Construction Management Agreement

CONSTRUCTION MANAGEMENT AGREEMENT


This Construction Management Agreement (the "Agreement") is made this 11th day of April, 2003, by and between SARDY HOUSE, LLC, a Colorado limited liability company (hereinafter "Owner"), and BLOCK 66, LLC, a Colorado limited liability company (hereinafter "Construction Manager").


Owner and Construction Manager agree as set forth below:


1. DESIGNATION OF BLOCK 66, LLC AS CONSTRUCTION MANAGER AND AGENT. Owner hereby irrevocably appoints Construction Manager as its Construction Manager and Agent. Construction Manager shall perform the duties and assume the responsibilities of construction manager by and through Frank S. Peters and Daniel D. Delano. Construction Manager shall have the complete and exclusive authority, subject to Owner's right to approve plans, specifications, and budgets as provided below, to contract for, supervise and direct all aspects of the Work (defined below) required in order to complete the renovation of the Sardy House in Aspen, Colorado. In that regard, Owner hereby appoints and constitutes Construction Manager as Owner's lawful attorney-in-fact to do any and every act that Owner might do in Owner's own behalf related to the Work, including the authorization to enter into contracts on behalf of Owner, to prosecute or defend any action or proceeding in connection with the Work. Owner covenants not to interfere in any manner with Construction Manager's performance hereunder, and agrees not to undertake any of the Work except through the Construction Manager pursuant to this Agreement, unless and until the Agreement is terminated as provided herein.


2. CONSTRUCTION CONTRACTS. The Construction Manager is hereby authorized and directed, on behalf of Owner, to enter into "Construction Contracts" with such construction contractors or subcontractors, suppliers or vendors as Construction Manager may select to perform the Work (collectively, the "Contractors"). The Construction Contracts shall obligate Owner to pay for the Cost of the Work (defined below), together with a contractor's fee based on the Cost of the Work. The Construction Contracts shall obligate the Contractors to perform in a good and workmanlike manner and in compliance with all applicable federal, state, and local laws, ordinances, regulations, codes and orders, and to obtain, maintain, and provide evidence of comprehensive general liability insurance, errors and omissions insurance, builders' risk insurance, workmen's compensation insurance, unemployment insurance, and any other insurance coverage which may be required by the Construction Manager. In the event that any Contractor fails to adequately perform in the judgment of the Construction Manager, the Construction Manager is authorized to terminate the Construction Contract and to enter into a contract with another Contractor of the Construction Manager's choice who the Construction Manager reasonably believes is qualified and capable of completing the Work, in accordance with the approved plans and specifications and in a reasonable time.


3. THE WORK. The "Work" to be performed by Contractors and directed by the Construction Manager shall consist of the renovation and equipping of the Sardy House in Aspen, Colorado, in accordance with the plans and specifications set forth in EXHIBIT A, which plans and specifications are hereby approved by Owner. The date on which construction commences shall be determined by the Construction Manager. The parties agree that there shall be no material changes to the Work unless agreed to in writing by Owner and Construction Manager, which agreement shall establish the adjustment, if any, to the Cost of the Work for which Owner is responsible.


4. COST OF THE WORK.


(a) The term "Cost of the Work" shall mean costs necessarily
incurred by the Contractors in the performance of the Work. The Cost of
the Work shall include only the items set forth below:


(1) The wages and benefits of individuals employed by
Contractors to perform the Work, together with Contractors'
payroll and employment insurance costs.


(2) The cost, including transportation, of materials
incorporated or to be incorporated in the Work, including
prepaid costs incurred by Owner prior to the commencement of
construction, less any deposits previously paid by Owner.


(3) Payments made by Contractors to subcontractors in
accordance with the Construction Contracts.


(4) Costs of all temporary facilities, equipment and
hand tools not customarily owned by construction workers which
are provided by the Contractors at the site of and fully
consumed in the performance of the Work.


(5) Reasonable rental costs for necessary temporary
facilities, machinery and equipment used at the site of the
Work, whether rented from the Contractors or others.


(6) Cost of removal of debris from the site of the
Work.


(7) Fees and assessment for the building permit and
for other permits necessary for the prosecution of the Work
for which the Contractors are required to pay.


(8) Cost incurred in taking action to prevent
threatened damage, injury or loss in the case of an emergency
affecting the safety of persons and property, unless caused by
the fault, neglect or intentional act of the Contractors.


(9) Sales, use or similar taxes imposed by a
governmental authority which are directly related to the Work
and for which the Contractors are liable, except for income or
franchise taxes.


(b) Although Owner has or is obligated to pay all of the
following items, except (4), the term "Cost of the Work" shall not
include:


(1) The Contractors' fees.


(2) The Construction Manager's Fee.


(3) Tap fees for water and sewer service.


(4) Contract ...