Construction Agreement - Standard Form of Agreements Between Owner and Design/Builder

Exhibit 10.12


Standard Form of Agreements Between
Owner and Design/Builder


AIA Document A191 -- Electronic Format


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THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES: CONSULTATION WITH AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.


Copyright 1985, (C)1996 The American Institute of Architects, 1733 New York Avenue, NW, Washington, DC 20006-5292. Reproduction of the material herein or substantial quotation of its provisions without the written permission of the AIA violates the copyright laws of the United States and will subject the violator to legal prosecution.


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1996 EDITION


TABLE OF ARTICLES


PART 1 AGREEMENT


1. Design/Builder 6. Dispute Resolution - Mediation and Arbitration


2. Owner 7. Miscellaneous Provisions


3. Ownership and Use of Documents and 8. Termination of the Agreement
Electronic data
9. Basis of Compensation 4. Time
10. Other Conditions and Services 5. Payments


PART 2 AGREEMENT 1. General Provisions 8. Changes in the Work


2. Owner 9. Correction of Work


3. Design/Builder 10. Dispute Resolution - Mediation and Arbitration


4. Time 11. Miscellaneous Provisions


5. Payments 12. Termination of the Agreement


6. Protection of Persons and Property 13. Basis of Compensation


7. Insurance and Bonds 14. Other Conditions and Services


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Standard Form of Agreements Between
Owner and Design/Builder


AIA Document A191 -- Electronic Format


This document comprises two separate Agreements: Part 1 Agreement and Part 2 Agreement. Before executing the Part 1 Agreement, the parties should reach substantial agreement on the Part 2 Agreement. To the extent referenced in these Agreements, subordinate parallel agreements to A191 consist of AIA Document A491, Standard Form of Agreements Between Design/Builder and Contractor, and AIA Document B901, Standard Form of Agreements Between Design/Builder and Architect.


PART 1 AGREEMENT


1996 EDITION


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AGREEMENT


made as of the 11th day of August in the year of nineteen hundred ninety nine
---- ---------------------------- (1999) ------ (In words, indicate day, month and year.)


BETWEEN the Owner: (Name and address) MediChem Research, Inc., an Illinois corporation ------------------------------------------------- 12305 South New Avenue ---------------------- Lemont, Illinois 60439 ----------------------


and the Design/Builder: (Name and address) Walsh Construction Company of Illinois, an Illinois corporation --------------------------------------------------------------- 929 West Adams Street --------------------- Chicago, Illinois 60607 -----------------------


For the following Project: (Include Project name, location and a summary description) MediChem New Corporate Center and Research and Development Facility on ---------------------------------------------------------------------- approximately 14.2 acres ("Project Parcel") situated in the International ------------------------------------------------------------------------- Centre, Woodridge, Illinois. ----------------------------


The architectural services described in Article I will be provided by Solomon,
-------- Cordwell Buenz & Associates Inc. who is lawfully licensed to practice -------------------------------- architecture in Illinois, pursuant to a contract with the Design/Builder dated
----------------------------------- August 11, 1999.


Normal structural, mechanical and electrical engineering services will be provided by the following consultants licensed to practice in Illinois pursuant
---------------------------- ----------------------------------------- to separate contracts with the Design/Builder: --------------------------------------------- Space Civil Engineer ---------------------------------------------- Welsh Engineering Structural Engineer --------------------------------------------------- McGuire Engineering Mechanical/Electrical/Fire Protection Engineers ------------------------------------------------------------------------------- Allan Kracower Associates Inc. Landscape Architect ---------------------------------------------------


The Owner and the Design/Builder agree as set forth below.


RECITALS


1. The Design/Builder has represented to the Owner that it is an expert in the
construction of research and office facilities and will contract with
consultants who are expert in the design and engineering of research and
office facilities. The Design/Builder acknowledges that Owner, in entering
into the Agreement is seeking to consolidate the responsibility for the
design, engineering and construction of the Corporate Center and Research
and Development Facility in the Design/Builder.


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TERMS AND CONDITIONS -- PART I AGREEMENT


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ARTICLE 1
DESIGN/BUILDER


1.1 SERVICES


1.1.1 Preliminary design, budget, and schedule comprise the services required to accomplish the preparation and submission of the Design/Builder's Proposal as well as the preparation and submission of any modifications to the Proposal prior to execution of the Part 2 Agreement.


1.2 RESPONSIBILITIES


1.2.1 Design services required by this Part 1 Agreement shall be performed by qualified architects and other design professionals. The contractual obligations of such professional persons or entities are undertaken and performed in the interest of the Design/Builder.


1.2.2 The agreements between the Design/Builder and the persons or entities identified in this Part 1 Agreement, and any subsequent modifications, shall be in writing. These agreements, including financial arrangements with respect to this Project, shall be promptly and fully disclosed to the Owner upon request.


1.2.3 Construction budgets shall be prepared by qualified professionals, cost estimators or contractors retained by and acting in the interest of the Design/Builder.


1.2.4 The Design/Builder shall be responsible to the Owner for acts and omissions of the Design/Builder's Design employees, subcontractors and their agents and employees, persons, including the Architect and other design professionals, performing any portion of the Design/Builder's obligations under this Part 1 Agreement.


1.2.5 If the Design/Builder believes or is advised by the Architect or by another design professional retained to provide services on the Project that implementation of any instruction received from the Owner would cause a violation of any applicable law, the Design/Builder shall notify the Owner in writing. The Design/Builder shall not be obligated to perform any act which it
--- --- believes will violate any applicable law.


1.2.6 Nothing contained in this Part 1 Agreement shall create a contractual relationship between the Owner and any person or entity other than the Design/Builder.


1.3 BASIC SERVICES


1.3.1 The Design/Builder shall provide a preliminary evaluation of the Owner's program and project budget requirements, each in terms of the other.


1.3.2 The Design/Builder shall visit the site, become familiar with the local conditions, and correlate observable conditions with the requirements of the Owner's program, schedule, and budget.


1.3.3 The Design/Builder shall review laws applicable to design and construction of the Project correlate such laws with the Owner's program requirements; and advise the Owner if any program requirement may cause a violation of such laws. Necessary changes to the Owner's program shall be accomplished by appropriate written modification or disclosed as described in Paragraph 1.3.5.


1.3.4 The Design/Builder shall review with the Owner alternative approaches to design and construction of the Project.


1.3.5 The Design/Builder shall submit to the Owner a Proposal, including the completed Schematic Design Documents, a statement of the proposed contract sum,
--------- and proposed schedule for completion of the Project. Schematic Design Documents
--------- shall consist of preliminary design drawings, outline specifications or other documents sufficient to establish the size, quality and character of the entire Project, its architectural, structural, mechanical and electrical systems, and the materials and such other elements of the Project as may be appropriate. Deviations from the Owner's program shall be disclosed in the Proposal. If the Proposal is accepted by the Owner, the parties shall then execute the Part 2 Agreement. A modification to the Proposal before execution of the Part 2 Agreement shall be recorded in writing as an addendum and shall be identified in the Contract Documents of the Part 2 Agreement.


1.4 ADDITIONAL SERVICES


1.4.1 The Additional Services described under this Paragraph 1.4 shall be provided by the Design/Builder and paid for by the Owner if authorized or confirmed in writing by the Owner.


1.4.2 Making revisions in the Preliminary Design Documents, budget or other documents when such revisions are:


.1 inconsistent with approvals or instructions previously given by the
Owner, including revisions made necessary by adjustments in the
Owner's program or Project budget;


.2 required by the enactment or revision of codes, laws or regulations
subsequent to the preparation of such documents; or


.3 due to changes required as a result of the Owner's failure to render
decisions in a timely manner.


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1.4.3 Providing more extensive programmatic criteria than that furnished by the Owner as described in Paragraph 2.1. When authorized, the Design/Builder shall provide professional services to assist the Owner in the preparation of the program. Programming services may consist of:


.1 consulting with the Owner and other persons or entities not
designated in this Part 1 Agreement to define the program
requirements of the Project and to review the understanding of such
requirements with the Owner;


.2 documentation of the applicable requirements necessary for the
various Project functions or operations;


.3 providing, a review and analysis of the functional and
organizational relationships, requirements, and objectives for the
Project;


.4 setting forth a written program of requirements for the Owner's
approval which summarizes the Owner's objectives, schedule,
constraints, and criteria.


1.4.4 Providing financial feasibility or other special studies.


1.4.5 Providing planning surveys, site evaluations, or comparative studies of prospective sites.


1.4.6 Providing special surveys, environmental studies, and submissions required for approvals of governmental authorities or others having jurisdiction over the Project.


1.4.7 Providing services relative to future facilities, systems, and equipment.


1.4.8 Providing services at the Owner's specific request to perform detailed investigations of existing conditions or facilities or to make measured drawings thereof.


1.4.9 Providing services at the Owner's specific request to verify the accuracy of drawings or other information furnished by the Owner.


1.4.10 Coordinating services in connection with the work of separate persons or entities retained by the Owner subsequent to the execution of this Part 1 Agreement.


1.4.11 Providing analyses of owning and operating costs.


1.4.12 Providing interior design and other similar services required for or in connection with the selection, procurement or installation of furniture, furnishings, and related equipment.


1.4.13 Providing services for planning tenant or rental spaces.


1.4.14 Making investigations, inventories of materials or equipment, or valuations and detailed appraisals of existing facilities.


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ARTICLE 2
OWNER


2.1 RESPONSIBILITIES


2.1.1 The Owner shall provide full information in a timely manner regarding requirements for the Project, including a written program which shall set forth the Owner 's objectives, schedule, constraints and criteria.


2.1.2 The Owner shall establish and update an overall budget for the Project, including reasonable contingencies. This budget shall not constitute the contract sum.


2.1.3 The Owner shall designate a representative authorized to act on the Owner's behalf with respect to the Project. The Owner or such authorized representative shall render decisions in a timely manner pertaining to documents submitted by the Design/Builder in order to avoid unreasonable delay in the orderly and sequential progress of the Design/Builder's services. The Owner may obtain independent review of the documents by a separate architect, engineer, contractor, or cost estimator under contract to or employed by the Owner. Such independent review shall be undertaken at the Owner's expense in a timely manner and shall not have the orderly progress of the Design/Builder's services.


2.1.4 The Owner shall furnish surveys describing physical characteristics, legal limitations and utility locations for the site of the Project, and a written legal description of the site. The surveys and legal information shall include, as applicable, grades and lines of streets, alleys, pavements, and adjoining property and structures; adjacent drainage; rights-of-way, restrictions, easements, encroachments, zoning deed restrictions, boundaries and contours of the site; locations, dimensions and necessary data pertaining to existing buildings, other improvements and trees; and information concerning available utility services and lines, both public and private, above and below grade, including inverts and depths. All the information on the survey shall be referenced to a Project bench-mark.


2.1.5 The Owner shall furnish the services of geotechnical engineers when such services are stipulated in this Part 1 Agreement, or deemed reasonably necessary by the Design/Builder. Such services may include but are not limited to test borings, test pits, determinations of soil bearing values, percolation tests, evaluations of hazardous materials, ground corrosion and resistivity tests, and necessary operations for anticipating, subsoil conditions. The services of geotechnical engineer(s) or other consultants shall include preparation and submission of all appropriate reports and professional recommendations.


2.1.6 The Owner shall disclose, to the extent known to the owner, the results and reports of prior tests, inspections or investigations conducted for the Project involving: structural or mechanical systems; chemical, air and water pollution hazardous materials; or other environmental and subsurface conditions. The Owner shall disclose all information known to the Owner regarding the presence of pollutants at the Project's site.


2.1.7 The Owner shall furnish all legal, accounting and insurance counseling services as may be necessary at any time for the Project, including such auditing services as the Owner may require to verify the Design Builder's Applications for Payment.


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2.1.8 The Owner shall promptly obtain easements, zoning variances, and legal authorizations regarding site utilization where essential to the execution of the Owner's program.


2.1.9 Those services, information. surveys, and reports required by Paragraphs 2.1.4 through 2.1.8 which are within the Owner's control shall be furnished at the Owner's expense, and the Design/Builder shall be entitled to rely upon the accuracy and completeness thereof, except to the extent the Owner advises the Design/Builder to the contrary in writing.


2.1.10 If the Owner requires the Design/Builder to maintain any special insurance coverage, policy, amendment, or rider, above and beyond that required
------------------------------ by the Contract Documents, the Owner shall pay the additional cost thereof, ------------------------- except as otherwise stipulated in this Part 1 Agreement.


2.1.11 The Owner shall communicate with persons or entities employed or retained by the Design/Builder through the Design/Builder, unless otherwise directed by the Design/Builder.


ARTICLE 3
OWNERSHIP AND USE OF DOCUMENTS
AND ELECTRONIC DATA


3.1 Drawings, specifications, and other documents and electronic data furnished by the Design/Builder are instruments of service. The Design/Builder's Architect and other providers of professional services shall retain all common law, statutory and other reserved rights including copyright in those instruments of service furnished by them. Drawings, specifications, and other documents and electronic data are furnished for use solely with respect to this Part 1 Agreement. The Owner shall be permitted to retain copies, including reproducible copies, of the drawings, specifications, and other documents and electronic data furnished by the Design/Builder for information and reference in connection with the Project except as provided in Paragraphs 3.2 and 3.3.


3.2 If the Part 2 Agreement is not executed, the Owner shall not use the drawings, specifications, and other documents and electronic data furnished by the Design/Builder without the written permission of the Design/Builder. Drawings, specifications, and other documents and electronic data shall not be used by the Owner or others on other projects, for additions to this Project or for completion of this Project by others, except by agreement in writing and with appropriate compensation to the Design/Builder, unless the Design/Builder is adjudged to be in default under this Part 1 Agreement or under any other subsequently executed agreement, or by agreement in writing.


3.3 If the Design/Builder defaults in the Design/Builder's obligations to the Owner, the Architect shall grant a license to the Owner to use the drawings, specifications, and other documents and electronic data furnished by the Architect to the Design/Builder for the completion of the Project, conditioned upon the Owner's execution of an agreement to cure the Design/Builder's default in payment to the Architect for services previously performed and to indemnify the Architect with regard to claims arising from such reuse without the Architect's professional involvement.


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3.4 Submission or distribution of the Design/Builder's documents to meet official regulatory requirements or for similar purposes in connection with the Project is not to be construed as publication in derogation of the rights reserved in Paragraph 3.1.


ARTICLE 4
TIME


4.1 Upon the request of the Owner, the Design/Builder shall prepare a schedule for the performance of the Basic and Additional Services which shall not exceed the time limits contained in Paragraph 10.1 and shall include allowances for periods of time required for the Owner's review and for approval of submissions by authorities having jurisdiction over the Project.


4.2 If the Design/Builder is delayed in the performance of services under this Part 1 Agreement through no fault of the Design/Builder, any applicable schedule shall be equitably adjusted.


ARTICLE 5
PAYMENTS


5.1 The initial payment provided in Article 9 shall be made upon execution of this Part 1 Agreement and credited to the Owner's account as provided in Subparagraph 9.1.2.


5.2 Subsequent payments for Basic Services, Additional Services and Reimbursable Expenses provided for in this Part 1 Agreement shall be made monthly on the basis set forth in Article 9.


5.3 Within ten (10) days of the Owner's receipt of a properly submitted and correct Application for Payment, the Owner shall make payment to the Design/Builder.


5.4 Payments due the Design/Builder under this Part 1 Agreement which are not paid when due shall bear interest from the date due at the rate specified in Paragraph 9.5, or in the absence of a specified rate, at the legal rate prevailing where the Project is located.


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ARTICLE 6
DISPUTE RESOLUTION -- MEDIATION
AND ARBITRATION


6.1 Claims, disputes or other matters in question between the parties to this Part 1 Agreement arising out of or relating to this Part 1 Agreement or breach thereof shall be subject to and decided by mediation or arbitration. Such mediation or arbitration shall be conducted in accordance with the Construction Industry Mediation or Arbitration Rules of the American Arbitration Association currently in effect.


6.2 In addition to and prior to arbitration, the parties shall endeavor to settle disputes by mediation. Demand for mediation shall be filed in writing with the other party to this Part 1 Agreement and with the American Arbitration Association. A demand for mediation shall be made within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall the demand for mediation be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of repose or limitations.


6.3 Demand for arbitration shall be filed in writing with the other party to this Part 1 Agreement and with the American Arbitration Association. A demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statutes of repose or limitations.


6.4 An arbitration pursuant to this Paragraph may be joined with an arbitration involving common issues of law or fact between the Design/Builder and any person or entity with whom the Design/Builder has a contractual obligation to arbitrate disputes. No other arbitration arising out of or relating to this Part 1 Agreement shall include, by consolidation, joinder or in any other manner, an additional person or entity not a party to this Part 1 Agreement or not a party to an agreement with the Design/Builder, except by written consent containing a specific reference to this Part 1 Agreement signed by the Owner, the Design/Builder and all other persons or entities sought to be joined. Consent to arbitration involving an additional person or entity shall not constitute consent to arbitration of any claim, dispute or other matter in question not described in the written consent or with a person or entity not named or described therein. The foregoing agreement to arbitrate and other agreements to arbitrate with an additional person or entity duly consented to by the parties to this Part 1 Agreement shall be specifically enforceable in accordance with applicable law in any court having jurisdiction thereof.


6.5 The award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.


ARTICLE 7
MISCELLANEOUS PROVISIONS


7.1 Unless otherwise provided, this Part 1 Agreement shall be achieved by the law of the place where the Project is located.


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7.2 The Owner and the Design/Builder, respectively, bind themselves, their partners, successors, assigns and legal representatives to the other party to this Part 1 Agreement and to the partners, successors and assigns of such other party with respect to all covenants of this Part 1 Agreement. Neither the Owner nor the Design/Builder shall assign this Part 1 Agreement without the written consent of the other.


7.3 Unless otherwise provided, neither the design for nor the cost of remediation of hazardous materials shall be the responsibility of the Design/Builder.


7.4 This Part 1 Agreement represents the entire and integrated agreement between the Owner and the Design/Builder and supersedes all prior negotiations, representations or agreements, either written or oral. This Part 1 Agreement may be amended only by written instrument signed by both the Owner and the Design/Builder.


7.5 Prior to the termination of the services of the Architect or any other design professional designated in this Part 1 Agreement, the Design/Builder shall identify, to the Owner in writing another architect or design professional with respect to whom the Owner has no reasonable objection, who will provide the services originally to have been provided by the Architect or other design professional whose services are being terminated.


ARTICLE 8
TERMINATION OF THE AGREEMENT


8.1 This Part 1 Agreement may be terminated by either party upon seven (7) days' written notice should the other party fail to perform substantially in accordance with its terms through no fault of the party initiating the termination.


8.2 This Part 1 Agreement may be terminated by the Owner without cause upon at least seven (7) days' written notice to the Design/Builder.


8.3 In the event of termination not the fault of the Design/Builder, the Design/Builder shall be compensated for services performed to the termination date, together with Reimbursable Expenses.


ARTICLE 9
BASIS OF COMPENSATION


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