by all; performance by the
Contractor shall be required only to the extent consistent with the
Contract Documents and reasonably inferable from them as being necessary to
produce the indicated results.
1.2.2 Organization of the Specifications into divisions, sections and
articles, and arrangement of Drawings shall not control the Contractor in
dividing the Work among Subcontractors or in establishing the extent of
Work to be performed by any trade.
1.2.3 Unless otherwise stated in the Contract Documents, words which have
well-known technical or construction industry meanings are used in the
Contract Documents in accordance with such recognized meanings.
1.3 CAPITALIZATION
1.3.1 Terms capitalized in these General Conditions include those which are
(1) specifically defined, (2) the titles of
<PAGE>
numbered articles and identified references to Paragraphs, Subparagraphs
and Clauses in the document or (3) the titles of other documents published
by the American Institute of Architects.
1.4 INTERPRETATION
1.4.1 In the interest of brevity the Contract Documents frequently omit
modifying words such as "all" and "any" and articles such as "the" and
"an," but the fact that a modifier or an article is absent from one
statement and appears in another is not intended to affect the
interpretation of either statement.
1.5 EXECUTION OF CONTRACT DOCUMENTS
1.5.1 The Contract Documents shall be signed by the Owner and Contractor.
If either the Owner or Contractor or both do not sign all the Contract
Documents, the Architect shall identify such unsigned Documents upon
request.
1.5.2 Execution of the Contract by the Contractor is a representation that
the Contractor has visited the site, become generally familiar with local
conditions under which the Work is to be performed and correlated personal
observations with requirements of the Contract Documents. Execution of the
Contract by the Owner is a representation that the Owner has made adequate
arrangements to fund the Project and has performed or fulfilled any
requirements or conditions for commencement of the Project except for those
requirements and conditions which by the terms hereof are the
responsibility of the Contractor.
1.6 OWNERSHIP AND USE OF DRAWINGS, SPECIFICATIONS AND OTHER INSTRUMENTS
OF SERVICE
1.6.1 The Drawings, Specifications and other documents, including those in
electronic form, prepared by the Architect and the Architect's consultants
are Instruments of Service through which the Work to be executed by the
Contractor is described. The Contractor may retain one record set. Neither
the Contractor nor any Subcontractor, Sub-subcontractor or material or
equipment supplier shall own or claim a copyright in the Drawings,
Specifications and other documents prepared by the Architect or the
Architect's consultants, and unless otherwise indicated the Architect and
the Architect's consultants shall be deemed the authors of them and will
retain all common law, statutory and other reserved rights, in addition to
the copyrights. All copies of Instruments of Service, except the
Contractor's record set, shall be returned or suitably accounted for to the
Architect, on request, upon completion of the Work. The Drawings,
Specifications and other documents prepared by the Architect and the
Architect's consultants, and copies thereof furnished to the Contractor,
are for use solely with respect to this Project. They are not to be used by
the Contractor or any Subcontractor, Sub-subcontractor or material or
equipment supplier on other projects or for additions to this Project
outside the scope of the Work without the specific written consent of the
Owner, Architect and the Architect's consultants. The Contractor,
Subcontractors, Sub-subcontractors and material or equipment suppliers are
authorized to use and reproduce applicable portions of the Drawings,
Specifications and other documents prepared by the Architect and the
Architect's consultants appropriate to and for use in the execution of
their Work under the Contract Documents. All copies made under this
authorization shall bear the statutory copyright notice, if any, shown on
the Drawings, Specifications and other documents prepared by the Architect
and the Architect's consultants. Submittal or distribution to meet official
regulatory requirements or for other purposes in connection with this
Project is not to be construed as publication in derogation of the
Architect's or Architect's consultants' copyrights or other reserved
rights.
ARTICLE 2 OWNER
2.1 GENERAL
2.1.1 The Owner is the person or entity identified as such in the Agreement
and is referred to throughout the Contract Documents as if singular in
number. The Owner shall designate in writing a representative who shall
have express authority to bind the Owner with respect to all matters
requiring the Owner's approval or authorization. Except as otherwise
provided in Subparagraph 4.2.1, the Architect does not have such authority.
The term "Owner" means the Owner or the Owner's authorized representative.
2.1.2 The Owner shall furnish to the Contractor within fifteen days after
receipt of a written request, information necessary and relevant for the
Contractor to evaluate, give notice of or enforce mechanic's lien rights.
Such information shall include a correct statement of the record legal
title to the property on which the Project is located, usually referred to
as the site, and the Owner's interest therein.
2.2 INFORMATION AND SERVICES REQUIRED OF THE OWNER
2.2.1 The Owner shall, at the written request of the Contractor, prior to
commencement of the Work and thereafter, furnish to the Contractor
reasonable evidence that financial arrangements have been made to fulfill
the Owner's obligations under the Contract. Furnishing of such evidence
shall be a condition precedent to commencement or continuation of the Work.
After such
<PAGE>
evidence has been furnished, the Owner shall not materially vary such
financial arrangements without prior notice to the Contractor. - Without
limitin2.ih~ foregoin2. the Owner shall provide evidence of financial
arran2ements in each instance of a Chan2e Order that increases the Contract
Sum by $25.000 or more.
2.2.2 Except for permits and fees, including those required under
Subparagraph 3.7.1, which are the responsibility of the Contractor under
the Contract Documents, the Owner shall secure and pay for necessary
approvals, easements, assessments and charges required for construction,
use or occupancy of permanent structures or for permanent changes in
existing facilities.
2.2.3 The Owner shall furnish surveys describing physical characteristics,
legal limitations and utility locations for the site of the Project, and a
legal description of the site. The Contractor shall be entitled to rely on
the accuracy of information furnished by the Owner but shall exercise
proper precautions relating to the safe performance of the Work.
2.2.4 Information or services required of the Owner by the Contract
Documents shall be furnished by the Owner with reasonable promptness. Any
other information or services relevant to the Contractor's performance of
the Work under the Owner's control shall be furnished by the Owner after
receipt from the Contractor of a written request for such information or
services and within the period of time reasonably requested.
2.2.5 Unless otherwise provided in the Contract Documents, the Contractor
will be furnished, free of charge, such copies of Drawings and Project
Manuals as are reasonably necessary for execution of the Work.
2.3 OWNER'S RIGHT TO STOP THE WORK
2.3.1 If the Contractor fails to correct Work which is not in accordance
with the requirements of the Contract Documents as required by Paragraph
12.2 or persistently fails to carry out Work in accordance with the
Contract Documents, the Owner may issue a written order to the Contractor
to stop the Work, or any portion thereof, until the cause for such order
has been eliminated; however, the right of the Owner to stop the Work shall
not give rise to a duty on the part of the Owner to exercise this right for
the benefit of the Contractor or any other person or entity, except to the
extent required by Subparagraph 6.1.3.
2.4 OWNERS RIGHT TO CARRY OUT THE WORK
2.4.1 If the Contractor. defaults or neglects to carry out the Work in
accordance with the Contract Documents and fails within a seven-day period
after receipt of written notice from the Owner to commence and continue
correction of such default or neglect with diligence and promptness, the
Owner may after such seven-day period give the Contractor a second written
notice to correct such deficiencies within seven-day period. If the
Contractor within such seven-day period after receipt of such second notice
fails to commence and continue to correct any deficiencies, the Owner may,
without prejudice to other remedies the Owner may have, correct such
deficiencies. In such case an appropriate Change Order shall be issued
deducting from payments then or thereafter due the Contractor the
reasonable cost of correcting such deficiencies, including Owner s expenses
and compensation for the Architect's additional services made necessary by
such default, neglect or failure. Such action by the Owner and amounts
charged to the Contractor are both subject to prior approval of the
Architect. If payments then or thereafter due the Contractor are not
sufficient to cover such amounts, the Contractor shall pay the difference
to the Owner.
ARTICLE 3 CONTRACTOR
3.1 GENERAL
3.1.1 The Contractor is the person or entity identified as such in the
Agreement and is referred to throughout the Contract Documents as if
singular in number. The term "Contractor" means the Contractor or the
Contractor's authorized representative.
3.1.2 The Contractor shall perform the Work in accordance with the Contract
Documents.
3.1.3 The Contractor shall not be relieved of obligations to perform the
Work in accordance with the Contract Documents by activities or duties of
the Architect in the Architect's administration of the Contract, but shall
be entitled to rely upon tests, inspections or approvals required or
performed by the Architect, Owner, or consultants of either of them.
3.2 REVIEW OF CONTRACT DOCUMENTS AND FIELD CONDITIONS BY CONTRACTOR
3.2.1 Since the Contract Documents are complementary, before starting each
portion of the Work, the Contractor shall carefully study and compare the
various Drawings and other Contract Documents relative to that portion of
the Work, as well as
the information furnished by the Owner pursuant to Subparagraph 2.2.3, shall
take field measurements of any existing conditions related to that portion
of the Work and shall observe any conditions at the site affecting it. These
obligations are for the purpose of facilitating construction by the
Contractor and are not for the purpose of discovering errors, omissions, or
inconsistencies in the Contract Documents; however, any errors,
inconsistencies or omissions discovered by the Contractor shall be reported
promptly to the Architect as a request for information in such form as the
Architect may require.
3.2.2 Any design errors or omissions noted by the Contractor during this
review shall be reported promptly to the Architect, but it is recognized
that the Contractor's review is made in the Contractor's capacity as a
contractor and not as a licensed design professional unless otherwise
specifically provided in the Contract Documents. The Contractor is not
required to ascertain that the Contract Documents are in accordance with
applicable laws, statutes, ordinances, building codes, and rules and
regulations, but any nonconformity discovered by or made known to the
Contractor shall be reported promptly to the Architect.
3.2.3 If the Contractor believes that additional cost or time is involved
because of clarifications or instructions issued by the Architect in
response to the Contractor's notices or requests for information pursuant
to Subparagraphs 3.2.1 and 3.2.2, the Contractor shall make Claims as
provided in Subparagraphs 4.3.6 and 4.3.7. If the Contractor without
justification fails to perform the obligations of Subparagraphs 3.2.1 and
3.2.2, the Contractor shall pay such costs and damages to the Owner as
would have been avoided if the Contractor had performed such obligations.
The Contractor shall not be liable to the Owner or Architect for damages
resulting from errors, inconsistencies or omissions in the Contract
Documents or for differences between field measurements or conditions and
the Contract Documents unless the Contractor recognized such error,
inconsistency, omission or difference and knowingly failed to report it to
the Architect.
3.3 SUPERVISION AND CONSTRUCTION PROCEDURES
3.3.1 The Contractor shall supervise and direct the Work, using the
Contractor's best skill and attention. The Contractor shall be solely
responsible for and have control over construction means, methods,
techniques, sequences and procedures and for coordinating all portions of
the Work under the Contract, unless the Contract Documents give other
specific instructions concerning these matters. If the Contract Documents
give specific instructions concerning construction means, methods,
techniques, sequences or procedures, the Contractor shall evaluate the
jobsite safety thereof and, except as stated below, shall be fully and
solely responsible for the jobsite safety of such means, methods,
techniques, sequences or procedures. If the Contractor determines that such
means, methods, techniques, sequences or procedures may not be safe, the
Contractor shall give timely written notice to the Owner and Architect and
shall not proceed with that portion of the Work without further written
instructions from the Architect. If the Contractor is then instructed to
proceed with the required means, methods, techniques, sequences or
procedures without acceptance of changes proposed by the Contractor, the
Architect9wnea~-shall be solely responsible for any resulting loss or
damage.
3.3.2 The Contractor shall be responsible to the Owner for acts and
omissions of the Contractor's employees, Subcontractors and their agents
and employees, and other persons or entities performing portions of the
Work for or on behalf of the Contractor or any of its Subcontractors.
3.3.3 The Contractor shall be responsible for inspection of portions of
Work already performed to determine that such portions are in proper
condition to receive subsequent Work.
3.4 LABOR AND MATERIALS
3.4.1 Unless otherwise provided in the Contract Documents, the Contractor
shall provide and pay for labor, materials, equipment, tools, construction
equipment and machinery, water, heat, utilities, transportation, and other
facilities and services necessary for proper execution and completion of
the Work, whether temporary or permanent and whether or not incorporated or
to be incorporated in the Work.
3.4.2 The Contractor may make substitutions with the consent of the Owner,
after evaluation by the Architect and in accordance with a Change Order. or
by advising the Architect of any substitution in accordance with
sub-paragraph 3.12.8 and receiving approval from the Architect for such
submittal thereafter.
3.4.3 The Contractor shall enforce strict discipline and good order among
the Contractor's employees and other persons carrying out the Contract. The
Contractor shall not permit employment of unfit persons or persons not
skilled in tasks assigned to them.
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3.5 WARRANTY
3.5.1 The Contractor warrants to the Owner and Architect that materials and
equipment furnished under the Contract will be of good quality and new
unless otherwise required or permitted by the Contract Documents, that the
Work will be free from defects not inherent in the quality required or
permitted, and that the Work will conform to the requirements of the
Contract Documents. Work not conforming to these requirements, including
substitutions not properly approved and authorized, may be considered
defective. The Contractor's warranty excludes remedy for damage or defect
caused by abuse, modifications not executed by the Contractor, improper or
insufficient maintenance, improper or inappropriate design criteria.
improper operation, or normal wear and tear and normal usage. If required
by the Architect, the Contractor shall furnish satisfactory evidence as to
the kind and quality of materials and equipment.
3.6 TAXES
3.6.1 The Contractor shall pay sales, consumer, use and similar taxes for
the Work provided by the Contractor which are legally enacted when bids are
received or negotiations concluded, whether or not yet effective or merely
scheduled to go into effect.
3.7 PERMITS, FEES AND NOTICES
3.7.1 Unless otherwise provided in the Contract Documents, the Contractor
shall secure and pay for the building permit and other permits and
governmental fees, licenses and inspections necessary for proper execution
and completion of the Work which are customarily secured after execution of
the Contract and which are legally required when bids are received or
negotiations concluded.
3.7.2 The Contractor shall comply with and give notices required by laws,
ordinances, rules, regulations and lawful orders of public authorities
applicable to performance of the Work.
3.7.3 It is not the Contractor's responsibility to ascertain that the
Contract Documents are in accordance with applicable laws, statutes,
ordinances, building codes, and rules and regulations. However, if the
Contractor observes that portions of the Contract Documents are at clearly
at variance therewith, the Contractor shall promptly notify the Architect
and Owner in writing, and necessary changes shall be accomplished by
appropriate Modification.
3.7.4 If the Contractor performs Work knowing it to be contrary to laws,
statutes, ordinances, building codes, and rules and regulations without
such notice to the Architect and Owner, the Contractor shall assume
appropriate responsibility for such Work and shall bear the costs
attributable to correction.
3.8 ALLOWANCES
3.8.1 The Contractor shall include in the Contract Sum all allowances
stated in the Contract Documents. Items covered by allowances shall be
supplied for such amounts and by such persons or entities as the Owner may
direct, but the Contractor shall not be required to employ persons or
entities to whom the Contractor has reasonable objection.
3.8.2 Unless otherwise provided in the Contract Documents:
.1 allowances shall cover the cost to the Contractor of materials
and equipment delivered at the site and all required taxes,
less applicable trade discounts;
.2 Contractor's costs for unloading and handling at the site,
labor, installation costs, overhead, profit and other expenses
contemplated for stated allowance amounts shall be included in
the Contract Sum but not in the allowances;
.3 whenever costs are more than or less than allowances, the
Contract Sum shall be adjusted accordingly by Change Order.
The amount of the Change Order shall reflect (1) the
difference between actual costs and the allowances under
Clause 3.8.2.1 and (2) changes in Contractor's costs under
Clause 3.8.2.2.
3.8.3 Materials and equipment under an allowance shall be selected by the
Owner in sufficient time to avoid delay ~ disruption in the Work.
3.9 SUPERINTENDENT
3.9.1 The Contractor shall employ a competent superintendent and necessary
assistants who shall be in attendance at the
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Project site during performance of the Work. The superintendent shall
represent the Contractor, and communications given to the superintendent
shall be as binding as if given to the Contractor. Important communications
shall be confirmed in writing. Other communications shall be similarly
confirmed on written request in each case.
3.10 CONTRACTOR'S CONSTRUCTION SCHEDULES
3.10.1 The Contractor, promptly after being awarded the Contract, shall
prepare and submit for the Owner's and Architect's information a
Contractor's construction schedule for the Work. The schedule shall not
exceed time limits current under the Contract Documents, shall be revised
at appropriate intervals as required by the conditions of the Work and
Project, shall be related to the entire Project to the extent required by
the Contract Documents, and shall provide for expeditious and practicable
execution of the Work.
3.10.2 The Contractor shall prepare and keep current, for the Architect's
approval, a schedule of submittals which is coordinated with the
Contractor's construction schedule and allows the Architect reasonable time
to review submittals.
3.10.3 The Contractor shall perform the Work in general accordance with the
most recent schedules submitted to the Owner and Architect. The Architect
shall review and take appropriate action on submittals in accordance with
such schedules or. where not depicted on the schedules. within 14 days
after receipt thereof.
3.11 DOCUMENTS AND SAMPLES AT THE SITE
3.11.1 The Contractor shall maintain at the site for the Owner one record
copy of the Drawings, Specifications, Addenda, Change Orders and other
Modifications, in good order and marked currently to record field changes
and selections made during construction, and one record copy of approved
Shop Drawings, Product Data, Samples and similar required submittals. These
shall be available to the Architect and shall be delivered to the Architect
for submittal to the Owner upon completion of the Work.
3.12 SHOP DRAWINGS, PRODUCT DATA AND SAMPLES
3.12.1 Shop Drawings are drawings, diagrams, schedules and other data
specially prepared for the Work by the Contractor or a Subcontractor,
Sub-subcontractor, manufacturer, supplier or distributor to illustrate some
portion of the Work.
3.12.2 Product Data are illustrations, standard schedules, performance
charts, instructions, brochures, diagrams and other information furnished
by the Contractor to illustrate materials or equipment for some portion of
the Work.
3.12.3 Samples are physical examples which illustrate materials, equipment
or workmanship and establish standards by which the Work will be judged.
3.12.4 Shop Drawings, Product Data, Samples and similar submittals are not
Contract Documents. The purpose of their submittal is to demonstrate for
those portions of the Work for which submittals are required by the
Contract Documents the way by which the Contractor proposes to conform to
the information given and the design concept expressed in the Contract
Documents. Review by the Architect is subject to the limitations of
Subparagraph 4.2.7. Informational submittals upon which the Architect is
not expected to take responsive action may be so identified in the Contract
Documents. Submittals which are not required by the Contract Documents may
be returned by the Architect without action.
3.12.5 The Contractor shall review for compliance with the Contract
Documents, approve and submit to the Architect Shop Drawings, Product Data,
Samples and similar submittals required by the Contract Documents with
reasonable promptness and in such sequence as to cause no delay in the Work
or in the activities of the Owner or of separate contractors. Submittals
which are not marked as reviewed for compliance with the Contract Documents
and approved by the Contractor may be returned by the Architect without
action.
3.12.6 By approving and submitting Shop Drawings, Product Data, Samples and
similar submittals, the Contractor represents that the Contractor has
determined and verified materials, field measurements and field
construction criteria related thereto, or will do so, and has checked and
coordinated the information contained within such submittals with the
requirements of the Work and of the Contract Documents.
3.12.7 The Contractor shall perform no portion of the Work for which the
Contract Documents require submittal and review of Shop Drawings, Product
Data, Samples or similar submittals until the respective submittal has been
approved by the Architect.
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3.12.8 The Work shall be in accordance with approved submittals except that
the Contractor shall not be relieved of responsibility for deviations from
requirements of the Contract Documents by the Architect's approval of Shop
Drawings, Product Data, Samples or similar submittals unless the Contractor
has specifically informed the Architect in writing of such deviation at the
time of submittal and (I) the Architect has given written approval to the
specific deviation as a minor change in the Work, or (2) the Architect has
with knowledge of any deviation approved such submittal, or (3) a Change
Order or Construction Change Directive has been issued authorizing the
deviation. The Contractor shall not be relieved of responsibility for
errors or omissions in Shop Drawings, Product Data, Samples or similar
submittals by the Architect's approval thereof.
3.12.9 The Contractor shall direct specific attention, in writing or on
resubmitted Shop Drawings, Product Data, Samples or similar submittals, to
revisions other than those requested by the Architect on previous
submittals. In the absence of such written notice the Architect's approval
of a resubmission shall not apply to such revisions.
3.12.10 The Contractor shall not be required to provide professional
services which constitute the practice of architecture or engineering unless
such services are specifically required by the Contract Documents for a
portion of the Work or unless the Contractor needs to provide such services
in order to carry out the Contractor's responsibilities for construction
means, methods, techniques, sequences and procedures. The Contractor shall
not be required to provide professional services in violation of applicable
law. If professional design services or certifications by a design
professional related to systems, materials or equipment are specifically
required of the Contractor by the Contract Documents, the Owner and the
Architect will specify all performance and design criteria that such
services must satisfy. The Architect, upon completion of the Drawings and
Specifications, shall notify the Owner and Contractor of all items for which
the Contract Documents require the Contractor to furnish architecture or
engineering services. - The Contractor shall cause such services or
certifications to be provided by a properly licensed design professional,
whose signature and seal shall appear on all drawings, calculations,
specifications, certifications, Shop Drawings and other submittals prepared
by such professional. Shop Drawings and other submittals related to the Work
designed or certified by such professional, if prepared by others, shall
bear such professional's written approval when submitted to the Architect.
The Owner and the Architect shall be entitled to rely upon the adequacy,
accuracy and completeness of the services, certifications or approvals
performed by such design professionals, provided the Owner and Architect
have specified to the Contractor all performance and design criteria that
such services must satisfy. Pursuant to this Subparagraph 3.12.10, the
Architect will review, approve or take other appropriate action on
submittals only for the limited purpose of checking for conformance with
information given and the design concept expressed in the Contract
Documents- and for coordination with other applicable design elements. The
Contractor shall not be responsible for the adequacy of the performance or
design criteria required by the Contract Documents.
3.13 USE OF SITE
3.13.1 The Contractor shall confine operations at the site to areas
permitted by law, ordinances, permits and the Contract Documents and shall
not unreasonably encumber the site with materials or equipment.
3.14 CUTTING AND PATCHING
3.14.1 The Contractor shall be responsible for cutting, fitting or patching
required to complete the Work or to make its parts fit together properly.
3.14.2 The Contractor shall not damage or endanger a portion of the Work or
fully or partially completed construction of the Owner or separate
contractors by cutting, patching or otherwise altering such construction,
or by excavation. The Contractor shall not cut or otherwise alter such
construction by the Owner or a separate contractor except with written
consent of the Owner and of such separate contractor; such consent shall
not be unreasonably withheld. The Contractor shall not unreasonably
withhold from the Owner or a separate contractor the Contractor's consent
to cutting or otherwise altering the Work.
3.15 CLEANING UP
3.15.1 The Contractor shall keep the premises and surrounding area free
from accumulation of waste materials or rubbish caused by operations under
the Contract. At completion of the Work, the Contractor shall remove from
and about the Project waste materials, rubbish, the Contractor's tools,
construction equipment, machinery and surplus materials.
3.15.2 If the Contractor fails to clean up as provided in the Contract
Documents, the Owner may do so and the cost thereof shall be charged to the
Contractor.
3.16 ACCESS TO WORK
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3.16.1 The Contractor shall provide the Owner and Architect access to the
Work in preparation and progress wherever located.
3.17 ROYALTIES, PATENTS AND COPYRIGHTS
3.17.1 The Contractor shall pay all royalties and license fees. The Owner
shall defend suits or claims for infringement of copyrights and patent
rights and shall hold the Contractor and Architect harmless from loss on
account thereof, but shall not be responsible for such defense or loss when
a particular design, process or product of a particular manufacturer or
manufacturers is required by the Contract Documents or where the copyright
violations are contained in Drawings, Specifications or other documents
prepared by the Owner or Architect. However, if the Contractor has reason
to believe that the required design, process or product is an infringement
of a copyright or a patent, the Contractor shall be responsible for such
loss unless such information is promptly furnished to the Architect.
3.18 INDEMNIFICATION
3.18.1 To the fullest extent permitted by law and to the extent claims,
damages, losses or expenses are not covered by Commercial General Liability
insurance purchased by the Contractor in accordance with Paragraph 11.3,
the Contractor shall indemnify and hold harmless the Owner, Architect,
Architect's consultants, and agents and employees of any of them from and
against claims, damages, losses and expenses, including but not limited to
attorneys' fees, arising out of or resulting from performance of the Work,
provided that such claim, damage, loss or expense is attributable to bodily
injury, sickness, disease or death, or to injury to or destruction of
tangible property (other than the Work itself), but only to the extent
caused by the negligent acts or omissions of the Contractor, a
Subcontractor, anyone directly or indirectly employed by them or anyone for
whose acts they may be liable, regardless of whether or not such claim,
damage, loss or expense is caused in part by a party indemnified hereunder.
Such obligation shall not be construed to negate, abridge, or reduce other
rights or obligations of indemnity which would otherwise exist as to a
party or person described in this Paragraph 3.18.
3.18.2 In claims against any person or entity indemnified under this
Paragraph 3.18 by an employee of the Contractor, a Subcontractor, anyone
directly or indirectly employed by them or anyone for whose acts they may
be liable, the indemnification obligation under Subparagraph 3.18.1 shall
not be limited by a limitation on amount or type of damages, compensation
or benefits payable by or for the Contractor or a Subcontractor under
workers' compensation acts, disability benefit acts or other employee
benefit acts.
ARTICLE 4 ADMINISTRATION OF THE CONTRACT
4.1 ARCHITECT
4.1.1 The Architect is the person lawfully licensed to practice
architecture or an entity lawfully practicing architecture identified as
such in the Agreement and is referred to throughout the Contract Documents
as if singular in number. The term "Architect" means the Architect or the
Architect's authorized representative.
4.1.2 Duties, responsibilities and limitations of authority of the
Architect as set forth in the Contract Documents shall not be restricted,
modified or extended without written consent of the Owner, Contractor and
Architect. Consent shall not be unreasonably withheld.
4.1.3 If the employment of the Architect is terminated, the Owner shall
employ a new Architect against whom the Contractor has no reasonable
objection and whose status under the Contract Documents shall be that of
the former Architect.
4.2 ARCHITECT'S ADMINISTRATION OF THE CONTRACT
4.2.1 The Architect will provide administration of the Contract as
described in the Contract Documents, and will be an Owner's representative
(1) during construction, (2) until final payment is due and (3) with the
Owner's concurrence, from time to time during the one-year period for
correction of Work described in Paragraph 12.2. The Architect will have
authority to act on behalf of the Owner only to the extent provided in the
Contract Documents, unless otherwise modified in writing in accordance with
other provisions of the Contract.
4.2.2 The Architect, as a representative of the Owner, will visit the site
at intervals appropriate to the stage of the Contractor's operations (1) to
become generally familiar with and to keep the Owner informed about the
progress and quality of the portion of the Work completed, (2) to endeavor
to guard the Owner against defects and deficiencies in the Work, and (3) to
determine in general if the Work is being performed in a manner indicating
that the Work, when fully completed, will be in accordance with the
Contract Documents. However, the Architect will not be required to make
exhaustive or continuous on-site inspections to
<PAGE>
check the quality or quantity of the Work. The Architect will neither have
control over or charge of, nor be responsible for, the construction means,
methods, techniques, sequences or procedures, or for the safety precautions
and programs in connection with the Work, since these are solely the
Contractor's rights and responsibilities under the Contract Documents,
except as provided in Subparagraph 3.3.1.
4.2.3 The Architect will not be responsible for the Contractor's failure to
perform the Work in accordance with the requirements of the Contract
Documents. except where such failure is due to a directive from the
Architect. . The Architect will not have control over or charge of and will
not be responsible for acts or omissions of the Contractor, Subcontractors,
or their agents or employees, or any other persons or entities performing
portions of the Work.
4.2.4 Communications Facilitating Contract Administration. Except as
otherwise provided in the Contract Documents or when direct communications
have been specially authorized, the Owner and Contractor shall endeavor to
communicate with each other through the Architect or shall provide the
Architect with contemporaneous conies of any such direct communications.
about matters arising out of or relating to the Contract. Communications by
and with the Architect's consultants shall be through the Architect.
Communications by and with Subcontractors and material suppliers shall be
through the Contractor. Communications by and with separate contractors
shall be through the Owner.
4.2.5 Based on the Architect's evaluations of the Contractor's Applications
for Payment, the Architect will review and certify the amounts due the
Contractor and will issue Certificates for Payment in such amounts.
4.2.6 The Architect will have authority to reject Work that does not
conform to the Contract Documents. Whenever the Architect considers it
necessary or advisable, the Architect will have authority to require
inspection or testing of the Work in accordance with Subparagraphs 13.5.2
and 13.5.3, whether or not such Work is fabricated, installed or completed.
However, neither this authority of the Architect nor a decision made in
good faith either to exercise or not to exercise such authority shall give
rise to a duty or responsibility of the Architect to the Contractor,
Subcontractors, material and equipment suppliers, their agents or
employees, or other persons or entities performing portions of the Work.
4.2.7 The Architect will review and approve or take other appropriate action
upon the Contractor's submittals such as Shop Drawings, Product Data and
Samples, but only for the limited purpose of checking for conformance with
information given and the design concept expressed in the Contract
Documents. The Architect's action will be taken with such reasonable
promptness as to cause no delay in the Work or in the activities of the
Owner, Contractor or separate contractors, while allowing sufficient time in
the Architect's professional judgment to permit adequate review. Review of
such submittals is not conducted for the purpose of determining the accuracy
and completeness of other details such as dimensions and quantities, or for
substantiating instructions for installation or performance of equipment or
systems, all of which remain the responsibility of the Contractor as
required by the Contract Documents. The Architect's review of the
Contractor's submittals shall not relieve the Contractor of the obligations
under Paragraphs 3.3, 3.5 and 3.12. The Architect's review shall not
constitute approval of safety precautions or, unless otherwise specifically
stated by the Architect, of any construction means, methods, techniques,
sequences or procedures. The Architect's approval of a specific item shall
not indicate approval of an assembly of which the item is a component.
4.2.8 The Architect will prepare Change Orders and Construction Change
Directives, and may authorize minor changes in the Work as provided in
Paragraph 7.4.
4.2.9 The Architect will conduct inspections to determine the date or dates
of Substantial Completion and the date of final completion, will receive
and forward to the Owner, for the Owner's review and records, written
warranties and related documents required by the Contract and assembled by
the Contractor, and will issue a final Certificate for Payment upon
compliance with the requirements of the Contract Documents.
4.2.10 If the Owner and Architect agree, the Architect will provide one or
more project representatives to assist in carrying out the Architect's
responsibilities at the site. The duties, responsibilities and limitations
of authority of such project representatives shall be as set forth in an
exhibit to be incorporated in the Contract Documents.
4.2.11 The Architect will interpret and decide matters concerning
performance under, and requirements of, the Contract Documents on written
request of either the Owner or Contractor. The Architect's response to such
requests will be made in writing within any time limits agreed upon or
otherwise with reasonable promptness. If no agreement is made concerning
the time within which interpretations required of the Architect shall be
furnished in compliance with this Paragraph 4.2, then delay shall not be
recognized on account of failure by the Architect to furnish such
interpretations until 15 days after written request is made for them.
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4.2.12 Interpretations and decisions of the Architect will be consistent
with the intent of and reasonably inferable from the Contract Documents and
will be in writing or in the form of drawings. When making such
interpretations and initial decisions, the Architect will endeavor to secure
faithful performance by both Owner and Contractor, will not show partiality
to either and will not be liable for results of interpretations or decisions
so rendered in good faith.
4.2.13 The Architect's decisions on matters relating to aesthetic effect
will be final if consistent with the intent expressed in the Contract
Documents.
4.3 CLAIMS AND DISPUTES
4.3.1 Definition. A Claim is a demand or assertion by one of the parties
seeking, as a matter of right, adjustment or interpretation of Contract
terms, payment of money, extension of time or other relief with respect to
the terms of the Contract. The term "Claim" also includes other disputes and
matters in question between the Owner and Contractor arising out of or
relating to the Contract. Claims must be initiated by written notice. The
responsibility to substantiate Claims shall rest with the party making the
Claim.
4.3.2 Time Limits on Claims. Claims by either party must be initiated
within 21 days after occurrence of the event giving rise to such Claim or
within 21 days after the claimant first recognizes the condition giving
rise to the Claim, whichever is later.
Claims must be initiated by written notice to the Architect and the other
party.
4.3.3 Continuing Contract Performance. Pending final resolution of a Claim
except as otherwise agreed in writing or as provided in Subparagraph 9.7.1
and Article 14, the Contractor shall proceed diligently with performance of
the Contract and the Owner shall continue to make payments in accordance
with the Contract Documents.
4.3.4 Claims for Concealed or Unknown Conditions. If conditions are
encountered at the site which are (1) subsurface or Otherwise concealed
physical conditions which differ materially from those indicated in the
Contract Documents or (2) unknown Physical conditions of an unusual nature,
which differ materially from those ordinarily found to exist and generally
recognized as inherent in construction activities of the character provided
for in the Contract Documents, then notice by the observing party Shall be
given to the other party promptly before conditions are disturbed and in no
event later than 21 days after first observance Of the conditions. The
Architect will promptly investigate such conditions and, if they differ
materially and cause an increase or
Decrease in the Contractor's cost of, or time required for, performance of
any part of the Work, will recommend an equitable adjustment in the
Contract Sum or Contract Time, or both. Claims by either party in
opposition to such determination must be made within 21 days after the
Architect has given notice of the decision. If the conditions
Encountered are materially different, the Contract Sum and Contract Time
shall be equitably adjusted, but if the Owner and Contractor cannot agree
on an adjustment in the Contract Sum or Contract Time, the adjustment shall
be determined in accordance with sub-paragraph 7.3.6.
<PAGE>
4.3.5 Claims for Additional Cost. If the Contractor wishes to make Claim for
an increase in the Contract Sum, written notice as provided herein shall be
given before proceeding to execute the Work. Prior notice is not required
for Clams relating to an emergency endangering life or property arising
under Paragraph 10.6.
4.3.6 If the Contractor believes additional cost is involved for reasons
including but not limited to (1) a written interpretation from the
Architect, (2) an order by the Owner to stop the Work where the Contractor
was not at fault, (3) a written order for a minor change in the Work issued
by the Architect, (4) failure of payment by the Owner, (5) termination of
the Contract by the Owner, (6) Owner's suspension or (7) other reasonable
grounds, Claim shall be filed in accordance with this Paragraph 4.3.
4.3.7 Claims for Additional Time
4.3.7.1 If the Contractor wishes to make Claim for an increase in the
Contract Time, written notice as provided herein shall be given. The
Contractor's Claim shall include an estimate of cost and of probable effect
of delay on progress of the Work where such estimate and effect can be
reasonably estimated at the time of making the claim. In the case of a
continuing delay only one Claim is necessary.
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4.3.7.2 If adverse weather conditions are the basis for a Claim for
additional time, such Claim shall be documented by data substantiating that
weather conditions were abnormal for the period of time, and had an adverse
effect on the scheduled construction.
4.3.8 Injury or Damage to Person or Property. If either party to the
Contract suffers injury or damage to person or property because of an act or
omission of the other party, or of others for whose acts such party is
legally responsible, written notice of such injury or damage, whether or not
insured, shall be given to the other party within a reasonable time not
exceeding 21 days after discovery. The notice shall provide sufficient
detail to enable the other party to investigate the matter.
4.3.9 If unit prices are stated in the Contract Documents or subsequently
agreed upon, and if quantities originally contemplated are materially
changed in a proposed Change Order or Construction Change Directive so that
application of such unit prices to quantities of Work proposed will cause
substantial inequity to the Owner or Contractor, the applicable unit prices
shall be equitably adjusted.
4.3.10 Claims for Consequential Damages. The Contractor and Owner waive
Claims against each other for consequential damages arising out of or
relating to this Contract. This mutual waiver includes:
.1 damages incurred by the Owner for rental expenses, for losses
of use, income, profit, financing, business and reputation, and
for loss of management or employee productivity or of the
services of such persons; and
.2 damages incurred by the Contractor for principal office
expenses including the compensation of personnel stationed
there, for losses of financing, business and reputation, and
for loss of profit except anticipated profit arising directly
from the Work.
This mutual waiver is applicable, without limitation, to all consequential
damages due to either party's termination in accordance with Article 14.
Nothing contained in this Subparagraph 4.3.10 shall be deemed to preclude an
award of liquidated direct damages, when applicable, in accordance with the
requirements of the Contract Documents.
4.4 RESOLUTION OF CLAIMS AND DISPUTES
4.4.1 Decision of Architect. Claims, including those alleging an error or
omission by the Architect but excluding those arising under Paragraphs 10.3
through 10.5, shall be referred initially to the Architect for decision. An
initial decision by the Architect shall be required as a condition
precedent to mediation, arbitration or litigation of all Claims between the
Contractor and Owner arising prior to the date final payment is due, unless
30 days have passed after the Claim has been referred to the Architect with
no decision having been rendered by the Architect. The Architect will not
decide disputes between the Contractor and persons or entities other than
the Owner.
4.4.2 The Architect will review Claims and within ten days of the receipt of
the Claim take one or more of the following actions: (1) request additional
supporting data from the claimant or a response with supporting data from
the other party, (2) reject the Claim in whole or in part, (3) approve the
Claim, (4) suggest a compromise, or (5) advise the parties that the
Architect is unable to resolve the Claim if the Architect lacks sufficient
information to evaluate the merits of the Claim or if the Architect
concludes that, in the Architect's sole discretion, it would be
inappropriate for the Architect to resolve the Claim.
4.4.3 In evaluating Claims, the Architect may, but shall not be obligated
to, consult with or seek information from either party or from persons with
special knowledge or expertise who may assist the Architect in rendering a
decision. The Architect may request the Owner to authorize retention of such
persons at the Owner's expense.
4.4.4 If the Architect requests a party to provide a response to a Claim or
to furnish additional supporting data, such party shall respond, within ten
days after receipt of such request, and shall either provide a response on
the requested supporting data, advise the Architect when the response or
supporting data will be furnished or advise the Architect that no supporting
data will be furnished. Upon receipt of the response or supporting data, if
any, the Architect will either reject or approve the Claim in whole or in
part.
4.4.5 The Architect will approve or reject Claims by written decision, which
shall state the reasons therefor and which shall notify the parties of any
change in the Contract Sum or Contract Time or both. The approval or
rejection of a Claim by the Architect shall be final and binding on the
parties but subject to mediation and arbitration.
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4.4.6 When a written decision of the Architect states that (1) the decision
is final but subject to mediation and arbitration and (2) a demand for
arbitration of a Claim covered by such decision must be made within 30 days
after the date on which the party making the demand receives the final
written decision, then failure to demand arbitration within said 30 days'
period shall result in the Architect's decision becoming final and binding
upon the Owner and Contractor. If the Architect renders a decision after
arbitration proceedings have been initiated, such decision may be entered as
evidence, but shall not supersede arbitration proceedings unless the
decision is acceptable to all parties concerned.
4.4.7 Upon receipt of a Claim against the Contractor or at any time
thereafter, the Architect or the Owner may, but is not obligated to, notify
the surety, if any, of the nature and amount of the Claim. If the Claim
relates to a possibility of a Contractor's default, the Architect or the
Owner may, but is not obligated to, notify the surety and request the
surety's assistance in resolving the controversy.
4.4.8If a Claim relates to or is the subject of a mechanic's lien, the party
asserting such Claim may proceed in accordance with applicable law to
comply with the lien notice or filing deadlines prior to resolution of the
Claim by the Architect, by mediation or by arbitration.
4.4.9 MEDIATION
4.5.1 Any Claim arising out of or related to the Contract, may, upon
agreement of the Contractor and Owner, be submitted to mediation.
4.5.2 The parties shall endeavor to resolve their Claims by mediation
which, unless the parties mutually agree otherwise, shall be in accordance
with the Construction Industry Mediation Rules of the American Arbitration
Association currently in effect. Request for mediation shall be filed in
writing with the other party to the Contract and with the American
Arbitration Association. The request may be made concurrently with the
filing of a demand for arbitration.
4.5.3 The parties shall share the mediator's fee and any filing fees
equally. The mediation shall be held in the place where the Project is
located, unless another location is mutually agreed upon. Agreements
reached in mediation shall be enforceable as settlement agreements in any
court having jurisdiction thereof.
4.6 ARBITRATION
4.6.1 Any Claim arising out of or related to the Contract, except Claims
relating to aesthetic effect and except those waived as provided for in
Subparagraphs 4.3.10, 9.10.4 and 9.10.5, shall, after decision by the
Architect or 30 days after submission of the Claim to the Architect, be
subject to arbitration.
4.6.2 Claims not resolved by mediation shall be decided by arbitration
which, unless the parties mutually agree otherwise, shall be in accordance
with the Construction Industry Arbitration Rules of the American
Arbitration Association currently in effect. The demand for arbitration
shall be filed in writing with the other party to the Contract and with the
American Arbitration Association, and a copy shall be filed with the
Architect.
4.6.3 A demand for arbitration shall be made within the time limits
specified in Subparagraphs 4.4.6 and 4.6.1 as applicable, and in other
cases within a reasonable time after the Claim has arisen, and in no event
shall it be made after the date when institution of legal or equitable
proceedings based on such Claim would be barred by the applicable statute
of limitations as determined pursuant to Paragraph 13.7.
4.6.4 Limitation on Consolidation or Joinder. Arbitration arising out of or
relating to the Contract may include, by consolidation or joinder or in any
other manner, the Architect, the Architect's employees or consultants. No
arbitration shall include, by consolidation or joinder or in any other
manner, parties other than the Owner, Contractor, Architect, a separate
contractor as described in Article 6 and other persons substantially
involved in a common question of fact or law whose presence is required if
complete relief is to be accorded in arbitration. No person or entity other
than the Owner, Contractors Architect or a separate contractor as described
in Article 6 shall be included as an original
<PAGE>
third party or additional third party to an arbitration whose interest or
responsibility is insubstantial. Consent to arbitration involving an
additional person or entity shall not constitute consent to arbitration of
a Claim not described therein or with a person or entity not named or
described therein. The foregoing agreement to arbitrate and other
agreements to arbitrate with an additional person or entity duly consented
to by parties to the Agreement shall be specifically enforceable under
applicable law in any court having jurisdiction thereof.
4.6.5 Claims and Timely Assertion of Claims. The party filing a notice of
demand for arbitration must assert in the demand all Claims then known to
that party on which arbitration is permitted to be demanded.
4.6.6 Judgment on Final Award. The award rendered by the arbitrator or
arbitrators shall be final, and judgment may be entered upon it m
accordance with applicable law in any court having jurisdiction thereof.
4.6.7 The prevailing party shall be entitled to recover its reasonable
attorneys' fees and expenses incurred in arbitration and/or litigation.
ARTICLE 5 SUBCONTRACTORS
5.1 DEFINITIONS
5.1.1 A Subcontractor is a person or entity who has a direct contract with
the Contractor to perform a portion of the Work at the site. The term
"Subcontractor" is referred to throughout the Contract Documents as if
singular in number and means a Subcontractor or an authorized
representative of the Subcontractor. The term "Subcontractor" does not
include a separate contractor or subcontractors of a separate contractor.
5.1.2 A Sub-subcontractor is a person or entity who has a direct or
indirect contract with a Subcontractor to perform a portion of the Work at
the site. The term "Sub-subcontractor" is referred to throughout the
Contract Documents as if singular in number and means a Sub-subcontractor
or an authorized representative of the Sub-subcontractor.
5.2 AWARD OF SUBCONTRACTS AND OTHER CONTRACTS FOR PORTIONS OF THE WORK
5.2.1 Unless otherwise stated in the Contract Documents or the bidding
requirements, the Contractor, as soon as practicable after award of the
Contract, shall furnish in writing to the Owner through the Architect the
names of persons or entities (including those who are to furnish materials
or equipment fabricated to a special design) proposed for each principal
portion of the Work. The Architect will promptly reply to the Contractor in
writing stating whether or not the Owner or the Architect, after due
investigation, has reasonable objection to any such proposed person or
entity. Failure of the Owner or Architect to reply promptly shall
constitute notice of no reasonable objection.
5.2.2 The Contractor shall not contract with a proposed person or entity to
whom the Owner or Architect has made reasonable and timely objection. The
Contractor shall not be required to contract with anyone to whom the
Contractor has made reasonable objection.
5.2.3 If the Owner or Architect has reasonable objection to a person or
entity proposed by the Contractor, the Contractor shall propose another to
whom the Owner or Architect has no reasonable objection. If the proposed
but rejected Subcontractor was reasonably capable of performing the Work,
the Contract Sum and Contract Time shall be increased or decreased by the
difference, if any, occasioned by such change, and an appropriate Change
Order shall be issued before commencement of the substitute Subcontractor's
Work.
5.2.4 The Contractor shall not change a Subcontractor, person or entity
previously selected if the Owner or Architect makes reasonable objection to
such substitute.
5.3 SUBCONTRACTUAL RELATIONS
5.3.1 By appropriate agreement, written where legally required for
validity, the Contractor shall require each Subcontractor, to the extent of
the Work to be performed by the Subcontractor, to be bound to the
Contractor by terms of the Contract Documents, and to assume toward the
Contractor all the obligations and responsibilities, including the
responsibility for safety of the Subcontractor's Work, which the
Contractor, by these Documents, assumes toward the Owner and Architect.
Each subcontract agreement shall preserve and protect the rights of the
Owner and Architect under the Contract Documents with respect to the Work
to be performed by the Subcontractor so that subcontracting thereof will
not prejudice such rights, and shall allow to the Subcontractor, unless
specifically provided otherwise in the subcontract agreement, the benefit
of all rights, remedies and redress against the Contractor that the
Contractor, by the Contract Documents, has against the Owner. Where
<PAGE>
appropriate, the Contractor shall require each Subcontractor to enter into
similar agreements with Sub-subcontractors. The Contractor shall make
available to each proposed Subcontractor, prior to the execution of the
subcontract agreement, copies of the Contract Documents to which the
Subcontractor will be bound, and, upon written request of the
Subcontractor, identify to the Subcontractor terms and conditions of the
proposed subcontract agreement which may be at variance with the Contract
Documents. Subcontractors will similarly make copies of applicable portions
of such documents available to their respective proposed
Sub-subcontractors.
5.4 CONTINGENT ASSIGNMENT OF SUBCONTRACTS
ARTICLE 6 CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS
6.1 OWNER'S RIGHT TO PERFORM CONSTRUCTION AND TO AWARD SEPARATE CONTRACTS
6.1.1 The Owner reserves the right to perform construction or operations
related to the Project with the Owner's own forces, and to award separate
contracts in connection with other portions of the Project or other
construction or operations on the site under Conditions of the Contract
identical or substantially similar to these including those portions
related to insurance and waiver of subrogation. If the Contractor claims
that delay or additional cost is involved because of such action by the
Owner, the Contractor shall make such Claim as provided in Paragraph 4.3.
6.1.2 When separate contracts are awarded for different portions of the
Project or other construction or operations on the site, the term
"Contractor" in the Contract Documents in each case shall mean the
Contractor who executes each separate Owner-Contractor Agreement.
6.1.3 The Owner shall provide for coordination of the activities of the
Owner's own forces and of each separate contractor with the Work of the
Contractor, who shall cooperate with them. The Contractor shall participate
with other separate contractors and the Owner in reviewing their
construction schedules when directed to do so. The Contractor shall make
any revisions to the construction schedule deemed necessary after a joint
review and mutual agreement. The construction schedules shall then
constitute the schedules to be used by the Contractor, separate contractors
and the Other until subsequently revised. The Contract Sum and Contract
Time shall be equitably adjusted for any charges arising from the
activities provided for in Paragraphs 6.1 and 6.2.
6.1.4 Unless otherwise provided in the Contract Documents, when the Owner
performs construction or operations related to the Project with the Owner's
own forces, the Owner shall be deemed to be subject to the same obligations
and to have the same rights which apply to the Contractor under the
Conditions of the Contract, including, without excluding others, those
stated in Article 3, this Article 6 and Articles 10, II and 12.
6.2 MUTUAL RESPONSIBILITY
6.2.1 The Contractor shall afford the Owner and separate contractors
reasonable opportunity for introduction and storage of their materials and
equipment and performance of their activities, and shall connect and
coordinate the Contractor's construction and operations with theirs as
required by the Contract Documents.
6.2.2 If part of the Contractor's Work depends for proper execution or
results upon construction or operations by the Owner or a separate
contractor, the Contractor shall, prior to proceeding with that portion of
the Work, promptly report to the Architect apparent discrepancies or
defects in such other construction that would render it unsuitable for such
proper execution and results. Failure of the Contractor so to report shall
constitute an acknowledgment that the Owner s or separate contractor's
completed or partially completed construction is fit and proper to receive
the Contractor's Work, except as to defects not then reasonably
discoverable.
<PAGE>
6.2.3 The Owner shall be reimbursed by the Contractor for costs incurred by
the Owner which are payable to a separate contractor because of delays,
improperly timed activities or defective construction of the Contractor.
The Owner shall be responsible to the Contractor for costs incurred by the
Contractor because of delays, improperly timed activities, damage to the
Work or defective construction of a separate contractor.
6.2.4 The Contractor shall promptly remedy damage wrongfully caused by the
Contractor to completed or partially completed construction or to property
of the Owner or separate contractors as provided in Subparagraph 10.2.5.
6.2.5 The Owner and each separate contractor shall have the same
responsibilities for cutting and patching as are described for the
Contractor in Subparagraph 3.14.
6.3 OWNER'S RIGHT TO CLEAN UP
6.3.1 If a dispute arises among the Contractor, separate contractors and
the Owner as to the responsibility under their respective contracts for
maintaining the premises and surrounding area free from waste materials and
rubbish, the Owner may clean up and the Architect will allocate the cost
among those responsible.
ARTICLE 7 CHANGES IN THE WORK
7.1 GENERAL
7.1.1 Changes in the Work may be accomplished after execution of the
Contract, and without invalidating the Contract, by Change Order,
Construction Change Directive or order for a minor change in the Work,
subject to the limitations stated in this Article 7 and elsewhere in the
Contract Documents.
7.1.2 A Change Order shall be based upon agreement among the Owner,
Contractor and Architect; a Construction Change Directive requires
agreement by the Owner and Architect and may or may not be agreed to by the
Contractor; an order for a minor change in the Work may be issued by the
Architect alone.
7.1.3 Changes in the Work shall be performed under applicable provisions of
the Contract Documents, and the Contractor shall proceed promptly, unless
otherwise provided in the Change Order, Construction Change Directive or
order for a minor change in the Work.
7.2 CHANGE ORDERS
7.2.1 A Change Order is a written instrument prepared by the Architect and
signed by the Owner, Contractor and Architect, stating their agreement upon
all of the following:
.1 change in the Work;
.2 the amount of the adjustment, if any, in the Contract Sum; and
.3 the extent of the adjustment, if any, in the Contract Time.
7.2.2 Methods used in determining adjustments to the Contract Sum may
include those listed in Subparagraph 7.3.3.
7.3 CONSTRUCTION CHANGE DIRECTIVES
7.3.1 A Construction Change Directive is a written order prepared by the
Architect and signed by the Owner and Architect, directing a change in the
Work prior to agreement on adjustment, if any, in the Contract Sum or
Contract Time, or both. The Owner may by Construction Change Directive,
without invalidating the Contract, order changes in the Work within the
general scope of the Contract consisting of additions, deletions or other
revisions, the Contract Sum and Contract Time being adjusted accordingly.
7.3.2 A Construction Change Directive shall be used in the absence of total
agreement on the terms of a Change Order.
7.3.3 If the Construction Change Directive provides for an adjustment to
the Contract Sum, the adjustment shall be based on one of the following
methods:
.1 mutual acceptance of a lump sum properly itemized and
supported by sufficient substantiating data to permit
evaluation;
.2 unit prices stated in the Contract Documents or subsequently
agreed upon;
.3 cost to be determined in a manner agreed upon by the parties
and a mutually acceptable fixed or percentage fee; or
.4 as provided in Subparagraph 7.3.6.
7.3.4 Upon receipt of a Construction Change Directive, the Contractor shall
promptly proceed with the change in the Work involved and advise the
Architect of the Contractor's agreement or disagreement with the method, if
any, provided in the Construction Change Directive for determining the
proposed adjustment in the Contract Sum or Contract Time.
7.3.5 A Construction Change Directive signed by the Contractor indicates
the agreement of the Contractor therewith, including adjustment in Contract
Sum and Contract Time or the method for determining them. Such agreement
shall be effective immediately and shall be recorded as a Change Order.
7.3.6 If the Contractor does not respond promptly or disagrees with the
method for adjustment in the Contract Sum, the method and the adjustment
shall be determined on the basis of reasonable expenditures and savings of
those performing the Work attributable to the change, including, in case of
an increase in the Contract Sum, a reasonable allowance for overhead and
profit. In such case, and also under Clause 7.3.3.3, the Contractor shall
keep and present, in such form as the Architect may prescribe, an itemized
accounting together with appropriate supporting data. Unless otherwise
provided in the Contract Documents, costs for the purposes of this
Subparagraph 7.3.6 shall be limited to the following:
.1 costs of labor, including social security, old age and
unemployment insurance, fringe benefits required by agreement
or custom, and workers' compensation insurance;
.2 costs of materials, supplies and equipment, including cost of
transportation, whether incorporated or consumed;
.3 rental costs of machinery and equipment, exclusive of hand
tools, whether rented from the Contractor or others;
.4 costs of premiums for all bonds and insurance, permit fees,
and sales, use or similar taxes related to the Work; and
.5 additional costs of supervision field office personnel and
field office costs directly attributable to the change.
7.3.7 The amount of credit to be allowed by the Contractor to the Owner for
a deletion or change which results in a net decrease in the Contract Sum
shall be actual net cost. When both additions and credits covering related
Work or substitutions are involved in a change, the allowance for overhead
and profit shall be figured on the basis of net increase, if any, with
respect to that change.
7.3.8 Pending final determination of the total cost of a Construction
Change Directive to the Owner, amounts not in dispute for such changes in
the Work shall be included in Applications for Payment accompanied by a
Change Order indicating the parties' agreement with part or all of such
costs. For any portion of such cost that remains in dispute, the Architect
will make an interim determination for purposes of monthly certification
for payment for those costs. That determination of cost shall adjust the
Contract Sum on the same basis as a Change Order, subject to the right of
either party to disagree and assert a claim in accordance with Article 4.
7.3.9 When the Owner and Contractor agree with the determination made by
the Architect concerning the adjustments in the Contract Sum and Contract
Time, or otherwise reach agreement upon the adjustments, such agreement
shall be effective immediately and shall be recorded by preparation and
execution of an appropriate Change Order.
<PAGE>
7.4 MINOR CHANGES IN THE WORK
7.4.1 The Architect will have authority to order minor changes in the Work
not involving adjustment in the Contract Sum or extension of the Contract
Time and not inconsistent with the intent of the Contract Documents. Such
changes shall be effected by written order and shall be binding on the
Owner and Contractor. The Contractor shall carry out such written orders
promptly.
ARTICLE 8 TIME
8.1 DEFINITIONS
8.1.1 Unless otherwise provided, Contract Time is the period of time,
including authorized adjustments, allotted in the Contract Documents for
Substantial Completion of the Work.
8.1.2 The date of commencement of the Work is the date established in the
Agreement.
8.1.3 The date of Substantial Completion is the date upon which the Work
has achieved the standards set forth in sub-paragraph 9.8.1.
8.1.4 The term "day" as used in the Contract Documents shall mean calendar
day unless otherwise specifically defined.
8.2 PROGRESS AND COMPLETION
8.2.1 Time limits stated in the Contract Documents are of the essence of
the Contract. By executing the Agreement the Contractor confirms that the
Contract Time is a reasonable period for performing the Work.
8.2.2 The Contractor shall not knowingly, except by agreement or
instruction of the Owner in writing, prematurely commence operations on the
site or elsewhere prior to the effective date of insurance required by
Article 11 to be furnished by the Contractor and Owner. The date of
commencement of the Work shall not be changed by the effective date of such
insurance. Unless the date of commencement is established by the Contract
Documents or a notice to proceed given by the Owner, the Contractor shall
notify the Owner in writing not less than five days or other agreed period
before commencing the Work to permit the timely filing of mortgages,
mechanic's liens and other security interests.
8.2.3 The Contractor shall proceed expeditiously with adequate forces and
shall achieve Substantial Completion within the Contract Time.
8.3 DELAYS AND EXTENSIONS OF TIME
8.3.1 If the Contractor is delayed at any time in the commencement or
progress of the Work by an act or neglect of the Owner or Architect, or of
an employee of either, or of a separate contractor employed by the Owner,
or by changes ordered in the Work, or by labor disputes, fire, unusual
delay in deliveries, unavoidable casualties or other causes beyond the
Contractor's control, or by delay authorized by the Owner pending mediation
and arbitration, or by other causes which the Architect determines may
justify delay, then the Contract Time shall be extended by Change Order for
such time as completion of the Work has been delayed.
8.3.2 Claims relating to time shall be made in accordance with applicable
provisions of Paragraph 4.3.
8.3.3 This Paragraph 8.3 does not preclude recovery of damages for
delay by either party under other provisions of the
Contract Documents.
ARTICLE 9 PAYMENTS AND COMPLETION
9.1 CONTRACT SUM
9.1.1 The Contract Sum is stated in the Agreement and, including authorized
adjustments or other amounts to which the Contractor may become entitled in
accordance with the terms hereof, is the total amount payable by the Owner
to the Contractor for performance of the Work under the Contract Documents.
9.2 SCHEDULE OF VALUES
9.2.1 Before the first Application for Payment, the Contractor shall submit
to the Architect a schedule of values allocated to various portions of the
Work, prepared in such form and supported by such data to substantiate its
accuracy as the Architect may
<PAGE>
reasonably require. This schedule, unless objected to by the Architect,
shall be used as a basis for reviewing the Contractor's Applications for
Payment.
9.3 APPLICATIONS FOR PAYMENT
9.3.1 At least ten days before the date established for each progress
payment, the Contractor shall submit to the Architect an itemized
Application for Payment for operations completed in accordance with the
schedule of values. Such application shall be notarized, if required, and
supported by such data substantiating the Contractor's right to payment as
the Owner or Architect may reasonably require, such as copies of
requisitions from Subcontractors and material suppliers, and reflecting
retainage if provided for in the Contract Documents.
9.3.1.1 As provided in Subparagraph 7.3.8, such applications may include
requests for payment on account of changes in the Work which have been
properly authorized by Construction Change Directives, or by interim
determinations of the Architect, but not yet included in Change Orders.
9.3.1.2 Such applications may not include requests for payment for portions
of the Work for which the Contractor does not intend to pay to a
Subcontractor or material supplier, unless such Work has been performed by
others whom the Contractor intends to pay or has been performed by the
Contractor.
9.3.2 Unless otherwise provided in the Contract Documents, payments shall
be made on account of materials and equipment delivered and suitably stored
at the site for subsequent incorporation in the Work. If approved in
advance by the Owner, payment may similarly be made for materials and
equipment suitably stored off the site at a location agreed upon in
writing. Payment for materials and equipment stored on or off the site
shall be conditioned upon compliance by the Contractor with procedures
satisfactory to the Owner to establish the Owner's title to such materials
and equipment or otherwise protect the Owner's interest, and shall include
the costs of applicable insurance, storage and transportation to the site
for such materials and equipment stored off the site.
9.3.3 The Contractor warrants that title to all Work covered by an
Application for Payment will pass to the Owner no later than the time of
payment. The Contractor further warrants that upon submittal of an
Application for Payment all Work for which Certificates for Payment have
been previously issued and payments received from the Owner shall, to the
best of the Contractor's knowledge, information and belief, except as the
Contractor may advise the Owner be free and clear of liens, claims,
security interests or encumbrances in favor of the Contractor,
Subcontractors, material suppliers, or other persons or entities making a
claim by reason of having provided labor, materials and equipment relating
to the Work.
9.4 CERTIFICATES FOR PAYMENT
9.4.1 The Architect will, within seven days after receipt of the
Contractor's Application for Payment, either issue to the Owner a
Certificate for Payment, with a copy to the Contractor, for such amount as
the Architect determines is properly due, or notify the Contractor and
Owner in writing of the Architect's reasons for withholding certification
in whole or in part as provided in Subparagraph 9.5.1.
9.4.2 The issuance of a Certificate for Payment will constitute a
representation by the Architect to the Owner, based on the Architect's
evaluation of the Work and the data comprising the Application for Payment,
that the Work has progressed to the point indicated and that, to the best
of the Architect's knowledge, information and belief, the quality of the
Work is in accordance with the Contract Documents. The foregoing
representations are subject to an evaluation of the Work for conformance
with the Contract Documents upon Substantial Completion, to results of
subsequent tests and inspections, to correction of minor deviations from
the Contract Documents prior to completion and to specific qualifications
expressed by the Architect. The issuance of a Certificate for Payment will
further constitute a representation that the Contractor is entitled to
payment in the amount certified. However, the issuance of a Certificate for
Payment will not be a representation that the Architect has (1) made
exhaustive or continuous on-site inspections to check the quality or
quantity of the Work, (2) reviewed construction means, methods, techniques,
sequences or procedures, (3) reviewed copies of requisitions received from
Subcontractors and material suppliers and other data requested by the Owner
to substantiate the Contractor's right to payment, or (4) made examination
to ascertain how or for what purpose the Contractor has used money
previously paid on account of the Contract Sum.
9.5 DECISIONS TO WITHHOLD CERTIFICATION
9.5.1 The Architect may withhold a Certificate for Payment in whole or in
part, to the extent reasonably necessary to protect the Owner, if the
representations to the Owner required by Subparagraph 9.4.2 cannot be made.
If the Architect is unable to certify payment in the amount of the
Application, the Architect will notify the Contractor and Owner as
<PAGE>
provided in Subparagraph 9.4.1. If the Contractor and Architect cannot
agree on a revised amount, the Architect will promptly issue a Certificate
for Payment for the amount for which the Architect is able to make such
representations to the Owner. The Architect may also withhold a Certificate
for Payment or, because of subsequently discovered evidence, may nullify
the whole or a part of a Certificate for Payment previously issued, to such
extent as may be necessary in the Architect's opinion to protect the Owner
from loss for which the Contractor is responsible, including loss resulting
from acts and omissions described in Subparagraph 3.3.2, because of:
.1 defective Work not remedied;
.2 third party claims filed or reasonable evidence indicating
probable filing of such claims unless security acceptable to
the Owner is provided by the Contractor;
.3 failure of the Contractor to make payments properly to
Subcontractors or for labor, materials or equipment;
.4 reasonable evidence that the Work cannot be completed for the
unpaid balance of the Contract Sum;
.5 damage to the Owner or another contractor;
.6 reasonable evidence that the Work will not be completed within
the Contract Time, and that the unpaid balance would not be
adequate to cover actual or liquidated damages for the
anticipated delay; or
.7 persistent failure to carry out the Work in accordance with
the Contract Documents.
9.5.2 When the above reasons for withholding certification are removed,
certification will be made for amounts previously withheld.
9.6 PROGRESS PAYMENTS
9.6.1 After the Architect has issued a Certificate for Payment, the Owner
shall make payment in the manner and within the time provided in the
Contract Documents, and shall so notify the Architect.
9.6.2 The Contractor shall promptly pay each Subcontractor, upon receipt of
payment from the Owner, out of the amount paid to the Contractor on account
of such Subcontractor's portion of the Work, the amount to which said
Subcontractor is entitled, reflecting percentages actually retained from
payments to the Contractor on account of such Subcontractor's portion of
the Work. The Contractor shall, by appropriate agreement with each
Subcontractor, require each Subcontractor to make payments to
Sub-subcontractors in a similar manner.
9.6.3 The Architect will, on request, furnish to a Subcontractor, if
practicable, information regarding percentages of completion or amounts
applied for by the Contractor and action taken thereon by the Architect and
Owner on account of portions of the Work done by such Subcontractor.
9.6.4 Neither the Owner nor Architect shall have an obligation to pay or to
see to the payment of money to a Subcontractor except as may otherwise be
required by law.
9.6.5 Payment to material suppliers shall be treated in a manner similar to
that provided in Subparagraphs 9.6.2, 9.6.3 and 9.6.4.
9.6.6 A Certificate for Payment, a progress payment, or partial or entire
use or occupancy of the Project by the Owner shall not constitute
acceptance of Work not in accordance with the Contract Documents.
9.6.7 Unless the Contractor provides the Owner with a payment bond in the
full penal sum of the Contract Sum, payments received by the Contractor for
Work properly performed by Subcontractors and suppliers shall be held by
the Contractor for those Subcontractors or suppliers who performed Work or
furnished materials, or both, under contract with the Contractor for which
payment was made by the Owner. Nothing contained herein shall require money
to be placed in a separate account and not commingled with money of the
Contractor, shall create any fiduciary liability or tort liability on the
part of the Contractor for breach of trust or shall entitle any person or
entity to an award of punitive damages against the Contractor for breach of
the requirements of this provision.
<PAGE>
9.7 FAILURE OF PAYMENT
9.7.1 If the Architect does not issue a Certificate for Payment, through no
fault of the Contractor, within seven days after receipt of the
Contractor's Application for Payment, or if the Owner does not pay the
Contractor within seven days after the date established in the Contract
Documents the amount certified by the Architect or awarded by arbitration,
then the Contractor may, upon three additional days' written notice to the
Owner and Architect, stop the Work until payment of the amount owing has
been received. The Contract Time shall be extended appropriately and the
Contract Sum shall be increased by the amount of the Contractor's
reasonable costs of shut-down, delay and start-up, plus interest as
provided for in the Contract Documents.
9.8 SUBSTANTIAL COMPLETION
9.8.1 Substantial Completion is the stage in the progress of the Work when
the Work or designated portion thereof is sufficiently complete in
accordance with the Contract Documents so that the Owner can occupy or
utilize the Work for its intended use.
9.8.2 When the Contractor considers that the Work, or a portion thereof
which the Owner agrees to accept separately, is substantially complete, the
Contractor shall notify the Architect. who shall prepare and submit to the
Architect a comprehensive list of items to be completed or corrected prior
to final payment. Failure to include an item on such list does not alter
the responsibility of the Contractor to complete all Work in accordance
with the Contract Documents.
9.8.3 The Architect will make an inspection to determine whether the Work
or designated portion thereof is substantially complete. If the Architect's
inspection discloses any item, whether or not included on the Contractor's
list, which is not sufficiently complete in accordance with the Contract
Documents so that the Owner can occupy or utilize the Work or designated
portion thereof for its intended use, the Contractor shall, before issuance
of the Certificate of Substantial Completion, complete or correct such item
upon notification by the Architect. In such case, the Contractor shall then
submit a request for another inspection by the Architect to determine
Substantial Completion.
9.8.4 When the Work or designated portion thereof is substantially
complete, the Architect will prepare a Certificate of Substantial
Completion which shall establish the date of Substantial Completion, shall
establish responsibilities of the Owner and Contractor for security,
maintenance, heat, utilities, damage to the Work and insurance, and shall
fix the time within which the Contractor shall finish all items on the list
accompanying the Certificate. Warranties required by the Contract Documents
shall commence on the date of Substantial Completion of the Work or
designated portion thereof unless otherwise provided in the Certificate of
Substantial Completion.
9.8.5 The Certificate of Substantial Completion shall be submitted to the
Owner and Contractor for their written acceptance of responsibilities
assigned to them in such Certificate. Upon such acceptance and consent of
surety, if any, the Owner shall make payment of retainage applying to such
Work or designated portion thereof. Such payment shall be adjusted for Work
that is incomplete or not in accordance with the requirements of the
Contract Documents.
9.9 PARTIAL OCCUPANCY OR USE
9.9.1 The Owner may occupy or use any completed or partially completed
portion of the Work at any stage when such portion is designated by
separate agreement with the Contractor, provided such occupancy or use is
consented to by the insurer as required under Clause 11.4.1.5 and
authorized by public authorities having jurisdiction over the Work. Such
partial occupancy or use may commence whether or not the portion is
substantially complete, provided the Owner and Contractor have accepted in
writing the responsibilities assigned to each of them for payments,
retainage, if any, security, maintenance, heat, utilities, damage to the
Work and insurance, and have agreed in writing concerning the period for
correction of the Work and commencement of warranties required by the
Contract Documents. When the Contractor considers a portion substantially
complete, the Contractor shall notify the Architect who shall prepare and
submit a list to the Architect as provided under Subparagraph 9.8.2.
Consent of the Contractor to partial occupancy or use shall not be
unreasonably withheld. The stage of the progress of the Work shall be
determined by written agreement between the Owner and Contractor or, if no
agreement is reached, by decision of the Architect.
9.9.2 Immediately prior to such partial occupancy or use, the Owner,
Contractor and Architect shall jointly inspect the area to be occupied or
portion of the Work to be used in order to determine and record the
condition of the Work.
9.9.3 Unless otherwise agreed upon, partial occupancy or use of a portion
or portions of the Work shall not constitute acceptance of Work not
complying with the requirements of the Contract Documents.
<PAGE>
9.10 FINAL COMPLETION AND FINAL PAYMENT
9.10.1 Upon receipt of written notice that the Work is ready for final
inspection and acceptance and upon receipt of a final Application for
Payment, the Architect will promptly make such inspection and, if the Work
is acceptable under the Contract Documents and the Contract fully
performed, the Architect will promptly issue a final Certificate for
Payment stating that to the best of the Architect's knowledge, information
and belief, and on the basis of the Architect's on-site visits and
inspections, the Work has been completed in accordance with terms and
conditions of the Contract Documents and that the entire balance found to
be due the Contractor and noted in the final Certificate is due and
payable. The Architect's final Certificate for Payment will constitute a
further representation that conditions listed in Subparagraph 9.10.2 as
precedent to the Contractor's being entitled to final payment have been
fulfilled.
9.10.2 Neither final payment nor any remaining retained percentage shall
become due until the Contractor submits to the Architect (1) an affidavit
that payrolls, bills for materials and equipment, and other indebtedness
connected with the Work for which the Owner or the Owner's property might
be responsible or encumbered (less amounts withheld by Owner) have been
paid or otherwise satisfied, (2) a certificate evidencing that insurance
required by the Contract Documents to remain in force after final payment
is currently in effect and will not be canceled or allowed to expire until
at least 30 days' prior written notice has been given to the Owner, (3) a
written statement that the Contractor knows of no substantial reason that
the insurance will not be renewable to cover the period required by the
Contract Documents, (4) consent of surety, if any, to final payment and
(5), if required by the Owner, other data establishing payment or
satisfaction of obligations, such as receipts, releases and waivers of
liens, claims, security interests or encumbrances arising out of the
Contract, to the extent and in such form as may be designated by the Owner.
If a Subcontractor refuses to furnish a release or waiver required by the
Owner, the Contractor may furnish a bond satisfactory to the Owner to
indemnify the Owner against such lien. If such lien remains unsatisfied
after payments are made, the Contractor shall refund to the Owner all money
that the Owner may be compelled to pay in discharging such lien, including
all costs and reasonable attorneys' fees.
9.10.3 If, after Substantial Completion of the Work, final completion
thereof is materially delayed through no fault of the Contractor or by
issuance of Change Orders affecting final completion,
and-the-Afehiteet-se-ees4ifess the Owner shall, upon application by the
Contractor and certification by the Architect, and without terminating the
Contract, make payment of the balance due for that portion of the Work
fully completed and accepted. If the remaining balance for Work not fully
completed or corrected is less than retainage stipulated in the Contract
Documents, and if bonds have been furnished, the written consent of surety
to payment of the balance due for that portion of the Work fully completed
and accepted shall be submitted by the Contractor to the Architect prior to
certification of such payment. Such payment shall be made under terms and
conditions governing final payment, except that it shall not constitute a
waiver of claims. 9.10.4 The making of final payment shall constitute a
waiver of Claims by the Owner except those arising from:
.1 liens, Claims, security interests or encumbrances arising out of
the Contract and unsettled; .2 failure of the Work to comply with
the requirements of the Contract Documents; or .3 terms of special
warranties required by the Contract Documents.
9.10.5 Acceptance of final payment by the Contractor, a Subcontractor or
material supplier shall not constitute a waiver of claims previously made
in writing except as identified by that payee as settled or waived at the
time of final Application for Payment.
ARTICLE 10 PROTECTION OF PERSONS AND PROPERTY
10.1 SAFETY PRECAUTIONS AND PROGRAMS
10.1.1 The Contractor shall be responsible for initiating, maintaining and
supervising all safety precautions and programs in connection with the
performance of the Contract.
10.2 SAFETY OF PERSONS AND PROPERTY
10.2.1 The Contractor shall take reasonable precautions for safety of, and
shall provide reasonable protection to prevent damage, injury or loss to:
<PAGE>
.1 employees on the Work and other persons who may be affected
thereby;
.2 the Work and materials and equipment to be incorporated
therein, whether in storage on or off the site, under care,
custody or control of the Contractor or the Contractor's
Subcontractors or Sub-subcontractors; and
.3 other property at the site or adjacent thereto, such as trees,
shrubs, lawns, walks, pavements, roadways, structures and
utilities not designated for removal, relocation or
replacement in the course of construction.
10.2.2 The Contractor shall give notices and comply with applicable laws,
ordinances, rules, regulations and lawful orders of public authorities
bearing on safety of persons or property or their protection from damage,
injury or loss.
10.2.3 The Contractor shall erect and maintain, as required by existing
conditions and performance of the Contract, reasonable safeguards for
safety and protection, including posting danger signs and other warnings
against hazards, promulgating safety regulations and notifying owners and
users of adjacent sites and utilities.
10.2.4 When use or storage of explosives or other hazardous materials or
equipment or unusual methods are necessary for execution of the Work, the
Contractor shall exercise utmost care and carry on such activities under
supervision of properly qualified personnel.
10.2.5 The Contractor shall promptly remedy damage and loss (other than
damage or loss insured under property insurance required by the Contract
Documents) to property referred to in Clauses 10.2.1.2 and 10.2.1.3 caused
in whole or in part by the Contractor, a Subcontractor, a
Sub-subcontractor, or anyone directly or indirectly employed by any of
them, or by anyone for whose. acts they may be liable and for which the
Contractor is responsible under Clauses 10.2.1.2 and 10.2.1.3, except
damage or loss attributable to acts or omissions of the Owner or Architect
or anyone directly or indirectly employed by either of them, or by anyone
for whose acts either of them may be liable, and not attributable to the
fault or negligence of the Contractor. The foregoing obligations of the
Contractor are in addition to the Contractor's obligations under Paragraph
3.18.
10.2.6 The Contractor shall designate a responsible member of the
Contractor's organization at the site whose duty shall be the prevention of
accidents. This person shall be the Contractor's superintendent unless
otherwise designated by the Contractor in writing to the Owner and
Architect.
10.2.7 The Contractor shall not load or permit any part of the construction
or site to be loaded so as to endanger its safety.
10.3 HAZARDOUS MATERIALS
10.3.1 If reasonable precautions will be inadequate to prevent foreseeable
bodily injury or death to persons resulting from a material or substance,
including but not limited to asbestos or polychlorinated biphenyl (PCB),
encountered on the site by the Contractor, the Contractor shall, upon
recognizing the condition, immediately stop Work in the affected area and
report the condition to the Owner and Architect in writing.
10.3.2 The Owner shall obtain the services of a licensed laboratory to
verify the presence or absence of the material or substance reported by the
Contractor and, in the event such material or substance is found to be
present, to verify that it has been rendered harmless. Unless otherwise
required by the Contract Documents, the Owner shall furnish in writing to
the Contractor and Architect the names and qualifications of persons or
entities who are to perform tests verifying the presence or absence of such
material or substance or who are to perform the task of removal or safe
containment of such material or substance. The Contractor and the Architect
will promptly reply to the Owner in writing stating whether or not either
has reasonable objection to the persons or entities proposed by the Owner.
If either the Contractor or Architect has an objection to a person or
entity proposed by the Owner, the Owner shall propose another to whom the
Contractor and the Architect have no reasonable objection. When the
material or substance has been rendered harmless, Work in the affected area
shall resume upon written agreement of the Owner and Contractor. The
Contract Time shall be extended appropriately and the Contract Sum shall be
increased in the amount of the Contractor's reasonable additional costs of
shut-down, delay and start-up, which adjustments shall be accomplished as
provided in Article 7.
10.3.3 To the fullest extent permitted by law, the Owner shall indemnify
and hold harmless the Contractor, Subcontractors, Architect, Architect's
consultants and agents and employees of any of them from and against
claims, damages, losses and expenses, including but not limited to
attorneys' fees, arising out of or resulting from performance of the Work
in the affected
<PAGE>
area if in fact the material or substance presents the risk of bodily
injury or death as described in Subparagraph 10.3.1 and has not been
rendered harmless, provided that such claim, damage, loss or expense is
attributable to bodily injury, sickness, disease or death, or to injury to
or destruction of tangible property (other than the Work itself) and
provided that such damage, loss or expense is not due to the sole
negligence of a party seeking indemnity.
10.4 The Owner shall not be responsible under Paragraph 10.3 for materials
and substances brought to the site by the Contractor unless such materials
or substances were required by the Contract Documents.
10.5 If, without negligence on the part of the Contractor, the Contractor
is held liable for the cost of remediation of a hazardous material or
substance solely by reason of performing Work as required by the Contract
Documents, the Owner shall indemnify the Contractor for all cost and
expense thereby incurred.
10.6 EMERGENCIES
10.6.1 In an emergency affecting safety of persons or property, the
Contractor shall act, at the Contractor's discretion, to prevent threatened
damage, injury or loss. Additional compensation or extension of time
claimed by the Contractor on account of an emergency shall be determined as
provided in Paragraph 4.3 and Article 7.
ARTICLE 11 INSURANCE AND BONDS
11.1 CONTRACTOR'S LIABILITY INSURANCE
11.1.1 The Contractor shall purchase from and maintain in a company or
companies lawfully authorized to do business in the jurisdiction in which
the Project is located such insurance as will protect the Contractor from
claims set forth below which may arise out of or result from the
Contractor's operations under the Contract and for which the Contractor may
be legally liable, whether such operations be by the Contractor or by a
Subcontractor or by anyone directly or indirectly employed by any of them,
or by anyone for whose acts any of them may be liable:
.1 claims under workers' compensation, disability benefit and
other similar employee benefit acts which are applicable to
the Work to be performed;
.2 claims for damages because of bodily injury, occupational
sickness or disease, or death of the Contractor's
employees;
.3 claims for damages because of bodily injury, sickness or
disease, or death of any person other than the Contractor's
employees;
.4 claims for damages insured by usual personal injury liability
coverage;
.5 claims for damages, other than to the Work itself, because of
injury to or destruction of tangible property, including loss
of use resulting therefrom;
.6 claims for damages because of bodily injury, death of a person
or property damage arising out of ownership, maintenance or
use of a motor vehicle'
.7 claims for bodily injury or property damage arising out of
completed operations; and
.8 claims involving contractual liability insurance applicable to
the Contractor's obligations under Paragraph 3.18.
11.1.2 The insurance required by Subparagraph 11.1.1 shall be written for not
less than the following limits:
Insert B: Per Occurrence Aggregate
Insert C: Workmen's Compensation Statutory Statutory
Insert D: Personal Injury $ $
Insert E: Property Damage $ $
Insert F: Automobile $ $
Insert G: Excess $ $
11.1.3 Certificates of insurance acceptable to the Owner shall be filed
with the Owner prior to commencement of the Work. These certificates and
the insurance policies required by this Paragraph 11.1 shall contain a
provision requiring the agent or company to furnish at least 30 days' prior
written notice of cancellation or expiration to the Owner. If any of the
foregoing insurance coverages are required to remain in force after final
payment and are reasonably available, an additional certificate evidencing
continuation of such coverage shall be submitted with the final Application
for Payment as required by Subparagraph 9.10.2. Information concerning
reduction of coverage on account of revised limits or claims paid under the
General Aggregate, or both, shall be furnished by the Contractor with
reasonable promptness in accordance with the Contractor's information and
belief.
11.2 OWNER'S LIABILITY INSURANCE
11.2.1 The Owner shall be responsible for purchasing and maintaining the
Owner's usual liability insurance.
11.3 PROJECT MANAGEMENT PROTECTIVE LIABILITY INSURANCE
11.3.1 Optionally, the Owner may require the Contractor to purchase and
maintain Project Management Protective Liability insurance from the
Contractor's usual sources as primary coverage for the Owner's,
Contractor's and Architect's vicarious liability for construction
operations under the Contract. Unless otherwise required by the Contract
Documents, the Owner shall reimburse the Contractor by increasing the
Contract Sum to pay the cost of purchasing and maintaining such optional
insurance coverage, and the Contractor shall not be responsible for
purchasing any other liability insurance on behalf of the Owner. The
minimum limits of liability purchased with such coverage shall be equal to
the aggregate of the limits required for Contractor's Liability Insurance
under Clauses 11.1.1.2 through 11.1.1.5.
11.3.2 To the extent damages are covered by Project Management Protective
Liability insurance, the Owner, Contractor and Architect waive all rights
against each other for damages, except such rights as they may have to the
proceeds of such insurance.
The policy shall provide for such waivers of subrogation by endorsement or
otherwise.
11.3.3 The Owner shall not require the Contractor to include the Owner,
Architect or other persons or entities as additional insureds on the
Contractor's Liability Insurance coverage under Paragraph 11.1.
11.4 PROPERTY INSURANCE
11.4.1 Unless otherwise provided, the Owner shall purchase and maintain, in
a company or companies lawfully authorized to do business in the
jurisdiction in which the Project is located, property insurance written on
a builder's risk "all-risk" or equivalent policy form in the amount of the
initial Contract Sum, plus value of subsequent Contract modifications and
cost of materials supplied or installed by others, comprising total value
for the entire Project at the site on a replacement cost basis without
optional deductibles. Such property insurance shall be maintained, unless
otherwise provided in the Contract Documents or otherwise agreed in writing
by all persons and entities who are beneficiaries of such insurance, until
final payment has been made as provided in Paragraph 9.10 or until no
person or entity other than the Owner has an insurable interest in the
property required by this Paragraph 11.4 to be covered, whichever is later.
This insurance shall include interests of the Owner, the Contractor,
Subcontractors and Sub-subcontractors in the Project.
11.4.1.1 Property insurance shall be on an "all-risk" or equivalent policy
form and shall include, without limitation, insurance against the perils of
fire (with extended coverage) and physical loss or damage including,
without duplication of coverage, theft, vandalism, malicious mischief,
collapse, earthquake, flood, windstorm, falsework, testing and startup,
temporary buildings and debris removal including demolition occasioned by
enforcement of any applicable legal requirements, and shall cover
reasonable compensation for Architect's and Contractor's services and
expenses required as a result of such insured loss.
11.4.1.2 If the Owner does not intend to purchase such property insurance
required by the Contract and with all of the coverages in the amount
described above, the Owner shall so inform the Contractor in writing prior
to commencement of the Work. The Contractor may then effect insurance which
will protect the interests of the Contractor, Subcontractors and
Sub-subcontractors in the Work, and by appropriate Change Order the cost
thereof shall be charged to the Owner. If the Contractor is damaged by the
failure or neglect of the Owner to purchase or maintain insurance as
described above, without so notifying the Contractor in writing, then the
Owner shall bear all reasonable costs properly attributable thereto.
11.4.1.3 If the property insurance requires deductibles, the Owner shall
pay costs not covered because of such deductibles.
<PAGE>
11.4.1.4 This property insurance shall cover portions of the Work stored
off the site, and also portions of the Work in transit.
11.4.1.5 Partial occupancy or use in accordance with Paragraph 9.9 shall
not commence until the insurance company or companies providing property
insurance have consented to such partial occupancy or use by endorsement or
otherwise. The Owner and the Contractor shall take reasonable steps to
obtain consent of the insurance company or companies and shall, without
mutual written consent, take no action with respect to partial occupancy or
use that would cause cancellation, lapse or reduction of insurance.
11.4.2 Boiler and Machinery Insurance. The Owner shall purchase and
maintain boiler and machinery insurance required by the Contract Documents
or by law, which shall specifically cover such insured objects during
installation and until final acceptance by the Owner; this insurance shall
include interests of the Owner, Contractor, Subcontractors and
Sub-subcontractors in the Work, and the Owner and Contractor shall be named
insureds.
11.4.3 Loss of Use Insurance. The Owner, at the Owner's option, may
purchase and maintain such insurance as will insure the Owner against loss
of use of the Owner's property due to fire or other hazards, however
caused. The Owner waives all rights of action against the Contractor for
loss of use of the Owner's property, including consequential losses due to
fire or other hazards however caused.
11.4.4 If the Contractor requests in writing that insurance for risks other
than those described herein or other special causes of loss be included in
the property insurance policy, the Owner shall, if possible, include such
insurance, and the cost thereof shall be charged to the Contractor by
appropriate Change Order.
*
11.4.5 If during the Project construction period the Owner insures
properties, real or personal or both, at or adjacent to the site by
property insurance under policies separate from those insuring the Project,
or if after final payment property insurance is to be provided on the
completed Project through a policy or policies other than those insuring
the Project during the construction period, the Owner shall waive all
rights in accordance with the terms of Subparagraph 11.4.7 for damages
caused by fire or other causes of loss covered by this separate property
insurance. All separate policies shall provide this waiver of subrogation
by endorsement or otherwise.
11.4.6 Before an exposure to loss may occur, the Owner shall file with the
Contractor a copy of each policy that includes insurance coverages required
by this Paragraph 11.4. Each policy shall contain all generally applicable
conditions, definitions, exclusions and endorsements related to this
Project. Each policy shall contain a provision that the policy will not be
canceled or allowed to expire, and that its limits will not be reduced,
until at least 30 days' prior written notice has been given to the
Contractor.
11.4.7 Waivers of Subrogation. The Owner and Contractor waive all rights
against (1) each other and any of their subcontractors, sub-subcontractors,
agents and employees, each of the other, and (2) the Architect, Architect's
consultants, separate contractors described in Article 6, if any, and any
of their subcontractors, sub-subcontractors, agents and employees, for
damages caused by fire or other causes of loss to the extent covered by
property insurance obtained pursuant to this Paragraph 11.4 or other
property insurance applicable to the Work, except such rights as they have
to proceeds of such insurance held by the Owner as fiduciary. The Owner or
Contractor, as appropriate, shall require of the Architect, Architect's
consultants, separate contractors described in Article 6, if any, and the
subcontractors, sub-subcontractors, agents and employees of any of them, by
appropriate agreements, written where legally required for validity,
similar waivers each in favor of other parties enumerated herein. The
policies shall provide such waivers of subrogation by endorsement or
otherwise. A waiver of subrogation shall be effective as to a person or
entity even though that person or entity would otherwise have a duty of
indemnification, contractual or otherwise, did not pay the insurance
premium directly or indirectly, and whether or not the person or entity had
an insurable interest in the property damaged.
11.4.8 A loss insured under Owner's property insurance shall be adjusted by
the Owner as fiduciary and made payable to the Owner as fiduciary for the
insureds, as their interests may appear, subject to requirements of any
applicable mortgagee clause and of Subparagraph 11.4.10. The Contractor
shall pay Subcontractors their just shares of insurance proceeds received
by the Contractor, and by appropriate agreements, written where legally
required for validity, shall require Subcontractors to make payments to
their Sub-subcontractors in similar manner.
11.4.9 If required in writing by a party in interest, the Owner as
fiduciary shall, upon occurrence of an insured loss, give bond for proper
performance of the Owner's duties. The cost of required bonds shall be
charged against proceeds received as fiduciary. The Owner shall deposit in
a separate account proceeds so received, which the Owner shall distribute
in accordance with such agreement as the parties in interest may reach, or
in accordance with an arbitration award in which case the procedure shall
be as provided in Paragraph 4.6. If after such loss no other special
agreement is made and unless the Owner terminates the Contract for
convenience, replacement of damaged property shall be performed by the
Contractor after notification of a Change in the Work in accordance with
Article 7.
11.4.10 The Owner as fiduciary shall have power to adjust and settle a loss
with insurers unless one of the parties in interest shall object in writing
within five days after occurrence of loss to the Owner's exercise of this
power; if such objection is made, the dispute shall be resolved as provided
in Paragraphs 4.5 and 4.6. The Owner as fiduciary shall, in the case of
arbitration, make settlement with insurers in accordance with directions of
the arbitrators. If distribution of insurance proceeds by arbitration is
required, the arbitrators will direct such distribution.
11.5 PERFORMANCE BOND AND PAYMENT BOND
11.5.1 The Owner shall have the right to require the Contractor to furnish
bonds covering faithful performance of the Contract and payment of
obligations arising thereunder as stipulated in bidding requirements or
specifically required in the Contract Documents on the date of execution of
the Contract. The cost of such bonds shall be added to the Contract Sum.
11.5.2 Upon the request of any person or entity appearing to be a potential
beneficiary of bonds coveting payment of obligations arising under the
Contract, the Contractor shall promptly furnish a copy of the bonds or
shall permit a copy to be made.
ARTICLE 12 UNCOVERING AND CORRECTION OF WORK
12.1 UNCOVERING OF WORK
12.1.1 If a portion of the Work is covered contrary to the Architect's
request or to requirements specifically expressed in the Contract
Documents, it must, if required in writing by the Architect, be uncovered
for the Architect's examination and be replaced at the Contractor's expense
without change in the Contract Time.
12.1.2 If a portion of the Work has been covered which the Architect has
not specifically requested to examine prior to its being covered, the
Architect may request to see such Work and it shall be uncovered by the
Contractor. If such Work is in accordance with the Contract Documents,
costs of uncovering and replacement shall, by appropriate Change Order, be
at the Owner's expense. If such Work is not in accordance with the Contract
Documents, correction shall be at the Contractor's expense unless the
condition was caused by the Owner or a separate contractor in which event
the Owner shall be responsible for payment of such costs.
12.2 CORRECTION OF WORK
12.2.1 BEFORE OR AFTER SUBSTANTIAL COMPLETION
12.2.1.1 The Contractor shall promptly correct Work rejected by the
Architect or failing to conform to the requirements of the Contract
Documents, whether discovered before or after Substantial Completion and
whether or not fabricated, installed or completed. Costs of correcting such
rejected Work, including additional testing and inspections and
compensation for the Architect's services and expenses made necessary
thereby, shall be at the Contractor's expense.
12.2.2 AFTER SUBSTANTIAL COMPLETION
12.2.2.1 In addition to the Contractor's obligations under Paragraph 3.5,
if, within one year after the date of Substantial Completion of the Work or
designated portion thereof or after the date for commencement of warranties
established under Subparagraph 9.9.1, or by terms of an applicable special
warranty required by the Contract Documents, any of the Work is found to be
not in accordance with the requirements of the Contract Documents, the
Contractor shall correct it promptly after receipt of written notice from
the Owner to do so unless the Owner has previously given the Contractor a
written acceptance of such condition. The Owner shall give such notice
promptly after discovery of the condition. During the one-year period for
correction of Work, if the Owner fails to notify the Contractor and give
the Contractor an opportunity to make the correction, the Owner waives the
rights to require correction by the Contractor and to make a claim for
breach of warranty. If the Contractor fails to correct nonconforming Work
within a reasonable time during that period after receipt of notice from
the Owner or Architect, the Owner may correct it in accordance with
Paragraph 2.4.
12.2.2.2 The one-year period for correction of Work shall be extended with
respect to portions of Work first performed after Substantial Completion by
the period of time between Substantial Completion and the actual
performance of the Work.
12.2.2.3 The one-year period for correction of Work shall not be extended
by corrective Work performed by the Contractor pursuant to this Paragraph
12.2.
12.2.3 The Contractor shall remove from the site portions of the Work which
are not in accordance with the requirements of the Contract Documents and
are neither corrected by the Contractor nor accepted by the Owner.
12.2.4 The Contractor shall bear the cost of correcting destroyed or
damaged construction, whether completed or partially completed, of the
Owner or separate contractors caused by the Contractor's correction or
removal of Work which is not in accordance with the requirements of the
Contract Documents.
12.2.5 Nothing contained in this Paragraph 12.2 shall be construed to
establish a period of limitation with respect to other obligations which
the Contractor might have under the Contract Documents. Establishment of
the one-year period for correction of Work as described in Subparagraph
12.2.2 relates only to the specific obligation of the Contractor to correct
the Work, and has no relationship to the time within which the obligation
to comply with the Contract Documents may be sought to be enforced, nor to
the time within which proceedings may be commenced to establish the
Contractor's liability with respect to the Contractor's obligations other
than specifically to correct the Work.
12.3 ACCEPTANCE OF NONCONFORMING WORK
12.3.1 If the Owner prefers to accept Work which is not in accordance with
the requirements of the Contract Documents, the Owner may do so instead of
requiring its removal and correction, in which case the Contract Sum may be
reduced as appropriate and equitable. Such adjustment shall be effected
whether or not final payment has been made.
ARTICLE 13 MISCELLANEOUS PROVISIONS
13.1 GOVERNING LAW
13.1.1 The Contract shall be governed by the law of the Commonwealth of
Massachusetts.
13.2 SUCCESSORS AND ASSIGNS
13.2.1 The Owner and Contractor respectively bind themselves, their
partners, successors, assigns and legal representatives to the other party
hereto and to partners, successors, assigns and legal representatives of
such other party .in respect to covenants, agreements and obligations
contained in the Contract Documents. Except as provided in Subparagraph
13.2.2, neither party to the Contract shall assign the Contract as a whole
without written consent of the other. If either party attempts to make such
an assignment without such consent, that party shall nevertheless remain
legally responsible for all obligations under the Contract.
13.2.2 The Owner may, without consent of the Contractor, assign the
Contract to an institutional lender providing construction financing for
the Project. In such event, the lender shall assume the Owner's rights and
obligations under the Contract Documents. The Contractor shall execute all
consents reasonably required to facilitate such assignment. but without
waiving or reducing the Contractor's rights under the Contract Documents.
13.3 WRITTEN NOTICE
13.3.1 Written notice shall be deemed to have been duly served if delivered
in person to the individual or a member of the firm or entity or to an
officer of the corporation for which it was intended, or if delivered at or
sent by registered or certified mail to the last business address known to
the party giving notice.
13.4 RIGHTS AND REMEDIES
13.4.1 Duties and obligations imposed by the Contract Documents and rights
and remedies available thereunder shall be in addition to and not a
limitation of duties, obligations, rights and remedies otherwise imposed or
available by law.
13.4.2 No action or failure to act by the Owner, Architect or Contractor
shall constitute a waiver of a right or duty afforded them under the
Contract, nor shall such action or failure to act constitute approval of or
acquiescence in a breach thereunder, except as may be specifically agreed
in writing.
13.5 TESTS AND INSPECTIONS
<PAGE>
13.5.1 Tests, inspections and approvals of portions of the Work required by
the Contract Documents or by laws, ordinances, rules, regulations or orders
of public authorities having jurisdiction shall be made at an appropriate
time. Unless otherwise provided, the Contractor shall make arrangements for
such tests, inspections and approvals with an independent testing
laboratory or entity acceptable to the Owner, or with the appropriate
public authority, and shall bear all related costs of tests, inspections
and approvals. The Contractor shall give the Architect timely notice of
when and where tests and inspections are to be made so that the Architect
may be present for such procedures. The Owner shall bear costs of tests,
inspections or approvals which do not become requirements until after bids
are received or negotiations concluded.
13.5.2 If the Architect, Owner or public authorities having jurisdiction
determine that portions of the Work require additional testing, inspection
or approval not included under Subparagraph 13.5.1, the Architect will,
upon written authorization from the Owner, instruct the Contractor to make
arrangements for such additional testing, inspection or approval by an
entity acceptable to the Owner, and the Contractor shall give timely notice
to the Architect of when and where tests and inspections are to be made so
that the Architect may be present for such procedures. Such costs, except
as provided in Subparagraph 13.5.3, shall be at the Owner's expense.
13.5.3 If such procedures for testing, inspection or approval under
Subparagraphs 13.5.1 and 13.5.2 reveal failure of the portions of the Work
to comply with requirements established by the Contract Documents, all
costs made necessary by such failure including those of repeated procedures
and compensation for the Architect's services and expenses shall be at the
Contractor's expense.
13.5.4 Required certificates of testing, inspection or approval shall,
unless otherwise required by the Contract Documents, be secured by the
Contractor and promptly delivered to the Architect.
13.5.5 If the Architect is to observe tests, inspections or approvals
required by the Contract Documents, the Architect will do so promptly and,
where practicable, at the normal place of testing.
13.5.6 Tests or inspections conducted pursuant to the Contract Documents
shall be made promptly to avoid unreasonable delay in the Work.
13.6 INTEREST
13.6.1 Payments due and unpaid under the Contract Documents shall bear
interest from the date payment is due at such rate as the parties may agree
upon in writing or, in the absence thereof, at the legal rate prevailing
from time to time at the place where the Project is located.
13.7 COMMENCEMENT OF STATUTORY LIMITATION PERIOD 13.7.1 As between the
Owner and Contractor:
.1 Before Substantial Completion. As to acts or failures to act
occurring prior to the relevant date of Substantial
Completion, any applicable statute of limitations shall
commence to run and any alleged cause of action shall be
deemed to have accrued in any and all events not later than
such date of Substantial Completion;
2. (Intentionally Omitted)
3. After Substantial Completion. As to acts or failures to act
occurring on or after the relevant date of Substantial
Completion, any applicable statute of limitations shall
commence to run and any alleged cause of action shall be
deemed to have accrued in any and all events not later than
the date of any act or failure to act by the Contractor or
Owner.
ARTICLE 14 TERMINATION OR SUSPENSION OF THE CONTRACT
<PAGE>
14.1 TERMINATION BY THE CONTRACTOR
14.1.1 The Contractor may terminate the Contract if the Work is stopped for
a period of 30 consecutive days through no act or fault of the Contractor
or a Subcontractor, Sub-subcontractor or their agents or employees or any
other persons or entities performing portions of the Work under direct or
indirect contract with the Contractor, for any of the following reasons:
.1 issuance of an order of a court or other public authority
having jurisdiction which requires all Work to be stopped;
.2 an act of government, such as a declaration of national
emergency which requires all Work to be stopped;
.3 because the Architect has not issued a Certificate for Payment
and has not notified the Contractor of the reason for
withholding certification as provided in Subparagraph 9.4.1,
or because the Owner has not made payment on a Certificate for
Payment within the time stated in the Contract Documents; or
.4 the Owner has failed to furnish to the Contractor promptly,
upon the Contractor's request, reasonable evidence as required
by Subparagraph 2.2.1; or
.5 The Owner has failed to provide information, make decisions,
or furnish information required by the Contract Documents, or
otherwise is guilty of a substantial breach of the Contract
Documents.
14.1.2 The Contractor may terminate the Contract if, through no act or
fault of the Contractor or a Subcontractor, Sub-subcontractor or their
agents or employees or any other persons or entities performing portions of
the Work under direct or indirect contract with the Contractor, repeated
suspensions, delays or interruptions of the entire Work by the Owner as
described in Paragraph 14.3 constitute in the aggregate more than 100
percent of the total number of days scheduled for completion, or 120 days
in any 365-day period, whichever is less.
14.1.3 If one of the reasons described in Subparagraph 14.1.1 or 14.1.2
exists, the Contractor may, upon seven days' written notice to the Owner
and Architect, terminate the Contract and recover from the Owner payment
for Work executed and for proven loss with respect to materials, equipment,
tools, and construction equipment and machinery, including reasonable
overhead, profit and damages.
14.1.4 If the Work is stopped for a period of 60 consecutive days through
no act or fault of the Contractor or a Subcontractor or their agents or
employees or any other persons performing portions of the Work under
contract with the Contractor because the Owner has persistently failed to
fulfill the Owner's obligations under the Contract Documents with respect
to matters important to the progress of the Work, the Contractor may, upon
seven additional days' written notice to the Owner and the Architect,
terminate the Contract and recover from the Owner as provided in
Subparagraph 14.1.3.
14.2 TERMINATION BY THE OWNER FOR CAUSE
14.2.1 The Owner may terminate the Contract if the Contractor:
.1 persistently or repeatedly refuses or fails to supply enough
properly skilled workers or proper materials;
.2 fails to make payment to Subcontractors for materials or labor
in accordance with the respective agreements between the
Contractor and the Subcontractors;
.3 persistently disregards laws, ordinances, or rules,
regulations or orders of a public authority having
jurisdiction; or
.4 otherwise is guilty of substantial breach of a provision of
the Contract Documents.
14.2.2 When any of the above reasons exist, the Owner, upon certification
by the Architect that sufficient cause exists to justify such action, may
without prejudice to any other rights or remedies of the Owner and after
giving the Contractor and the Contractor's surety, if any, seven days'
written notice, terminate employment of the Contractor and may, subject to
any prior rights of the surety:
.1 take possession of the site and of all materials, equipment,
tools, and construction equipment and machinery thereon
owned by the Contractor;
<PAGE>
.2 accept assignment of subcontracts pursuant to Paragraph 5.4;
and
.3 finish the Work by whatever reasonable method the Owner may
deem expedient. Upon request of the Contractor, the Owner
shall furnish to the Contractor a detailed accounting of the
costs incurred by the Owner in finishing the Work.
14.2.3 When the Owner terminates the Contract for one of the reasons stated
in Subparagraph 14.2.1, the Contractor shall not be entitled to receive
further payment until the Work is finished.
14.2.4 If the unpaid balance of the Contract Sum exceeds costs of finishing
the Work, including compensation for the Architect's services and expenses
made necessary thereby, and other damages incurred by the Owner and not
expressly waived, such excess shall be paid to the Contractor. If such
costs and damages exceed the unpaid balance, the Contractor shall pay the
difference to the Owner. The amount to be paid to the Contractor or Owner,
as the case may be, shall be certified by the Architect, upon application,
and this obligation for payment shall survive termination of the Contract.
14.3 SUSPENSION BY THE OWNER FOR CONVENIENCE
14.3.1 The Owner may, without cause, order the Contractor in writing to
suspend, delay or interrupt the Work in whole or in part for such period of
time as the Owner may determine.
14.3.2 The Contract Sum and Contract Time shall be adjusted for increases
in the cost and time caused by suspension, delay or interruption as
described in Subparagraph 14.3.1. Adjustment of the Contract Sum shall
include profit. No adjustment shall be made to the extent:
.1 that performance is, was or would have been so suspended,
delayed or interrupted by another cause for which the
Contractor is responsible; or
.2 that an equitable adjustment is made or denied under another
provision of the Contract.
14.4 TERMINATION BY THE OWNER FOR CONVENIENCE
14.4.1 The Owner may, at any time, terminate the Contract for the Owner's
convenience and without cause.
14.4.2 Upon receipt of written notice from the Owner of such termination
for the Owner's convenience, the Contractor shall:
.1 cease operations as directed by the Owner in the notice;
.2 take actions necessary, or that the Owner may direct, for the
protection and preservation of the Work; and
.3 except for Work directed to be performed prior to the
effective date of termination stated in the notice, terminate
all existing subcontracts and purchase orders and enter into
no further subcontracts and purchase orders.
14.4.3 In case of such termination for the Owner's convenience, the
Contractor shall be entitled to receive payment for Work executed, and
costs incurred by reason of such termination, along with reasonable
overhead and profit on the Work not executed.
<PAGE>
Plans and Specifications
Kronos Corporate Headquarters
Chelmsford, Massachusetts
February 22, 1999
Site Plans: Daylor Consulting Group, Inc. Dated
1 Cover Sheet 02/04/99
2 Existing Conditions Plan 02/04/99
3 Site Layout Plan 02/04/99
4 Site Grading Plan 02/04/99
5 Site Utility Plan 02/04/99
6 Site Erosion Control Plan 02/04/99
7 Site Landscaping Plan 02/04/99
8 Site Lighting Plan 02/04/99
9 Detail Sheet 02/04/99
10 Detail Sheet 02/04/99
11 Detail Sheet 02/04/99
12 Detail Sheet 02/04/99
Base Building
Architectural Plans: Spagnolo/Gisness & Associates
AO.0 Cover
AO.1 Legends, Schedules, Notes 02/22/99
Al.l First Floor Key Plan 02/22/99
Al.2 Second Floor Key Plan 02/22/99
Al.3 Third Floor Key Plan 02/22/99
Al.4 Roof Plan 02/22/99
A2.la Partial First Floor Plan Side A 02/22/99
A2.lb Partial First Floor Plan Side B 02/22/99
A2.2a Partial Second Floor Plan Side A 02/22/99
A2.2b Partial Second Floor Plan Side B 02/22/99
A2.3a Partial Third Floor Plan Side A 02/22/99
A2.3b Partial Third Floor Plan Side B 02/22/99
A3.l North and South Elevations 02/22/99
A3.2 East and West Elevations 02/22/99
A4.l Enlarged Elevation 02/22/99
A5.l Wall and Building Sections 02/22/99
A5.2 Wall & Building Sections 02/22/99
AG.l Enlarged Wall Section Details 02/22/99
AG.2 Loading Dock wall elevations and Sections 02/22/99
AG.3 Roof Details 02/22/99
A7.l Enlarged Plan Details 02/22/99
A7.2 Enlarged Plan Details 02/22/99
A8.l Enlarged Stair Details 02/22/99
A8.2 Enlarged Stair Details 02/22/99
A9.l Enlarged Elevator Details 02/22/99
AlO.l Enlarged Toilet Core Details 02/22/99
A12.l First Floor Reflected Ceiling Plan 02/22/99
A12.2 Second Floor Reflected Ceiling Plan 02/22/99
A12.3 Third Floor Reflected Ceiling Plan 02/22/99
<PAGE>
Structural Drawings - McNamara/Salvia
81.00 General Notes 02/22/99
S2.00 Foundation Plan 02/22/99
S2.0l Second Floor Framing Plan 02/22/99
S2.02 Third Floor Framing Plan 02/22/99
S2.03 Roof Framing Plan 02/22/99
S2.04 Roof Screen Plan 02/22/99
S3.00 Column Schedule and Baseplate Details 02/22/99
S3.0l Brace Frame Elevations and Details 02/22/99
S4.00 Typical Concrete Details I 02/22/99
S4.0l Typical Concrete Details II 02/22/99
S4.02 Typical Concrete Details III 02/22/99
S5.00 Typical Steel Details I 02/22/99
S5.01 Typical Steel Details II 02/22/99
SG.00 Spandrel Support Details 02/22/99
S7.00 Misc. Elevations, Sections and Details 02/22/99
Fire Protection: Abbood/Holloran Associates
FPl.0 Fire Protection Legend & Diagrams 02/22/99
FP2lA Fire Protection Partial First Floor Plan A 02/22/99
FP2.lB Fire Protection Partial First Floor Plan B 02/22/99
FP2.2A Fire Protection Partial Second Floor Plan A 02/22/99
FP2.2B Fire Protection Partial Second Floor Plan B 02/22/99
FP2.3A Fire Protection Partial Third Floor Plan A 02/22/99
FP2.3B Fire Protection Partial Third Floor Plan B 02/22/99
Plumbing: Abbood/Holloran Associates
P1.0 Plumbing Legend and Diagrams 02/22/99
P2.la Plumbing First Floor Plan 02/22/99
P2.lb Plumbing First Floor Plan 02/22/99
P2.2a Plumbing Second Floor Plan 02/22/99
P2.2b Plumbing Second Floor Plan 02/22/99
P2.3a Plumbing Third Floor Plan 02/22/99
P2.3b Plumbing Third Floor Plan 02/22/99
P2.4a Plumbing Roof Plan 02/22/99
P2.4b Plumbing Roof Plan 02/22/99
P3.0 Plumbing Riser Diagrams 02/22/99
HVAC: Abbood/Holloran Associates
Hl.0 HVAC Notes, Legend, Schedule 02/22/99
H1.1 HVAC Details 02/22/99
H2.la HVAC Partial First Floor Plan Site A 02/22/99
H2.lb HVAC Partial First Floor Plan Side B 02/22/99
H2.2a HVAC Partial Second Floor Plan Side A 02/22/99
H2.2b HVAC Partial Second Floor Plan Side B 02/22/99
H2.3a Partial Third Floor Plan Side A 02/22/99
H2.3b Partial Third Floor Plan Side B 02/22/99
H2.Ra Partial Roof Plan Side A 02/22/99
H2.Rb Partial Roof Plan Side B 02/22/99
H3.0 HVAC Riser Diagrams 02/22/99
<PAGE>
Electrical Drawings: Abbood/Holloran Associates
E-l Legend, Schedules & Notes 02/22/99
E-2-A Lighting and Power, First Floor Plan Side A 02/22/99
E-2-B Lighting and Power, First Floor Plan Side B 02/22/99
E--3-A Lighting and Power, Second Floor Plan Side A 02/22/99
E-3-B Lighting and Power, Second Floor Plan Side B 02/22/99
5-4-A Lighting and Power, Third Floor Plan Side A 02/22/99
E-4-B Lighting and Power, Third Floor Plan Side B 02/22/99
E-5-A Partial Roof Plan Side A 02/22/99
E-5-B Partial Roof Plan Side B 02/22/99
E-6 Power Distribution Riser Diagram 02/22/99
E-7 Fire Alarm Riser Diagram 02/22/99
SE-l Site Electrical Plan 02/12/99
<PAGE>
PROJECT MANUAL
BASE BUILDING
SPECIFICATIONS
DIVISION 1 - GENERAL REQUIREMENTS
01000 General Requirements 02/22/99
01030 Alternates 02/22/99
01400 Quality Control and Testing Services 02/22/99
01630 Substitution Request Form 02/22/99
DIVISION 2 - SITEWORK - Prepared by Daylor Consulting Group
02010 Subsurface Investigation 02/04/99
02070 Selective Demolition 02/04/99
02100 Site Preparation 02/04/99
02200 Earthwork 02/04/99
02210 Site Grading 02/04/99
02500 Paving and Surfacing 02/04/99
02524 Sidewalk 02/04/99
02600 Site Utilities 02/04/99
02601 Precast Concrete Manholes, Catch Basins, 02/04/99
02612 Reinforced Concrete Pipe 02/04/99
02616 Ductile Iron Pipe and Fittings 02/02/99
02622 Polyvinyl Chloride Pipe (PVC) 02/04/99
02640 Valves and Appurtenances 02/04/99
02645 Hydrants 02/04/99
02730 Wastewater Collection 02/04/99
02851 Guard Rail 02/04/99
02930 Lawns and Grasses 02/04/99
02950 Trees, Shrubs and Ground Covers 02/04/99
DIVISION 3 - CONCRETE
03001 Concrete Work - Building 02/22/99
03450 Architectural Precast Concrete 02/22/99
DIVISION 4 - MASONRY
04200 Unit Masonry 02/22/99
DIVISION 5 - METALS
05120Structural Steel 02/22/99
05300Metal Decking 02/22/99
05400Cold Formed Metal Framing 02/22/99
05500Miscellaneous Metals 02/22/99
DIVISION 6 - WOOD AND PLASTICS
06100 Rough Carpentry 02/22/99
06402 Interior Architectural Woodwork 02/22/99
DIVISION 7 - THERMAL AND MOISTURE PROTECTION
07145 Cementitious Waterproofing 02/22/99
07160 Bituminous Dampproofing 02/22/99
07200 Insulation and Vapor Retarders 02/22/99
07265 Sprayed-On Fireproofing 02/22/99
07270 Firestopping 02/22/99
07420 Metal Wall Panels 02/22/99
07530 Single-Ply Membrane Roofing System 02/22/99
07600 Flashing and Sheet Metal 02/22/99
07720 Roof Accessories 02/22/99
07900 Joint Sealers and Fillers 02/22/99
DIVISION 8 - DOORS AND WINDOWS
08110 Steel Doors and Frames 02/22/99
08200 Wood Doors 02/22/99
08305 Access Doors 02/22/99
08410 Aluminum Entrances 02/22/99
08700 Finish Hardware 02/22/99
08800 Glass and Glazing 02/22/99
08900 Glazed Aluminum Framing Systems 02/22/99
DIVISION 9 - FINISHES
09215 Veneer Plaster 02/22/99
09250 Gypsum Drywall 02/22/99
09260 Gypsum Sheathing 02/22/99
09300 Tile 02/22/99
09510 Acoustical Ceilings 02/22/99
09650 Resilient Flooring and Base 02/22/99
09680 Carpeting - See Interior Architect Specification
09720 Vinyl Wall Covering 02/22/99
09900 Painting 02/22/99
DIVISION 10 - SPECIALTIES
10160 Metal Toilet Partitions 02/22/99
10400 Signage and Graphics 02/22/99
10520 Fire Extinguishers and Cabinets 02/22/99
10800 Toilet Accessories 02/22/99
02/22/99
DIVISION 11 - EQUIPMENT
11160 Loading Dock Equipment 02/22/99
DIVISION 12 - FURNISHINGS
12500 Window Treatment - See Interior Architect Specification
12690 Entrance Mats - See Interior Architect Specification
DIVISION 13 - SPECIAL CONSTRUCTION
Not Used
DIVISION 14 - CONVEYING SYSTEMS
14240 Hydraulic Elevators 02/22/99
DIVISION 15 - MECHANICAL
15300Fire Protection 02/22/99
15400Plumbing 02/22/99
15500Heating, Ventilating and Air Conditioning 02/22/99
DIVISION 16 - ELECTRICAL
16000 Electrical 02/22/99
Appendices
Appendix A - Foundation Engineering Report 06/26/98
Prepared by McPhail Associates, Inc.
Geotechnical Engineers
AGREEMENT OF PURCHASE AND SALE
[Kronos Building, Boston, Massachusetts]
This Agreement of Purchase and Sale ("Agreement") is made and entered
into by and between Purchaser and Seller.
RECITALS
A. Defined terms are indicated by initial capital letters. Defined
terms shall have the meaning set forth herein, whether or not such
terms are used before or after the definitions are set forth.
B. Purchaser desires to purchase the Property and Seller desires to sell
the Property, all upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual terms, provisions,
covenants and agreements set forth herein, as well as the sums to be paid by
Purchaser to Seller, and for other good and valuable consideration, the receipt
and sufficiency of which are acknowledged, Purchaser and Seller agree as
follows:
ARTICLE 1 - Basic Information
1.1 Certain Basic Terms. The following defined terms shall have the
meanings set forth below:
1.1.1 Seller: W9/TIB-L Real Estate Limited Partnership, a Delaware
limited partnership
<PAGE>
Agreement of Purchase and Sale-(Kronos Building, Boston, Massachusetts) - Page 1
- -------------------------------------------------------------------------
1.1.2 Purchaser: Kronos Incorporated, a Massachusetts corporation
1.1.3 Purchase Price: $2,000,000.00, plus the total of the actual costs
listed on Exhibit H attached hereto, and any additional costs
reasonably incurred by Seller in connection with the
development of the Property subsequent to the date through
which the actual costs listed on Exhibit H are current,
which additional costs must be substantially consistent with
the types of projected costs listed on Exhibit H attached hereto
and shall be evidenced by a schedule of said additional costs
delivered from Seller to Purchaser as of Closing (Seller to be
reimbursed for said costs by adding same to the $2,000,000
base price).
1.1.4 Earnest Money: $25,000.00 (the "Earnest Money"), including interest
thereon, to be deposited in accordance with Section 3.1 below.
1.1.5 Title Company: Chicago Title Insurance Company
-------------
75 Federal Street
4th Floor
Boston, Massachusetts 02110
Attention: Beth Harrington
Telephone: (617) - 210-0750
Facsimile: (617) - 210-0777
1.1.6 Escrow Agent: Chicago Title Insurance Company
------------
75 Federal Street
4th Floor
Boston, Massachusetts 02110
Attention: Beth Harrington
Telephone: (617) - 210-0750
Facsimile: (617) - 210-0777
1.1.7 Broker: None
1.1.8 Effective Date: The date on
which this Agreement is
executed by the latter to
sign of Purchaser or
Seller, as indicated on the
signature page of this
Agreement.
1.1.9 Property
Information
Delivery Date: The date which is five (5) business days after the
Effective Date.
1.1.10 Title Commitment
Delivery Date: The date which is ten (10) days after the
Effective Date.
1.1.11 Survey Delivery
Date: N/A.
1.1.12 Title and Survey Review Period: The period ending
ten (10) days after
Purchaser's receipt of the
initial Title Commitment
and the initial Survey, but
in any event not later than
the expiration of the
Inspection Period.
1.1.13 Inspection Period: The period beginning on
the Effective Date and
ending ten (10) days
after the Effective Date.
1.1.14 Closing Date: The date
which is ten (10) days
after the later to occur of
(i) the expiration of the
Inspection Period, or (ii)
satisfaction of the
conditions set forth in
Subsections 7.2.4, 7.2.5,
7.2.6 and 7.2.7, but in no
event later than May 1,
1999 (the "Outside Date for
Closing").
1.2 Closing Costs. Closing costs shall be allocated and paid as follows:
Cost Responsible Party
- ---------------------------------------------------- ---------------------------
Title Commitment required to be delivered pursuant
to Section 5.1 Purchaser
- ---------------------------------------------------- ---------------------------
Premium for standard form Title Policy required to
be delivered pursuant to Section 5.4 Purchaser
- ---------------------------------------------------- ---------------------------
Premium for any upgrade of Title Policy for extended Purchaser
or additional coverage and any endorsements
desired by Purchaser, any inspection fee charged by
the Title Company, tax certificates, municipal and
utility lien certificates, and any other Title Company
charges
- ---------------------------------------------------- ---------------------------
Costs of Survey and/or any revisions, modifications
or recertifications thereto Purchaser
- ---------------------------------------------------- ---------------------------
Costs for UCC Searches Purchaser
- ---------------------------------------------------- ---------------------------
Recording fees for title clearing documents (if any), Seller
municipal lien certificate and Seller's legal
existence and authority documents
- --------------------------------------------------- ----------------------------
All other recording fees Purchaser
- ---------------------------------------------------- --------------------------
Any deed taxes, documentary stamps, transfer taxes, Seller
intangible taxes, mortgage taxes or other similar
taxes, fees or assessments
- ---------------------------------------------------- ---------------------------
Any escrow fee charged by Escrow Agent for holding
the Earnest Money or conducting the Closing Purchaser 1/2
Seller 1/2
- ---------------------------------------------------- ---------------------------
Real Estate Sales Commission to Broker Seller
- ---------------------------------------------------- ---------------------------
All other closing costs, expenses, charges and fees Purchaser
- ---------------------------------------------------- ---------------------------
1.3 Notice Addresses:
Purchaser: Kronos Incorporated Copy to:Francis X. Hanlon, Esq.
400 Fifth Avenue Ropes & Gray
Waltham, MA 02154 One International Place
Attention: Sally Wallace, Esq. Boston, MA 02110-2624
Telephone: (781) 487-4903 Telephone: (617) 951-7232
Facsimile: (781) 622-3950 Facsimile: (617) 951-7050
Seller: W9/TIB-L Real Estate Limited Copy to:C. Bradford Lowry
Partnership Haynes and Boone, LLP
c/o Archon Group 901 Main Street
1275 K Street Northwest 3100 NationsBank Plaza
Suite 900 Dallas, Texas 75202
Washington D.C. 20005 Telephone: (214) 651-5515
Attention: Mr. Paul Douglas Facsimile: (214) 651-5940
Telephone: (202) 216-5867
Facsimile: (202) 216-5801
1.4 Index of Certain Additional Defined Terms:
Asset Manager Section 12.18
Asset Manager's Employee Section 9.3
Assignment Subsection 7.3.2
CERCLA Section 11.3
Closing Section 7.1
Deed Subsection 7.3.1
Designated Representative(s) Section 12.20
Due Diligence Termination Notice Section 4.5
ERISA Subsection 7.4.3
Hazardous Materials Section 11.4
Improvements Subsection 2.1.1
Intangible Personal Property Subsection 2.1.4
Land Subsection 2.1.1
Lease Files Subsection 4.2.1
Permitted Exceptions Section 5.3
Permitted Outside Parties Section 4.8
Property Section 2.1
Property Documents Section 4.5
RCRA Section 11.3
Real Property Subsection 2.1.1
Reports Section 4.4
Rules Section 12.21
Survey Section 5.2
Tangible Personal Property Subsection 2.1.3
Taxes Section 8.1
Termination Reimbursement Section 12.20
Title Commitment Section 5.1
Title Policy Section 5.4
ARTICLE 2 - Property
2.1 Subject to the terms and conditions of this Agreement, Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller, the
following property (collectively, the "Property"):
2.1.1 Real Property. The land described in Exhibit A attached
hereto (the "Land"), together with (i) all improvements located thereon, if any
("Improvements"), (ii) all and singular the rights, benefits, privileges,
easements, tenements, hereditaments, and appurtenances thereon or in anywise
appertaining thereto including, without limitation, the Drainage Easement
described in Section 6.6 hereof, and (iii) without warranty, all right, title,
and interest of Seller, if any, in and to all strips and gores and any land
lying in the bed of any street, road or alley, open or proposed, adjoining such
Land (collectively, the "Real Property").
2.1.2 [Intentionally Omitted]
2.1.3 Tangible Personal Property. All of Seller's right, title
and interest, without warranty, in the equipment, machinery, furniture,
furnishings, supplies and other tangible personal property, if any, owned by
Seller and now or hereafter located in and used in connection with the
operation, ownership or management of the Real Property, but specifically
excluding any items of personal property owned by tenants at or on the Real
Property and further excluding any items of personal property owned by third
parties and leased to Seller (collectively, the "Tangible Personal Property").
2.1.4 Intangible Personal Property. All of Seller's right,
title and interest, if any, without warranty, in all intangible personal
property related to the Real Property and the Improvements, including, without
limitation: all trade names and trade marks associated with the Real Property
and the Improvements, including Seller's rights and interests, if any, in the
name of the Real Property; the plans and specifications and other architectural
and engineering drawings for the Improvements, if any (to the extent
assignable); warranties (to the extent assignable); contract rights, permits and
approvals related to the construction, operation, ownership or management of the
Real Property, including, without limitation, those listed on Exhibit D attached
hereto (but only to the extent assignable and Seller's obligations thereunder
are expressly assumed by Purchaser pursuant to this Agreement); governmental
permits, approvals and licenses, if any (to the extent assignable); and
telephone exchange numbers (to the extent assignable) (collectively the
"Intangible Personal Property").
ARTICLE 3 - Earnest Money
3.1 Deposit and Investment of Earnest Money. Within three (3) business
days after the Effective Date, Purchaser shall deposit the Earnest Money with
Escrow Agent. Escrow Agent shall invest the Earnest Money in government insured
interest-bearing accounts satisfactory to Seller and Purchaser, shall not
commingle the Earnest Money with any funds of Escrow Agent or others, and shall
promptly provide Purchaser and Seller with confirmation of the investments made.
Such account shall have no penalty for early withdrawal, and Purchaser accepts
all risks with regard to such account.
3.2 Form; Failure to Deposit. The Earnest Money shall be in the form of
a certified or cashier's check or the wire transfer to Escrow Agent of
immediately available U.S. federal funds. If Purchaser fails to timely deposit
any portion of the Earnest Money within the time periods required, Seller may
terminate this Agreement by written notice to Purchaser, in which event the
parties hereto shall have no further rights or obligations hereunder, except for
rights and obligations which, by their terms, survive the termination hereof.
3.3 Disposition of Earnest Money. The Earnest Money shall be applied as
a credit to the Purchase Price at Closing. However, if Purchaser elects to
terminate this Agreement prior to the expiration of the Inspection Period
pursuant to Section 4.5, Escrow Agent shall pay the Earnest Money (less an
amount equal to the Termination Reimbursement) to Purchaser one (1) business day
following receipt of the Due Diligence Termination Notice from Purchaser (as
long as the current investment can be liquidated and disbursed in one business
day). No notice to Escrow Agent from Seller shall be required for the release of
the Earnest Money (less an amount equal to the Termination Reimbursement) to
Purchaser by Escrow Agent if Purchaser terminates this Agreement pursuant to
Section 4.5. Notwithstanding anything herein to the contrary, in all events
where the Earnest Money is to be returned to Purchaser, other than in case of
Seller's default hereunder, a portion of the Earnest Money equal to the
Termination Reimbursement shall be delivered to Seller as reimbursement to
Seller pursuant to Section 12.20. In the event of a termination of this
Agreement by either Seller or Purchaser for any reason other than pursuant to
Section 4.5, Escrow Agent is authorized to deliver the Earnest Money (or portion
thereof) to the party hereto entitled to same pursuant to the terms hereof on or
before the fifth (5th) business day following receipt by Escrow Agent and the
non-terminating party of written notice of such termination from the terminating
party, unless the other party hereto notifies Escrow Agent that it disputes the
right of the other party to receive the Earnest Money (or portion thereof). In
such event, Escrow Agent may interplead the Earnest Money (or portion thereof in
dispute) into a court of competent jurisdiction in the county in which the
Earnest Money has been deposited. All attorneys' fees and costs and Escrow
Agent's costs and expenses incurred in connection with such interpleader shall
be assessed against the party that is not awarded the Earnest Money, or if the
Earnest Money is distributed in part to both parties, then in the inverse
proportion of such distribution.
ARTICLE 4 - Due Diligence
4.1 Due Diligence Materials To Be Delivered. To the extent such items
are in Seller's possession or in the possession of Seller's agents, employees or
contractors, Seller shall deliver to Purchaser the following (the "Property
Information") on or before the Property Information Delivery Date:
4.1.1 Development Related Contracts. Copy of any contracts
between Seller and third party service providers in connection with the
development of the Property undertaken by Seller, including, without limitation,
any agreements by and between Seller and any architect, environmental and
engineering firm, and civil, structural, HVAC, geotechnical or traffic engineer;
4.1.2 [Intentionally Omitted]
4.1.3 Reports. Copy of any environmental and engineering reports or site
assessments related to the Property prepared for the benefit of Seller;
4.1.4 Tax Statements. Copy of ad valorem tax statements relating to the
Property for the current tax period;
4.1.5 Title and Survey. Copy of Seller's most current title insurance
information and survey of the Property;
4.1.6 [Intentionally Omitted]
4.1.7 Personal Property. A list of Tangible and Intangible Personal
Property; and
4.1.8 Leasing Commissions. A list of contingent leasing commissions with
respect to the Property, if any.
4.2 Due Diligence Materials To Be Made Available. To the extent such
items are in Seller's possession or in the possession of Seller's agents,
employees or contractors, Seller shall make available to Purchaser for
Purchaser's review, at Seller's option at either the offices of Seller's Asset
Manager or property manager or at the Property, the following items and
information (the "Additional Property Information") on or before the Property
Information Delivery Date, and Purchaser at its expense shall have the right to
make copies of same:
4.2.1 [Intentionally Omitted]
4.2.2 [Intentionally Omitted]
4.2.3 [Intentionally Omitted]
4.2.4 Licenses, Permits and Certificates of Occupancy.
Licenses, permits and certificates of occupancy relating to or authorizing
construction or operation of a building or improvements on the property.
4.3 Physical Due Diligence. Commencing on the Effective Date and
continuing until the Closing, Purchaser shall have reasonable access to the
Property at all reasonable times for the purpose of conducting reasonably
necessary tests, including surveys and architectural, engineering, geotechnical
and environmental inspections and tests, provided that (i) Purchaser must give
Seller twenty-four (24) hours' prior telephone or written notice of any such
inspection or test, and with respect to any intrusive inspection or test (i.e.,
core sampling) must obtain Seller's prior written consent (which consent shall
not be unreasonably withheld or conditioned), (ii) prior to performing any
inspection or test, Purchaser must deliver a certificate of insurance to Seller
evidencing that Purchaser and its contractors, agents and representatives have
in place reasonable amounts of comprehensive general liability insurance and
workers compensation insurance for its activities on the Property in terms and
amounts reasonably satisfactory to Seller covering any accident arising in
connection with the presence of Purchaser, its contractors, agents and
representatives on the Property, which insurance shall name Seller and Asset
Manager as additional insureds thereunder, and (iii) all such tests shall be
conducted by Purchaser in compliance with Purchaser's responsibilities set forth
in Section 4.12 below. Purchaser shall bear the cost of all such inspections or
tests and shall be responsible for and act as the generator with respect to any
wastes generated by those tests. Subject to the provisions of Section 4.8
hereof, Purchaser or Purchaser's representatives may meet with any governmental
authority for any good faith, reasonable purpose in connection with the
transaction contemplated by this Agreement; provided, however, Purchaser must
contact Seller at least forty-eight (48) hours in advance by telephone or fax to
inform Seller of Purchaser's intended meeting and to allow Seller the
opportunity to attend such meeting if Seller desires.
During the Inspection Period Purchaser shall review the contracts
listed on Exhibit D attached hereto and notify Seller prior to the termination
of the Inspection Period as to which contracts Purchaser has elected to take
assignment of and assume obligations thereunder arising from and after the
Closing Date (the "Assumed Contracts"). It shall be a condition to Purchaser's
obligation to close on the Closing Date that any and all consents required in
connection with the assignment and assumption of the Assumed Contracts be
delivered on the Closing Date.
4.4 [Intentionally Omitted]
4.5 Due Diligence/Termination Right. Purchaser shall have through the
last day of the Inspection Period in which to (i) examine, inspect, and
investigate the Property Information and the Additional Property Information
(collectively, the "Property Documents") and the Property and, in Purchaser's
sole and absolute judgment and discretion, determine whether the Property is
acceptable to Purchaser, (ii) obtain all necessary internal approvals, and (iii)
satisfy all other contingencies of Purchaser, including those listed in Section
6.1.4 below. Notwithstanding anything to the contrary in this Agreement,
Purchaser may terminate this Agreement for any reason or no reason by giving
written notice of termination to Seller and Escrow Agent (the "Due Diligence
Termination Notice") on or before the last day of the Inspection Period. If
Purchaser does not give a Due Diligence Termination Notice, this Agreement shall
continue in full force and effect, Purchaser shall be deemed to have waived its
right to terminate this Agreement pursuant to this Section 4.5, and Purchaser
shall be deemed to have acknowledged that it has received or had access to all
Property Documents and conducted all inspections and tests of the Property that
it considers important.
4.6 Return of Documents and Reports. If this Agreement terminates for
any reason other than Seller's default hereunder, Purchaser shall promptly
return and/or deliver to Seller all Property Documents and copies thereof.
Additionally, if this Agreement terminates for any reason other than Seller's
default, then Purchaser must deliver to Seller copies of all third party
reports, investigations and studies, other than economic analyses (collectively,
the "Reports" and, individually, a "Report") prepared for Purchaser in
connection with its due diligence review of the Property. The Reports shall be
delivered to Seller without any representation or warranty as to the
completeness or accuracy of the Reports or any other matter relating thereto,
and Seller shall have no right to rely on any Report without the written consent
of the party preparing same. Purchaser's obligation to deliver the Property
Documents and the Reports to Seller shall survive the termination of this
Agreement.
4.7 [Intentionally Omitted]
4.8 Proprietary Information; Confidentiality. Purchaser acknowledges
that the Property Documents are proprietary and confidential and will be
delivered to Purchaser solely to assist Purchaser in determining the feasibility
of purchasing the Property. Purchaser shall not use the Property Documents for
any purpose other than as set forth in the preceding sentence. Purchaser shall
not disclose the contents to any person other than to those persons providing
financing or who are responsible for determining the feasibility of Purchaser's
acquisition of the Property and who have agreed to preserve the confidentiality
of such information as required hereby (collectively, "Permitted Outside
Parties"). At any time and from time to time, within two (2) business days after
Seller's request, Purchaser shall deliver to Seller a list of all parties to
whom Purchaser has provided any Property Documents or any information taken from
the Property Documents. Purchaser shall not divulge the contents of the Property
Documents and other information except in strict accordance with the
confidentiality standards set forth in this Section 4.8. In permitting Purchaser
to review the Property Documents or any other information, Seller has not waived
any privilege or claim of confidentiality with respect thereto, and no third
party benefits or relationships of any kind, either express or implied, have
been offered, intended or created.
4.9 No Representation or Warranty by Seller . Purchaser acknowledges
that, except as expressly set forth in this Agreement, neither Seller nor Asset
Manager has made nor makes any warranty or representation regarding the truth,
accuracy or completeness of the Property Documents or the source(s) thereof.
Purchaser further acknowledges that some if not all of the Property Documents
were prepared by third parties other than Seller and Asset Manager. Seller and
Asset Manager expressly disclaim any and all liability for representations or
warranties, express or implied, statements of fact and other matters contained
in such information, or for omissions from the Property Documents, or in any
other written or oral communications transmitted or made available to Purchaser.
Purchaser shall rely solely upon its own investigation with respect to the
Property, including, without limitation, the Property's physical, environmental
or economic condition, compliance or lack of compliance with any ordinance,
order, permit or regulation or any other attribute or matter relating thereto.
Seller and Asset Manager have not undertaken any independent investigation as to
the truth, accuracy or completeness of the Property Documents and are providing
the Property Documents solely as an accommodation to Purchaser.
4.0 Purchaser's Responsibilities. In conducting any inspections,
investigations or tests of the Property and/or Property Documents, Purchaser and
its agents and representatives shall: (i) not interfere with the operation and
maintenance of the Property; (ii) not damage any part of the Property; (iii) not
injure or otherwise cause bodily harm to Seller, Asset Manager, or their
respective agents, guests, invitees, contractors and employees or any tenants or
their guests or invitees; (iv) comply with all applicable laws; (v) not permit
any liens to attach to the Real Property by reason of the exercise of its rights
hereunder; (vi) repair any damage to the Real Property resulting directly or
indirectly from any such inspection or tests; and (vii) not reveal or disclose
prior to Closing any information obtained during the Inspection Period
concerning the Property and the Property Documents to anyone other than the
Permitted Outside Parties, in accordance with the confidentiality standards set
forth in Section 4.8 above, or except as may be otherwise required by law.
4.11 Purchaser's Agreement to Indemnify. Purchaser indemnifies and
holds Seller and Asset Manager harmless from and against any and all liens,
claims, causes of action, damages, liabilities and expenses (including
reasonable attorneys' fees) arising out of Purchaser's inspections or tests
permitted under this Agreement or any violation of the provisions of Sections
4.3, 4.8 and 4.10; provided, however, the indemnity shall not extend to protect
Seller from any pre-existing liabilities for matters merely discovered by
Purchaser (i.e., latent environmental contamination) so long as Purchaser's
actions do not aggravate any pre-existing liability of Seller. Purchaser also
indemnifies and holds any tenant harmless from and against any and all claims,
causes of action, damages, liabilities and expenses which such tenant may suffer
or incur due to Purchaser's breach of its obligation under Section 4.8 above to
maintain the confidential nature of any Property Documents or other information
relative to such tenant. Purchaser's obligations under this Section 4.11 shall
survive the termination of this Agreement and shall survive the Closing.
4.12 Environmental Studies; Seller's Right to Terminate. As additional
consideration for the transaction contemplated in this Agreement, Purchaser must
provide to Seller, immediately following the receipt of same by Purchaser,
copies of any and all reports, tests or studies involving contamination of or
other environmental concerns relating to the Property; provided, however,
Purchaser shall have no obligation to cause any such tests or studies to be
performed on the Property. Seller acknowledges that Purchaser has not made and
does not make any warranty or representation regarding the truth or accuracy of
any such studies or reports. Notwithstanding Section 4.11 above, Purchaser shall
have no liability or culpability of any nature as a result of having provided
such information to Seller or as a result of Seller's reliance thereon or
arising out of the fact that Purchaser merely conducted such tests or studies,
so long as Purchaser's actions do not aggravate any pre-existing liability of
Seller. In the event that such reports, tests or studies indicate the existence
or reasonable potential existence of any contamination of any portion of the
Property that is not disclosed in the Property Documents and that is material
(meaning that the reasonably estimated cost of remediation and/or other
liability associated therewith, as determined by Seller's environmental
consultants, exceeds $100,000.00), then Seller may terminate this Agreement by
giving written notice to Purchaser within ten (10) business days after Purchaser
has provided Seller with copies of such reports, tests or studies, whereupon the
Earnest Money (less the Termination Reimbursement, which shall be delivered to
Seller) shall be returned to Purchaser, the parties shall have no further
obligations hereunder except for obligations that expressly survive the
termination hereof, and Seller shall pay to Purchaser an amount equal to the
lesser of (A) Purchaser's actual out-of-pocket expenditures incurred directly in
connection with negotiating this Agreement and/or conducting due diligence
activities contemplated hereunder, or (B) Twenty-Five Thousand and No/100
Dollars ($25,000.00), provided, however, that Purchaser must make written demand
of Seller for such reimbursement and provide Seller reasonable supporting
documentation of actual expenditures within thirty (30) days of the termination
of this Agreement, and if Purchaser fails to provide such written demand and
supporting documentation within such thirty (30) day period, then Purchaser
shall be deemed to have forever waived its right to recover any amount from
Seller.
ARTICLE 5 - Title and Survey
5.1 Title Commitment. Purchaser shall cause to be prepared and
delivered to Seller on or before the Title Commitment Delivery Date: (i) a
current commitment for title insurance or preliminary title report (the "Title
Commitment") issued by the Title Company, in the amount of the Purchase Price
and on a ALTA 1992 Standard Form commitment, with Purchaser as the proposed
insured, and (ii) copies of all documents of record referred to in the Title
Commitment as exceptions to title to the Property.
5.2 New or Updated Survey. Purchaser may elect to obtain a new survey
or revise, modify, or re-certify an existing survey ("Survey") as necessary in
order for the Title Company to delete the survey exception from the Title Policy
or to otherwise satisfy Purchaser's objectives.
5.3 Title Review. During the Title and Survey Review Period, Purchaser
shall review title to the Property as disclosed by the Title Commitment and the
Survey. Seller shall have no obligation to cure title objections except
financing liens of an ascertainable amount created by, under or through Seller,
which liens Seller shall cause to be released at or prior to Closing (with
Seller having the right to apply the Purchase Price or a portion thereof for
such purpose), and Seller shall deliver the Property free and clear of any such
financing liens. Seller further agrees to remove any exceptions or encumbrances
to title which are voluntarily created by, under or through Seller after the
Effective Date without Purchaser's consent. The term "Permitted Exceptions"
shall mean: the specific exceptions (excluding exceptions that are part of the
promulgated title insurance form) in the Title Commitment that the Title Company
has not agreed to remove from the Title Commitment as of the end of the Title
and Survey Review Period and that Seller is not required to remove as provided
above; matters created by, through or under Purchaser; items shown on the Survey
which have not been removed as of the end of the Inspection Period; real estate
taxes not yet due and payable; tenants under any leases; and any licensees not
terminated as of Closing.
5.4 Delivery of Title Policy at Closing. In the event that the Title
Company does not issue at Closing, or unconditionally commit at Closing to
issue, to Purchaser, an owner's title policy in accordance with the Title
Commitment, insuring good, clear and marketable title to the Property in the
amount of the Purchase Price, subject only to the standard exceptions and
exclusions from coverage contained in such policy and the Permitted Exceptions
(the "Title Policy"), Purchaser shall have the right to terminate this
Agreement, in which case the Earnest Money (less the Termination Reimbursement,
which shall be delivered to Seller) shall be immediately returned to Purchaser
and the parties hereto shall have no further rights or obligations, other than
those that by their terms survive the termination of this Agreement.
ARTICLE 6 - Operations, Risk of Loss, and Covenants Prior to Closing
6.1 Ongoing Operations. From the Effective Date through Closing, Seller
will not enter into any contract that will be an obligation affecting the
Property subsequent to the Closing, except contracts entered into in the
ordinary course of business that are terminable without cause and without the
payment of any termination penalty on not more than thirty (30) days' prior
notice.
6.2 [Intentionally Omitted]
6.3 Condemnation. If proceedings in eminent domain are instituted with
respect to the Property or any portion thereof, Purchaser may, at its option, by
written notice to Seller given within ten (10) days after Seller notifies
Purchaser of such proceedings (and if necessary the Closing Date shall be
automatically extended to give Purchaser the full ten-day period to make such
election), either: (i) terminate this Agreement, in which case the Earnest Money
(less the Termination Reimbursement, which shall be delivered to Seller) shall
be immediately returned to Purchaser and the parties hereto shall have no
further rights or obligations, other than those that by their terms survive the
termination of this Agreement, or (ii) proceed under this Agreement, in which
event Seller shall, at the Closing, assign to Purchaser its entire right, title
and interest in and to any condemnation award, and Purchaser shall have the sole
right after the Closing to negotiate and otherwise deal with the condemning
authority in respect of such matter. If Purchaser does not give Seller written
notice of its election within the time required above, then Purchaser shall be
deemed to have elected option (ii) above.
6.4 New Subdivision Plan. The Property is comprised of (i) an
approximate one (1) acre portion (the "One Acre Portion") out of a parcel
currently containing approximately 9.77 acres and known as 5 Omni Way,
Chelmsford, Massachusetts and described as Lot 2A on Exhibit A attached hereto
(the "5 Omni Way Parcel"), said 5 Omni Way Parcel being a registered parcel
subject to the jurisdiction of the Land Court of Massachusetts, and (ii) all of
a parcel containing approximately 9.16 acres and known as 297 Billerica Road,
Chelmsford, Massachusetts, and described as Lot 1 A on Exhibit A attached hereto
(the "Non-Registered Parcel"), which is not a registered parcel. It is the
parties' intent that the One Acre Portion be subdivided from the 5 Omni Way
Parcel pursuant to a new subdivision plan (the "New Subdivision Plan") that must
be approved by the Land Court of Massachusetts. Seller has heretofore been
pursuing approval of the New Subdivision Plan and will continue to use
reasonable efforts to obtain such approval prior to the Outside Date for
Closing. Among other things, such approval will require that the current tenant
of the 5 Omni Way Parcel, Sun Microsystems, Inc. ("Sun Microsystems"), agree to
release the One Acre Portion from its leasehold estate by the execution of an
amendment to its existing lease, and further that Seller's current mortgagee of
the 5 Omni Way Parcel ("Seller's Lender") agree to release the One Acre Parcel
from the lien of its mortgage. Seller shall use reasonable efforts to cause Sun
Micro Systems to agree to release the One Acre Portion from its leasehold
estate, and to cause Seller's Lender to release the One Acre Portion from the
lien of its mortgage, prior to the Outside Date for Closing, but Seller shall
not be obligated to incur any material cost or expense whatsoever in connection
therewith, except that Seller agrees to pay the release price required by
Seller's Lender, and Seller shall further pay any reasonable, usual and
customary legal fees of Seller's counsel (but not any legal fees or other fees
that may be charged by Seller's Lender) in connection with said release.
Purchaser shall reasonably cooperate with Seller in satisfying the conditions of
this paragraph, and shall reimburse Seller for its costs and expenses in
connection therewith in accordance with the terms of Section 12.20 hereof.
Approval of the New Subdivision Plan is a condition precedent to both Seller's
and Purchaser's obligation to close in accordance with Subsection 7.2.4 hereof.
The provisions of Section 12.22 hereof shall apply with respect to this
paragraph.
6.5 New Lease for 2 Omni Way. Seller and Purchaser intend to negotiate
and enter into a new lease agreement (the "2 Omni Way Lease") pursuant to which
Purchaser, as tenant, will lease from Seller, as landlord, that certain building
owned by Seller adjacent to the Property and known as 2 Omni Way, Chelmsford,
Massachusetts (the "2 Omni Way Building"). Seller and Purchaser will negotiate
in good faith and use reasonable efforts to execute and enter into the 2 Omni
Way Lease prior to the Outside Date for Closing. The 2 Omni Way Lease is and
shall be subject to and conditioned on (i) termination of the existing lease
agreement between Seller and Sun Microsystems pursuant to which Sun Microsystems
currently leases from Seller the 2 Omni Way Building, and (ii) vacation of the 2
Omni Way Building by Sun Microsystems. Seller shall use reasonable efforts to
cause Sun Microsystems to terminate its lease and vacate the 2 Omni Way
Building, but Seller shall not be obligated to incur any material cost or
expense whatsoever in connection therewith. Satisfaction of the foregoing
requirements is a condition to Purchaser's obligation to close in accordance
with Subsection 7.2.5 hereof, and if by the Outside Date for Closing the 2 Omni
Way Lease has not been executed and entered into by Seller and Purchaser and/or
if Sun Microsystems has not terminated its lease and vacated the 2 Omni Way
Building, then Purchaser shall have the right to terminate this Agreement, in
which event the Earnest Money (less the Termination Reimbursement, which shall
be delivered to Seller) shall be returned to Purchaser. The provisions of
Section 12.22 hereof shall apply with respect to this paragraph.
6.6 Drainage Easement; Sun Microsystems' Consent. Both parties
acknowledge the need for a non-exclusive drainage easement benefitting the
Property (the "Drainage Easement") over and across the 5 Omni Way Parcel as
shown on the Plan attached hereto as Exhibit F-1. Seller and Purchaser agree
that the form of Drainage Easement shall be substantially in the form of Exhibit
F-2 hereto. Final approval of the Drainage Easement is and shall be conditioned
on the current tenant of the 5 Omni Way Parcel, Sun Microsystems, and Seller's
Lender each consenting in writing to the Drainage Easement and on Seller's
Lender subordinating its lien to the Drainage Easement. Seller shall use
reasonable efforts to cause Sun Microsystems and Seller's Lender each to consent
in writing to the Drainage Easement (and Seller's Lender to subordinate its lien
to the Drainage Easement) prior to the Outside Date for Closing, but Seller
shall not be obligated to incur any cost or expense whatsoever in connection
therewith. If the foregoing requirements have been satisfied as of Closing, then
at Closing Seller shall execute the Drainage Easement document and have same
recorded in the real property records of the county in which the Property is
located. Satisfaction of the foregoing requirements is a condition to
Purchaser's obligation to close in accordance with Subsection 7.2.6 hereof, and
if by the Outside Date for Closing the foregoing requirements have not been
satisfied, then Purchaser shall have the right to terminate this Agreement, in
which event the Earnest Money (less the Termination Reimbursement, which shall
be delivered to Seller) shall be returned to Purchaser. The provisions of
Section 12.22 hereof shall apply with respect to this paragraph.
6.7 Building Permit. Purchaser, at Purchaser's sole cost and expense,
shall, as soon as reasonably possible after the Effective Date, make application
with the appropriate municipal authorities to obtain a building permit for the
construction of a three (3) story, approximate 127,000 square feet office
building on the Property; provided, however, prior to submitting any
application, filing or any other document in connection therewith, Purchaser
shall submit same to Seller for Seller's approval, which approval shall not be
unreasonably withheld or delayed so long as Purchaser is otherwise not in
default under the terms of this Agreement. Purchaser shall diligently pursue the
building permit and use all reasonable efforts to obtain said permit as soon as
reasonably possible. Seller shall reasonably cooperate with Purchaser in this
regard, but shall not be obligated to incur any cost or expense whatsoever in
connection therewith. The issuance of a building permit shall be a condition to
Purchaser's obligation to close, and if Purchaser has not obtained the building
permit or is otherwise not satisfied with the status of the building permit
process prior to the Outside Closing Date, then Purchaser shall have the right
to terminate this Agreement, in which event the Earnest Money (less the
Termination Reimbursement, which shall be delivered to Seller) shall be returned
to Purchaser.
ARTICLE 7 - Closing
7.1 Closing. The consummation of the transaction contemplated herein
("Closing") shall occur on the Closing Date at the offices of Escrow Agent (or
such other location as may be mutually agreed upon by Seller and Purchaser).
Funds shall be deposited into and held by Escrow Agent in a closing escrow
account with a bank satisfactory to Purchaser and Seller. Upon satisfaction or
completion of all closing conditions and deliveries, the parties shall direct
Escrow Agent to immediately record and deliver the closing documents to the
appropriate parties and make disbursements according to the closing statements
executed by Seller and Purchaser.
7.2 Conditions to Parties' Obligation to Close. In addition to all
other conditions set forth herein, the obligation of Seller, on the one hand,
and Purchaser, on the other hand, to consummate the transactions contemplated
hereunder are conditioned upon the following:
7.2.1 Representations and Warranties. The other party's
representations and warranties contained herein shall be true and correct in all
material respects as of the date of this Agreement and the Closing Date;
7.2.2 Deliveries. As of the Closing Date, the other party
shall have tendered all deliveries to be made at Closing; and
7.2.3 Actions, Suits, etc. There shall exist no pending or
threatened actions, suits, arbitrations, claims, attachments, proceedings,
assignments for the benefit of creditors, insolvency, bankruptcy, reorganization
or other proceedings, against the other party that would materially and
adversely affect the operation or value of the Property or the other party's
ability to perform its obligations under this Agreement.
7.2.4 Release of One Acre Portion; New Subdivision Plan. The
releases from Sun Microsystems and Seller's Lender shall have been obtained in
accordance with Section 6.4, and the New Subdivision Plan shall have been
approved by the Land Court of Massachusetts. Notwithstanding anything herein to
the contrary, if this condition has not been satisfied by the Outside Date for
Closing, then either party may terminate this Agreement, in which event the
Earnest Money (less an amount equal to the Termination Reimbursement, which
shall be delivered to Seller) shall be delivered to Purchaser.
In addition to the foregoing conditions, the following shall be
additional conditions to Purchaser's obligation to consummate the transactions
contemplated hereunder:
7.2.5 New Lease for 2 Omni Way. The 2 Omni Way Lease shall
have been executed and entered into by Seller and Purchaser, and the other
conditions set forth in Section 6.5 shall have been satisfied. Notwithstanding
anything herein to the contrary, if this condition has not been satisfied by the
Outside Date for Closing, then Purchaser may terminate this Agreement, in which
event the Earnest Money (less an amount equal to the Termination Reimbursement,
which shall be delivered to Seller) shall be delivered to Purchaser.
7.2.6 Consent to Drainage Easement. Sun Microsystems and
Seller's Lender shall have consented to the Drainage Easement, and Seller's
Lender shall have subordinated its lien to the Drainage Easement, in accordance
with Section 6.6. Notwithstanding anything herein to the contrary, if this
condition has not been satisfied by the Outside Date for Closing, then Purchaser
may terminate this Agreement, in which event the Earnest Money (less an amount
equal to the Termination Reimbursement, which shall be delivered to Seller)
shall be delivered to Purchaser.
7.2.7 Building Permit. Purchaser shall have obtained the
building permit contemplated by Section 6.7. Notwithstanding anything herein to
the contrary, if this condition has not been satisfied by the Outside Date for
Closing, then Purchaser may terminate this Agreement, in which event the Earnest
Money (less an amount equal to the Termination Reimbursement, which shall be
delivered to Seller) shall be delivered to Purchaser.
So long as a party is not in default hereunder, if any condition to
such party's obligation to proceed with the Closing hereunder has not been
satisfied as of the Closing Date (or such earlier date as is provided herein),
such party may, in its sole discretion, terminate this Agreement by delivering
written notice to the other party on or before the Closing Date (or such earlier
date as is provided herein), or elect to close (or to permit any such earlier
termination deadline to pass) notwithstanding the non-satisfaction of such
condition, in which event such party shall be deemed to have waived any such
condition. In the event such party elects to close (or to permit any such
earlier termination deadline to pass), notwithstanding the non-satisfaction of
such condition, said party shall be deemed to have waived said condition, and
there shall be no liability on the part of any other party hereto for breaches
of representations and warranties of which the party electing to close had
knowledge at the Closing.
7.3 Seller's Deliveries in Escrow. As of or prior to the Closing Date,
Seller shall deliver in escrow to Escrow Agent the following:
7.3.1 Deed. A quitclaim deed in substantially the form
attached hereto as Exhibit E, executed and acknowledged by Seller, conveying to
Purchaser Seller's interest in the Real Property, subject to the Permitted
Exceptions (the "Deed");
7.3.2 Bill of Sale, Assignment and Assumption. A Bill of Sale,
Assignment and Assumption of Leases and Contracts in the form of Exhibit B
attached hereto (the "Assignment"), executed and acknowledged by Seller, vesting
in Purchaser, without warranty (except for title), Seller's right, title and
interest in and to the property described therein free of any claims, except for
the Permitted Exceptions to the extent applicable. The Assignment shall be
accompanied by any and all consents necessary for the assignment and assumption
of the Assumed Contracts which Purchaser has elected to assume pursuant to
Section 4.3 thereof.
7.3.3 Conveyancing or Transfer Tax Forms or Returns. Such
conveyancing or transfer tax forms or returns, if any, as are required to be
delivered or signed by Seller by applicable state and local law in connection
with the conveyance of the Real Property.
7.3.4 FIRPTA. A Foreign Investment in Real Property Tax Act
affidavit executed by Seller;
7.3.5 Drainage Easement. If the requirements of Section 6.6
are satisfied, the Drainage Easement document agreed to by Seller and Purchaser
substantially in the form of Exhibit F-2 attached hereto, executed and
acknowledged by Seller;
7.3.6 2 Omni Way Lease. If the requirements of Section 6.5
are satisfied, the 2 Omni Way Lease agreed to by Seller and Purchaser, executed
by Seller;
7.3.7 Authority. Evidence of the existence, organization and
authority of Seller and of the authority of the persons executing documents on
behalf of Seller reasonably satisfactory to the underwriter for the Title
Policy;
7.3.8 Schedule of Additional Costs. A schedule, certified by
Seller, of additional costs reasonably incurred by Seller subsequent to the date
through which the actual costs listed on Exhibit H are current, which additional
costs must be substantially consistent with the types of projected costs listed
on Exhibit H attached hereto; and
7.3.10 Additional Documents. Any additional documents that
Escrow Agent or the Title Company may reasonably require for the proper
consummation of the transaction contemplated by this Agreement (provided,
however, no such additional document shall expand any obligation, covenant,
representation or warranty of Seller or result in any new or additional
obligation, covenant, representation or warranty of Seller under this Agreement
beyond those expressly set forth in this Agreement).
7.4 Purchaser's Deliveries in Escrow. As of or prior to
the Closing Date, Purchaser shall deliver in escrow to Escrow Agent the
following:
7.4.1 Bill of Sale, Assignment and Assumption.
The Assignment, executed and acknowledged by Purchaser;
7.4.2 ERISA Letter. A letter to Seller in the form of Exhibit
C attached hereto duly executed by Purchaser, confirming that Purchaser is not
acquiring the Property with the assets of an employee benefit plan as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974 ("ERISA")
and, in the event Purchaser is unable or unwilling to make such a
representation, Purchaser shall be deemed to be in default hereunder, and Seller
shall have the right to terminate this Agreement and to receive and retain the
Earnest Money;
7.4.3 Conveyancing or Transfer Tax Forms or Returns. Such
conveyancing or transfer tax forms or returns, if any, as are required to be
delivered or signed by Purchaser by applicable state and local law in connection
with the conveyance of Real Property;
7.4.4 Drainage Easement. If the requirements of Section 6.6
are satisfied, the Drainage Easement document agreed to by Seller and Purchaser,
substantially in the form of Exhibit F-2 attached hereto, executed and
acknowledged by Purchaser; and
7.4.5 2 Omni Way Lease. If the requirements of Section 6.5
are satisfied, the 2 Omni Way Lease agreed to by Seller and Purchaser, executed
by Purchaser;
7.4.6 Additional Documents. Any additional documents that
Seller, Escrow Agent or the Title Company may reasonably require for the proper
consummation of the transaction contemplated by this Agreement (provided,
however, no such additional document shall expand any obligation, covenant,
representation or warranty of Purchaser or result in any new or additional
obligation, covenant, representation or warranty of Purchaser under this
Agreement beyond those expressly set forth in this Agreement).
7.5 Closing Statements. As of or prior to the Closing Date, Seller and
Purchaser shall deposit with Escrow Agent executed closing statements consistent
with this Agreement in the form required by Escrow Agent.
7.6 Purchase Price. At or before 1:00 p.m. local time on the Closing
Date, Purchaser shall deliver to Escrow Agent the Purchase Price, less the
Earnest Money that is applied to the Purchase Price, plus or minus applicable
prorations, in immediate, same-day U.S. federal funds wired for credit into
Escrow Agent's escrow account, which funds must be delivered in a manner to
permit Escrow Agent to deliver good funds to Seller or its designee on the
Closing Date (and, if requested by Seller, by wire transfer); in the event that
Escrow Agent is unable to deliver good funds to Seller or its designee on the
Closing Date, then the closing statements and related prorations will be revised
as necessary.
7.7 Possession. Seller shall deliver possession of the Property to
Purchaser at the Closing subject only to the Permitted Exceptions.
7.8 Delivery of Books and Records. After the Closing, Seller shall
deliver to the offices of Purchaser's property manager or to the Real Property
to the extent in Seller's or its property manager's possession or control: Lease
Files; maintenance records and warranties; plans and specifications; licenses,
permits and certificates of occupancy; copies or originals of all books and
records of account, contracts, and copies of correspondence with tenants and
suppliers; receipts for deposits, unpaid bills and other papers or documents
which pertain to the Property; all advertising materials; booklets; keys; and
other items, if any, used in the operation of the Property.
ARTICLE 8 - Prorations, Deposits, Commissions
8.1 Prorations. At Closing, the following items shall be prorated as of
the date of Closing with all items of income and expense for the Property being
borne by Purchaser from and after (but including) the date of Closing: Any
income and rents; fees and assessments; prepaid expenses and obligations;
accrued operating expenses; real and personal ad valorem taxes ("Taxes"); and
any assessments by private covenant for the then-current calendar year of
Closing. Specifically, the following shall apply to such prorations:
8.1.1 Taxes. If Taxes for the year of Closing are not known or
cannot be reasonably estimated, Taxes shall be prorated based on Taxes for the
year prior to Closing. Any additional Taxes relating to the year of Closing or
prior years arising out of a change in the use of the Real Property or a change
in ownership shall be assumed by Purchaser effective as of Closing and paid by
Purchaser when due and payable, and Purchaser shall indemnify Seller from and
against any and all such Taxes, which indemnification obligation shall survive
the Closing.
8.1.2 Utilities. Purchaser shall take all steps necessary to
effectuate the transfer of all utilities to its name as of the Closing Date, and
where necessary, post deposits with the utility companies. Seller shall ensure
that all utility meters are read as of the Closing Date. Seller shall be
entitled to recover any and all deposits held by any utility company as of the
Closing Date.
8.2 [Intentionally Omitted]
8.3 Closing Costs. Closing costs shall be allocated between
Seller and Purchaser in accordance with Section 1.2.
8.4 Final Adjustment After Closing. If final bills are not available or
cannot be issued prior to Closing for any item being prorated under Section 8.1,
then Purchaser and Seller agree to allocate such items on a fair and equitable
basis as soon as such bills are available, final adjustment to be made as soon
as reasonably possible after the Closing. Payments in connection with the final
adjustment shall be due within thirty (30) days of written notice. All such
rights and obligations shall survive the Closing.
8.5 [Intentionally Omitted]
8.6 Commissions. Seller and Purchaser each represent and warrant to the
other that no real estate brokerage commission is payable to any person or
entity in connection with the transaction contemplated hereby, and each agrees
to and does hereby indemnify and hold the other harmless against the payment of
any commission to any other person or entity claiming by, through or under
Seller or Purchaser, as applicable. This indemnification shall extend to any and
all claims, liabilities, costs and expenses (including reasonable attorneys'
fees and litigation costs) arising as a result of such claims and shall survive
the Closing.
ARTICLE 9 - Representations and Warranties
9.1 Seller's Representations and Warranties. Seller represents and
warrants to Purchaser that:
9.1.1 Organization and Authority. Seller has been duly
organized, is validly existing, and is in good standing in the state in which it
was formed and is authorized to do business and is in good standing in the
Commonwealth of Massachusetts. Seller has the full right and authority and has
obtained any and all consents required to enter into this Agreement and (subject
to the expressed conditions set forth in this Agreement) to consummate or cause
to be consummated the transactions contemplated hereby. This Agreement has been,
and all of the documents to be delivered by Seller at the Closing will be,
authorized and executed and constitute, or will constitute, as appropriate, the
valid and binding obligation of Seller, enforceable in accordance with their
terms.
9.1.2 Conflicts and Pending Actions. There is no agreement to
which Seller is a party or, to Seller's knowledge, that is binding on Seller
which is in conflict with this Agreement. To Seller's knowledge, there is no
action or proceeding pending or threatened against Seller or relating to the
Property, which challenges or impairs Seller's ability to execute or perform its
obligations under this Agreement.
9.1.3 Tenant/Leases. As of the Effective Date, there are no
tenants of the Property.
9.1.4 Service Contracts. To Seller's knowledge, there are
no service contracts with respect to the Property.
9.1.5 Notices from Governmental Authorities. To Seller's
knowledge, Seller has not received from any governmental authority written
notice of any material violation of any laws applicable (or alleged to be
applicable) to the Real Property, or any part thereof, that has not been
corrected, except as may be reflected by the Property Documents.
9.1.6. Project Costs. The project costs listed on Exhibit H
and any additional
costs incurred by Seller between the Effective Date and the Closing were
incurred in good faith by Seller in connection with the development of the
Property and the costs and any such additional costs are true and correct in all
material respects and represent arms-length transactions between Seller and the
parties to whom such costs are payable.
9.1.7. Sun Microsystem Agreements. To Seller's knowledge,
the agreements
of Sun Microsystems as described in Sections 6.4 and 6.6 hereof have been, or
as of Closing will have been, duly authorized and executed by Sun Microsystems
and are, or as of Closing will be, valid and binding agreements in accordance
with their respective terms.
9.2 Purchaser's Representations and Warranties. Purchaser represents
and warrants to Seller that:
9.2.1 Organization and Authority. Purchaser has been duly
organized and is validly existing as a corporation in good standing in the State
of Delaware and is qualified to do business in the state in which the Real
Property is located. Purchaser has the full right and authority and has obtained
any and all consents required to enter into this Agreement and to consummate or
cause to be consummated the transactions contemplated hereby. This Agreement has
been, and all of the documents to be delivered by Purchaser at the Closing will
be, authorized and properly executed and constitute, or will constitute, as
appropriate, the valid and binding obligation of Purchaser, enforceable in
accordance with their terms.
9.2.2 Conflicts and Pending Action. There is no agreement to
which Purchaser is a party or to Purchaser's knowledge binding on Purchaser
which is in conflict with this Agreement. There is no action or proceeding
pending or, to Purchaser's knowledge, threatened against Purchaser which
challenges or impairs Purchaser's ability to execute or perform its obligations
under this Agreement.
9.3 Survival of Representations and Warranties. The representations and
warranties set forth in this Article 9 are made as of the date of this Agreement
and are remade as of the Closing Date and shall not be deemed to be merged into
or waived by the instruments of Closing, but shall survive the Closing for a
period of twelve (12) months (the "Survival Period"). Terms such as "to Seller's
knowledge," "to the best of Seller's knowledge" or like phrases mean the actual
present and conscious awareness or knowledge of Paul Douglas, asset manager of
the Property ("Asset Manager's Employee"), without any duty of inquiry or
investigation; provided that so qualifying Seller's knowledge shall in no event
give rise to any personal liability on the part of Asset Manager's Employee or
any other officer or employee of Seller or its Asset Manager, on account of any
breach of any representation or warranty made by Seller herein. Said terms do
not include constructive knowledge, imputed knowledge, or knowledge Seller or
such persons do not have but could have obtained through further investigation
or inquiry. No broker, agent, or party other than Seller is authorized to make
any representation or warranty for or on behalf of Seller. Each party shall have
the right to bring an action against the other on the breach of a representation
or warranty hereunder, but only on the following conditions: (i) the party
bringing the action for breach first learns of the breach after Closing and
files such action within the Survival Period, and (ii) neither party shall have
the right to bring a cause of action for a breach of a representation or
warranty unless the damage to such party on account of such breach (individually
or when combined with damages from other breaches) equals or exceeds $15,000.00.
Neither party shall have any liability after Closing for the breach of a
representation or warranty hereunder of which the other party hereto had
knowledge as of Closing. Furthermore, Purchaser agrees that the maximum
liability of Seller for the alleged breach of any or all representations or
warranties set forth in this Agreement is limited to $250,000.00. The provisions
of this Section 9.3 shall survive the Closing. Any breach of a representation or
warranty that occurs prior to Closing shall be governed by Article 10.
ARTICLE 10 - Default and Remedies
10.1 Seller's Remedies. If Purchaser fails to perform its obligations
pursuant to this Agreement at or prior to Closing for any reason except failure
by Seller to perform hereunder, or if prior to Closing any one or more of
Purchaser's representations or warranties are breached in any material respect,
Seller shall be entitled, as its sole remedy (except as provided in Sections
4.11, 8.6, 10.3 and 10.4 hereof), to terminate this Agreement and recover the
Earnest Money as liquidated damages and not as penalty, in full satisfaction of
claims against Purchaser hereunder. Seller and Purchaser agree that Seller's
damages resulting from Purchaser's default are difficult, if not impossible, to
determine and the Earnest Money is a fair estimate of those damages which has
been agreed to in an effort to cause the amount of such damages to be certain.
Notwithstanding anything in this Section 10.1 or in Exhibit G to the contrary,
in the event of Purchaser's default and a termination of this Agreement, Seller
shall have all remedies available at law or in equity in the event Purchaser or
any party related to or affiliated with Purchaser is asserting any claims or
right to the Property that would otherwise delay or prevent Seller from having
clear, indefeasible and marketable title to the Property. In all other events
Seller's remedies shall be limited to those described in this Section 10.1 and
Sections 4.11, 8.6, 10.3 and 10.4 hereof.
10.2 Purchaser's Remedies. If Seller fails to perform its obligations
pursuant to this Agreement for any reason except failure by Purchaser to perform
hereunder, or if prior to Closing any one or more of Seller's representations or
warranties are breached in any material respect, Purchaser shall elect, as its
sole remedy, either to (i) terminate this Agreement by giving Seller timely
written notice of such election prior to or at Closing and recover the Earnest
Money, (ii) enforce specific performance, or (iii) waive said failure or breach
and proceed to Closing. Notwithstanding anything herein to the contrary,
Purchaser shall be deemed to have elected to terminate this Agreement if
Purchaser fails to deliver to Seller written notice of its intent to file a
claim or assert a cause of action for specific performance against Seller on or
before twenty (20) business days following the scheduled Closing Date or, having
given such notice, fails to file a lawsuit asserting such claim or cause of
action in the county in which the Property is located within three (3) months
following the scheduled Closing Date. Purchaser's remedies shall be limited to
those described in this Section 10.2 and Sections 10.3 and 10.4 hereof. If,
however, the equitable remedy of specific performance is not available,
Purchaser may seek any other right or remedy available at law or in equity;
provided, however, that in no event shall Seller's liability exceed the Earnest
Money, if it is not refunded to Purchaser), plus the lesser of (i) $75,000.00 or
(ii) the actual reasonable out-of-pocket expenses incurred by Purchaser and paid
(A) to Purchaser's attorneys in connection with the negotiation of this
Agreement and (B) to unrelated and unaffiliated third party consultants in
connection with the performance of examinations, inspections and/or
investigations pursuant to Article 4. For purposes of this provision, specific
performance shall be considered not available to Purchaser only if a court of
competent jurisdiction (or an arbitrator, as per Exhibit G) determines
conclusively that Purchaser is entitled to specific performance on the merits of
its claim but said court or arbitrator is unable to enforce specific performance
due to reasons beyond the control of the court or arbitrator. IN NO EVENT SHALL
SELLER'S DIRECT OR INDIRECT PARTNERS, SHAREHOLDERS, OWNERS OR AFFILIATES, ANY
OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF THE FOREGOING, OR ANY AFFILIATE OR
CONTROLLING PERSON THEREOF HAVE ANY LIABILITY FOR ANY CLAIM, CAUSE OF ACTION OR
OTHER LIABILITY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PROPERTY,
WHETHER BASED ON CONTRACT, COMMON LAW, STATUTE, EQUITY OR OTHERWISE.
10.3 Attorneys' Fees. In the event either party hereto employs an
attorney in connection with claims by one party against the other arising from
the operation of this Agreement, the non-prevailing party shall pay the
prevailing party all reasonable fees and expenses, including attorneys' fees,
incurred in connection with such claims.
10.4 Other Expenses. If this Agreement is terminated due to the default
of a party, then the defaulting party shall pay any fees or charges due to
Escrow Agent for holding the Earnest Money as well as any escrow cancellation
fees or charges and any fees or charges due to the Title Company for preparation
and/or cancellation of the Title Commitment.
ARTICLE 11 - Disclaimers, Release and Indemnity
11.1 Disclaimers By Seller. Except as expressly set forth in this
Agreement, it is understood and agreed that Seller and Asset Manager have not at
any time made and are not now making, and they specifically disclaim, any
warranties or representations of any kind or character, express or implied, with
respect to the Property, including, but not limited to, warranties or
representations as to (i) matters of title, (ii) environmental matters relating
to the Property or any portion thereof, including, without limitation, the
presence of Hazardous Materials in, on, under or in the vicinity of the
Property, (iii) geological conditions, including, without limitation,
subsidence, subsurface conditions, water table, underground water reservoirs,
limitations regarding the withdrawal of water, and geologic faults and the
resulting damage of past and/or future faulting, (iv) whether, and to the extent
to which the Property or any portion thereof is affected by any stream (surface
or underground), body of water, wetlands, flood prone area, flood plain,
floodway or special flood hazard, (v) drainage, (vi) soil conditions, including
the existence of instability, past soil repairs, soil additions or conditions of
soil fill, or susceptibility to landslides, or the sufficiency of any
undershoring, (vii) the presence of endangered species or any environmentally
sensitive or protected areas, (viii) zoning or building entitlements to which
the Property or any portion thereof may be subject, (ix) the availability of any
utilities to the Property or any portion thereof including, without limitation,
water, sewage, gas and electric, (x) usages of adjoining property, (xi) access
to the Property or any portion thereof, (xii) the value, compliance with the
plans and specifications, size, location, age, use, design, quality,
description, suitability, structural integrity, operation, title to, or physical
or financial condition of the Property or any portion thereof, or any income,
expenses, charges, liens, encumbrances, rights or claims on or affecting or
pertaining to the Property or any part thereof, (xiii) the condition or use of
the Property or compliance of the Property with any or all past, present or
future federal, state or local ordinances, rules, regulations or laws, building,
fire or zoning ordinances, codes or other similar laws, (xiv) the existence or
non-existence of underground storage tanks, surface impoundments, or landfills,
(xv) the merchantability of the Property or fitness of the Property for any
particular purpose, (xvi) the truth, accuracy or completeness of the Property
Documents, (xvii) tax consequences, or (xviii) any other matter or thing with
respect to the Property.
11.2 Sale "As Is, Where Is." Purchaser acknowledges and agrees that
upon Closing, Seller shall sell and convey to Purchaser and Purchaser shall
accept the Property "AS IS, WHERE IS, WITH ALL FAULTS," except to the extent
expressly provided otherwise in this Agreement and any document executed by
Seller and delivered to Purchaser at Closing. Except as expressly set forth in
this Agreement, Purchaser has not relied and will not rely on, and Seller has
not made and is not liable for or bound by, any express or implied warranties,
guarantees, statements, representations or information pertaining to the
Property or relating thereto (including specifically, without limitation,
Property information packages distributed with respect to the Property) made or
furnished by Seller, the Asset Manager of the Property, or any real estate
broker, agent or third party representing or purporting to represent Seller, to
whomever made or given, directly or indirectly, orally or in writing. Purchaser
represents that it is a knowledgeable, experienced and sophisticated purchaser
of real estate and that, except as expressly set forth in this Agreement, it is
relying solely on its own expertise and that of Purchaser's consultants in
purchasing the Property and shall make an independent verification of the
accuracy of any documents and information provided by Seller. Purchaser will
conduct such inspections and investigations of the Property as Purchaser deems
necessary, including, but not limited to, the physical and environmental
conditions thereof, and shall rely upon same. By failing to terminate this
Agreement prior to the expiration of the Inspection Period, Purchaser
acknowledges that Seller has afforded Purchaser a full opportunity to conduct
such investigations of the Property as Purchaser deemed necessary to satisfy
itself as to the condition of the Property and the existence or non-existence or
curative action to be taken with respect to any Hazardous Materials on or
discharged from the Property, and will rely solely upon same and not upon any
information provided by or on behalf of Seller or its agents or employees with
respect thereto, other than such representations, warranties and covenants of
Seller as are expressly set forth in this Agreement. Upon Closing, Purchaser
shall assume the risk that adverse matters, including, but not limited to,
adverse physical or construction defects or adverse environmental, health or
safety conditions, may not have been revealed by Purchaser's inspections and
investigations.
Purchaser's Initials
11.3 Seller Released from Liability. Purchaser acknowledges that it
will have the opportunity to inspect the Property during the Inspection Period,
and during such period, observe its physical characteristics and existing
conditions and the opportunity to conduct such investigation and study on and of
the Property and adjacent areas as Purchaser deems necessary, and Purchaser
hereby FOREVER RELEASES AND DISCHARGES Seller and Asset Manager from all
responsibility and liability, including without limitation, liabilities under
the Comprehensive Environmental Response, Compensation and Liability Act Of 1980
(42 U.S.C. Sections 9601 et seq.), as amended ("CERCLA"), regarding the
condition (including the presence in the soil, air, indoor air, structures and
surface and subsurface waters, of Hazardous Materials or other materials or
substances that have been or may in the future be determined to be toxic,
hazardous, undesirable or subject to regulation and that may need to be
specially treated, handled and/or removed from the Property under current or
future federal, state and local laws, regulations or guidelines), valuation,
salability or utility of the Property, or its suitability for any purpose
whatsoever. Purchaser further hereby WAIVES (and by closing this transaction
will be deemed to have waived) any and all objections to or complaints regarding
(including, but not limited to, federal, state, municipal and common law based
actions), or any private right of action under, state and federal law to which
the Property is or may be subject, including, but not limited to, CERCLA, RCRA,
physical characteristics and existing conditions, including, without limitation,
structural and geologic conditions, subsurface soil and water conditions and
solid and hazardous waste and Hazardous Materials on, under, adjacent to or
otherwise affecting the Property. Purchaser further hereby assumes the risk of
changes in applicable laws and regulations relating to past, present and future
environmental conditions on the Property and the risk that adverse physical
characteristics and conditions, including, without limitation, the presence of
Hazardous Materials or other contaminants, may not have been revealed by its
investigation.
11.4 "Hazardous Materials" Defined. For purposes hereof, "Hazardous
Materials" means "Hazardous Material," "Hazardous Substance," "Pollutant or
Contaminant," and "Petroleum" and "Natural Gas Liquids," as those terms are
defined or used in Section 101 of CERCLA, and any other substances regulated
because of their effect or potential effect on public health and the
environment, including, without limitation, PCBs, lead paint, asbestos, urea
formaldehyde, radioactive materials, putrescible, and infectious materials.
11.5 [Iintentionally Omitted]
11.6 Survival. The terms and conditions of this Article 11 shall
expressly survive the Closing, not merge with the provisions of any closing
documents and shall be incorporated into the Deed.
Purchaser acknowledges and agrees that the disclaimers and other
agreements set forth herein are an integral part of this Agreement and that
Seller would not have agreed to sell the Property to Purchaser for the Purchase
Price without the disclaimers and other agreements set forth above.
ARTICLE 12 - Miscellaneous
12.1 Parties Bound; Assignment. This Agreement, and the terms,
covenants, and conditions herein contained, shall inure to the benefit of and be
binding upon the heirs, personal representatives, successors, and assigns of
each of the parties hereto. Purchaser may assign its rights under this Agreement
upon the following conditions: (i) the Assignee of Purchaser must be an
affiliate of Purchaser or an entity controlling, controlled by, or under common
control with Purchaser, (ii) all of the Earnest Money must have been delivered
in accordance herewith, (iii) the Inspection Period shall be deemed to have
ended, (iv) the assignee of Purchaser shall assume all obligations of Purchaser
hereunder, but Purchaser shall remain primarily liable for the performance of
Purchaser's obligations, and (v) a copy of the fully executed written assignment
and assumption agreement shall be delivered to Seller at least ten (10) days
prior to Closing.
12.2 Headings. The article, section, subsection, paragraph and/or other
headings of this Agreement are for convenience only and in no way limit or
enlarge the scope or meaning of the language hereof.
12.3 Invalidity and Waiver. If any portion of this Agreement is held
invalid or inoperative, then so far as is reasonable and possible the remainder
of this Agreement shall be deemed valid and operative, and, to the greatest
extent legally possible, effect shall be given to the intent manifested by the
portion held invalid or inoperative. The failure by either party to enforce
against the other any term or provision of this Agreement shall not be deemed to
be a waiver of such party's right to enforce against the other party the same or
any other such term or provision in the future.
12.4 Governing Law. This Agreement shall, in all respects, be governed,
construed, applied, and enforced in accordance with the law of the state in
which the Real Property is located.
12.5 Survival. The provisions of this Agreement that contemplate
performance after the Closing and the obligations of the parties not fully
performed at the Closing shall survive the Closing and shall not be deemed to be
merged into or waived by the instruments of Closing.
12.6 Entirety and Amendments. This Agreement embodies the entire
agreement between the parties and supersedes all prior agreements and
understandings relating to the Property. This Agreement may be amended or
supplemented only by an instrument in writing executed by the party against whom
enforcement is sought.
12.7 Time. Time is of the essence in the performance of this Agreement.
12.8 Confidentiality. Purchaser shall make no public announcement or
disclosure of any information related to this Agreement to outside brokers or
third parties without the prior written specific consent of Seller; provided,
however, that Purchaser may, subject to the provisions of Section 4.8, make
disclosure of this Agreement to its Permitted Outside Parties as necessary to
perform its obligations hereunder and as may be required under laws or
regulations applicable to Purchaser.
12.9 Notices. All notices required or permitted hereunder shall be in
writing and shall be served on the parties at the addresses set forth in Section
1.3. Any such notices shall, unless otherwise provided herein, be given or
served (i) by depositing the same in the United States mail, postage paid,
certified and addressed to the party to be notified, with return receipt
requested, (ii) by overnight delivery using a nationally recognized overnight
courier, (iii) by personal delivery, or (iv) by facsimile, evidenced by
confirmed receipt. Notice deposited in the mail in the manner hereinabove
described shall be effective on the third (3rd) business day after such deposit.
Notice given in any other manner shall be effective only if and when received by
the party to be notified between the hours of 8:00 a.m. and 5:00 p.m. of any
business day with delivery made after such hours to be deemed received the
following business day. A party's address may be changed by written notice to
the other party; provided, however, that no notice of a change of address shall
be effective until actual receipt of such notice. Copies of notices are for
informational purposes only, and a failure to give or receive copies of any
notice shall not be deemed a failure to give notice. Notices given by counsel to
the Purchaser shall be deemed given by Purchaser and notices given by counsel to
the Seller shall be deemed given by Seller.
12.10 Construction. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement and agree that the normal rule
of construction - to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this Agreement
or any exhibits or amendments hereto.
12.11 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event after
which the designated period of time begins to run is not to be included and the
last day of the period so computed is to be included, unless such last day is a
Saturday, Sunday or legal holiday for national banks in the location where the
Property is located, in which event the period shall run until the end of the
next day which is neither a Saturday, Sunday, or legal holiday. The last day of
any period of time described herein shall be deemed to end at 5:00 p.m. local
time in the state in which the Real Property is located.
12.12 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of such counterparts shall constitute one Agreement. To facilitate execution of
this Agreement, the parties may execute and exchange by telephone facsimile
counterparts of the signature pages, provided that executed originals thereof
are forwarded to the other party on the same day by any of the delivery methods
set forth in Section 12.9 other than facsimile.
12.13 No Recordation. Without the prior written consent of Seller,
there shall be no recordation of either this Agreement or any memorandum hereof,
or any affidavit pertaining hereto, and any such recordation of this Agreement
or memorandum or affidavit by Purchaser without the prior written consent of
Seller shall constitute a default hereunder by Purchaser, whereupon Seller shall
have the remedies set forth in Section 10.1 hereof.
12.14 Further Assurances. In addition to the acts and deeds recited
herein and contemplated to be performed, executed and/or delivered by either
party at Closing, each party agrees to perform, execute and deliver, but without
any obligation to incur any additional liability or expense, on or after the
Closing any further deliveries and assurances as may be reasonably necessary to
consummate the transactions contemplated hereby or to further perfect the
conveyance, transfer and assignment of the Property to Purchaser.
12.15 Discharge of Obligations. The acceptance of the Deed by Purchaser
shall be deemed to be a full performance and discharge of every representation
and warranty made by Seller herein and every agreement and obligation on the
part of Seller to be performed pursuant to the provisions of this Agreement,
except those which are herein specifically stated to survive Closing.
12.16 ERISA. Under no circumstances shall Purchaser have the right to
assign this Agreement to any person or entity owned or controlled by an employee
benefit plan if Seller's sale of the Property to such person or entity would, in
the reasonable opinion of Seller's ERISA advisors or consultants, create or
otherwise cause a "prohibited transaction" under ERISA. In the event Purchaser
assigns this Agreement or transfers any ownership interest in Purchaser, and
such assignment or transfer would make the consummation of the transaction
hereunder a "prohibited transaction" under ERISA and necessitate the termination
of this Agreement then, notwithstanding any contrary provision which may be
contained herein, Seller shall have the right to terminate this Agreement.
12.17 No Third Party Beneficiary. The provisions of this Agreement and
of the documents to be executed and delivered at Closing are and will be for the
benefit of Seller, Asset Manager and Purchaser only and are not for the benefit
of any third party (other than Asset Manager), and accordingly, no third party
(other than Asset Manager) shall have the right to enforce the provisions of
this Agreement or of the documents to be executed and delivered at Closing,
except that a tenant of the Property may enforce Purchaser's indemnity
obligation under Section 4.11 hereof.
12.18 Asset Manager: Designated Representative. Seller has engaged
Archon Group, L.P. or affiliated companies ("Asset Manager") to provide certain
asset management services with respect to the Property, including acting as a
liaison between Seller and Purchaser in connection with the Property and this
Agreement. The Asset Manager will appoint one or more representatives
("Designated Representative(s)") to deal with Purchaser. Whenever any approval,
acceptance, consent, direction or action of Seller is required pursuant to this
Agreement, Purchaser shall send to the Designated Representative a written
notice requesting same, which notice shall: (i) describe in detail the matter
for which such approval, acceptance, consent, direction or other action of
Seller is requested; (ii) be accompanied by a copy of any contract, agreement or
other document to be executed by Seller evidencing such approval, consent,
acceptance, direction or action of Seller; and (iii) be accompanied by such
other documents, written explanations and information as may be reasonably
necessary to explain the request fully and completely. The Asset Manager will
communicate Seller's response to any such requests to Purchaser.
12.19 Mandatory Arbitration. The parties have agreed to submit certain
disputes to mandatory arbitration in accordance with the provisions of Exhibit G
attached hereto and made a part hereof for all purposes.
12.20 Termination Reimbursement. Notwithstanding anything herein to the
contrary, in all events where the Earnest Money is to be returned to Purchaser,
other than in case of (i) Seller's default and failure to close hereunder or
(ii) failure of Seller to obtain from Seller's Lender the release of the One
Acre Portion as contemplated by Section 6.4, or (iii) failure of Seller to be
ready, willing and able to deliver marketable title to the Property (subject to
the Permitted Exceptions) to Purchaser in accordance with this Agreement, a
portion of the Earnest Money equal to the sum of all costs and expenses incurred
by Seller from and after December 19, 1998 in connection with the prospective
development of the Property, including without limitation those costs and
expenses listed on Exhibit H attached hereto, to the extent said costs were
incurred on or after December 19, 1998, and additional costs and expenses
incurred subsequent to the date through which the actual costs listed on Exhibit
H are current (collectively, the "Termination Reimbursement"), shall be
delivered to Seller as reimbursement to Seller, Purchaser having agreed to
reimburse Seller for all such costs incurred from and after December 19, 1998,
regardless of whether Purchaser closes on the transaction, as consideration to
Seller for entering into this Agreement. If the amount of the Termination
Reimbursement exceeds the Earnest Money, then the entire Earnest Money shall be
delivered to Seller and Purchaser shall immediately pay to Seller the remainder
of the Termination Reimbursement, which obligation shall survive the termination
of this Agreement.
12.21. Further Assurances. Notwithstanding anything hereto to the
contrary, Seller agrees that if Purchaser reasonably determines that other
permits and approvals are required for the development of the Property in
accordance with existing permits and approvals and otherwise as currently
contemplated, Seller will take no action adverse to the interests of Purchaser
with respect to any such proceeding and will cooperate with Purchaser in all
reasonable respects in connection with any such proceeding, but Seller shall not
be obligated to incur any liability or material expense in connection therewith.
This Section 12.21 shall survive the Closing for a period of one (1) year.
12.22. W9/TIB. It is acknowledged that W9/TIB Real Estate Limited
Partnership, a Delaware limited partnership ("W9/TIB"), a related entity to
Seller, is the current owner of the 5 Omni Way Parcel (of which the One Acre
Portion is a part) and the 2 Omni Way Building. For purposes of Sections 6.4,
6.5, 6.6 and 12.23 hereof, and with respect to any expressed covenant on the
part of Seller that pertains to the 5 Omni Way Parcel and/or the 2 Omni Way
Building, Seller agrees to cause W9/TIB to perform or to cooperate with Seller
in permitting Seller to perform said covenants. Without limiting the generality
of the foregoing, and subject to the provisions of Section 6.4, Seller intends
to have W9/TIB convey the One Acre Portion to Seller prior to Closing.
12.23 Telecommunication Easement. Seller agrees that at any time within
twelve (12) months after the Closing (the "Telecommunications Easement Period"),
if requested by Purchaser in writing and subject to the conditions set forth
below, Seller shall grant a non-exclusive easement (the "Telecommuncations
Easement") for the installation of telecommuncations equipment over and across
the 5 Omni Way Parcel and connecting the 2 Omni Way Building to the Property.
Additionally, if at the time the Telecommunications Easement is executed
Purchaser, as tenant, has entered into a binding, written lease of the building
located at 4 Omni Way, Chelmsford, Massachusetts (the "4 Omni Way Building"),
then at Purchaser's written request the Telecommunications Easement shall also
serve to connect the 4 Omni Way Building to the Property. The Telecommunications
Easement shall survive only for so long as Purchaser remains a tenant of the 2
Omni Way Building or the 4 Omni Way Building. Seller and Purchaser agree that
the form of written instrument evidencing the Telecommunications Easement shall
be in a form which is usual and customary for easements of this type (subject to
each party's reasonable approval and subject to the requirements of this Section
12.23) and further agree to negotiate in good faith in order to reach a mutually
acceptable form of Telecommunications Easement instrument. Additionally, the
location of the Telecommunications Easement across the 5 Omni Way Parcel shall
be as directed by Seller, at Seller's sole but reasonable discretion. Final
approval of the Telecommunications Easement is and shall be conditioned on the
current tenant of the 5 Omni Way Parcel, Sun Microsystems, and Seller's Lender
each consenting in writing to the Telecommunications Easement. Seller shall use
reasonable efforts to cause Sun Microsystems and Seller's Lender each to consent
in writing to the Telecommunications Easement as soon as reasonably possible
after Seller and Purchaser have agreed on the form and location of the
Telecommunications Easement, but Seller shall not be obligated to incur any
material cost or expense whatsoever in connection therewith. All costs
associated with the installation of any telecommunications equipment and the
perpetual maintenance thereof shall be borne solely by Purchaser, and Purchaser
shall indemnify Seller from and against any and all claims, demands,
liabilities, causes of action, suits, judgments, damages and expenses (including
attorneys' fees) arising from the Telecommunications Easement. Only
telecommunications equipment that is normal and customary for communications
between buildings such as the office building contemplated to be built on the
Land, the existing 2 Omni Way Building and the existing 4 Omni Way Building, and
otherwise acceptable to Seller, in Seller's reasonable discretion, shall be
permitted. If for any reason the Closing does not occur or Purchaser does not
request the Telecommunications Easement in writing prior to the expiration of
the Telecommunications Easement Period, or if Purchaser does request the
Telecommunications Easement during the Telecommunications Easement Period but
thereafter the condtions to Seller's obligations under this Section 12.23 are
not satisfied, then Seller's obligation to grant the Telecommunications Easement
shall forever terminate and be of no further force or effect. The agreements set
forth in this Section 12.23 shall survive the Closing.
SIGNATURE PAGE TO AGREEMENT OF
PURCHASE AND SALE
BY AND BETWEEN
W9/TIB-L REAL ESTATE LIMITED PARTNERSHIP
AND
KRONOS INCORPORATED
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year written below.
SELLER: W9/TIB-L Real Estate Limited Partnership,
a Delaware limited partnership
By: W9/TIB-L, Gen-Par,Inc., a Delaware corporation,
General Partner
Date executed by Seller: By:/s/ S.M. Abelman
March 29, 1999 Name: Stephen M. Abelman
Title: Assistant Vice President
PURCHASER:
Kronos Incorporated, a Massachusetts corporation
Date executed by Purchaser: By:/s/ Lloyd B. Bussell
March 19, 1999 Name: Lloyd B. Bussell
Title: Vice President, Manufacturing
JOINDER BY ESCROW AGENT
Escrow Agent has executed this Agreement in order to confirm that Escrow Agent
has received and shall hold the Initial Earnest Money required to be deposited
under this Agreement and the interest earned thereto, in escrow, and shall
disburse the Earnest Money, and the interest earned thereon, pursuant to the
provisions of this Agreement.
Chicago Title Insurance Company,
a ______________________________
Date executed by Escrow Agent: By:/s/ Sharon A. Sbordon
Name: Sharon A. Sbordon
Title: Escrow Officer
<PAGE>
LIST OF EXHIBITS
A - Legal Description of Real Property
B - Bill of Sale, Assignment and Assumption of Leases and Contracts
C - ERISA Letter
D - Contract Rights, Permits and Approvals
E - Form of Deed
F-1 - Site Plan of Drainage Easement
F-2 - Form of Drainage Easement
G - Mandatory Arbitration
H - Development Costs and Expenses
<PAGE>
Agreement of Purchase and Sale - (Kronos Building, Boston, Massachusetts)
EXHIBIT A
LEGAL DESCRIPTION
[see attached]
<PAGE>
4
Agreement of Purchase and Sale - (Kronos Building, Boston, Massachusetts)
EXHIBIT B
BILL OF SALE, ASSIGNMENT AND ASSUMPTION
(name of property)
THIS BILL OF SALE, ASSIGNMENT AND ASSUMPTION is made as of the _____
day of __________________, by and between ______________ REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership ("Assignor"), and _______________, a
____________ ("Assignee").
W I T N E S S E T H:
For good and valuable consideration, receipt and sufficiency of which
are hereby acknowledged Assignor hereby agree as follows:
1. Assignor hereby sells, transfers, assigns and conveys to Assignee
the following:
a. All right, title and interest of Assignor in and to all
tangible personal property ("Personalty") set forth in the inventory on Exhibit
A attached hereto and made a part hereof, and located on, and used in connection
with the management, maintenance or operation of that certain land and
improvements located in the County of __________, State of ____________, as more
particularly described in Exhibit B attached hereto and made a part hereof
("Real Property"), but excluding tangible personal property owned or leased by
Assignor's property manager.
b. To the extent assignable, all right, title and interest of
Assignor in and to any and all warranties, guaranties, indemnities and claims
(including, without limitation, for workmanship, materials and performance), if
any, which exist or may hereafter exist against any contractor, subcontractor,
manufacturer or supplier or laborer, along with any plans and specifications and
other architectural and engineering drawings for the Real Property, permits and
approvals or development rights for the development of additional improvements
or associated with the existing improvements, including, without limitation,
those set forth on Exhibit D attached hereto and made a part hereof,
(collectively, the "Contracts").
2. This Bill of Sale, Assignment and Assumption is given pursuant to
that certain Agreement of Sale and Purchase (as amended, the "Purchase Agreement
") dated as of _____________, between Assignor and Assignee, providing for,
among other things, the conveyance of the Personalty, the Tenant Leases and the
Contracts.
3. As set forth in Article 11 of the Purchase Agreement, which is
hereby incorporated by reference as if herein set out in full and except as set
forth herein, the property conveyed hereunder is conveyed by Assignor and
accepted by Assignee AS IS, WHERE IS, AND WITHOUT ANY WARRANTIES OF WHATSOEVER
NATURE, EXPRESS OR IMPLIED, EXCEPT AS EXPRESSLY SET FORTH IN THE PURCHASE
AGREEMENT, IT BEING THE INTENTION OF ASSIGNOR AND ASSIGNEE EXPRESSLY TO NEGATE
AND EXCLUDE ALL WARRANTIES, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE, WARRANTIES
CREATED BY ANY AFFIRMATION OF FACT OR PROMISE OR BY ANY DESCRIPTION OF THE
PROPERTY CONVEYED HEREUNDER, OR BY ANY SAMPLE OR MODEL THEREOF, AND ALL OTHER
WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY THE ___________ UNIFORM
COMMERCIAL CODE.
4. Assignee hereby accepts the assignment of the Personalty, the Tenant
Leases and the Contracts and agrees to assume and discharge, in accordance with
the terms thereof, all of the obligations thereunder from and after the date
hereof. Additionally, but without limiting the generality of the foregoing,
Assignee agrees to assume and discharge all leasing commissions, costs for
tenant improvements, legal fees and other costs and expenses incurred with
respect to Leases and Lease renewals and extensions executed subsequent to the
Effective Date of the Agreement and those set forth on Exhibit E attached
hereto.
5. Assignee agrees to indemnify and hold harmless Assignor from any
cost, liability, damage or expense (including attorneys' fees) arising out of or
relating to Assignee's failure to perform any of the foregoing obligations
arising from and accruing on or after the date hereof.
6. Assignor agrees to indemnify and hold harmless Assignee from any
cost, liability, damage or expense (including attorneys' fees) arising out of or
relating to Assignor's failure to perform any of the obligations of Assignor
under the Tenant Leases or Contracts, to the extent accruing prior to the date
hereof.
7. This Bill of Sale, Assignment and Assumption may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Bill
of Sale, Assignment and Assumption as of the date first above written.
ASSIGNOR:
__________ REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: ____________ Gen-Par, Inc.,
a Delaware corporation,
its general partner
By:
Name:
Title:
ASSIGNEE:
-------------------------,
a _______________________
By:
Name:
Title:
[INSERT APPROPRIATE ACKNOWLEDGMENTS FOR THE STATE]
Exhibit A Personalty
Exhibit B Real Property
Exhibit C Tenant Leases
Exhibit D Contracts
Exhibit E Lease Costs and Expenses
<PAGE>
[PG NUMBER]
Agreement of Purchase and Sale - (Kronos Building, Boston, Massachusetts)
EXHIBIT C
ERISA LETTER
____________________, 199__
______________ Real Estate Limited Partnership
Re: Acquisition of [Property] in [City, State]
Ladies and Gentlemen:
The undersigned represents to you that [Purchaser], or any affiliates
thereof, or any firm, person or entity providing financing for the purchase of
the entire interest of _______________ Real Estate Limited Partnership in the
above-described property (the "Property") are not using the assets of an
employee benefit plan as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") and covered under Title I,
Part 4 of the ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended, in the performance or discharge of its obligations under that certain
Agreement of Purchase and Sale dated __________________, 199__, with respect to
the Property by and between _______________ Real Estate Limited Partnership, as
Seller, and the undersigned, as Purchaser, including the acquisition of the
Property.
Very truly yours,
,
a
By:
Name:
Title:
<PAGE>
9
Agreement of Purchase and Sale - (Kronos Building, Boston, Massachusetts)
EXHIBIT D
LIST OF CONTRACT RIGHTS, PERMITS AND APPROVALS
[see attached]
<PAGE>
EXHIBIT E
FORM OF DEED
COMMONWEALTH OF MASSACHUSETTS ss.
ss.
COUNTY OF ss.
W9/TIB-L REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited
partnership having its usual place of business at c/o Archon Group, L.P., 600
Las Colinas Boulevard, Suite 1900, Irving, Texas 75039 ("Grantor"), for
consideration paid, and in full consideration of the sum of Dollars ($ ) grants
to , a ("Grantee"), whose address is , with QUITCLAIM COVENANTS, all of that
certain real property in County, Massachusetts, as more particularly described
on Exhibit A attached hereto and made a part hereof for all purposes, subject
to, however, and with the benefit of, all rights, agreements, easements,
reservations and restrictions of record, insofar as the same are or may be in
force and enforceable, along with the rights of tenants in possession pursuant
to unrecorded leases and to the lien of real property taxes for fiscal year 1999
(i.e., the taxes assessed as of January 1, 1998) and subsequent years to the
extent not yet due and payable, which taxes Grantee, by acceptance and recording
of this Deed, assumes and agrees to pay.
IN WITNESS WHEREOF, the said Grantor has caused these presents to be
signed, acknowledged and delivered in its name and behalf by , Assistant Vice
President of , Inc., its general partner hereto duly authorized, this day of ,
1999 and signed in the presence of:
Name:
GRANTOR:
W9/TIB-L REAL ESTATE LIMITED
PARTNERSHIP,
a Delaware limited partnership
By: , Inc.,
a Delaware corporation,
General Partner
By:
Name:
Title:
THE STATE OF ___________ ss.
ss.
COUNTY OF ___________ ss.
Then personally appeared before me ,the __________________________ of ,
Inc., a Delaware corporation, in its capacity as managing general partner of
W9/TIB-L Real Estate Limited Partnership, a Delaware limited partnership, and
acknowledged that he/she executed the foregoing instrument as the of , Inc., a
Delaware corporation, on behalf of said corporation, in its capacity as managing
general partner of W9/TIB-L Real Estate Limited Partnership, a Delaware limited
partnership, and further acknowledged the foregoing instrument to be his/her
free act and deed and the free act and deed of , Inc., a Delaware corporation,
in its capacity as managing general partner of W9/TIB-L Real Estate Limited
Partnership, a Delaware limited partnership.
Notary Public in and for the State of
{PERSONALIZED SEAL} Print Name of Notary:
My Commission Expires:
____________________________ 19___________
at ____________ o'clock and _______ minutes ___.m.
Received and entered with _______________________
__________________________________________ Deeds
Book _______________, Page ______________
Attest:
- --------------------------------------
Register
RETURN TO:
__________________
<PAGE>
EXHIBIT F-1
SITE PLAN OF DRAINAGE EASEMENT
[see attached]
<PAGE>
EXHIBIT F-2
FORM OF DRAINAGE EASEMENT
[see attached]
<PAGE>
EXHIBIT G
MANDATORY ARBITRATION
The parties have agreed to submit certain disputes to mandatory arbitration in
accordance with the following provisions:
Scope of Arbitration. The parties to this Agreement have agreed to
submit all disputes with an amount in controversy of $250,000.00 or less to
final and binding arbitration as the sole and exclusive remedy for all claims
for damages arising out of, involving, or relating to (a) this Agreement or (b)
the events giving rise to this Agreement, including all non-contractual claims
for damages related to this Agreement or the events giving rise to it (including
claims for fraudulent inducement of contract). Notwithstanding the foregoing,
the dispute resolution procedure set forth below shall not apply to (i) claims
for injunctive or other equitable relief, or (ii) any claims for damages
exceeding $250,000.00. The parties agree that two (2) sets of rules will apply,
depending on the amount in controversy. If the amount in controversy is equal to
or less than $50,000.00, then SET A (as set forth below) will apply. If the
amount in controversy is greater than $50,000.00 and less than or equal to
$250,000.00, then SET B will apply. The amount in controversy is calculated
using the amount of actual damages alleged by the Claiming Party (defined
below), exclusive of interest and attorneys' fees. The dispute resolution
procedure set forth below does not independently give rise to any right or
remedy. The procedure is intended to be applied to rights or remedies expressly
granted in other sections of this Agreement.
Notice of Dispute. Any party shall give the other parties written
notice of the existence and nature of any dispute proposed to be arbitrated (the
"Written Notice"). The Written Notice must be served on the other parties as
required below. The party serving Written Notice shall be referred to as the
"Claiming Party." The party to whom the claims are directed shall be referred to
as the "Responding Party."
Appointment of Arbitrators.
SET A: The parties agree that these disputes will be
arbitrated by a single arbitrator who is a board certified or licensed real
estate attorney in the state in which the Property is located. The parties shall
attempt to agree upon an arbitrator within ten (10) days of the service of the
Written Notice. If the parties are unable to agree, then the arbitrator shall be
appointed from, and pursuant to the rules for commercial arbitration of, the
American Arbitration Association. Prior to appointment, the arbitrator shall
agree to conduct such arbitration in strict accordance with the terms of this
Agreement.
SET B: The parties agree that these disputes will be
arbitrated by a panel of three (3) arbitrators. Each party shall appoint one
person to serve as an arbitrator within fifteen (15) days of receipt of the
Written Notice. The two (2) arbitrators thus appointed shall within seven (7)
days of their appointment together select a third arbitrator with such knowledge
and expertise as necessary to serve as chairman of the panel of arbitrators
(preferably a board certified or licensed real estate attorney in the state in
which the Property is located), and this person shall serve as chairman. The
three arbitrators shall determine all matters, including the panel's final
decision with respect to the claims presented in the arbitration, by majority
vote. If the two arbitrators selected by the parties are unable to agree upon
the appointment of the third arbitrator within seven (7) days of their
appointment, both shall give written notice of such failure to agree to the
parties, and if the parties fail to agree upon the selection of such third
arbitrator within five (5) days thereafter, such third arbitrator shall be
appointed from, and pursuant to the rules for commercial arbitration of, the
American Arbitration Association. Prior to appointment, each arbitrator shall
agree to conduct such arbitration in strict accordance with the terms of this
Agreement.
Initial Meeting of the Arbitrators. Within seven (7) days after the
selection of the last arbitrator (SET A: the arbitrator; SET B: the third
arbitrator), the arbitrator(s) shall conduct an initial meeting with the parties
(the "Initial Meeting"). All meetings between the arbitrators, or between the
arbitrator(s) and the parties, including the Initial Meeting, may be conducted
by telephone, with the exception of the arbitration hearing at which evidence is
presented. At the Initial Meeting, the parties and the arbitrator(s) shall agree
upon a schedule for the arbitration proceedings, with dates no later than the
deadlines provided below. The statement of claim, the response to the statement
of claim and counterclaims (if any), and the response to the counterclaims (if
any) (collectively, the "Pleadings") shall be submitted to each arbitrator on
the date they are served, unless service occurs prior to appointment of all
arbitrators. If service of any of the Pleadings occurs prior to the appointment
of any of the arbitrators, copies of any such Pleadings shall be submitted to
such arbitrator promptly after such arbitrator's appointment.
Conduct of the Arbitration.
SET A: With respect to each dispute to be arbitrated, no more
than six (6) months shall pass between the selection of the arbitrator and the
release of a decision by the arbitrator; no more than two (2) depositions
(lasting in total for both depositions no more than 15 hours) may be taken by
each of the Claiming Party or the Responding Party, and no more than ten (10)
interrogatories may be asked for by each of the Claiming Party or the Responding
Party. The arbitration hearing shall last no more than two (2) days with the
time divided equally between the parties. All proceedings, including discovery,
depositions, and the arbitration hearings shall be governed by the Federal Rules
of Civil Procedure and the Local Rules of Civil Procedure of the United States
District Court for the district in which the Property is located, unless such
rules conflict with the provisions of this Agreement, in which case the
provisions of this Agreement control; provided, however, that the parties agree
that the provisions of Federal Rule of Civil Procedure 26(a) shall not apply.
SET B: With respect to each dispute to be arbitrated, no more
than eleven (11) months shall pass between the selection of the third arbitrator
and the release of a decision by the arbitration panel; no more than eight (8)
depositions (lasting in total for all eight depositions no more than 50 hours)
may be taken by each of the Claiming Party or the Responding Party, and no more
than thirty (30) interrogatories may be asked for by each of the Claiming Party
or the Responding Party. The arbitration hearing shall last no more than five
(5) days with the time divided equally between the parties. All proceedings,
including discovery, depositions, and the arbitration hearings shall be governed
by the Federal Rules of Civil Procedure and the Local Rules of Civil Procedure
of the United States District Court for the district in which the Property is
located, unless such rules conflict with the provisions of this Agreement, in
which case the provisions of this Agreement control; provided, however, that the
parties agree that the provisions of Federal Rule of Civil Procedure 26(a) shall
not apply.
Motions. The parties may make applications to the panel of
arbitrator(s) regarding issues of discovery, procedure and privilege. Any such
motions shall be made to and resolved by the arbitrator(s) as soon as
practicable. No party shall be permitted to file any motions for dismissal of
claims (including dismissal based upon failure to join an indispensable party),
or for summary judgment, concerning the claims or counterclaims asserted in any
arbitration.
Schedule of Arbitration Proceedings.
SET A: At the Initial Meeting, the parties and the
arbitrator shall agree to a schedule that conforms with the
following deadlines:
<TABLE>
<CAPTION>
Event Deadline Not Later Than
<S> <C>
Service of statement of claim by Claiming Party 15 days after service of Written Notice
Service of response to statement of claim and 21 days after service of statement of claim
counterclaims, if any, by Responding Party
Service of response to counterclaims, if any, by 7 days after service of counterclaims, if any
the Claiming Party
Commencement of document discovery 1 day after service of response to statement of claim
Commencement of deposition discovery 45 days after service of statement of claim
Completion of all discovery 100 days after service of statement of claim
Commencement of the arbitration hearing 21 days after the completion of discovery
Issuance of decision by the arbitrator(s) 14 days after receipt of the last hearing transcript
by the arbitrator(s). [All sessions of the arbitration
hearings shall be promptly transcribed and transcripts
shall be promptly provided to the parties and the
arbitrator(s).]
SET B: At the Initial Meeting, the parties and the arbitrators shall agree to a schedule that conforms with the
following deadlines:
Event Deadline Not Later Than
Service of statement of claim by Claiming Party 15 days after service of Written Notice
Service of response to statement of claim and 21 days after service of statement of claim
counterclaims, if any, by Responding Party
Service of response to counterclaims, if any, by 7 days after service of counterclaims, if any
the Claiming Party
Commencement of document discovery 1 day after service of response to statement of claim
Commencement of deposition discovery 75 days after service of statement of claim
Completion of all discovery 200 days after service of statement of claim
Commencement of the arbitration hearing 30 days after the completion of discovery
Issuance of decision by the arbitrator(s) 14 days after receipt of the last hearing transcript
by the arbitrator(s). [All sessions of the arbitration
hearings shall be promptly transcribed and transcripts
shall be promptly provided to the parties and the
arbitrator(s).]
</TABLE>
Extensions of Time. The parties may jointly agree, in writing, to extend any
of the foregoing deadlines.
Decision Binding on the Parties. Unless the parties agree otherwise in
writing, the arbitrator(s)' decision shall become binding on the parties at such
time as the decision is confirmed by order of a court in the jurisdiction where
the Property is located. The parties irrevocably and unconditionally submit to
the jurisdiction of such court for any and all proceedings relating to such
confirmation. Any award ordered shall be paid within ten (10) days of
confirmation of the arbitrator(s)' decision.
Cost of Arbitration Proceeding. Except as specifically provided, the
costs incurred by the parties in conjunction with an arbitration proceeding
pursuant to this Agreement, including reasonable attorney's fees, fees paid to
experts, and fees for obtaining transcripts shall be paid or reimbursed in
accordance with the provisions of Section 10.3 of the Agreement. In the event
that the arbitrators determine that no party is entitled to indemnification by
any other party, then (a) each party shall pay its own expenses, including
attorney's fees, fees paid to experts, fees for obtaining transcripts, expenses
of witnesses called solely by that party, and all fees charged by the arbitrator
appointed by such party and (b) the parties shall each pay fifty percent of all
remaining expenses of the arbitration proceeding.
Service of Documents. Any process, notice, memorandum, motion, demand,
or other paper or communication, or application to the panel of arbitrators
shall be deemed to have been sufficiently served or submitted if done in
accordance with Section 12.9 of this Agreement, except that service by facsimile
shall not suffice for purposes of this Exhibit G.
<PAGE>
1
Agreement of Purchase and Sale - (Kronos Building, Boston, Massachusetts)
EXHIBIT H
EXHIBIT H
297 Billerica Rd.
Category Spent/Date Vendor
Sitework $19,492.98 G. Conway
Subtotal $19,492.98
Architect & Engineer $665.56 Rimmer Environmental
$2,790.00 ENSR
$2,172.03 Elkus Manfredi Architects
$26,182.95 Vanasse & Associates, Inc.
$222,777.72 Spagnolo/Gisness &
Associates, Inc.
$129,110.29 Daylor Consulting Group,
Inc.
Subtotal $383,698.55
Testing $7,716.18 McPhail & Associates
Subtotal $7,716.18
Construction Management Fee $186,070.50 Trammell Crow Company
Subtotal $186,070.50
Legal/Closing $60,754.60 Riemer & Braunstein
Subtotal $60,754.60
Drainage Easement Legal $1,555.85 Choate, Hall, Stewart &
Stevenson
Subtotal $1,555.85
Utility Design and Permit $3,600.00 Massachusetts Electric
$172.00
$1,836.00
Subtotal $5,608.00
Total Costs-to-Date $664,896.66
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Financial Statements of the Corporation for the
six months ended April 3, 1999 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000886903
<NAME> KRONOS, INC
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> APR-03-1999
<CASH> 17,481
<SECURITIES> 21,817
<RECEIVABLES> 52,190
<ALLOWANCES> 1,535
<INVENTORY> 3,501
<CURRENT-ASSETS> 105,316
<PP&E> 50,814
<DEPRECIATION> 35,272
<TOTAL-ASSETS> 177,570
<CURRENT-LIABILITIES> 71,429
<BONDS> 0
0
0
<COMMON> 126
<OTHER-SE> 93,228
<TOTAL-LIABILITY-AND-EQUITY> 177,570
<SALES> 73,823
<TOTAL-REVENUES> 114,801
<CGS> 17,313
<TOTAL-COSTS> 42,170
<OTHER-EXPENSES> 60,673
<LOSS-PROVISION> 346
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 11,958
<INCOME-TAX> 4,197
<INCOME-CONTINUING> 7,761
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,761
<EPS-PRIMARY> $0.62
<EPS-DILUTED> $0.60
</TABLE>
