Owner/Contractor Agreement for Construction

OWNER/CONTRACTOR AGREEMENT
FOR CONSTRUCTION


BETWEEN


OWNER


ALTERA CORPORATION
2610 ORCHARD PARKWAY
SAN JOSE, CA 95134-2020


AND


CONTRACTOR


RUDOLPH AND SLETTEN, INC.
P.O. BOX 4637
989 E. HILLSDALE BLVD., SUITE 100
FOSTER CITY, CA 94404


JANUARY 10, 1996 2
TABLE OF CONTENTS


ARTICLE 1: DEFINITIONS.................................................... 2


ARTICLE 2: CONTRACT DOCUMENTS............................................. 6


ARTICLE 3: THE WORK....................................................... 6


ARTICLE 4: CONTRACTOR'S DUTIES AND STATUS................................. 6


ARTICLE 5: CONTRACT TIME.................................................. 9


ARTICLE 6: COST OF THE WORK AND GUARANTEED MAXIMUM PRICE.................. 10


ARTICLE 7: CONTRACTOR'S FEE............................................... 11


ARTICLE 8: CHANGE IN THE WORK............................................. 12


ARTICLE 9: COSTS TO BE REIMBURSED......................................... 13


ARTICLE 10: COSTS NOT TO BE REIMBURSED.................................... 16


ARTICLE 11: DISCOUNTS, REBATES AND REFUNDS................................ 17


ARTICLE 12: SUBCONTRACTS AND OTHER AGREEMENTS............................. 17


ARTICLE 13: ACCOUNTING RECORDS............................................ 18


ARTICLE 14: APPLICATIONS FOR PAYMENT...................................... 18


ARTICLE 15: PAYMENTS TO CONTRACTOR........................................ 21


ARTICLE 16: TERMINATION OF AGREEMENT...................................... 25


ARTICLE 17: MISCELLANEOUS PROVISIONS...................................... 29


ARTICLE 18: EXHIBITS...................................................... 34 3
OWNER/CONTRACTOR AGREEMENT
FOR CONSTRUCTION
(GUARANTEED MAXIMUM PRICE)


THIS AGREEMENT is made as of January 10, 1995


BETWEEN


Owner: Altera Corporation
2610 Orchard Parkway
San Jose, CA 95134-2020


and Contractor: Rudolph and Sletten, Inc.
P.O. Box 4637
989 E. Hillsdale Blvd., Suite 100
Foster City, CA 94404


For the Project: Altera Corporation Headquarters Project
North First Street and Caviglia Drive
San Jose, CA


Project Architect: Robinson Mills + Williams
50 W. San Fernando St.
Suite 330
San Jose, CA 95113


Contractor agrees to provide certain construction services, and Owner agrees to compensate Contractor for such services, on the following terms and conditions:


January 10, 1995
Page 1 4 ARTICLE 1: DEFINITIONS


1.1 Interpretation and Use of Definitions. All capitalized terms and words (other than proper nouns) used in this Agreement shall have the meanings set forth below, unless otherwise defined in this Agreement or unless another meaning is clearly intended based on the express language of the applicable provision.


.1 Agreement. This Owner/Contractor Agreement for Construction between Owner and Contractor, including all attached Exhibits, and any addenda and/or modifications to any of the foregoing.


.2 Architect. The Project Architect identified above.


.3 Certificate of Occupancy. Written notification by the City of San Jose of satisfaction of all terms, conditions and other provisions of all necessary permits and approvals authorizing the full use and occupancy of the respective Segment of the Work for the purposes intended without restriction.


.4 Certificate of Substantial Completion. A certificate prepared by Architect pursuant to Subparagraph 9.8.2 of the General Conditions, certifying that the Work is Substantially Complete and establishing the date of Substantial Completion.


.5 Change Order. Defined in Paragraph 8.2.


.6 Change Order Request. Defined in Paragraph 8.2.


.7 Change Order Work. A Change in the Work covered by any approved Change Order.


.8 Claim. A demand or assertion by one of the parties seeking, as a matter of right, an adjustment or interpretation of the terms of the Agreement, payment of money, extension of time, or other relief with respect to the terms of the Agreement, whether arising due to an error or omission, breach of the Agreement, or otherwise.


.9 Confidential Information. Defined in Exhibit G.


.10 Construction Schedule. Defined in Paragraph 5.1.


.11 Contract Documents. Defined in Paragraph 2.1.


January 10, 1995
Page 2 5
.12 Contract Time. The period of time, including adjustments authorized by Change Orders, allotted in the Contract Documents for Substantial Completion of each respective building or other applicable Segment of the Work.


.13 Contractor. Rudolph and Sletten, Inc., a California corporation.


.14 Contractor's Fee. Defined in Article 7.


.15 Cost of the Work. Defined in Article 9.


.16 Day. Calendar day unless otherwise specifically designated.


.17 Default Rate. The "reference rate" or "prime rate" published from time to time by Bank of America, N.T.& S.A., as the rate at which it lends funds to credit worthy borrowers, plus two percent (2%); provided, however, that in no event shall any interest or other amount due, payable or paid hereunder, or pursuant to any other provision of this Agreement or any Contract Documents, exceed the maximum applicable legal interest rate in effect from time to time.


.18 Drawings and Specifications. The drawings, specifications and other documents which fix and describe the size and character of the entire Project as to, without limitation, architecture, structure, electrical systems, mechanical systems, civil engineering and landscaping.


.19 Equipment Schedule. Defined in Subparagraph 9.1.5.


.20 Event of Default. Defined in Paragraph 16.3.


.21 Final Application for Payment. An Application for Payment for the Final Payment, which shall only be made in accordance with the provisions of Paragraph 15.8.


.22 Final Completion. The status of the Work when all Punch List items have been fully and finally completed, and all final releases, documents and manuals required by the Contract Documents have been delivered.


.23 Final Payment. Defined in Paragraph 15.8.


.24 Force Majeure Delay. A delay in Contractor's performance under this Agreement due to: an act or omission of Owner or Architect or any of their respective employees or agents; labor disputes not caused by Contractor, fire, unusual delay in transportation, adverse weather conditions not reasonably foreseeable, unavoidable casualties, or any similar causes beyond the reasonable control of Contractor and not reasonably foreseeable by Contractor, for which a written claim of justifiable delay is made by Contractor pursuant to Paragraph 8.3 of the General Conditions.


January 10, 1995
Page 3 6
.25 General Conditions. Those "General Conditions of the Contract for Construction" set forth in Exhibit I attached hereto.


.26 General Work Requirements. The portions of the Work and related requirements that apply generally to site conditions, site safety, permits, taxes, insurance, jobsite administration, and so forth, as described more specifically in Exhibit E attached to this Agreement.


.27 Guaranteed Maximum Price. Defined in Paragraph 6.2.


.28 Laws. All Federal, State and local laws, statutes, ordinances, rules, regulations, building codes and orders applicable to the Project, the Work, the parties to this Agreement or otherwise governing the foregoing, as well as those certain covenants, conditions and restrictions (CC&R's) recorded in the Official Records of Santa Clara County on February 7, 1980 in Book F 128, Page 480, as amended (the Protea CC&R's), and on February 7, 1985 in Book J 232, Page 651, as amended (the NELO CC&R's).


.29 Mechanics' Lien. Any mechanics' lien, materialmen's lien, stop notice, charge, imposition, garnishment or attachment upon or against the Property, the Project or Owner.


.30 Notice of Completion. A written notice verified by Owner or Owner's authorized agent, and recorded with the Santa Clara County Recorder within 10 days after completion of a Segment of the Work, pursuant to Section 3093 of the California Civil Code.


.31 Notice to Proceed. Owner's issuance to Contractor of an instruction to proceed with a defined scope of Work prior to Owner's having approved the Guaranteed Maximum Price.


.32 Owner. Altera Corporation, a California corporation.


.33 Preconstruction Services. Services performed by Contractor prior to commencement of construction, as defined in Subparagraph 9.1.16.


.34 Project. 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 as described in Paragraph 3.1. The Project will include (i) approximately 360,000 square feet consisting of a Corporate Building with 4 levels, a Production Building with 2 levels, and an Engineering Building with 3 levels, all with shell, core, sitework and interior improvements; and (ii) approximately 150,000 square feet consisting of an Expansion Building with 3 levels, with shell, core, sitework, and partial interior improvements.


.35 Property. The real property described in Exhibit A attached hereto, which is also the site of the Project.


January 10, 1995
Page 4 7
.36 Punch List. A comprehensive list of minor items to be completed or corrected following Substantial Completion of the Work, which items shall not materially affect the use or aesthetic appearance of the Project.


.37 Schedule of Values. Defined in Paragraph 6.3.


.38 Segment. Each separate building, design/build system, or distinct portion of the Work covered by a separate Notice to Proceed.


.39 Subcontract. A written agreement between the Contractor and another party to perform a portion of the Work or to supply equipment, materials or labor to the Project, as defined in Paragraph 12.1.


.40 Subcontractor. A person or entity who, pursuant to a Subcontract, is retained by Contractor to perform a portion of the Work or to supply equipment, materials or labor to the Project, including without limitation any subcontractor, sub-subcontractor, laborer, design professional, engineer, surveyor, consultant, equipment lessor, supplier or other materialman so retained, but excluding any separate contractor retained by Owner to construct any portion of the Project that is not within the scope of the Work.


.41 Substantial Completion. The status of the Work when (i) Owner and Architect agree that the Work is sufficiently complete to permit Owner to occupy or utilize the Work (or designated portion thereof) for the use for which it is intended and (ii) Contractor has delivered to the Owner all information showing the Work to be sufficiently complete to allow Owner to obtain a Certificate of Occupancy.


.42 Work. The construction and services required and reasonably implied or inferred to be required by the Contract Documents, whether such work is 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 includes all Work which would reasonably be inferred or anticipated by a contractor with Contractor's experience and expertise after reviewing the Contract Documents. The Work may constitute the whole or a part of the Project.


ARTICLE 2: CONTRACT DOCUMENTS


2.1 The Contract Documents consist of this Agreement (including all exhibits attached hereto), the Drawings and Specifications, all Notices to Proceed issued by Owner, and all Change Orders executed by Owner and Contractor. The Contract Documents are further enumerated in Exhibit B attached hereto, entitled "Contract Documents," and are incorporated herein by this reference, and supersede all prior negotiations, representations and agreements, either written or oral, between Owner and Contractor with respect to the Work. The Contract Documents shall not include shop drawings, product data, or samples


January 10, 1995
Page 5 8 as described in Paragraph 3.12 of the General Conditions. The Contract Documents will be developed and completed in accordance with the Construction Schedule. As Contract Documents are completed, they shall become a part of this Agreement.


ARTICLE 3: THE WORK


3.1 Subject to Article 4 below, Contractor shall perform all the Work required for the Project under the Contract Documents. The Work includes, without limitation, the sitework, the core and shell of each of the buildings, and the interior improvements of each of the buildings (but only partial interiors for the Expansion Building). The Property is approximately twenty five (25) acres. Parking lots and landscaping will be built out for the entire 25 acre site. The buildings will be steel framed with curtainwall and pre-cast concrete exteriors, or such other materials as Owner elects.


3.2 Owner may require Subcontracts to include hourly rates, unit prices, alternate prices or allowances for certain portions of the Work. Contractor shall be liable for the enforcement and administration of such hourly rates, unit prices, alternate prices or allowances until completion of the Work. Such Subcontracts shall provide that if this Agreement is terminated, or if Owner wishes to engage a Subcontractor directly for work that is not part of Contractor's Work under this Agreement, then Owner shall be entitled to contract with Subcontractor directly on the basis of such rates, prices and allowances.


ARTICLE 4: CONTRACTOR'S DUTIES AND STATUS


4.1 Contractor shall perform all services and prosecute the Work under and pursuant to this Agreement with the degree of care, skill and diligence generally recognized as applicable to general contractors of good reputation performing services of the nature encompassed in the Work in the San Francisco Bay Area.


4.1.1 Contractor is skilled in the professional calling necessary to perform the Work. Any references, terms or provisions in this Agreement, the General Conditions or any other Contract Documents to the standard of care or degree of knowledge or deemed knowledge to be applied to Contractor's performance of the Work shall be deemed to refer to the standards set forth in this Paragraph 4.1.


4.1.2 Contractor acknowledges that Owner, not being skilled in such matters, is relying upon the skill and knowledge of Contractor with respect to the Work. Contractor accepts the relationship of trust and confidence established by this Agreement. Contractor shall exercise its best skill and judgment, and shall cooperate with Architect to further the interests of Owner. Contractor shall furnish efficient business administration and superintendence, and shall use its best efforts to furnish at all times an adequate supply of workers and materials, and to perform the Work in the best, most expeditious and most economical manner consistent with the interests of Owner.


January 10, 1995
Page 6 9 4.2 Contractor shall furnish and transport all necessary labor, materials, tools, implements and appliances required to perform and completely finish the Work as described in Article 3 of this Agreement, in a workmanlike manner, and to the satisfaction and approval of Owner and Architect, in accordance with the Contract Documents, free of any and all Mechanics' Liens and claims of Subcontractors.


4.3 Contractor agrees that the design and construction of any design/build portion of the Project shall be in conformity in all respects with all Laws. Contractor shall not construct any portions of the Work when it knows or should reasonably know, as a competent and experienced general contractor, that such Work or any portion thereof was designed in violation of any Law. Contractor shall not construct any portion of the Work when it knows or should reasonably know, as a competent and experienced general contractor, that such portion of the Work is unbuildable or unsafe. Contractor shall require design/build Subcontractors to obtain and maintain such insurance coverages, including professional liability, as Owner requires.


4.4 The services to be performed by Contractor pursuant to this Agreement and any of the Contract Documents shall not constitute it as an architect or engineer, nor impose upon Contractor any obligation to assume, or to render to, or to perform on behalf of Owner, the professional responsibilities, duties, services and activities for which Owner has contracted with Architect, nor impose upon Contractor any liability with respect thereto. Subject to the provisions of Paragraphs 4.1 and 4.3 of this Agreement, above, Contractor assumes no responsibility or liability in connection with the design of the Project nor for the failure of Architect to provide any such design for the Project. Contractor, by the performance of its duties under this Agreement, shall not be deemed to have relieved Architect of any responsibilities for services to be rendered by Architect with respect to the Project, whether pursuant to the written agreement between Owner and Architect or otherwise, nor shall Contractor incur any liability for Architect's failure or refusal to perform or render any such services. Contractor shall promptly notify Owner and/or Architect, in writing, if Contractor becomes aware that any needed designs for the Project are omitted, and Contractor shall not proceed with the relevant part of the Project until so directed by Owner.


4.5 Intentionally omitted.


4.6 Contractor hereby certifies that it has verified, to the best of its ability, the coordination and completeness of all Contract Documents. Contractor shall review all Contract Documents prior to their being issued for Subcontractor bidding. Following this review, Contractor shall advise Owner and Architect of any areas where the Contract Documents are incomplete or lacking in clarity. The Architect shall coordinate with the Contractor for the Work of the design/build Subcontractors by providing drawing backgrounds for their Work, conducting meetings for the purpose of coordination, and establishing completion dates for their Work in the Construction Schedule. The design/build Subcontractors will be responsible for coordinating their Work with that of the Architect and its subconsultants on the Project. The Construction Schedule will establish mutually agreed milestones and completion dates for the design/build Subcontractors' Work. If any changes are required to other aspects


January 10, 1995
Page 7 10 of the design because of insufficient information provided by Contractor on the design/build systems or failure to meet an applicable completion date in the Construction Schedule, the services of the Architect in connection with such changes shall be paid by the Contractor and shall not be a Cost of the Work. Conversely, the Architect's contract with Owner shall provide that if any changes are required to the design/build Subcontractor's Work due to insufficient information on the Architect's drawings or failure by the Architect to meet an applicable completion date in the Construction Schedule, the Architect is responsible for the cost of the time incurred by the Subcontractors to make changes to their drawings.


4.7 Contractor has considered all information relevant to the Project and available as of the date of this Agreement. Contractor shall coordinate its construction with other projects under construction in the immediate vicinity of the Project. As of the time that Owner and Contractor agree upon the Guaranteed Maximum Price pursuant to Paragraph 6.2(iii), Contractor shall have satisfied itself with respect to visible conditions, then-current public knowledge, matters of record, and all other then-existing information relevant to the Project and available to Contractor. Contractor's agreement to the Guaranteed Maximum Price shall be deemed conclusively to be an acceptance by Contractor of the foregoing information, and a determination by Contractor that the Guaranteed Maximum Price is just and reasonable compensation for the Work. The Contractor shall be entitled to reasonably rely on all information the Owner has provided concerning the Project.


4.8 If any disputed Claim (as defined in Paragraph 1.1) should arise between Owner and Contractor under this Agreement or otherwise concerning the Work, Contractor shall proceed to perform the Work as directed by Owner pending settlement of the dispute in accordance with Article 4 of the General Conditions. Until any such disputed Claim is settled, Owner shall continue to pay Contractor all sums due Contractor which are not in dispute and/or are not directly related to Work which is in dispute.


4.9 Contractor shall warrant the Work to Owner as provided in Section 3.5 of the General Conditions.


ARTICLE 5: CONTRACT TIME


5.1 The time allowed for Substantial Completion of each Segment of the Work, and all other important Project milestones, are set forth in Exhibit C attached hereto ("Construction Schedule"). Each Segment of the Work shall commence upon Owner's issuance of a Notice to Proceed to Contractor provided that necessary governmental authorizations have been obtained for such Segment. The Contract Time for Substantial Completion of each of the buildings, together with associated sitework and other related portions of the Work as shown on the Drawings and Specifications, shall be consistent with the following completion dates:


Building 1 Corporate Building June 13, 1997
Building 2 Expansion Building May 2, 1997
Building 3 Engineering Building May 23, 1997
Building 4 Production Building May 2, 1997


January 10, 1995
Page 8 11
Contractor shall achieve Substantial Completion of each Segment of the Work within the Contract Time specified in the Construction Schedule. Contractor acknowledges that the applicable Contract Time for each Segment includes an allowance for thirty (30) calendar days of delay due to Force Majeure Delays, including inclement weather. If Contractor is delayed on the critical path by more than thirty (30) days due to Force Majeure Delays, then the provisions of Subparagraph 8.3.1 of the General Conditions shall apply.


Contractor also acknowledges that Owner intends to install its office systems furniture with non-union labor prior to Substantial Completion, and Contractor shall not be entitled to any extension of the Contract Time by reason of any labor disputes on account of such non-union labor, pursuant to Paragraph 3.20 of the General Conditions.


Final Completion with respect to any portion of the Work shall occur within forty-five (45) days following Substantial Completion and agreement upon the Punch List as to any such portion. It is understood that the Architect will use reasonable efforts to respond to submittals, shop drawings and questions with reasonable promptness, so as to not delay the Work, as described in Subparagraph 4.2.7 of the General Conditions.


5.2 Time is of the essence of this Agreement. Contractor shall complete each portion of the Work within the applicable Contract Time as may be adjusted by Change Order.


5.3 Contractor shall advise Owner of any delay in the Work (including delays in receipt of drawings from Architect) and the cause of such delay, pursuant to Article 8 of the General Conditions. Contractor shall take all prudent steps necessary to minimize the delay and shall diligently proceed to complete the Work as required by the Contract Documents. Contractor's notice to Owner required by this Paragraph 5.3 shall not limit any right Owner may otherwise have to recover damages from Contractor based on such delay.


5.4 Contractor shall meet all milestones in the Construction Schedule, as adjusted by Change Orders. Should Contractor fail to meet any of such critical dates, Contractor shall, upon written notice from Owner, cause its employees, Subcontractors and all other parties under its control to work any necessary overtime or extra shift work to return to the Construction Schedule, or to demonstrate to Owner's satisfaction an alternate plan to return the Work to the Construction Schedule. If the delays are not caused by Contractor's or any Subcontractor's negligence, then the cost for such extra work, including without limitation overtime rates, shall be a Cost of the Work, except that the Guaranteed Maximum Price shall not be increased as a result of such work other than for Force Majeure Delays as provided in Subparagraph 8.3.1 of the General Conditions. If the delays are caused by Contractor's or a Subcontractor's negligence, then the cost for such extra work, including without limitation overtime rates, shall not be a Cost of the Work, but shall be borne solely by Contractor.


ARTICLE 6: COST OF THE WORK AND GUARANTEED MAXIMUM PRICE


January 10, 1995
Page 9 12 6.1 The maximum cost to Owner for Contractor's performance of the Work shall be the least of the following amounts:


6.1.1 the Cost of the Work as defined in Article 9 below and as limited by Paragraph 6.2, plus the Contractor's Fee; or


6.1.2 the sum set forth in those Notices to Proceed to be executed by Owner and Contractor from time to time during the course of the Work, as more particularly provided in Article 15 of the General Conditions; or


6.1.3 an amount to be determined by Owner and Contractor within 45 days after completion of the Contract Documents and set forth in a Change Order (the "Guaranteed Maximum Price"), which Guaranteed Maximum Price is intended to represent Owner's and Contr ...