Construction Services Agreement With The Henderson Corporation

Exhibit 10.38


CONSTRUCTION AGREEMENT

Between


DENDREON CORPORATION


Owner,


- and -

THE HENDERSON CORPORATION

Contractor.


As of November 4, 2005

TABLE OF CONTENTS


ARTICLE PAGE


ARTICLE I

Contract Documents 1

ARTICLE II

Scope of the Work 3

ARTICLE III

Contract Sum and Guaranteed Maximum Price 5

ARTICLE IV

Reimbursable Costs 8

ARTICLE V

Non-Reimbursable Costs 8

ARTICLE VI

Schedule of the Work and Early Occupancy 10

ARTICLE VII

Contractor' s Work 12

ARTICLE VIII

Trade Contracts 21

ARTICLE IX

Discounts, Rebates and Refunds 22

ARTICLE X

Accounting Records 22

ARTICLE XI

Applications for Payment 23

ARTICLE XII

Assignment 25

ARTICLE XIII

Liens and Claims 25

ARTICLE XIV

Events of Default and Termination or Suspension of Agreement 26

ARTICLE XV

Bonds 30

ARTICLE XVI

Management of the Work by Contractor and Owner 30

ARTICLE XVII

Consultants 31

ARTICLE XVIII

Insurance 31

ARTICLE XIX

Hazardous Materials 31

ARTICLE XX

Materials and Equipment 32

ARTICLE XXI

Substitutions 33

ARTICLE XXII

Changes in the Work 35

ARTICLE XXIII

Inspection and Testing 37

ARTICLE XXIV

Ownership and Use of Documents; Confidentiality 38

ARTICLE XXV

Nondisclosure 39

ARTICLE XXVI

Owner' s Right To Perform Work And to Award Separate Contracts; and Cooperation with Separate Contractors 40

ARTICLE XXVII

Equal Opportunity 40

ARTICLE XXIII

Claims For Damages 41

ARTICLE XXIX

Additional Provisions 41

THIS AGREEMENT, made as of the 4 th day of November, 2005, by and between DENDREON CORPORATION, having an office at 3005 First Avenue, Seattle, Washington, 98121 (" Owner" ), and THE HENDERSON, having an office at 575 State Hwy. 28, Raritan, New Jersey, 08869 (" Contractor" ).


W I T N E S S E T H :


WHEREAS, Owner intends to develop a therapeutic biotechnology processing facility at 220 Hanover Avenue, Hanover, New Jersey (the " Project" ).

WHEREAS , Contractor has been advised that, under separate agreement, Owner has retained the services of Perkins & Will, to provide certain architectural services for the Project (the " Architect" ); Affiliated Engineers NW, Inc. to provide certain engineering services for the Project (the " Engineer" ); and AES Clean Technology, Inc., to provide certain design and build services for the clean room to be located within the Project (the " Design Builder" and collectively the Architect, Engineer and Design Builder shall be referred to as " Architect" ) and such other required consulting engineers, design build professionals and Architects (the " Consultants" ) as deemed necessary by Owner to prepare preliminary and final plans, specifications, working drawings and other construction documents for the Project (the final versions of which are hereinafter collectively referred to as the " Construction Documents" ); and


WHEREAS , Contractor has been advised that, pursuant to this Agreement, Owner intends to retain the services of Contractor (a) to consult with Owner and Architect in the preparation of the Construction Documents and (b) to perform construction related services and to arrange for, monitor, supervise, administer and contract for the construction (collectively the " Work" ) of all or any portion of the Project, all as more particularly set forth in Article II hereof; and

WHEREAS , Contractor desires to be retained by Owner to perform, or cause to be performed, the Work;

NOW, THEREFORE , in consideration of the mutual covenants and agreements contained herein, Contractor and Owner hereby agree as follows.


ARTICLE I

Contract Documents

1.01 The contract documents (collectively, the " Contract Documents" ) shall consist of the following:


(a) This Agreement, including all the Exhibits annexed hereto and made a part hereof;

(b) The Construction Documents identified on Exhibit " A" hereto, and such other Construction Documents as may hereafter be prepared by Architect or Consultants and approved in writing by Owner;

(c) Any form of trade contractor approval letter as Owner may use to evidence its approval of the award of " Trade Contracts" to " Trade Contractors" (as such terms are defined in Section 8.01 hereof) (the " Trade Contractor Approval Letter" );

(d) Change Orders, Emergency Change Orders and Field Orders (as such terms are defined in Article XXIII hereof);


(e) The payment and performance bonds required to be provided by Trade Contractors in accordance with the provisions of Article XV hereof; and

(f) The Progress Schedule (as defined in section 7.01(k) hereof) to be initially prepared for the Work by Contractor and submitted to Owner for its approval in accordance with the provisions of Section 7.01(k) for the construction and Final Completion (as such term is defined in Section 6.01 hereof) of the Work, as the same may be updated, modified or extended, subject to Owner' s prior approval, in accordance with the applicable provisions of this Agreement. A copy of the preliminary schedule, as of the date of this Agreement, is attached hereto as Exhibit C .

1.02 The Contract Documents form the contract between Owner and Contractor. References in the Contract Documents to " the contract" or " this contract" shall be deemed to include all of the Contract Documents. References to " this Agreement" or " the Agreement" shall refer to this instrument, which is one of the Contract Documents.


1.03 The intent of the Contract Documents is to include in the Work all labor, materials and supplies, insurance, tools, equipment, permits (excluding building and site work permits which shall be paid for by Owner), licenses, taxes, approvals, transportation, testing and field surveying (customarily furnished by general contractors) and other services and items required in connection with the satisfactory performance, execution and Final Completion of the Work in accordance with the Contract Documents. Matters not expressly included in the Contract Documents but which are reasonably inferable therefrom shall be deemed included as a part of the Work. Controlled inspections, as required by any governmental authority, shall be provided by the Owner.


1.04 The Contract Documents are complementary and cumulative and what is called for by one shall be as binding as if called for by all.

1.05 Words and abbreviations which have well known technical or trade meanings are used in the Contract Documents in accordance with such recognized meanings.


1.06 If any conflicts or ambiguities exist in or between the Construction Documents, the Construction Documents and any of the Contract Documents, or the Construction Documents and existing conditions at the Project Site, Contractor shall, immediately upon discovery of such conflict or ambiguity, bring the same to the attention of Owner for resolution. It is expressly understood and agreed that Owner, in consultation with Architect, shall be the interpreter of the Construction Documents and shall resolve any such conflicts and ambiguities. Any Work relating to any such conflict or ambiguity which is performed by Contractor' s own forces or any Trade Contractor after


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discovery by Contractor but before Owner has had a reasonable time to respond to or address such condition, as provided herein, shall be at Contractor' s or such Trade Contractor' s sole risk, cost and expense.


1.07 Modifications to parts of the Contract Documents are for the purpose of varying, modifying, rescinding or adding to the Contract Documents. All modifications should be read together with the portions of the Contract Documents to which they relate.


1.08 The drawings and specifications comprising the Construction Documents are complementary. Anything shown in any of the drawings and not mentioned in the specifications, or mentioned in any of the specifications and not shown in the drawings, shall have the same effect as if shown or mentioned in both.


1.09 A typical or representative detail indicated on the Construction Documents shall constitute the standard for workmanship and materials throughout corresponding parts of the Work, unless otherwise shown.

1.10 The layout of mechanical and electrical systems, equipment, fixtures, piping, ductwork, conduits, specialty items and accessories indicated on the Construction Documents is diagrammatic. The actual scope of the Work shall be carried out so as not to affect the architectural and structural integrity and limitations of the Project and shall be performed in such sequence and manner so as to avoid conflicts and provide clear access to all control points, including valves, strainers, control devices and specialty items of every nature related to such systems and equipment in conformance with all applicable codes; it being agreed Contractor shall not be liable or responsible for errors, omissions, or coordination deficiencies in, between or among the Construction Documents. Subject to the provisions of Section 29.01 hereof, if Contractor discovers or has knowledge of (i) conflicts in or the shop drawings, the coordination drawings or the Construction Documents, or (ii) any conflicts between existing conditions at the Site (which Contractor is aware of or by testing as agreed to by Owner) and the Construction Documents which, in Contractor' s opinion, are of a nature that may affect the architectural or structural integrity or limitations of the Project, Contractor immediately shall bring the same to the attention of Owner and Architect for resolution in the manner provided in Section 1.06 hereof. Any Work relating to any such conflict which is performed by Contractor or by any Trade Contractor after discovery but prior to the resolution of the same shall be borne by the responsible party in accordance with Section 1.06


ARTICLE II

Scope of the Work


2.01 Contractor shall perform all Construction services described in this Agreement in connection with the construction of the Work. The general scope of the Work, as initially reflected in the Construction Documents and as set forth in Exhibit A, will be developed into a detailed design and construction program and further refined as the preparation of the Construction Documents progresses so as to include, and further define, (i) the scope, parameters and anticipated timing for the Work, and (ii) Owner' s and Contractor' s understanding of the quality of the materials and workmanship required and expected. Contractor represents that (i) it has fully acquainted itself with


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the general design concept and scope of the Work, as reflected in the Construction Documents, (ii) it has visited the Project site and existing buildings, if any, including the location of adjacent structures and utilities, and is generally familiar with access to the Project site and with the observable condition of any existing buildings. Owner shall be responsible for obtaining all consents, licenses and easements required from adjoining property owners.


2.02 In addition to the services referred to in Section 2.01 hereof, Contractor, shall perform and furnish, or cause to be performed and furnished all labor, materials, plant, power, light, heat, water (to the extent that power, light, heat and water and the equipment associated therewith are not already otherwise available in the building and are necessary to perform the Work, in which case such utility costs shall be a Reimbursable Costs in accordance with Article IV herein ) , telephone, tools, supplies, equipment, services, transportation, scaffolding, permits, (excluding building and site permits which shall be paid for by Owner) licenses, supervision and shall provide all services, business administration, management, coordination and supervision, necessary for, or incidental to, the successful prosecution and Final Completion of the Work, including, but not limited to, all services, business administration, management, coordination and supervision of the services provided by AES and all other Trade Contractors in connection with the Project (the " General Conditions Work Items" ) in the most expeditious and economical manner, consistent with best industry accepted standards, strict and complete compliance with codes and ordinances having jurisdiction over the Work, lawful construction practices and the interests of Owner relating to quality, timely economical completion of the Work, to the extent made known to the Contractor. The Work shall be performed and executed in a customary and workmanlike manner by qualified and efficient workers, in conformance with the Contract Documents and best industry trade practices.

2.03 Contractor agrees to furnish efficient business administration with emphasis on budget control, construction scheduling, coordination of the Work, supervision and Construction in an expeditious and economical manner consistent with the interests of Owner and shall assist Owner in developing and maintaining a climate of understanding and good will with all governmental and quasi-governmental agencies affected by the Project, the local communities adjacent to the Project site, proposed tenants and the public at large. Contractor shall require all Trade Contractors (as such term is defined in Section 8.01 hereof) to comply with Contractor' s instructions related to storage of materials and scheduling. Contractor shall generally advise and assist the Owner on all matters concerning the construction of the Project upon which the Owner requests advice and assistance and also about all matters concerning which Contractor, being familiar with the construction industry, might normally be consulted. All recommendations to be rendered by Contractor shall be in writing when requested, stating advantages and disadvantages and evaluating alternatives and shall be in sufficient detail to enable Owner to analyze such recommendations and make informed decisions with respect thereto. Without limiting the foregoing, Contractors' obligations are more fully described herein.


2.04 Contractor accepts the relationship of trust and confidence established between it and Owner by this Agreement and covenants to Owner to furnish its best professional skill and judgment and to cooperate with Owner, Architect and Consultants in furthering the interests of Owner as made known to Contractor. Contractor understands that it is the Owner' s intent to construct the Project at a reasonable cost and in the most expeditious fashion given budgetary considerations. Accordingly, Contractor will devote its best efforts (consistent with the Project Budget and Schedule) toward (i)


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maintaining the cost level of the Project at the lowest possible point consistent with good construction practices, (ii) carrying out Owner' s intent and direction of the Architect' s and Consultants' Construction Documents and (iii) achieving the most rapid and efficient construction and completion of the Project. Contractor will use its best efforts to bring to the Owner' s attention any possibilities for savings that may present themselves during the course of Contractor' s performance under this Agreement and will confer with Owner periodically in order to determine whether there are any areas where, by design change or otherwise, costs may be reduced. Contractor shall not knowingly accept for its own account any trade discounts, except to the extent permitted by Article IX, or contributions, or deal with (or recommend that the Owner deal with) any firm in which Contractor has any financial or other interest, or undertake any activity or employment which would or could create a conflict of interest or compromise the Contractor' s judgment or prevent the Contractor from serving the best interests of the Owner. If Contractor shall become aware of any facts which are or may be in violation of the preceding sentence or shall have any financial or other interest in any firm with which the Owner is dealing or proposes to deal with in connection with the Project, Contractor shall immediately advise Owner thereof in writing. It shall be deemed a conflict of interest and a material breach of the terms of this Contract, for Contractor to knowingly employ at the Project, or knowingly recommend acceptance of bids from Trade Contractors employing, with respect to the Project, any relatives (including in-laws) of any of the officers or directors, or executives of the Contractor. Any breach hereunder shall entitle the Owner to terminate this Agreement upon seven (7) days' prior notice.


ARTICLE III

Contract Sum and

Guaranteed Maximum Price


3.01 As consideration for the full and complete performance of the Work and all of Contractor' s obligations hereunder, Owner shall pay to Contractor a sum of money (" Contract Sum" ) equal to the total of: (i) a fee (" Contractor' s Fee" ) Contractor' s Fee includes all overhead (including home office personnel and expenses not otherwise reimbursable under Section 3.10 hereof) and profit;

(ii) General Conditions, as provided in Section 3.03 and;

(iii) Contractor' s Reimbursable Costs as defined in Article IV hereof.

provided, however, that except as expressly provided herein, the Contract Sum shall not exceed fifteen million dollars ($15,000,000) (the " Guaranteed Maximum Price" or " GMP" )


3.02 The Contractor' s Fee which includes all costs not otherwise identified in this Agreement and profit shall be a fixed fee of five hundred forty thousand dollars ($540,000) (" Contractor' s Fixed Fee" ), plus, subject to terms of the Agreement, an additional one hundred twenty three thousand five hundred fifty five dollars ($123,555) for obtaining Substantial Completion by July 31, 2006 (" Contractor' s Substantial Completion Fee" ) plus another one hundred twenty three thousand five hundred fifty five dollars ($123, 555) for achieving Substantial Completion for a Contract Sum not to exceed the GMP.

3.03 The Contractor' s General Conditions Costs, as approved in advance by Owner, which are more fully defined in Section 3.09 below are estimated at one hundred ninety five thousand dollars ($195,000).


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3.04 Contractor acknowledges that the Documents identified on Exhibit " A" annexed hereto are incomplete and are being developed by Architect. However, Contractor represents that the documents in Exhibit " A" contain sufficient information so as to provide Contractor with an understanding of the scope of the Work and the level of finishes so as to enable Contractor to prepare the Preliminary Budget which will be provided to Owner upon completion.

3.05 Unless adjusted by Change Order pursuant to Article XXII below, in no event shall the Contract Sum exceed the Guaranteed Maximum Price.


3.06 In the event that the GMP is adjusted by Change Order as defined in Article XXII below, Contractor shall be entitled to a Contractors fee of the total of the actual Reimbursable Costs and actual General Conditions which are included in such Change Order with no mark-up for fee.

3.07 Payments on account of the Contractor' s Fee and General Conditions, shall be paid monthly, simultaneously with each progress payment made to Contractor under Article XI hereof. The proportion of the Contractor' s Fee earned at the date of any Application for Payment (as such term is defined in Section 11.01(a) hereof) shall be calculated as defined in Section 11.01 for the Work completed in such Application for Payment. All payments to Contractor shall be subject to the hold-back requirements set forth in Article 3.08 below.


3.08 Unless otherwise agreed to by Owner and Contractor, Owner shall make progress payments to Contractor pursuant to the provisions of Article XI hereof, subject to a hold-back on the Trade Contract Costs (hereinafter defined) (including payments to Trade Contractors for the performance of General Conditions Work Items pursuant to Trade Contracts) in an amount equal to ten percent (10%) of each such Trade Contractor Costs.


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3.09 The General Conditions Costs shall include, but not be limited to, the following:

(a) Rates for the following classifications of personnel and who provide services in connection with the Work and for such time as is actually devoted to the Work, Project Executive, Project Manager, Project Engineer(s), Assistant Project Manager(s), Estimator(s), Project Superintendent(s), Assistant Superintendent(s), On-site Safety Coordinator, Mechanical/Electrical Project Manager(s) and Superintendent(s), Project Accountant(s), Timekeepers, Teamsters, Master Mechanics, Elevator Operators, Operating Engineers, laborers, personnel engaged (e.g. at shops or on the road) in expediting the production or transportation of materials or equipment, clerical and data processing personnel, estimators, schedulers and accountants;


(b) actual costs and expenses incurred in connection with telegrams, telephones (and charges), fax, messenger service, blueprinting, xeroxing, photographs, field office, trailers, correspondence and other similar petty cash items directly related to the Work; and

(c) Actual costs of all temporary structures and their maintenance, less the reasonable salvage value obtainable on such items which are used but not totally consumed in the performance of the Work; provided, however, that at Owner' s option and at its direction, Contractor either shall (i) deliver all such temporary structures to Owner, (ii) use reasonable efforts to sell the same for the account of Owner, or (iii) discard the same in the manner set forth in Section 6.06 hereof;

(d) Rental charges and maintenance expenses for any temporary structure necessary in connection with the performance of the Work, including the installation, erection, removal, transportation and delivery costs thereof;


(e) Rental charges of all machinery and equipment (exclusive of hand tools) used at the Project site and necessary in connection with the performance of the Work, together with costs incurred in the installation thereof, and the dismantling, removal, transportation and delivery of the same;


(f) Actual costs incurred by Contractor in performing General Conditions Work Items by Contractor' s own labor force or by Trade Contractors retained by Contractor to perform the same, provided such costs are not back-chargeable or deductible from any other Trade Contractor for any reason;


(g) license fees necessary for the performance of the Work, fines, violations or penalties and

(h) legal and accounting fees reasonably incurred in performance of the Work, excluding any legal and accounting fees incurred by Contractor (i) as a result of failure of Contractor (as opposed to Trade Contractors) to perform in accordance with this Agreement, or arising out of the negligence of Contractor or (ii) provided Owner has paid Contractor, wrongful failure of Contractor to pay any Trade Contractor, supplier or others in connection with the Project and (iii) arising out of or related to the negotiation of this Agreement.


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ARTICLE IV

Reimbursable Costs


4.01 In addition to the Contractor' s Fee, and General Conditions payable hereunder, and Owner shall reimburse Contractor for the actual costs necessarily incurred by Contractor in the proper performance of the Work (hereinafter the " Reimbursable Costs" ), which Reimbursable Costs shall be at rates not higher than those which are competitive and prevailing in the locality for work and services similar to the Work and shall be comprised of the costs listed in Subsections (a) through (f) hereunder:


(a) costs of freight, trucking and, subject to Owner' s prior written approval, the warehousing of materials required for the Work;

(b) payments made by Contractor for work performed and materials, supplies and equipment furnished pursuant to Trade Contracts and/or Purchase Orders (and Change Orders) approved by Owner in accordance with the provisions of this Agreement (" Trade Contract Costs" );

(c) Federal, State and local sales, use, excise, personal property and other similar taxes, if any, which may be required to be paid by Contractor in connection with the Work, except taxes applicable, directly or indirectly, to the Contractor' s Fee;

(d) actual costs reasonably and necessarily incurred due to an emergency, not compensated by insurance, affecting the safety of persons or property, except to the extent caused by Contractor' s negligence or Contractor' s intentional failure to comply with the terms of this Agreement. As a condition precedent to payment for such costs Contractor must give written notice to Owner within 48-hours after incurring such costs;


(e) premiums for insurance as required in Exhibit B.


(f) additional utility costs as per paragraph 2.02


4.02 Contractor shall use its best efforts to minimize the Reimbursable Costs incurred in the performance of the Work, consistent with the intent and purposes of this Agreement, sound business practice and the reasonable instructions of Owner.

ARTICLE V

Non-Reimbursable Costs


5.01 Except to the extent included in Section 3.09 or Article IV, Owner shall not reimburse Contractor for any of the following costs, all of which shall be borne by Contractor at its sole cost and expense:


(a) salaries or other compensation of any principals and branch office heads of Contractor.


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(b) expenses of operating Contractor' s home and branch offices, including overhead and administrative expenses except to the extent that such expenses are reimbursable pursuant to the provisions of Section 3.09 or Article IV hereof;

(c) any part of Contractor' s capital expenses, including interest on capital employed in connection with the Work;

(d) (i) costs not reimbursed by insurance, due (x) to the negligent acts or omissions or willful misconduct of Contractor, or Contractor' s failure to perform its obligations under this Agreement or (y) from the violation by Contractor of any Federal, State or local laws, ordinances or statutes; (ii) casualty losses and related expenses sustained by Contractor in connection with tools, equipment, supplies and other personal effects owned or rented by Contractor; and (iii) any other costs which would have been insured but for the failure of Contractor to carry the insurance required to be carried hereunder or the failure of Contractor to comply with the requirements of any insurance carriers providing insurance coverage for the Project, as set forth in Exhibit B hereof;


(e) costs of uncovering, correcting or replacing defective Work which has arisen by reason of Contractor' s gross negligence or intentional breach of this Agreement or failure to properly supervise or coordinate the Work;


(f) losses, costs, and expenses (including attorneys' fees and disbursements) incurred by Contractor in connection with, or as a result of, the occurrence of any event expressly provided for under the terms of this Agreement wherein Contractor agrees to indemnify and hold harmless Owner against such losses, costs and expenses (except Owner shall reimburse Contractor for legal fees incurred in discharging or bonding Trade Contractor mechanic' s liens as provided for in Section 3.10(i);

(g) General Conditions Costs which are back-charged to or are deducted from any Trade Contractor for any reason;

(h) costs incurred by reason of Contractor' s failure to comply with its obligations under this Agreement, including costs in the form of penalties, fines or other similar charges, as well as any and all costs incurred in contravention of laws, rules and regulations attributable to Contractor' s gross negligence;


(i) except as otherwise provided in Subsection 4.01 hereof, premiums for other insurance carried by Contractor;


(j) costs of any item expressly excluded from, or not expressly included within, the items referred to in Section 3.09 or 4.01 hereof; and

(k) costs of any item or expense which this Agreement provides are t ...