Construction Management/Contractor Agreement

EXHIBIT 10.4


CONSTRUCTION MANAGEMENT/CONTRACTOR AGREEMENT


THIS AGREEMENT is made and entered into as of this 1st day of September, 1998, by and between MUDRA CONSTRUCTION, LTD., a Nebraska corporation, with its principal place of business at 2425 North 84th Street, Omaha, Nebraska, 68134 ("Mudra") and PROFESSIONAL VETERINARY PRODUCTS, LTD., a Missouri corporation, with its principal place of business at 10100 J Street, Omaha, Nebraska, 68127 ("PVP").


1. SCOPE OF WORK


(a) Subject to and in accordance with the terms and conditions of this Agreement, Mudra agrees to furnish all design and engineering services, and all construction services, including all general construction, mechanical, and electrical and all other construction services, equipment and tools necessary to perform the work as necessary and required for the construction of an approximately 110,000 square foot office and warehouse building as set forth in plans and specifications being furnished by Mudra upon the tract of land legally described as Lot 3, Replat 1, Hilltop Industrial Park, Sarpy County, Nebraska.


(b) Mudra will contract with such qualified and licensed architects and engineers as are necessary for the proper design of the Project. The cost of the architect and engineering services shall be paid by Mudra and shall not be included in the cost of the work. All architects and engineers utilized by Mudra will be subject to the prior approval of PVP. The architect and engineers will prepare plans and specifications in accordance with the PVP's requirement and budget. PVP must approve all plans and specifications before bids for any work are solicited. In the event PVP requests any changes in the plans and specifications after such approval, PVP shall be responsible for such changes, unless the changes are necessitated due to the fault of Mudra or any subcontractor of Mudra.


(c) All documents, including the plans and specifications for the Project, shall be deemed owned by PVP, who may utilize such documents in the future for any renovation, remodeling, modification or expansion of the Project without any future compensation to Mudra or to any architect or engineer utilized by Mudra for preparation thereof. Mudra shall make appropriate arrangements with any architect and engineer used by Mudra to assure PVP's rights to such documents.


(d) Mudra shall furnish to PVP reproducible record drawings of the Project, which shall be delivered to PVP within 120 days after final completion.


2. CONSTRUCTION MANAGEMENT DUTIES AND RESPONSIBILITIES OF MUDRA


Mudra's construction management duties shall include, but not be limited to, the following:


(a) Mudra shall utilize only qualified subcontractors and suppliers of labor and materials to construct the building. For each subcontract to be awarded, Mudra shall obtain two or more suitable bids based upon the plans and specifications approved by PVP. PVP will approve in advance all such subcontracts to be awarded by Mudra and shall reserve the right to reject any subcontractor. PVP shall have the right to require that bids be obtained from subcontractors that PVP designates; provided, however, that all such subcontractors must be reasonably acceptable to Mudra. All subcontractors will enter into written contracts with Mudra for the performance of such work, and Mudra shall be responsible to PVP to manage the subcontractors' work and to assure that all such work is performed by the subcontractors in accordance with the requirements of this contract and in compliance with the plans and specifications approved by PVP. All such subcontracts shall incorporate by reference the terms and conditions of this Agreement and shall provide that upon termination of this Agreement due to the default of Mudra, such subcontractors shall, at the election of PVP, continue to perform their subcontracts as direct contractors of PVP, without any increase in their respective subcontracted awards. Mudra will obtain from the plumbing, mechanical, electrical and sprinkler subcontractors payment and performance bonds in the amount of their respective contracts.


(b) After receipt of bids for all of the work to be performed for such Project, Mudra will furnish to PVP a guaranteed maximum price ("GMP") for the Project, which GMP shall include a contingency acceptable to PVP for costs that are reimbursable but are not the proper subject of a change order. Such GMP shall be based upon the approved plans and specifications upon which the bids were based. The GMP shall include the cost of all labor, materials, taxes, permit fees, and all other costs of any nature, and shall include Mudra's fee set forth in Paragraph 6 below. At the time the GMP is established, this Agreement shall be amended to include the GMP as a part of this Agreement. Such amendment shall also identify the plans and specifications upon which such GMP is based and shall set forth any allowances, unit prices and unit price quantities included therein. Any changes in the plans and specifications may cause a change in the GMP as provided in Paragraph 10 below.


(c) Mudra shall be responsible for the construction of the Project and as such, shall perform or cause to be performed, all construction work required by the plans and specifications, Mudra shall further be responsible for the acts and omissions of all subcontractors and for person and entities employed or contracted by them. Mudra shall oversee and supervise the Project, inspect the work of subcontractors for adherence to the plans and specifications, coordinate the activities of the subcontractors and assure completion by the subcontractors of all subcontracted work. All work shall be done in a good and worker like manner, and in compliance with all


applicable governmental laws, ordinances, regulations and codes. PVP shall not interfere in any manner with the performance of the work by Mudra or any subcontractor, so long as such work is being performed in a good and worker like manner, in accordance with all applicable governmental laws, ordinances, regulations and codes and is being performed in compliance with the Agreement and with the approved plans and specifications


(d) Mudra shall, at the expense of PVP, obtain all required permits, licenses and certificates of inspection and shall see to it that all construction work and materials, and all activities of Mudra and the subcontractors and others on the Project site are in compliance with all laws, ordinances, and regulations of all governmental agencies having jurisdiction. Mudra shall obtain all inspection services required by law. Any deviations from the plans and specifications must be approved in advance by PVP.


(e) Mudra shall be responsible and shall take all necessary precautions for the safety of all persons working at the Project and shall comply with all applicable federal, state and local laws, ordinances and regulations applicable thereto. Mudra shall take all necessary precautions to protect the safety and protection of the workers on the Project, the public and for any improvements on the Project site.


(f) Mudra shall pay all royalties and license fees which may be due for the inclusion of any potential or copyrighted materials, methods or options selected by Mudra, the architect, any engineer or subcontractor, and incorporated in the Project, and shall indemnify PVP and hold PVP harmless from any liability with respect thereto.


(g) Mudra shall meet and shall be responsible for requiring that each subcontractor meet the insurance requirements stated below. Mudra and each subcontractor shall purchase from and maintain in a company or companies lawfully authorized to do business in the jurisdiction in which the work is performed, and reasonably acceptable to PVP, insurance for claims under workers' compensation; employers' liability; business automobile liability; and commercial general liability (including product/completed operations coverage to be maintained for at least 2 years after substantial completion) which may arise out of or result from the obligations under this Agreement. The Insurance shall include contractual liability insurance applicable to any indemnity obligation of Mudra, and shall name PVP as an additional insured on such policies. Mudra and each subcontractor shall furnish a certificate evidencing the insurance required by this paragraph and evidencing the obligation of its insurer not to cancel or materially amend such policy without thirty (30) days prior written notice to PVP and evidencing PVP's status as an additional insured. The certificates shall be filed with PVP prior to the commencement of the work. The insurance required by this paragraph shall have minimum limits as follows:


Workers Compensation Statutory Limits
Employers' Liability $ 500,000
Automobile Liability $ 500,000
Commercial General Liability $1,000,000


(h) To the fullest extent permitted by law, Mudra shall defend, indemnify and hold PVP harmless from all clai ...