Standard Form of Design-build Agreement

STANDARD FORM OF DESIGN-BUILD AGREEMENT AND
GENERAL CONDITIONS BETWEEN OWNER AND CONTRACTOR
(Where the Basis of Payment is the Cost of the Work Plus a Fee, with
a Guaranteed Maximum Price Option)


ARTICLE 1


AGREEMENT


This Agreement is made this 30th day of August in the year 1996, by and between the


OWNER NEOSE TECHNOLOGIES, INC. (Name and Address) 102 Witmer Road
Horsham, PA 19044


and the


CONTRACTOR IRWIN & LEIGHTON, INC. (Name and Address) 460 North Gulph Road
King of Prussia, PA 19406


for services in connection with the following


PROJECT CLINICAL SUPPLIES PILOT PLANT FACILITY
102 Witmer Road
Horsham, PA 19044


Notice to the parties shall be given at the above addresses.


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ARTICLE 2


GENERAL PROVISIONS


2.1 TEAM RELATIONSHIP The Owner and the Contractor agree to proceed with the Project on the basis of trust, good faith and fair dealing, and shall take all actions reasonably necessary to perform this Agreement in an economical and timely manner, including consideration of design modifications and alternative materials or equipment that will permit the Work to be constructed within the Guaranteed Maximum Price (GMP) and by the date of Substantial Completion, if they are established by Amendment No. 1. The Contractor agrees to procure the architectural and engineering services set forth below, and to furnish construction and administration of the Work.


2.2 ARCHITECT/ENGINEER Architectural and engineering services shall be procured from licensed, independent design professionals retained by the Contractor or furnished by licensed employees of the Contractor, or as permitted by the law of the state where the Project is located. The person or entity providing architectural and engineering services shall be referred to as the Architect/Engineer. If the Architect/Engineer is an independent design professional, the architectural and engineering services shall be procured pursuant to a separate agreement between the Contractor and the Architect/Engineer. The Architect/Engineer for the Project is Francis Cauffman Foley Hoffmann.


2.3 EXTENT OF AGREEMENT This Agreement is solely for the benefit of the parties, represents the entire and integrated agreement between the parties, and supersedes all prior negotiations, representations or agreements, either written or oral.


2.4 DEFINITIONS


.1 The Contract Documents consist of:


a. Change Orders and written amendments to this Agreement signed by
both the Owner and Contractor, including Amendment No. 1 if executed;


b. this Agreement except for the existing Contract Documents set forth
in item e below;


c. the most current Documents approved by the Owner pursuant to
Subparagraphs 3.1.4, 3.1.5 or 3.1.6;


d. the information provided by the Owner pursuant to Clause 4.1.2.1;


e. the Contract Documents in existence at the time of execution of
this Agreement which are set forth in Article 15;


f. the Owner's Program provided pursuant to Subparagraph 4.1.1.


In case of any inconsistency, conflict or ambiguity among the Contract
Documents, the Documents shall govern in the order in which they are listed
above.


.2 The Work is the Design Phase Services procured in accordance with
Paragraph 3.1, the GMP Proposal provided in accordance with Paragraph 3.2,
the Construction Phase Services provided in accordance with Paragraph 3.3,
Additional Services that may be provided in accordance with Paragraph 3.8,
and other services which are necessary to complete the Project in
accordance with and reasonably inferable from the Contract Documents.


.3 The term Day shall mean calendar day.


.4 A Subcontractor is a person or entity who has an agreement with the
Contractor to perform any portion of the Work. The term Subcontractor does
not include the Architect/Engineer or any separate contractor employed by
the Owner or any separate contractor's subcontractors.


.5 A Subsubcontractor is a person or entity who has an agreement with a
Subcontractor to perform any portion of the Subcontractor's work.


.6 Substantial Completion of the Work, or of a designated portion, occurs
on the date when construction is sufficiently complete in accordance with
the Contract Documents so that the Owner can occupy or utilize the Project,
or a designated portion, for the use for which it is intended. This date
shall be confirmed by a certificate of Substantial Completion signed by the
Owner and Contractor. The certificate shall state the respective
responsibilities of the Owner and Contractor for security, maintenance,
heat, utilities, damage to the Work, and insurance. The certificate shall
also list the items to be completed or corrected, and establish the time
for their completion and correction.


.7 The Owner's Program is an initial description of the Owner's objectives,
including budgetary and time criteria, space requirements and
relationships, flexibility and expandability requirements, special
equipment and systems, and site requirements.


ARTICLE 3


CONTRACTOR'S RESPONSIBILITIES


The Contractor shall be responsible for procuring the design and for the construction of the Work consistent with the Owner's Program, as such Program may be modified by the Owner during the course of the Work. The Contractor shall exercise reasonable skill and judgment in the performance of its services, but does not warrant or guarantee schedules and estimates other than those that are part of the GMP proposal.


3.1 DESIGN PHASE SERVICES


3.1.1 PRELIMINARY EVALUATION The Contractor shall provide a preliminary evaluation of the Project's feasibility based on the Owner's Program and other relevant information.


3.1.2 PRELIMINARY SCHEDULE The Contractor shall prepare a preliminary schedule of the Work for the Owner's written approval. The schedule shall show the activities of the Owner, Architect/Engineer and Contractor necessary to meet the Owner's completion requirements. The schedule shall be updated periodically with the level of detail for each schedule update reflecting the information then available. If an update indicates that a previously approved schedule will not be met, the Contractor shall recommend corrective action to the Owner in writing.


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3.1.3 PRELIMINARY ESTIMATE When sufficient Project information has been identified, the Contractor shall prepare for the Owner's written approval a preliminary estimate utilizing area, volume or similar conceptual estimating techniques. The estimate shall be updated periodically with the level of detail for each estimate update reflecting the information then available. If the preliminary estimate or any update exceeds the Owner's budget, the Contractor shall make written recommendations to the Owner.


3.1.4 SCHEMATIC DESIGN DOCUMENTS The Contractor shall submit for the Owner's written approval Schematic Design Documents, based on the Owner's Program and other relevant information. Schematic Design Documents shall include drawings, outline specifications and other conceptual documents illustrating the Project's basic elements, scale, and their relationship to the site. One set of these documents shall be furnished to the Owner. The Contractor shall update the preliminary schedule and estimate based on the Schematic Design Documents.


3.1.5 DESIGN DEVELOPMENT DOCUMENTS The Contractor shall submit for the Owner's written approval Design Development Documents based on the approved Schematic Design Documents. The Design Development Documents shall further define the Project including drawings and outline specifications fixing and describing the Project size and character, and other appropriate elements incorporating the structural, architectural, mechanical and electrical systems. One set of these documents shall be furnished to the Owner. The Contractor shall update the schedule and estimate based on the Design Development Documents.


3.1.6 CONSTRUCTION DOCUMENTS The Contractor shall submit for the Owner's written approval Construction Documents based on the approved Design Development Documents. The Construction Documents shall set forth in detail the requirements for construction of the Work, and shall consist of drawings and specifications based upon codes, laws or regulations enacted at the time of their preparation. Construction shall be in accordance with these approved Construction Documents. One set of these documents shall be furnished to the Owner prior to commencement of construction. If a GMP has not been established, the Contractor shall prepare a further update of the schedule and estimate.


3.1.7 OWNERSHIP OF DOCUMENTS All Documents shall remain the property of the Contractor and are not to be used by the Owner without the written consent of the Contractor.


3.2 GUARANTEED MAXIMUM PRICE (GMP) PROPOSAL


3.2.1 When the drawings and specifications are sufficiently complete, the Contractor shall, propose a GMP, which shall be the sum of the estimated Cost of the Work as defined in Article 8 and the Contractor's Fee as defined in Article 7. The GMP is subject to modification as provided in Article 9.


3.2.2 [Intentionally Omitted]


3.2.3 The estimated Cost of the Work may include the Contractor's contingency, a sum established by the Contractor for use at the Contractor's discretion to cover costs which are properly reimbursable as a Cost of the Work but are not the basis for a Change Order.


3.2.4 BASIS OF GUARANTEED MAXIMUM PRICE The Contractor shall include with the GMP proposal a written statement of its basis, which shall include:


.1 a list of the drawings and specifications, including all addenda, which
were used in preparation of the GMP proposal;


.2 a list of allowances and a statement of their basis;


.3 a list of the assumptions and clarifications made by the Contractor in
the preparation of the GMP proposal to supplement the information contained
in the drawings and specifications;


.4 the date of Substantial Completion upon which the proposed GMP is based,
and the Schedule of Work upon which the date of Substantial Completion is
based;


.5 schedule of applicable alternate prices;


.6 schedule of applicable unit prices;


.7 statement of Additional Services included, if any; and


.8 the time limit for acceptance of the GMP proposal.


3.2.5 The Contractor shall meet with the Owner to review the GMP proposal. In the event that the Owner discovers any inconsistencies or inaccuracies in the information presented, the Owner shall promptly give written notice to the Contractor, who shall make appropriate adjustments to the GMP, its basis or both.


3.2.6 Unless the Owner accepts the GMP proposal in writing on or before the date specified in the proposal for such acceptance and so notifies the Contractor, the GMP proposal shall not be effective without written acceptance by the Contractor.


3.2.7 Prior to the Owner's acceptance of the Contractor's GMP proposal, the Contractor shall incur costs to be reimbursed as part of the Cost of the Work, as provided in this Agreement or as the Owner may specifically authorize in writing.


3.2.8 Upon acceptance by the Owner of the GMP proposal, the GMP and its basis shall be set forth in Amendment No. 1. The GMP and the date of Substantial Completion shall be subject to modification by changes in the Work as provided in Articles 6 and 9.


3.2.9 The GMP shall include in the Cost of the Work those taxes which are applicable at the time the GMP is established. If in accordance with the Owner's direction an exemption is claimed for taxes, the Owner agrees to indemnify, defend and hold the Contractor harmless for any liability, penalty, interest, fine, tax assessment, attorneys fees or other expense or cost incurred by the Contractor as a result of any action taken by the Contractor in accordance with the Owner's direction.


3.3 CONSTRUCTION PHASE SERVICES


3.3.1 The Construction Phase will commence upon the issuance by the Owner of a written notice to proceed with


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construction. If construction commences prior to execution of Amendment No. 1, the Owner's written notice to proceed shall list the documents that are applicable to the part of the Work which the Owner has authorized.


3.3.2 In order to complete the Work, the Contractor shall provide all necessary construction supervision, inspection, construction equipment, labor, materials, tools, and subcontracted items.


3.3.3 The Contractor shall give all notices and comply with all laws and ordinances legally enacted at the date of execution of the Agreement which govern the proper performance of the Work.


3.3.4 The Contractor shall prepare and submit a Schedule of Work for the Owner's written approval. This schedule shall indicate the dates for the start and completion of the various stages of the construction including the dates when information and approvals are required from the Owner. It shall be revised as required by the conditions of the Work.


3.3.5 The Contractor shall secure the building permits necessary for the construction of the Project.


3.3.6 The Contractor shall take necessary precautions for the safety of its employees on the Project, and shall comply with all applicable provisions of federal, state and municipal safety laws to prevent accidents or injury to persons on, about or adjacent to the Project site. The Contractor, directly or through its Subcontractors, shall erect and properly maintain at all times, as required by the conditions and progress of the Work, necessary safeguards for the protection of workers and the public. The Contractor, however, shall not be responsible for the elimination or abatement of safety hazards created or otherwise resulting from work at the Project site carried on by the Owner or its employees, agents, separate contractors or tenants. The Owner agrees to cause its employees, agents, separate contractors and tenants to abide by and fully adhere to all applicable provisions of federal, state and municipal safety laws and regulations. The above provision shall not relieve Subcontractors of their responsibility for the safety of persons or property in the performance of their work, nor for compliance with all applicable provisions of relevant laws.


3.3.7 The Contractor shall keep such full and detailed accounts as may be necessary for proper financial management under this Agreement. The Owner shall be afforded access to all the Contractor's records, books, correspondence, instructions, drawings, receipts, vouchers, memoranda and similar data relating to this Agreement. The Contractor shall preserve all such records for a period of three years after the final payment or longer where required by law.


3.3.8 The Contractor shall provide periodic written reports to the Owner on the progress of the Work as agreed to by the Owner and Contractor.


3.3.9 The Contractor shall develop a system of cost reporting for the Work, including regular monitoring of actual costs for activities in progress and estimates for uncompleted tasks and proposed changes in the Work. The reports shall be presented to the Owner at mutually agreeable intervals.


3.3.10 At all times the Contractor shall maintain the site of the Work free from debris and waste materials resulting from the Work. At the completion of the Work, the Contractor shall remove from the premises all construction equipment, tools, surplus materials, waste materials and debris.


3.4 HAZARDOUS MATERIAL


3.4.1 A Hazardous Material is any substance or material identified now or in the future as hazardous under any federal, state or local law or regulation, or any other substance or material which may be considered hazardous or otherwise subject to statutory or regulatory requirements governing handling, disposal and/or clean-up. The Contractor shall not be obligated to commence or continue Work until any known or suspected Hazardous Material discovered at the Project site has been removed, rendered or determined to be harmless by the Owner as certified by an independent testing laboratory and approved by the appropriate government agency.


3.4.2 If after the commencement of the Work, known or suspected Hazardous Material is discovered at the Project site, the Contractor shall be entitled to immediately stop Work in the affected area, and the Contractor shall report the condition to the Owner and, if required, the government agency with jurisdiction.


3.4.3 The Contractor shall not be required to perform any Work relating to or in the area of known or suspected Hazardous Material without written mutual agreement.


3.4.4 The Owner shall be responsible for retaining an independent testing laboratory to determine the nature of the material encountered and whether it is a Hazardous Material requiring corrective measures and/or remedial action. Such measures shall be the sole responsibility of the Owner, and shall be performed in a manner minimizing any adverse effect upon the Work of the Contractor. The Contractor shall resume Work in the area affected by any Hazardous Material only upon written agreement between the parties after the Hazardous Material has been removed or rendered harmless.


3.4.5 If the Contractor incurs additional costs and/or is delayed due to the presence of known or suspected Hazardous Material, the Contractor shall be entitled to an equitable adjustment in the GMP and/or the date of Substantial Completion.


3.4.6 To the fullest extent permitted by law, the Owner shall defend, indemnify and hold harmless the Contractor, Architect/Engineer, Subcontractors and Subsubcontractors, and the agents, officers, directors and employees of each of them, from and against any and all claims, damages, losses, costs and expenses, whether direct, indirect or consequential, including but not limited to attorney's fees, costs and expenses incurred in connection with litigation or arbitration, arising out of or relating to the performance of the Work in any area affected by Hazardous Material. To the fullest extent permitted by law, such indemnification shall apply regardless of the fault, negligence, breach of warranty or contract, or strict liability of the indemnitee.


3.4.7 The terms of this Paragraph 3.4 shall survive the completion of the Work under this Agreement and/or any termination of this Agreement.


3.5 ROYALTIES, PATENTS AND COPYRIGHTS The Contractor shall pay all royalties and license fees which may be due on the inclusion of any patented or copyrighted


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materials, methods, equipment, or systems selected by the Contractor and incorporated in the Work. The Contractor shall defend, indemnify and hold the Owner harmless from all suits or claims for infringement of any patent rights or copyrights arising out of such selection. The Owner agrees to defend, indemnify and hold the Contractor harmless from any suits or claims of infringement of any patent rights or copyrights arising out of any patented or copyrighted materials, methods, equipment or systems specified by the Owner.


3.6 TAX EXEMPTION If in accordance with the Owner's direction an exemption is claimed for taxes, the Owner agrees to defend, indemnify and hold the Contractor harmless from any liability, penalty, interest, fine, tax assessment, attorneys fees or other expense or cost incurred by the Contractor as a result of any action taken by the Contractor in accordance with the Owner's direction.


3.7 WARRANTIES AND COMPLETION


3.7.1 The Contractor warrants that all materials and equipment furnished under the Construction Phase of this Agreement will be new unless otherwise specified, of good quality, in conformance with the Contract Documents, and free from defective workmanship and materials. Warranties shall commence on the date of Substantial Completion of the Work or of a designated portion. The Contractor agrees to correct all construction performed under this Agreement which proves to be defective in workmanship and materials within a period of one year from the date of Substantial Completion or for such longer periods of time as may be set forth with respect to specific warranties required by the Contract Documents.


3.7.2 Those products, equipment, systems or materials incorporated in the Work at the direction of or upon the specific request of the Owner (e.g. process equipment) shall be covered exclusively by the warranty of the manufacturer. There are no warranties which extend beyond the description on the face thereof. All other warranties expressed or implied including the warranty of merchantability and the warranty of fitness for a particular purpose are expressly disclaimed.


3.7.3 The Contractor shall secure required certificates of inspection, testing or approval and deliver them to the Owner.


3.7.4 The Contractor shall collect all written warranties and equipment manuals and deliver them to the Owner.


3.7.5 With the assistance of the Owner's maintenance personnel, the Contractor shall direct the checkout of utilities and operations of systems and equipment for readiness, and assist in their initial start-up and testing. Validation of building support and process systems shall be performed as agreed upon with Owner.


3.8 ADDITIONAL SERVICES The Contractor shall provide or procure the following Additional Services upon the request of the Owner. A written agreement between the Owner and Contractor shall define the extent of such Additional Services. If a GMP has been established for the Work or any portion of the Work, such Additional Services shall be considered a Change in the Work, unless they are specifically included in the statement of the basis of the GMP as set forth in Amendment No. 1.


.1 Documentation of the Owner's Program, establishing the Project budget,
investigating sources of financing, general business planning and other
information and documentation as may be required to establish the
feasibility of the Project.


.2 Consultations, negotiations, and documentation supporting the
procurement of Project financing.


.3 Surveys, site evaluations, legal descriptions and aerial photographs.


.4 Appraisals of existing equipment, existing properties, new equipment and
developed properties.


.5 Soils, subsurface and environmental studies, reports and investigations
required for submission to governmental authorities or others having
jurisdiction over the Project.


.6 Consultations and representations other than normal assistance in
securing building permits, before governmental authorities or others having
jurisdiction over the Project.


.7 Investigation or making measured drawings of existing conditions or the
verification of drawings or other Owner-provided information.


.8 Artistic renderings, models and mockups of the Project or any part of
the Project or the Work.


.9 Inventories of existing furniture, fixtures, furnishings and equipment
which might be under consideration for incorporation into the Work.


.10 Interior design and related services including procurement and
placement of furniture, furnishings, artwork and decorations.


.11 Making revisions to the Schematic Design, Design Development,
Construction Documents or documents forming the basis of the GMP after they
have been approved by the Owner, and which are due to causes beyond the
control of the Contractor.


.12 Design, coordination, management, expediting and other services
supporting the procurement of materials to be obtained, or work to be
performed, by the Owner, including but not limited to telephone systems,
computer wiring networks, sound systems, alarms, security systems and other
specialty systems which are not a part of this Agreement.


.13 Estimates, proposals, appraisals, consulta ...