HomeMy WebLinkAboutR23390- Comdyn PD, LLC - Dvlpmnt of Affordable Housing on a 20-Acre Site Contract Number R24000
PALM DESERT REDEVELOPMENT AGENCY
STAFF REPORT
REQUEST: CONSIDERATION AND APPROVAL OF AN AGREEMENT WITH
COMDYN PD, LLC FOR THE DEVELOPMENT OF AFFORDABLE
HOUSING ON A 20-ACRE SITE
SUBMITTED BY: LAURI AYLAIAN, REDEVELOPMENT MANAGER
DEVELOPER: COMDYN PD, LLC
2800 28th ST., STE. 206
SANTA MONICA, CA 90405
DATE: JULY 14, 2005
CONTENTS: AGREEMENT BETWEEN THE PALM DESERT
REDEVELOPMENT AGENCY AND COMDYN PD, LLC FOR FEE
DEVELOPER SERVICES FOR AGENCY-OWNED PROPERTY IN
THE CITY OF PALM DESERT
Recommendation:
By Minute Motion, that the Agency Board consider and approve the
agreement between the Palm Desert Redevelopment Agency and Comdyn
PD, LLC for fee developer services for Agency-owned property located in the
City of Palm Desert for the development of affordable housing consisting of
infrastructure, 27 senior rental units, and 94 single-family homes; authorizing
the Executive Director to finalize the agreement and the Agency Chair to
execute same.
This is a multi-year agreement. Funding for the work to be performed during the Fiscal
Year 2005/06 has been budgeted in Account No. 870-4698-466-4001. Funding for the
subsequent two fiscal years will be appropriated through the annual budget process.
Executive Summary:
Acceptance of the staff recommendation will approve an agreement with ComDyn PD,
LLC to develop the infrastructure, senior rental units, and single-family homes designed
for the 20-acre parcel of Agency-owned land immediately west and south of the Hovley
Garden Apartments. Approval will authorize the Executive Director to make minor
modifications (including downward adjustments in cost to the Agency), as appropriate
and necessary, to protect Agency interests prior to execution of the agreement. This
authorization is needed to meet the project schedule, which calls for construction work
to commence before the summer is over.
Contract Number R2400(
Staff Report
Consideration and Approval of Agreement with ComDyn PD, LLC
Page 2 of 4
July 14, 2005
Discussion:
In February 2005, the Redevelopment Agency issued a Request for Proposals to 43
firms interested in developing affordable housing on a 20-acre parcel owned by the
Agency. In April 2005, six written proposals were received in response to the Request
for Proposals. The three top-ranked firms, ComDyn, LLC, Palm Desert Development,
and Rancho Housing Alliance, were interviewed in depth regarding their proposals.
Based on the proposals, the oral interviews, and the recommendation of the Ad Hoc
Housing Committee, the Agency Board on 12 May 2005 authorized staff to negotiate an
agreement with ComDyn, LLC of Santa Monica, California. Staff has been working with
the developer and both parties' legal counsels since that time to negotiate a
development agreement. The agreement appended to this staff report is a result of
those negotiations.
Under the terms of the subject agreement, the developer will be required to build the
infrastructure to serve all planned uses on the 20-acre site, construct 27 senior rental
units and a community room to serve those units, and construct, market and sell 94
single-family homes in three phases. The developer will also be required to:
• Design, permit, and construct the landscaping, senior rental unit carports, and
community gardens
• Qualify potential homebuyers and provide homeowner education and training
• Implement energy conservation measures and elements of universal design into the
design of the single-family homes
• Complete the design development and construction documents for the single-family
homes, based upon previously approved schematic design drawings prepared by
Kristi Hanson, Inc., under contract to the Redevelopment Agency
• Provide monitoring and assistance for three months after the close of escrow as
part of a new-homeowner outreach program to the purchasers of the single-family
homes
The contract amount is for a stipulated sum in the amount of$25,674,845 consisting of
$17,495,901 for the single-family homes, $2,910,156 for the senior rental units, and an
amount not to exceed $5,268,788 for the infrastructure. The Agency will own and
operate the senior rental units and will transfer the single-family homes directly to the
qualifying buyers, providing such subsidy as is necessary to make them affordable to
families of low and moderate income. The entire project is scheduled to take 28 months
to complete.
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Contract Number R24000
Staff Report
Consideration and Approval of Agreement with ComDyn PD, LLC
Page 3 of 4
July 14, 2005
Additional deal points that staff would like to bring to the attention of the Agency Board
are as follows:
1. The developer is also acting as the general contractor for the project. The
developer is not authorized to issue any change orders to the general contractor
that are outside of the scope of the original project budget without prior consent
of the Agency.
2. The Agency will make payment to the developer based upon the progress of the
construction work, plus a developer's fee that is paid in increments as certain
milestones are reached throughout the course of the project.
3. The stipulated sum for the agreement is based upon the assumption that fifty
percent of the single-family homes will be sold to families of low income and fifty
percent to families of moderate income. In the event that this ratio is significantly
altered, an adjustment to the stipulated sum will be warranted.
4. In the event that there is an increase in the cost for the vertical construction that
exceeds ten percent between the April 2005 date of the developer's proposal and
the date when the vertical construction is permitted, the Agency can require the
developer to solicit bids from third-party general contractors that are mutually
acceptable to both parties. If such a third-party contractor provides a lower bid
than the developer's own general contractor, the Agency can require that the
developer remain in his role as developer, but contract with the third-party
contractor for construction of the vertical improvements. If, during the same
period of time, the cost escalates by an amount less than ten percent of the value
of the vertical construction, the developer will retain his own general contractor to
perform the work, and the stipulated sum will be automatically revised to
compensate for the cost increase. Note that even in the event of a ten percent
cost increase, the contract amount for the developer will be less than was
proposed by any other respondents to the Request for Proposals.
5. The developer will take the lead role in creating and implementing financing,
marketing, community outreach and programming for all sales of single-family
homes. The developer will also identify third-party sources of subsidized
financing that can be used to further leverage the Agency's investment, and/or
deepen affordability to the targeted population of potential homebuyers.
6. In the event of material cost increases for lumber, concrete or copper is greater
than five percent during the actual course of vertical construction work, the
Agency will, with appropriate substantiation of price increases, process a change
order to compensate the developer for these material increases.
G'RDA\Mana Hunt1V/PDATA.AYLAIAN\STFRPTS'.071405ComDynPD DDA ooc
Contract Number R240
Staff Report
Consideration and Approval of Agreement with ComDyn PD, LLC
Page 4 of 4
July 14, 2005
7. Any costs associated with scope increases, such as energy-saving devices,
universal design features, or amenities not previously identified, will come back
to the Agency Board for approval in change orders.
8. The developer will provide a one-year warranty for all construction work, plus
other warranties as provided for by state statute.
Because of the complexity of the subject agreement and the timing of the upcoming
hiatus from meetings of the Agency Board, staff requests that the Agency Board
approve the agreement as presented, subject to minor modifications as may be
approved by Agency Counsel and the Executive Director prior to execution. Such
modifications are likely to be made in areas dealing with: remedies short of termination;
assessment of liquidated damages in the event the developer fails to timely complete
the work; indemnifications, sureties, and insurance requirements specific to concerns
associated with having a single asset limited liability corporation holding harmless the
Redevelopment Agency; and downward adjustments in the infrastructure cost based
upon refinement of the original budgetary estimates.
This affordable housing project will assist the Agency in meeting its requirements under
the Regional Housing Needs Assessment. Assuming an average first deed of trust
value of $110,000 for the single-family homes, the Agency will recoup approximately
$10.5 million of the $25.7 million cost of this project.
Submitted by: Department Head:
auri Aylaian Dave Yrigoye �G
Redevelopment Manager Director of development/Housing
mh
Approval:
st n McCarthy,ict- velopment Paul Si ' son • or o inance
Carlos . rte , Executive Director
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Contract No. R2400
AGREEMENT BETWEEN
THE PALM DESERT REDEVELOPMENT AGENCY AND
COMDYN PD, LLC
FOR FEE DEVELOPER SERVICES FOR AGENCY OWNED
PROPERTY LOCATED IN THE CITY OF PALM DESERT
THIS AGREEMENT BETWEEN THE PALM DESERT REDEVELOPMENT
AGENCY AND COMDYN PD. LLC FOR FEE DEVELOPER SERVICES FOR AGENCY
OWNED PROPERTY LOCATED IN THE CITY OF PALM DESERT("Agreement") is made
this day of , 2005 ("Execution Date'') by and between the
PALM DESERT REDEVELOPMENT AGENCY,a public body, corporate and politic
("Owner"),and COMDYN PD, LLC, a California limited liability company ("Developer").
RECITALS
A. Owner is the owner of the real property described in the attached Exhibit A (the
"Real Property" or the"Site"), and located in the City of Palm Desert ("City"). The Real
Property was acquired by Owner in 1998. Owner desires to develop the Real Property to provide
for(i) the development and construction of a twenty-seven (27) unit senior rental housing facility
(the "Rental Housing") and ninety-four(94) units of affordable single-family detached housing
(the"For-Sale Housing"), with related infrastructure, landscaping and amenities, as more
particularly described in the contract documents("Contract Documents") listed on Exhibit B.1
hereof, as same may be modified, amplified and refined pursuant to this Agreement, and (ii)the
marketing and sale of For-Sale Housing residences (collectively, the "Project").
B. Owner is a public body, corporate and politic, exercising governmental functions
and powers, and organized under the Community' Redevelopment Law of the State of California
(being Section 38000 et seq. of the Health and Safety Code of the State of California).
C. The Housing Cooperation Law of the State of California(being Section 34500 et
seq. of the Health and Safety Code of the State of California) authorizes Owner to enter into a
cooperation agreement with a local housing authority and thereby agree to do any and all things,
necessary or convenient to and/or cooperate in the planning, undertaking, construction, or
operation of housing projects.
D. Owner and the Palm Desert Housing Authority have entered into such a
cooperation agreement entitled "Housing Cooperation Agreement". dated as of May 12. 2005,
and pertaining to the development of the Real Property as described in this Agreement.
E. Pursuant to the Housing Cooperation Agreement, Owner has obtained or will
obtain all of the necessary land use entitlement and approvals for the development and
construction of the Project(the "Existing Approvals") except for those items listed in Section D
of Exhibit B.3 hereof(the"Remaining Approvals"):
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F. Owner has caused the preparation of certain of the Contract Documents for the
Project, as described in Section C of Exhibit B.3 hereof(the"Owner's Documents").
G. Developer is experienced in the development, construction. marketing and sale of
projects similar to the Project.
H. Owner and Developer desire to enter into an agreement whereby Developer, on
behalf of Owner, shall undertake certain duties in connection with the development and
construction of the Project, and the marketing and sale of the For-Sale Housing, as more
particularly described herein.
NOW, THEREFORE, the parties agree as follows:
1. Engagement and General Duties of Developer.
1.1. Engagement of Developer. Owner hereby engages Developer, subject to
the terms and conditions set forth in this Agreement, to perform the duties and obligations set
forth in this Agreement as provided in the Development and Construction Plan, attached hereto
as Exhibit B.3 and the Sales and Marketing Plan, attached hereto as Exhibit B.4, and Developer
agrees to perform such duties and obligations in accordance with the terms and conditions of this
Agreement.
1.2. Performance of Developer. Developer accepts the relationship of trust and
confidence established between Developer and Owner by this Agreement. Developer agrees to
furnish its reasonable, good faith skill and judgment and to cooperate with Owner,and Owner's
employees and representatives, the Project general contractor(the "General Contractor"), the
Rental Housing architect (the "Rental Housing Architect") and the For-Sale Housing architect
(the"For-Sale Housing Architect") (sometimes jointly referred to as the`'Architects")and other
contractors and consultants performing work on the Project listed on Exhibit C attached hereto,
as same may be expanded (`Consultants"). In consideration for the payment by Owner to
Developer of the sums required under this Agreement, Developer agrees to use its good faith
efforts to perform its duties and obligations under this Agreement (i) in an efficient, expeditious
and economical manner, consistent with this Agreement, (ii) in such manner designed to effect
completion of the development and construction of the Project and the marketing and sale of the
For-Sale Housing within the time periods set forth in the Business Plan attached hereto as
Exhibit B, as same may be modified pursuant to this Agreement (the"Business Plan"),and
(iii) in such manner designed to effect completion of the development and construction of the
Project and the marketing and sale of the For-Sale Housing within the budgeted costs set forth in
the Business Plan.
1.3. Developer's Personnel and Developer's Overhead.
(a) Developer shall provide an adequate number of experienced
administrative, construction, sales and supervisory personnel to reasonably perform the duties
and obligations of Developer as described in this Agreement. in this regard, Developer shall
provide the personal services of Loren Bloch in a supervisory capacity. Developer shall be
responsible for hiring. supervising, training and paying all of Developer's employees and staff
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members performing administrative, construction, marketing and sale, supervisory, or other
services relating to the Project. Developer shall provide reasonably necessary training to its
personnel relating to the duties and obligations of Developer under this Agreement.
(b) Developer shall be responsible for the payment of Developer's
overhead costs, which are included in the"Developer Fee" (as defined in Section 4 hereof),
including all salaries, fringe benefit contributions, payroll taxes, withholding taxes and other
taxes or levies, accounting fees, legal fees,office overhead expenses, travel expenses, leasing
and sales expenses, telephone and other telecommunication expenses, and document
reproduction expenses associated with the Developer's obligations under this Agreement.
1.4. Completion of the Project. Notwithstanding anything to the contrary
contained herein, for purposes of this Agreement, the construction of each of the Rental Housing
and the For-Sale Housing will be considered complete upon the last to occur of(a) Owner's
receipt of a written certification from the Rental Housing Architect or the For-Sale Housing
Architect, as applicable, that all construction work required to be performed under this
Agreement for completion of the physical improvements ("Work") has been completed
substantially in accordance with the"Construction Documents", as same shall be listed in
Section C of Exhibit B.1 of this Agreement, subject only to standard punchlist items which in the
aggregate will cost no more than Seven Thousand Five Hundred Dollars ($7,500) to complete;
(b) the issuance of. and receipt by Owner, of a certificate of occupancy issued by the City; and
(c) the receipt of unconditional stop notice releases relating to any stop notices from contractors
or suppliers performing services or providing materials. At the next regularly scheduled meeting
of the Palm Desert Redevelopment Agency occurring after the completion of construction of
each of the Rental Housing and the For-Sale Housing, Owner shall approve and thereafter
deliver to Developer a Partial Certificate of Completion in a form reasonably acceptable to
Developer evidencing such completion (the "Partial Certificate of Completion"). Upon
completion of the marketing and sale of the For-Sale Housing, as described in the Sales and
Marketing Plan attached as Exhibit B.4 hereto, Developer shall request in writing and at the next
regularly scheduled meeting of the Palm Desert Redevelopment Agency, Owner shall approve
and thereafter deliver to Developer a Certificate of Completion in form reasonably satisfactory to
Developer evidencing such completion (the "Final Certificate of Completion").
1.5. Business Plan.
(a) The parties have formulated a Business Plan for the development
and construction of the Project and the marketing and sale of the For-Sale Project, attached
hereto as Exhibit B. The Business Plan is comprised of(a) the"List of Contract Documents"at
Exhibit B.1, (b)the"Project Budget"at Exhibit B.2, (c) the "Development and Construction
Plan" at Exhibit B.3, (d) the "Sales and Marketing Plan"at Exhibit B.4,and (e) the"Project
Schedule"at Exhibit B.S. In addition, the"List of Consultants" is provided at Exhibit C.
(b) The parties acknowledge and agree that the Business Plan shall be
refined and modified as necessary, among other things, to incorporate the permit-ready
construction documents for the Project in the List of Contract Documents (the"Construction
Documents")and to adjust the Project Schedule as the Project proceeds to reflect then-current
conditions. The List of Consultants shall be modified to include the full list of Consultants for
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the Project as they are identified by the parties. The Business Plan may be updated and refined
periodically by written document, upon the request of either party, subject to the prior reasonable
written approval of the other party, and such modified Business Plan shall be deemed to
constitute the"Business Plan" hereunder.
1.6. Progress Meetings and Reports.
(a) Developer shall schedule and attend monthly meetings with Owner
to discuss the progress of the development and construction of the Project and the marketing and
sale of the For-Sale Housing and to assess Developer's compliance with the requirements of this
Agreement. including, without limitation, the terms and objectives of the Business Plan, as same
may be amended.
(b) Within ten (10) days following the end of each calendar month,
Developer shall provide Owner with a detailed written report on the status of the development
and construction of the Project and the marketing and sale of the For-Sale Housing, including,
without limitation, the status of Developer's compliance with the requirements of the
Development and Construction Plan, the Sales and Marketing Plan and the Project Budget,
including a report showing any variation or deviation from the Project Budget and the basis for
such variation or deviation, and shall document any adjustments to the Project Schedule based on
the current status.
1.7. Meetings with Third Parties. Developer shall use good faith efforts to
provide Owner with seven (7) days' advance notice in order to enable Owner to prepare for and
attend any meetings in connection with the development, construction and/or sale of the Project
at which any significant negotiations or events are expected to occur. including, without
limitation, meetings with either Architect, the Consultants or the General Contractor, meetings
respecting any easement agreements and meetings with prospective purchasers. At Owner's
request. any such meeting shall be re-scheduled to a time reasonably acceptable to Owner, so
that Owner may attend same.
1.8. Project Budget. In the event that the total costs of the Project included
within the Stipulated Sum, excluding those items set forth in Section 4.1 hereof, exceed the total
amount set forth in the Project Budget. as same may be amended. such excess costs shall be the
responsibility of Developer.
2. Development and Construction Services.
2.1. Construction Services. Developer shall oversee all Work for the Project
by the General Contractor and shall utilize best efforts to cause the same to comply with the
Development and Construction Plan. Developer shall establish and implement appropriate
administrative and financial controls for the development and construction of the Project, as
provided in this Section 2 of the Agreement. Developer shall promptly advise Owner if at any
time Developer reasonably believes that development or construction of the Project is not
proceeding in accordance with the Development and Construction Plan and/or the Construction
Documents, or if Developer reasonably believes that the Project Budget will be exceeded. In
such event. Developer shall make recommendations to Owner as to the appropriate corrective
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action reasonably to be taken, the parties shall consult and coordinate to address such issues and
Developer will implement any such reasonable corrective action approved by Owner.
2.2. Preliminary Activities.
(a) Within ten (10) business days after the Execution Date of this
Agreement, Developer shall, in coordination with Owner,arrange for the performance by third
party consultants acceptable to the parties (the`'Initial Due Diligence") of an updated Phase I
report. assessing the environmental condition of the Real Property, and an updated soils and
geotechnical report. The parties have entered into that certain Right of Entry and Access
Agreement providing access to the Real Property for such preliminary activities. Upon
completion, copies of such reports shall be delivered to Owner and Developer for review. Based
on the results of the Initial Due Diligence, the parties shall mutually determine whether any
further evaluation ("Additional Due Diligence") is warranted. If Additional Due Diligence is
undertaken, the Project Budget shall be revised to add the costs of such Additional Due
Diligence to the Project Costs(as hereinafter defined) to be paid by Owner and the Project
Schedule shall be revised to take into account such Additional Due Diligence. In the event,
following the Additional Due Diligence, remediation work is required pursuant to applicable
laws or governmental requirements, such work shall be performed or coordinated and overseen
by Developer, and the costs of such work shall be added to the Project Costs to be paid by
Owner.
(b) Owner has obtained the Existing Approvals for the Project.
Developer shall process in a timely manner and diligently pursue the Remaining Approvals in
accordance with Sections D and E of the Development and Construction Plan. Developer shall
provide assistance to Owner and the City by, among other things, preparing documents in
connection with Owner's submissions for the Remaining Approvals, and attending meetings or
otherwise making presentations before applicable governmental agencies, including the City
Council, and the City's Planning Commission and Architectural Review Commission, as
required. In connection with Developer's obligations under this Section 2.2, Developer shall not
submit or file any document on behalf of Owner relating to the Remaining Approvals not
contemplated by the Development and Construction Plan without the prior written approval of
Owner, which shall not be unreasonably withheld or delayed. Developer and Owner shall
coordinate and cooperate with each other in connection with the obtaining of the Remaining
Approvals without unreasonable delay.
2.3. Architect and Consultant Contracts. Owner has selected, retained and
executed an agreement with Kristi Hanson Architects, Inc. as the Rental Housing Architect.
Developer has selected and Owner has accepted KTGY Group, Inc. as the For-Sale Housing
Architect and the Consultants whose services are necessary or desirable in connection with the
development and construction of the Project. as listed on Exhibit C attached hereto. Developer
shall negotiate with the For-Sale Housing Architect and the Consultants and shall prepare
agreements to be entered into between Developer and the Architect and Developer and the
various Consultants in forms reasonably acceptable to Owner. Notwithstanding anything to the
contrary contained in this Agreement, subject to Section 1.8 hereof, only to the extent of
Owner's timely payment of the Project Costs(as defined in Section 4 hereof) in accordance with
this Agreement, shall Developer be responsible for the timely payment of all costs and fees
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payable under all contracts entered into between Developer and the For-Sale Housing Architect
and Consultants, as well as any legal fees incurred by Developer in connection with the
negotiation and preparation of such agreements.
2.4. Construction Contract. Owner and Developer have selected and approved
Community Dynamics, Inc., as the General Contractor for the Project, subject to the provisions
of Section F of the Development and Construction Plan. The parties acknowledge and agree that
Community Dynamics, Inc. and Developer are related entities. For purposes of this Agreement,
the term "General Contractor" shall include, to the extent applicable, the term "New General
Contractor". as defined in Section F of the Development and Construction Plan. Developer shall
negotiate with the General Contractor and shall prepare a guaranteed maximum cost construction
contract (the"Construction Contract") to be entered into between the Developer and the General
Contractor substantially in the form attached hereto as Exhibit F, as provided in the Development
and Construction Plan. In the event that the New General Contractor serves as the General
Contractor, the Project Schedule shall be extended accordingly. The terms of the Construction
Contract shall (i) require that the General Contractor commence and complete the Project in
compliance with requirements of the Construction Documents, the Project Schedule and the
Project Budget, as same may be amended, and (ii) require that the General Contractor obtain a
performance bond and a labor and material payment bond (from a bonding company reasonably
acceptable to the Owner) in dual obligee form covering performance of the General Contractor
and cause Owner and Developer to be named as only co-obligees thereon. Notwithstanding
anything to the contrary contained in this Agreement, subject to Section 1.8 hereof, only to the
extent of Owner's timely payment of the Project Costs (as defined in Section 4 hereof) in
accordance with this Agreement, shall Developer be responsible for the timely payment of all
costs and expenses payable under the Construction Contract, as well as any legal fees incurred by
Developer in connection with the negotiation and preparation of the Construction Contract.
2.5. Easement Agreements. To the extent requested by Owner, Developer
shall initiate negotiations and supervise counsel selected by Owner in the preparation and
negotiation of any reciprocal easement agreement or declaration of easements or grant of
easements affecting or benefiting the Real Property which are necessary or appropriate in
connection with the development of the Project, including, if approved by Owner, easement
agreements relating to shared access rights with other property owners. Each draft of any such
agreement shall promptly be provided to Owner for its review and comment. Any such
document shall be subject to Owner's written approval, which shall be exercised in Owner's sole
discretion, and shall incorporate any specific requirements of Owner. Notwithstanding anything
to the contrary contained in this Agreement, Owner shall be responsible for all costs and fees
associated with the negotiation and documentation of all such easement agreements, including
the legal fees charged by counsel selected by Owner.
2.6. Developer's Review of Construction Documents. Other than the Owner's
Documents, Developer shall review all plans, specifications, drawings, working drawings,
depictions, renderings and other materials prepared by the Architects or the Consultants for the
Project to determine, in Developer's good faith business judgment, whether they are consistent
with Owner's requirements. All such documents shall be submitted to Owner and shall be
subject to Owner's reasonable approval. As to all Construction Documents, Developer shall
provide recommendations to Owner on construction feasibility, availability of materials and
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labor, factors related to costs, including costs of alternative designs or materials and possible cost
savings. In addition,as to all Construction Documents, Developer shall recommend design
concepts and the utilization of construction methods and materials which are intended to result in
energy efficiency and conservation in the Project, with the goal of minimizing the energy
consumption and the operating costs of the Project.
2.7. Project Management. Developer shall maintain a reasonable number of
competent staff persons at the Project site to monitor the progress of the Work. Developer shall
oversee and coordinate the activities of the Architects, the General Contractor and all
Consultants and use its good faith efforts to avoid unnecessary duplications of effort or
unnecessary delays in the progress of the Work. Developer shall assume responsibility for the
planning, scheduling and proper management for all phases of development of the Project,
including, without limitation, schedules for commencement and completion of the various phases
of design and commencement and completion of construction, and the Developer also shall be
responsible for the day-to-day management of the development of the Project.
2.8. Change Orders. Developer shall develop and use good faith efforts to
properly implement, subject to Owner's approval, a system for reviewing and processing
construction change orders. Developer shall make recommendations to Owner concerning
necessary or desirable changes to the Work, shall review requests for change orders, shall submit
recommendations to the Owner concerning changes and shall negotiate change orders with the
General Contractor. Developer shall not be authorized to issue change orders which are outside
the scope of the Project Budget without the prior consent of Owner, which consent shall not be
unreasonably withheld. Owner shall respond in writing to such applications for change orders
within two(2) business days after receipt thereof or as soon as is practicable within the
constraints of Owner's municipal purchasing ordinance. Developer shall modify the Project
Budget and, to the extent applicable, the Project Schedule. to reflect each change order.
2.9. Payment Applications.
(a) The procedure for processing applications for payment
(`'Applications for Payment") for Project Costs, as defined in Section 4 hereof, is set forth in
Exhibit D attached hereto. Owner shall review and process Developer's Applications for
Payment in accordance with Exhibit D. Upon receipt of payment by Owner, Developer shall
promptly pay such amounts to the appropriate payee and shall indemnify Owner against any
third party claims for such payments.
(b) Developer shall, subject to the approval of Owner, oversee, assist
and use reasonable. good faith efforts in the handling of disputes concerning financial or
contractual matters with the General Contractor, Architects and Consultants. Developer shall
have no obligation to institute lawsuits or alternative dispute resolution proceedings in
connection with the foregoing; provided, however, in the event Owner, at Owner's sole cost,
institutes a lawsuit or commences an alternative dispute resolution proceeding in connection with
any such dispute, Developer shall be obligated to provide reasonable assistance chargeable to
Owner at Developer's hourly rate (as set forth in Developer's annual rate schedule), by, among
other things, preparing documents in connection with Owner's court or other filings and
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attending hearings and providing testimony before applicable courts or other relevant
decisionmakers.
2.10. Inspections and Construction Punchlist. Developer shall establish
inspection procedures and conduct periodic inspections of the Work (including the materials
used in the course of construction)as are reasonably necessary to process applications for
payment or as may be reasonably necessary to monitor compliance of the Work with the
requirements of the Construction Documents. Prior to processing the General Contractor's final
application for payment, Developer shall conduct a thorough inspection of the Project, shall
prepare a detailed "punchlist" intended to state any items which reasonably require installation or
repair and shall name the party responsible for undertaking such installation or repair. Developer
shall use its good faith efforts to confirm that all Work, including punchlist work, is promptly
and properly completed. Developer shall deliver to Owner as-built drawings of the Project
within thirty (30) days following completion of each of the Rental Housing and the For-Sale
Housing, and shall deliver to Owner all keys, equipment. operational manuals, warranties and
other items relating to the Rental Housing within ten (10)days after completion thereof.
Developer shall oversee the design and preparation by the General Contractor(who shall be so
obligated pursuant to the terms of its contract with Developer)of a handbook and provide basic
training to Owner with respect to the operation of systems installed within the Rental Housing.
Such handbook and basic training shall be provided to Owner at a mutually acceptable time.
2.11. Retention of Documents and Records. Developer shall assemble and
retain all contracts, agreements and other records and data relative to the Project, as may be
necessary to carry out Developer's obligations hereunder, and such other records and data as are
typically retained by Developer and construction and property managers for similar projects,
including, without limitation, certificates and policies of insurance from Consultants and
subcontractors. All documents to be maintained by Developer under this Agreement shall be
available for inspection and/or copying by Owner at reasonable times upon advance notice to
Developer.
2.12. Protection and Safety. Developer shall oversee General Contractor, who
shall have the responsibility to take such reasonable actions as are reasonably necessary to
maintain adequate protection of the Project from damage, injury or loss, and Developer shall use
its reasonable, good faith efforts to coordinate with the General Contractor in taking reasonable
precautions for the safety of persons performing work on the Project. All agreements prepared
by Developer shall require the General Contractor and all subcontractors to comply with all
applicable provisions of federal, state and local safety laws and building codes and standards.
2.13. Coordination of Owner Inspection and Other Rights. Developer shall
coordinate with Owner and permit Owner, at reasonable times, upon reasonable prior notice, to
inspect the Project and inspect and audit Developer's records relating to the Project, to consult
with Developer's Project personnel, to attend Project meetings, and to post such advertisements,
signs or notices as Owner may deem desirable at or in the vicinity of the Project.
2.14. Ancillary Construction Services. In addition to the specific duties
described in this Agreement, to the extent required by the Development and Construction Plan,
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Developer shall perform such other reasonable services as may be necessary to complete the
development and construction of the Project.
2.15. Excluded Services. Notwithstanding anything herein to the contrary.
Developer shall not be responsible for arranging, recommending or procuring construction
financing or funding for the Project or any portion thereof. Developer shall have no
responsibility for the ongoing leasing or management of the Rental Housing. following its
completion; provided, however, Developer shall be responsible for managing, overseeing,
coordinating with legal counsel and otherwise handling (subject to Owner's approval, which may
be withheld in Owner's reasonable discretion)all material disputes or issues concerning alleged
construction defects (i) relating to the Rental Housing which arise within one(I)year following
the completion date set forth in the Partial Certificate of Completion therefor, and (ii) relating to
the For-Sale Housing which arise within one (1)year following the completion date set forth in
the Partial Certificate of Completion therefor.
3. Marketing and Sale of For-Sale Housing.
3.1. Sales and Marketing Plan. Developer shall assist in the marketing and
sale of the For-Sale Housing in accordance with the Sales and Marketing Plan attached as
Exhibit B.4, as same may be modified and refined by the parties.
3.2. Consultation and Recommendations. Developer shall consult with Owner
and shall make recommendations to Owner as Owner may request, or as may be necessary from
time to time in connection with the timely and efficient marketing and sale of the For-Sale
Housing. Developer shall meet with Owner and Owner's representatives and consultants from
time to time to review, and if requested by Owner, to modify. the Sales and Marketing Plan,
which modifications shall be subject to the prior written approval of Owner. which approval
shall not be unreasonably withheld. Developer shall use its reasonable, good faith efforts on a
continuing basis to sell all of the For-Sale residences to purchasers who qualify as low or
moderate income households under state law in the ratios established in the Sales and Marketing
Plan, and who are otherwise acceptable to Owner in the exercise of its sole discretion.
3.3. Purchase and Sale Agreement Forms. All purchase and sale agreements to
be executed with respect to the For-Sale Housing shall be in a form reasonably acceptable to
Owner.
3.4. Purchaser Evaluation. Developer shall use its good faith efforts to obtain
(at Developer's expense) reasonably necessary financial information from each prospective
purchaser to enable Developer and Owner to determine whether such prospective purchaser is a
qualifying purchaser under the low and moderate income requirements under the Sales and
Marketing Plan. If Developer proposes that a purchase and sale agreement be entered into with a
prospective purchaser, Developer shall, at that time, provide to Owner all financial information
which Developer has obtained with respect to such purchaser, including income tax returns and
all other relevant information for determining purchaser eligibility.
3.5. Purchase and Sale Agreement Execution. Owner shall receive copies of
all material correspondence between Developer and any prospective purchaser. All purchase and
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sale agreements presented to Owner for approval shall be complete and shall be carefully
prepared and reviewed by Developer. Only Owner shall have the authority to execute any
purchase and sale agreement or any other agreement with respect to the transfer of the For-Sale
Housing residences or the use, occupancy or control thereof. Owner shall have the right, at any
time (even after execution of a purchase and sale agreement by a prospective purchaser), in its
sole and absolute discretion, to refuse to execute a purchase and sale agreement with any
prospective purchaser. Developer shall provide Owner with sales status and progress reports at
the monthly meetings referenced in Section 1.6 above.
3.6. Limitations on Developer Concerning Sales Materials. Developer shall
not use or permit to be used any promotional material or promotional aids for the sale of the
For-Sale Housing residences other than those which have been approved in writing by Owner.
Without limiting the generality of the foregoing, Developer shall not use any form of agreement
or document except those furnished to Developer by Owner or previously approved by Owner in
writing. Developer shall have no authority to make, amend, modify, alter, add to, delete from or
otherwise change any contract or agreement executed by Owner, nor shall Developer authorize,
make or approve any alteration to or change in any purchase and sale agreement form,
promotional material or other marketing and sale material previously approved by Owner,
without Owner's prior written consent in each instance. No employee, agent or representative of
Developer shall be empowered or authorized to make any material representation to any
prospective purchaser or other person or entity unless the same is contained in the written
marketing and sale literature previously approved in writing by Owner.
3.7. Compliance With Rules and Regulations. Developer shall fully comply
with such reasonable written rules, regulations and policies respecting the sale of the For-Sale
Housing residences as Owner may establish in writing from time to time or as may be required
by governmental authorities having jurisdiction over such matters. Developer shall cause each of
its employees to comply with such written rules, regulations and policies.
3.8. Ancillary Marketing and Sales Services. In addition to the specific duties
and obligations described in this Agreement, to the extent required by the Sales and Marketing
Plan, Developer shall perform such other reasonable services as may be necessary with respect to
the marketing and sale of the For-Sale Housing residences.
4. Compensation of Developer.
4.1. Stipulated Sum. Owner shall pay to Developer for the performance of
services under this Agreement ("Developer's Fee") and the costs of development and
construction of the Project and the marketing and sale of the For-Sale Housing ("Project Costs")
the aggregate sum of Twenty-Five Million, Six Hundred Eighty-Three Thousand, Two Hundred
Seventy-Six Dollars ($25,683,276) (the "Stipulated Sum"), as itemized in the Project Budget.
The following Project Costs. for which Owner is responsible, are expressly
excluded from the Stipulated Sum:
(a) Owner approved changes to design and/or engineering
specifications;
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(b) Owner approved changes to Developer's scope of work;
(c) Owner Delays(as defined in Section 8.12 hereof);
(d) Delays due to inclement weather conditions that are equivalent to
or more severe than a 10-year storm event, with reference to the seasonal records of the NOAA
for the Palm Desert area during such period, and that have an adverse effect on the timing of
Project activities;
(e) Force Majeure delays(as defined in Section 8.11 hereof);
(I) Any additional costs or penalties if the Project is determined to be
subject to state prevailing wage laws or public bid procedures;
(g) Insurance premiums for coverage in excess of required minimums;
(h) Construction cost increases, if any, as permitted under Section F of
Exhibit B.3; and
(i) Increases in public agencies' permit and/or impact fees effective as
of April 19, 2005.
4.2. Payment. The Stipulated Sum shall be paid by Owner to Developer as
follows:
(a) General Contractor Project Costs: As the work is billed by the
General Contractor, provided that such billings accurately reflect the progress percentage of the
Work completed and meet the Application for Payment procedures described in Exhibit D of this
Agreement.
(b) Other Project Costs: As the work is billed, provided that such
billings meet the Application for Payment procedures described in Exhibit D of this Agreement.
(c) Developer's Fee:
(i) Twenty-two (22) consecutive equal monthly installments of
Thirty-One Thousand Sixty Dollars ($31,060) due and payable on the first (1s`) day of each
calendar month, commencing on the first full calendar month following the Execution Date of
this Agreement; and
(ii) The balance as follows:
a) Upon completion of Stage 1 Improvements(as
defined in the Business Plan): $ 98,745
b) Upon completion of preparation of Owner's
homebuyer loan and sales documentation for the
For-Sale Housing: $ 98,745
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c) Upon completion of construction of the Rental
Housing (as defined in Section 1.4 hereof) $ 98,745
d) Upon the closing of the first sale of all Phase 1
(as defined in the Business Plan) For Sale Housing
residences $ 98,745
e) Upon the closing of the first sale of all Phase 2
(as defined in the Business Plan) For-Sale
Housing residences $ 98,745
f) Upon the closing of the first sale of all Phase 3 (as
defined in the Business Plan) For-Sale Housing
residences $ 98,745
g) Ninety (90) days after the closing of the first
sale of all Phase 3 (as defined in the Business Plan)
For-Sale Housing residences $ 90,810
5. Agency Obligations.
5.1. Owner of the Site. Owner acquired the Real Property in 1998 and, since
such time, has had full control and possession thereof. Owner shall continue to hold fee title to
the Real Property throughout the development and construction period for the Project, and, upon
completion, shall own and manage the Rental Housing and shall timely transfer to individual
purchasers the For-Sale Housing residences.
5.2. Grant of Access. From and after the Execution Date of this Agreement,
Owner hereby grants to Developer, the General Contractor, the Architects and the Consultants
and all other parties involved in the Work on the Real Property and the marketing and sale of the
For-Sale Housing, the right of entry and continuous access to the Site throughout the term of this
Agreement.
5.3. Prompt Owner Performance and Coordination with Developer.
(a) Owner acknowledges and agrees that the implementation of this
Agreement requires continuous and direct coordination with Developer and the prompt and
expeditious performance of Owner's responsibilities, including without limitation the review and
approval of documents, proposals, materials, change orders, Applications for Payment and
similar items. The Project Budget and the Project Schedule are predicated upon such prompt
action and efficient coordination with Developer by Owner. Owner agrees to reasonably assist
in implementing this Agreement and to promptly perform Owner's obligations under the
Business Plan.
(b) Within five(5) business days after the Execution Date, Owner
shall designate Owner's Project Manager("Owner's Project Manager") for the Project, who,
under the supervision of Lauri Aylaian, shall be responsible for coordinating with Developer on
behalf of Owner. Owner shall devise a written communication protocol and plan. reasonably
acceptable to Developer, to ensure that items and issues are efficiently addressed.
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5.4. Attendance at Progress Meetings. To the extent feasible. Owner's Project
Manager shall attend all Project progress meetings. as described in Section 1.6 hereof: and shall
be responsible for advising Owner and, to the extent applicable, the City of the results of such
progress meetings.
5.5. Approval of Plans and Documents. Except as otherwise provided in
Sections 2.8 and 2.9, to the extent that Owner approval is required under this Agreement. within
five (5) business days after delivery to Owner. Owner shall review each submittal by Developer
in a prompt and expeditious manner and shall notify Developer in writing of Owner approval or,
in the case of disapproval. the specific basis for such disapproval and the suggested means to
cure such basis. Except to the extent expressly stated to the contrary in this Agreement,
approvals by Owner shall not be unreasonably withheld or delayed.
5.6. Owner's Preparation of Contract Documents. Owner has caused, or will
cause, the preparation and delivery to Owner of the Owner's Documents, including(i)all
Construction Documents (as listed in Section C of Exhibit B.l) for the Stage I Improvements(as
defined in the Business Plan) and the Rental Housing, and (ii) schematic drawings for the
For-Sale Housing, as listed in Section C of Exhibit B.1. Owner acknowledges and agrees that
Owner shall be responsible for the quality and utility of the Owner Documents, and that. subject
to Section 2.6 hereof.. Developer shall bear no responsibility therefor.
5.7. Owner Cooperation and Assistance. Owner acknowledges and agrees that
the Business Plan is predicated upon timely action by the City in reviewing and acting upon
documents and submittals for the Project, including without limitation the Remaining Approvals.
Owner agrees to assist Developer. to the extent feasible, in the processing by the City and any
other governmental agencies of the Remaining Approvals.
5.8. Approval of Proposed Modifications to the Business Plan. Owner
acknowledges and agrees that various aspects of the Business Plan and the Project are anticipated
to evolve and require modification and refinement during term of this Agreement. Owner agrees
to consider in good faith any such requests by Developer and to cooperate in addressing
unexpected circumstances consistent with the intent and objectives of the Agreement.
5.9. Establishment of Ratio of Low and Moderate Income Purchaser Eligible
Units. Owner acknowledges and agrees that the Project Budget, the Project Schedule and the
Business Plan are predicated upon the ratio of low and moderate income purchaser eligible units
within the Project specified in Section G of the Construction and Development Plan. Any
adjustment to such ratio may require modifications to the Project Budget, the Project Schedule
and the Business Plan.
5.10. Owner Financing. Owner shall be responsible for(i) timely providing
adequate subsidies in the form of deferred loans to low and moderate income purchasers of the
For-Sale Housing and (ii) for timely obtaining and providing all Project funding and financing.
5.11. Stipulated Sum Payments. Owner shall promptly make all payments
specified in Section 4 hereof and shall review and approve all Applications for Payment in
accordance with the requirements of Exhibit D. Agency acknowledges and agrees that the
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timely payment of the Project Costs is necessary in order to assure timely payment of the
General Contractor, the Architects and the Consultants and to avoid the recordation of stop
payment notices against the Site to secure such payments, and Owner shall fully indemnify
Developer against any third party claims asserting costs and liabilities for the untimely payment
of Project Costs to Developer.
5.12. Owner Representations and Warranties. Owner hereby represents and
warrants the following to Developer as of the Execution Date of this Agreement:
(a) Compliance With Laws. To the actual knowledge of Owner, the
Real Property is not in violation, and Owner has not received, any request for information or any
notice that Owner or the Real Property (or any portion thereof) is in violation, of(i) any federal,
state or local law,ordinance,rule.regulation,code or order or(ii) any requirement imposed
under any covenants, conditions, restrictions, easements, agreements or other rights affecting the
Real Property, or that any investigation of such matters has been commenced and is continuing
or is contemplated.
(b) Entitlements. All land use approvals and entitlements required for
the construction, completion, ownership, use and occupancy of the Real Property for the Project,
other than the Remaining Approvals, have been obtained in accordance with applicable law, are
fully paid for, are in effect and good standing from all appropriate authorities, are no longer
subject to legal challenge under the California Environmental Quality Act or upon other basis,
and will not be revoked, invalidated, violated or otherwise adversely affected by the
consummation of this Agreement, and Owner and the Real Property are in compliance with all
requirements and conditions of same.
(c) No Government Proceedings. To the actual knowledge of Owner.
there are no existing, pending or contemplated or threatened condemnation, incorporation,
annexation or moratorium proceedings affecting the Real Property (or any portion thereof). To
the actual knowledge of Owner, there are no existing, pending or contemplated or threatened
governmental rules, regulations, plans, studies or efforts, or court orders or decisions, which do
or could adversely affect the use or development of the Project on the Real Property.
(d) Condition of Property. To the actual knowledge of Owner, there
are no defects or conditions, including structural defects and/or soil conditions, in or otherwise
affecting the Real Property which impair or could impair the use or development of the Project
on the Real Property.
(e) No Prevailing Wage Requirements. The funding of the Project
Costs from Owner's housing set aside fund does not subject the Project to compliance with state
laws requiring public bidding and/or the payment of prevailing wages.
(f) Environmental Matters.
(i) Definitions. The term "Hazardous Materials" means any
product, substance, chemical, material or waste whose presence, nature, quantity and/or intensity
of existence, use, manufacture, processing, treatment, storage, disposal, transportation, spill,
release or effect, either by itself or in combination with other materials on or expected to be on
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the Property, is either(A) potentially injurious to public health, safety, welfare. or the
environment, or to the Property; (B) regulated, monitored, or subject to reporting by any
governmental authority; or(C) a basis for potential liability to any governmental agency or a
third party under any applicable statute or common law theory. Without limiting the foregoing,
the term "Hazardous Materials" includes, but is not limited to, hydrocarbons. petroleum,
gasoline, crude oil or any products or byproducts thereof. The term "Environmental Laws"
means all federal, state and local laws, ordinances, rules, regulations, codes or orders, including,
without limitation, any requirement imposed under any permits, licenses,judgments, decrees,
agreements or recorded covenants, conditions, restrictions or easements, the purpose of which is
to protect the environment, human health, public safety or welfare, or which pertain to
Hazardous Materials.
(ii) Presence and Use. To the actual knowledge of Owner, no
person has used. generated, stored, spilled or released any Hazardous Materials on the Real
Property. or transported Hazardous Materials to or from the Real Property, and no person has
manufactured, processed, treated or disposed of Hazardous Materials on the Real Property.
(iii)Com pliance. To the actual knowledge of Owner, no
condition exists on the Real Property arising out of or related to the presence of Hazardous
Materials on the Real Property that may require remediation in order to prevent damage or harm
to human health, safety, or the environment, nor has any event occurred with respect to the Real
Property that upon the failure to act. the passage of time or the giving of notice would give rise to
liability under any Environmental Law.
(g) Actual Knowledge. For purposes of this Section 5.12, the '`actual
knowledge of Owner' shall be deemed to mean the actual knowledge of David Yrigoyen.
Director of Redevelopment/Housing, and Lauri Aylaian, Redevelopment Manager.
5.13. Ancillary Owner Obligations. In addition to the specific duties and
obligations described in this Agreement, to the extent provided in the Business Plan, Owner shall
take such reasonable actions as may be necessary to perform Owner's obligations with respect to
the development and construction of the Project and the sale of the For-Sale Housing.
6. Defaults, Remedies and Termination.
6.1. Events of Default. Each of the following events shall constitute an "Event
of Default":
(a) Subject to extensions of time set forth in Sections 8.11 and 8.12,
failure by either party to observe, perform or comply with any material term. covenant,
agreement or condition of this Agreement (other than Owner's obligations under Section 2.9
and 4 hereof) which is to be observed, performed or complied with by such party hereunder,
including without limitation Developer's obligations under Section 1.2(ii) hereof, if such failure
shall continue uncured for fifteen (15)calendar days after delivery by the other party of written
notice of such failure specifying the nature of such failure, unless such failure is not susceptible
of being cured within said fifteen (15)calendar day period, in which event such a failure shall
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not constitute an Event of Default if curative action is commenced within said fifteen (15) day
period and thereafter diligently prosecuted to completion.
(b) Failure by Owner to timely process and deliver a payment as
provided in Sections 2.9 and 4 hereof;
(c) Either party shall commit any fraud, material misrepresentation,
breach of fiduciary duty, or willful misconduct in the performance of its obligations hereunder.
(d) Either party shall (i) apply for or consent in writing to the
appointment of a receiver, trustee, or liquidator of all or substantially all of its assets; (ii) file a
voluntary petition in bankruptcy or admit in writing its inability to pay its debts as they become
due; (iii) make a general assignment for the benefit of creditors;(iv) file a petition or an answer
seeking reorganization or an arrangement with creditors or take advantage of any insolvency
law; or(v) file an answer admitting the material allegations of a petition filed against it in any
bankruptcy, reorganization, or insolvency proceeding; or if any voluntary petition in bankruptcy
or similar proceeding shall be filed against Developer seeking its reorganization, liquidation, or
appointment of a receiver, trustee. or liquidator for all or substantially all of its assets.
6.2. Termination Upon Event of Default. At its option, in the event of the
occurrence of an Event of Default by the other party, the non-defaulting party shall have the right
to terminate this Agreement upon delivery of written notice to the defaulting party.
6.3. Termination Upon Death or Disability. Owner shall have the right to
terminate this Agreement upon fifteen (15) days' written notice to Developer should Loren
Bloch fail to be able, due to physical disability or death, to provide the services required of him
pursuant to this Agreement, unless Owner, in Owner's reasonable discretion approves of a
substitute for such individual. Any disability preventing such party from performing duties
under this Agreement for a continuous period of thirty (30)days shall be deemed to constitute a
failure by such party to provide the services required of him pursuant to this Agreement.
6.4. Termination Upon Abandonment or Suspension of the Project.
Notwithstanding anything to the contrary contained in this Agreement. Owner shall have the
right, upon thirty (30)days' written notice to Developer, to terminate this Agreement in
connection with an election by Owner to abandon the Project or to suspend development of the
Project for a period of not less than one(1)year.
6.5. Termination Upon Completion. This Agreement shall terminate upon the
later of(a) the date ninety(90) days following the later to occur of(i) the completion of the
Rental Housing. as defined in Section 1.4 hereof, and (ii) the closing of the first sale of the final
For-Sale Housing residence to be sold, and (b)the date five (5) business days after the date of
delivery by Owner to Developer of the final payment under Section 4.2(c)(ji)(g) hereof.
6.6. Actions Subsequent to Termination.
(a) Within fifteen(15)calendar days after any termination of this
Agreement other than for an Event of Default by Developer, Owner shall pay to Developer all
unpaid Project Costs and Developer's Fees for work performed or materials provided prior to the
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effective termination date. If such termination was made pursuant to Section 6.4 hereof, in
recognition of the lost opportunity costs and resources committed by Developer to the Project.
Owner shall pay to Developer an additional sum equal to fifty percent (50%)of the remaining
unpaid balance of the total Developer's Fees.
(b) Within fifteen (15)calendar days after termination of this
Agreement by Owner based on an Event of Default by Developer, Owner shall deposit and retain
in an escrow account pending resolution pursuant to Section 6.7 hereof of the Event of Default
claim against Developer, funds in an amount equivalent to all unpaid Project Costs and
Developer's Fees for work performed or materials provided prior to the effective termination
date.
(c) Upon payment or deposit of funds by Owner in accordance with
(a) or (b) above and delivery to Developer, in form reasonably acceptable to Developer. of a
release and indemnity agreement for liability from and after such termination date relating to the
Project and the Real Property (but, in the case of a termination based on an Event of Default by
Developer, reserving any claims by Owner relating to such Event of Default). Developer shall
promptly (i)execute and, if appropriate, record such instruments as Owner may require to
transfer to Owner all of the Developer's interest and rights from and after the termination date in
and to the Contract Documents, all warranties and guaranties, any and all improvements
constructed or placed upon the Real Property by Developer, and all other contracts and
agreements to which the Developer is a party and which pertain to the Project, and(ii)account
for and deliver to Owner or to such other person as Owner shall designate in writing, all
materials, supplies, equipment, keys, contracts, documents and books and records pertaining to
this Agreement or to the Project, whether in possession of Developer or a party engaged by the
Developer pursuant to the provisions hereof. Developer shall also furnish all such information,
take all such other action and shall cooperate with Owner as Owner shall reasonably require in
order to effectuate an orderly and systematic termination of Developer's duties and activities
hereunder. All personal property(including capital equipment, hardware, trade and non-trade
fixtures, materials and supplies) acquired pursuant to this Agreement, whether paid for directly
by Owner or by way of reimbursement to Developer, shall at all times be the personal property
of Owner and shall remain on the Real Property after such termination.
6.7. Dispute Resolution. [SUBJECT TO FURTHER DISCUSSION]
(a) ADR Procedure. Any dispute under the Contract Documents
involving an amount that is less than Two Hundred Fifty Thousand Dollars ($250,000) shall be
resolved through the alternative dispute resolution procedure(the "ADR Procedure") as
described in this Section 6.7(a).
(i) In the event of a dispute to be resolved through the ADR
Procedure, either party may notify the other in writing(the "ADR Notice") that such party elects
to have the dispute resolved by the ADR Procedure. ADR Procedures noticed in order to resolve
disputes which involve structural or exterior wall issues or mechanical, electrical, plumbing,
elevator, fire, life safety and other similar systems shall be resolved by . ADR
Procedures noticed in order to resolve disputes which do not involve such issues shall be
resolved by . Each of said companies is herein called the"Arbitrator"as
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applicable to the dispute in question. A copy of the ADR Notice shall also be delivered to
or , as appropriate, given the subject matter of the ADR
Procedure. The ADR Notice shall (a) describe generally the nature of the dispute such that the
Arbitrator will be able to determine which, if any, of the Arbitrator's consultants the Arbitrator
may need in order to assist in the resolution of the dispute, and (b) a proposed date and time at
which the duly authorized representatives of the Owner and Developer and the Arbitrator will
meet (the"ADR Meeting") in order to resolve the dispute. Said date and time must be no less
than two(2) full business days from delivery of the ADR Notice and must be on a business day.
Neither Owner nor Developer may object to the date and time of any ADR Meeting which
complies with the foregoing requirements. If, however, the Arbitrator is unable to attend the
ADR Meeting at the time designated in the ADR Notice, or if the Arbitrator requires a consultant
to attend the ADR Meeting and cannot arrange to have such consultant present at such time, then
the Arbitrator will so notify Owner and Developer which notice shall set forth the first day and
time at which the Arbitrator can meet on a business day, and the Arbitrator and the ADR
Meeting shall be held at such time and place.
(ii) All ADR Meetings shall be held at the Site unless the
dispute to be resolved requires inspection of materials, samples. mock-ups or similar items which
are located elsewhere and cannot reasonably be brought to the Site. At the ADR Meeting, each
party shall explain to the Arbitrator its position with respect to the dispute and shall answer such
questions as the Arbitrator may pose. The Arbitrator shall have the authority to determine the
length of time permitted each party to make its presentation. Rules of evidence and discovery
shall not be applicable to the ADR Procedure. With respect to disputes which involve matters
beyond the area of expertise of the Arbitrator, the Arbitrator shall engage one or more
consultants to assist the Arbitrator in resolving the dispute.
(iii) If reasonably possible, the Arbitrator shall render its
decision at the ADR Meeting or within one (1) business day thereafter and shall immediately
notify the parties of such decision. Such decision shall be confirmed in writing and shall be
conclusive and binding on the parties except that the parties may petition to vacate or correct any
decision to a court of law upon the same grounds that an arbitration award may be vacated or
corrected under the California Code of Civil Procedure. The fees of the Arbitrator shall be paid
equally by the parties.
(iv) Owner and Developer shall and do hereby agree to
indemnify the Arbitrator for, and hold the Arbitrator harmless from and against, any and all
claims, loss, cost, damage, liability or expense including, without limitation, reasonable
attorneys' fees and costs, arising out of or in connection with any decision rendered by the
Arbitrator in good faith. If the Arbitrator fails or refuses at any time to act under this
Section 6.7(a), Owner and Developer shall, within five(5) business days after such failure, agree
upon another Arbitrator. If the parties are unable to so agree in said five (5) business day period,
then either party may thereafter request appointment of an architect to serve are the Arbitrator by
the then highest officer of the Riverside County Chapter of the American Institute of Architects.
Neither the Arbitrator designated above nor any Arbitrator thereafter agreed upon or designated
pursuant to this provision, shall have had any employment, agency relationship, business
affiliation, or similar relationship with Owner or Developer for a period of ten (10)years
preceding the Execution Date.
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(b) Referee Procedure. ANY DISPUTE ARISING FROM OR IN
CONNECTION WITH THIS AGREEMENT FOR WHICH THE ADR PROCEDURE IS NOT
PROVIDED SHALL BE HEARD AND DETERMINED BY A REFEREE PURSUANT TO
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638 ET SEQ. IN EFFECT AS OF
THE DATE HEREOF. THE VENUE OF ANY PROCEEDING HEREUNDER SHALL BE IN
RIVERSIDE COUNTY, CALIFORNIA (UNLESS CHANGED BY ORDER OF THE
REFEREE).
(i) THE PARTY SEEKING TO RESOLVE THE DISPUTE
SHALL SERVE A COMPLAINT OR STATEMENT OF CLAIM ON THE OTHER PARTY,
DESCRIBING THE MATTERS IN DISPUTE IN THE MANNER PRESCRIBED FOR
GIVING NOTICE HEREUNDER. WITHIN FIVE (5) DAYS AFTER THE SERVICE OF THE
COMPLAINT OR STATEMENT OF THE COMPLAINT OR STATEMENT OF CLAIM, THE
PARTY SEEKING RELIEF SHALL MAKE A WRITTEN REQUEST FOR THE SPECIFIC
DESIGNATION OF A REFEREE TO TRY THE DISPUTE. THEREAFTER THE PARTIES
SHALL USE THEIR BEST EFFORTS TO AGREE UPON THE SELECTION OF A
REFEREE. IF THE PARTIES ARE UNABLE TO AGREE UPON A REFEREE WITHIN TEN
(10) BUSINESS DAYS AFTER A WRITTEN REQUEST TO DO SO BY ANY PARTY,
THEN ANY PARTY MAY PETITION THE PRESIDING JUDGE OF THE RIVERSIDE
COUNTY SUPERIOR COURT TO APPOINT A REFEREE. THE PRESIDING JUDGE
SHALL HAVE THE POWER TO ASSIGN SAID REQUEST TO SUCH JUDGE OF THE
SUPERIOR COURT AS THE PRESIDING JUDGE DEEMS APPROPRIATE. FOR THE
GUIDANCE OF THE JUDGE MAKING THE APPOINTMENT OF SAID REFEREE, THE
PARTIES AGREE THAT THE PERSON SO APPOINTED SHALL BE A RETIRED JUDGE.
(ii) THE PROVISIONS OF CALIFORNIA CODE OF CIVIL
PROCEDURE, SECTIONS 640, 641, 642, 643, 644, 645 AND 645.1, SHALL BE
APPLICABLE TO DISPUTE RESOLUTION BY A REFEREE HEREUNDER. IN AN
EFFORT TO CLARIFY AND AMPLIFY THE PROVISIONS OF CALIFORNIA CODE OF
CIVIL PROCEDURE SECTIONS 644 AND 645, THE PARTIES AGREE THAT THE
REFEREE SHALL DECIDE THE DISPUTE SUBMITTED BY THE PARTIES FOR
DECISION IN THE SAME MANNER AS REQUIRED FOR A TRIAL BY COURT AS SET
FORTH IN CALIFORNIA CODE OF CIVIL PROCEDURE, SECTIONS 631.8 AND 632,
AND CALIFORNIA RULES OF COURT, RULE 232. THE REFEREE SHALL TRY AND
DECIDE THE DISPUTE ACCORDING TO AND BASED ON ALL OF THE SUBSTANTIVE
AND PROCEDURAL STATUTORY AND DECISIONAL LAW OF THE STATE OF
CALIFORNIA, UNLESS THE PARTIES STIPULATE TO THE CONTRARY. WHEN THE
REFEREE HAS DECIDED THE DISPUTE,THE REFEREE SHALL ALSO CAUSE THE
PREPARATION OF A JUDGMENT BASED ON SAID DECISION. THE JUDGMENT TO BE
ENTERED BY THE SUPERIOR COURT, BASED UPON THE DECISION OF THE
REFEREE, SHALL BE APPEALABLE IN THE SAME MANNER AS IF THE JUDGE
SIGNING THE JUDGMENT HAD TRIED THE CASE.
(iii) THE PARTIES SHALL DILIGENTLY COOPERATE
WITH ONE ANOTHER AND THE PERSON(S) APPOINTED TO RESOLVE THE DISPUTE,
AND SHALL PERFORM SUCH ACTS AS MAY BE NECESSARY TO OBTAIN A PROMPT
AND EXPEDITIOUS RESOLUTION OF THE DISPUTE. IF EITHER PARTY REFUSES TO
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12281-00003-1477196 7
DILIGENTLY COOPERATE, AND THE OTHER PARTY, AFTER FIRST GIVING NOTICE
OF ITS INTENT TO RELY ON THE PROVISIONS OF THIS SECTION 6.7(b) INCURS
ADDITIONAL EXPENSES OR ATTORNEYS' FEES SOLELY AS A RESULT OF SUCH
FAILURE TO DILIGENTLY COOPERATE, THE REFEREE MAY AWARD SUCH
ADDITIONAL EXPENSES AND ATTORNEYS' FEES TO THE PARTY GIVING SUCH
NOTICE, EVEN IF SUCH PARTY IS NOT THE PREVAILING PARTY IN THE DISPUTE.
(iv) THE COST OF THE PROCEEDING SHALL INITIALLY
BE BORNE EQUALLY BY THE PARTIES TO THE DISPUTE. BUT THE PREVAILING
PARTY IN SUCH PROCEEDINGS SHALL BE ENTITLED TO RECOVER, IN ADDITION
TO ATTORNEYS' FEES AND ALL OTHER COSTS, ITS CONTRIBUTION FOR THE COST
OF THE REFEREE AS AN ITEM OF RECOVERABLE COSTS. IF EITHER PARTY
REFUSES TO PAY ITS SHARE OF THE COSTS OF THE PROCEEDING, AT THE TIME(S)
REQUIRED.THE OTHER PARTY MAY DO SO, IN WHICH EVENT THAT PARTY WILL
BE ENTITLED TO RECOVER (OR OFFSET) THE AMOUNT ADVANCED, WITH
INTEREST, EVEN 1F THAT PARTY IS NOT THE PREVAILING PARTY. THE REFEREE
SHALL INCLUDE SUCH COSTS IN HIS JUDGMENT OR AWARD.
(v) OWNER AND DEVELOPER HEREBY EXPRESSLY
WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE
OF ACTION, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS
AGREEMENT, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR
INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS
AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF
WHETHER SOUNDING IN CONTRACT. TORT, OR OTHERWISE. TO THE EXTENT
THEY MAY LEGALLY DO SO, OWNER AND DEVELOPER HEREBY AGREE THAT
ANY SUCH CLAIM. DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING
SHALL BE DECIDED BY JUDICIAL REFERENCE IN THE MANNER 'DESCRIBED IN
THIS SECTION 6.7(b) AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION 6.7(b) WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR PARTIES
HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY AND
AGREEMENT TO ABIDE BY THE PROCEDURES SET FORTH HEREIN.
OWNER'S INITIALS DEVELOPER'S INITIALS
7. Insurance Provisions.
7.1. Insurance Limits. Developer shall maintain at its sole cost and expense,
insurance coverage which complies with the following minimum requirements:
(a) Worker's Compensation Insurance in accordance with applicable
law, and Employer's Liability Insurance, with limits of not less than One Million Dollars
($1,000,000). Developer's Worker's Compensation Insurance shall in all respects comply with
the requirements of California law.
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(b) Comprehensive General Liability Insurance, including coverage
for bodily injury, property damage, personal injury (employee and contractual liability
exclusions deleted). products and completed operations, contractual liability, owner's protective
liability, and broad form property damage. with the following limits: One Million Dollars
($1,000,000) for each occurrence, combined single limit for bodily injury, property damage and
personal injury; and Two Million Dollars ($2,000,000)aggregate for personal injury and
property damage for products and completed operations.
(c) Professional Liability Insurance ("errors and omissions")relating
to Developers acts with respect to the Project with the following limits of liability: One Million
Dollars ($1,000,000) per claim; Two Million Dollars($2,000,000) in the aggregate. Developer
agrees to maintain the above-required minimum of Professional Liability coverage in force for a
period of three (3) years following completion of the Project.
(d) The maximum deductible amount under any policy of insurance
required pursuant to this Section 7.1 shall not exceed One Hundred Thousand Dollars
($100,000).
7.2. Umbrella Policies and Owner as Additional Insured. The limits of liability
of the insurance coverage required pursuant to Section 7.1 may be provided by any combination
of primary insurance policies and excess liability("umbrella") insurance policies; provided the
coverage required is not diminished thereby. Developer agrees to procure the addition of Owner
and Owner's officers, elected and/or appointed officials and employees as additional named
insureds to the Comprehensive General Liability Insurance policy maintained by Developer
which shall cover losses. costs, expenses, damages and attorneys' fees resulting from or arising
out of the negligence or conduct of Developer, its staff members, employees, agents and
representatives.
7.3. Maintenance of Insurance By Others.
(a) All agreements with the Architects, Consultants, General
Contractor and subcontractors shall, unless otherwise approved by Owner, require such parties
and their subcontractors performing work at the Project to procure and maintain, at each such
party's own cost and expense:
(i) A policy of Worker's Compensation Insurance in
accordance with applicable law, and Employer's Liability Insurance with limits of not less than
One Million Dollars($1,000,000).
(ii) Comprehensive General Liability Insurance, including
coverage for bodily injury, property damage, personal injury (employee and contractual liability
exclusions deleted) products and completed operations, contractual liability, owner's protective
liability and broad form property damage with the following limits of liability: One Million
Dollars ($1,000,000) for each occurrence. combined single limit for bodily injury, property
damage and personal injury; and Two Million Dollars ($2,000,000)aggregate for personal injury
and property damage for products and completed operations.
21
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(b) The agreements with the Architects and all Consultants shall
require such parties to maintain Professional Liability insurance (errors and omissions).
Professional Liability insurance carried by such parties shall have liability limits of One Million
Dollars ($1,000,000) per claim;One Million Dollars($1,000,000) in the aggregate. The
Architect and the Consultants shall maintain the above-required minimum of Professional
Liability coverage in force for a period of three (3)years following completion of the Project.
(c) The maximum deductible amount permitted under any policy of
insurance required pursuant to this Section 7.3 shall not exceed Fifty Thousand Dollars
($50,000).
(d) Owner and Owner's officers, elected and/or appointed officials and
employees shall be required to be named as additional insureds to the Comprehensive General
Liability insurance policy required to be maintained pursuant to this Section 7.3 which shall
cover losses, costs,expenses, damages and attorneys' fees resulting from or arising out of the
negligence or conduct of the insured party, its staff members,employees, agents and
representatives.
7.4. Certificates and Cancellation. Developer shall promptly deliver to Owner
certificates of insurance, copies of insurance policies, or other evidence of the minimum levels of
insurance set forth above, as reasonably requested by Owner. The insurance policies required
under this Agreement shall provide that none of the required coverage may be canceled or
terminated without thirty (30) days' prior written notice to Owner.
7.5. Continued Coverage. Notwithstanding the expiration or early termination
of this Agreement, Developer shall maintain insurance coverage such that the insurance
provisions of this Agreement shall survive such expiration or early termination of this
Agreement and Developer's insurance carriers shall remain obligated under the policies for all
occurrences that arise that are within the scope of the requirements of insurance coverage set
forth in this Agreement.
7.6. Waiver of Subrogation. Owner and Developer hereby waive any rights
each may have against the other on account of any loss or damage occasioned to Owner or
Developer, as the case may be, arising from any risk covered by the insurance maintained under
this Agreement. Owner and Developer each, on behalf of their respective insurance companies,
waive any right of subrogation that such insurance company may have against Owner or
Developer, as the case may be, and each party shall obtain endorsements to such insurance
policies as are necessary to effectuate such waivers.
7.7. Insurance—General. All insurance required to be maintained pursuant to
this Section 7 shall be written by insurance companies admitted to do business in California and
having a rating of at least B+N11 in the most recent edition of Best's Insurance Guide. At all
times during the term of this Agreement, Developer shall maintain on file with the City Clerk of
Palm Desert, a certificate (or certificates)of insurance in the form attached hereto as Exhibit E,
reflecting that the insurance policies required to be maintained pursuant to this Agreement are in
effect in the amounts required, naming the additional insureds required hereunder,and that the
policies cannot be canceled, modified or reduced except after thirty(30) days' notice by the
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12281-00003-14771967
subject insurance carrier to Owner. All insurance maintained pursuant to this Agreement shall
be primary to any coverage otherwise available to Owner.
8. Miscellaneous Provisions.
8.1. Assignment. Developer may not voluntarily or involuntarily, directly or
indirectly, sell, assign, hypothecate. pledge or otherwise transfer or dispose of all or any portion
of its interest in this Agreement, or delegate any of Developer's obligations or duties hereunder,
to any third party without the prior written consent of Owner, which may be withheld in Owner's
sole discretion. Any attempted sale, assignment, hypothecation, pledge or other transfer without
such consent shall be void. For purposes of this Agreement, a sale or other transfer of a
controlling interest in Developer shall constitute an assignment of Developer's rights hereunder.
Owner may not sell, assign, hypothecate, pledge or otherwise transfer or dispose of all or any
portion of its interest in this Agreement or, prior to completion of the Rental Housing or the
For-Sale Housing, its interest in all or any portion of such Real Property so as to materially effect
the Project, the Project Costs, the Business Plan or Developer's activities, without the prior
written consent of Developer, which may be withheld in Developer's sole discretion.
8.2. Amendment. This Agreement may be amended from time to time only by
a writing executed by Owner and Developer.
8.3. Notices. The address of each of the parties shall for all purposes be as set
forth below, unless otherwise changed by the applicable party by notice to the other as provided
herein.
If to Owner: Palm Desert Redevelopment Agency
73-510 Fred Waring Drive
Palm Desert, California 92260
Attn.: Mr. David Yrigoyen
Phone: (760) 346-0611
Fax: (760) 341-6372
With a copy to: Richards, Watson & Gershon
355 South Grand Avenue, 40th Floor
Los Angeles, California 90071
Attn.: Jim G. Grayson. Esq.
Phone: (213) 626-8484
Fax: (213) 626-0078
If to Developer: ComDyn PD, LLC •
2800 28th Street, Suite 206
Santa Monica, California 90405
Attn: Loren Bloch
Phone: (310) 399-9555
Fax: (310) 399-9777
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With a copy to: Greenberg Glusker Fields Claman
Machtinger& Kinsella LLP
1900 Avenue of the Stars, Suite 2100
Los Angeles. California 90067
Attn: Elizabeth Watson. Esq.
Phone: (310) 201-7439
Fax: (310) 201-2339
Any notices, consents, offers, acceptances, elections, demands and other
communications required or provided by this Agreement shall be in writing and shall be deemed
to have been made or given (a) when personally served, (b) two (2)days after being placed in the
United States mail, postage prepaid, registered or certified and properly addressed, or(c) when
deposited with a recognized overnight delivery service which maintains delivery records(such as
Federal Express).
8.4. Attorneys' Fees. In any judicial action between the parties to enforce any
of the provisions of this Agreement or any right of any party under this Agreement, regardless of
whether such action or proceeding is prosecuted to judgment and in addition to any other
remedy, the unsuccessful party shall pay to the prevailing party all costs and expenses, including
reasonable attorneys' fees, incurred therein by the prevailing party.
8.5. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all prior agreements
and negotiations between the parties with respect thereto.
8.6. Governing Law. This Agreement shall be enforced, governed by, and
construed in accordance with the laws of the State of California.
8.7. Severability. If any provision of this Agreement shall be invalid or
unenforceable for any reason and to any extent, the remainder of this Agreement shall not be
affected thereby, but shall be enforced to the greatest extent permitted by law.
8.8. No Waiver. No failure or delay of a party in the exercise of any right
given to such party hereunder or by law shall constitute a waiver thereof, nor shall any single or
partial exercise of any such right preclude other further exercise thereof or of any other right.
The waiver by a party of any breach of any provision hereof shall not be deemed to be a waiver
of any subsequent breach thereof, or of any breach of any other provision hereof.
8.9. No Joint Venture. Owner shall not and does not by this Agreement in any
way or for any purpose become a partner of Developer in the conduct of its business, or
otherwise, or a joint venturer of or a member of a joint enterprise with Developer, it being
understood and agreed between Owner and Developer that Developer is and shall be, for all
purposes of this Agreement, an independent contractor of Owner.
8.10. Successors and Assigns. Subject to the provisions of Section 8.1, this
Agreement shall bind and inure to the benefit of the parties and their respective successors and
assigns.
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l 2281-00003.1477196 7
8.11. Force Majeure. Except with respect to the dates set forth in Section 6.3,
any time limits provided for either party's performance under this Agreement shall be extended
for and throughout such additional period of time as such performance is prevented or delayed
due to strikes, lockouts, acts of God, wars, riots, civil insurrection or disturbance, abnormal force
of elements, fires, casualties, freight embargoes, delays due to the existence or remediation of
hazardous materials, litigation or alternative dispute resolution proceedings with third parties.
acts or inaction of any third party or other inabilities or causes beyond the parties' reasonable
control; provided, however, that in no event shall any such extension be deemed to have
occurred unless(i)the party whose performance is delayed shall have given notice to the other
party within fifteen (15) days after the occurrence of the event of delay, setting forth the facts
giving rise to such extension, and (ii)the applicable period or periods of time within which such
other party may exercise its rights hereunder shall be commensurately extended. The party
whose performance is delayed shall give prompt written notice to the other party of the cessation
of the event or condition giving rise to such delay.
8.12. Owner Delays. Developer's performance shall be excused and extended
to the extent of delays, failure to act or untimely action (each an "Owner Delay") by Owner
which affect the critical path schedule for the Project as reflected in the Business Plan.
Developer shall promptly notify Owner in writing of any occurrence or instance of Owner Delay
of which Developer becomes aware and of the implications of such Owner Delay on Developer's
ability to perform timely under this Agreement. In the event of an Owner Delay, Owner shall be
responsible for all resultant increases in Project Costs, and the Developer's Fee shall be
increased to compensate Developer for all costs and expenses of such Owner Delay, including
without limitation Developer's overhead costs, as documented with appropriate substantiation by
Developer.
8.13. Indemnity.
(a) Developer's Indemnity. To the fullest extent permitted by law, but
subject to the limitations on liability set forth in Section 8.22 below, Developer agrees that
neither Owner nor Owner's officers, elected and/or appointed officials or employees shall be
liable for any damage or liability of any kind or for any injury to or death of persons or damage
to property of Developer or any other person from any cause whatsoever related to or arising out
of any Event of Default under this Agreement by Developer and/or any negligence or willful
misconduct by Developer, or any of its staff members, employees, agents and/or representatives
in the carrying out of Developer's duties under this Agreement. Developer shall pay for, defend
(with an attorney reasonably approved by Owner), indemnify. and save Owner and Owner's
officers, elected and appointed officials and employees harmless against and from any real or
alleged damage or injury and from all claims,judgments, liabilities, costs and expenses,
including attorneys' fees and costs, arising out of or connected with the negligence or willful
misconduct by Developer, or any of its staff members, employees, agents and/or representatives,
in the carrying out of Developer's duties under this Agreement, and/or any Event of Default
under this Agreement by Developer; provided, however(and though Developer shall in all cases
accept any tender of defense of any action or proceeding in which Owner or an indemnified party
hereunder is named or made a party and/or commence the defense of Owner or an indemnified
party upon written notice of any allegation being made against such party and shall,
notwithstanding any allegations of negligence or misconduct on the part of such party, defend
25
12281-00003.1 477196 7
such party as provided herein), Developer shall not be liable for such damage or injury (and shall
be reimbursed the costs of defense)to the extent and in the proportion that the same is ultimately
determined by a court of competent jurisdiction to be attributable to the negligence or willful
misconduct of such indemnified party. This obligation to indemnify shall include all of the
indemnified party's attorneys fees, litigation costs, investigation costs and court costs and all
other costs, expenses and liabilities incurred by such party or its counsel from the first notice that
any claim or demand is to be made or may be made. Developer's obligations under this
Section 8.13(a) shall survive the termination or expiration of this Agreement.
(b) Owner's Indemnity. To the fullest extent permitted by law, but
subject to the limitations on liability set forth in Section 8.22 below, Owner agrees that neither
Developer nor Developer's officers, employees, or representatives shall be liable for any damage
or liability of any kind or for any injury to or death of persons or damage to property of Owner or
any other person from any cause whatsoever related to or arising out of any Event of Default
under this Agreement by Owner and/or any negligence or willful misconduct by Owner, or any
of its staff members, employees, agents and/or representatives in the carrying out of Owner's
duties under this Agreement, including, but not limited to, damages resulting from the use of
Owner's Documents or reliance upon the Existing Approvals. Owner shall pay for, defend (with
an attorney reasonably approved by Developer), indemnify, and save Developer and Developer's
officers, employees and representatives harmless against and from any real or alleged damage or
injury and from all claims,judgments, liabilities, costs and expenses, including attorneys' fees
and costs, arising out of or connected with the negligence or willful misconduct by Owner, or
any of its staff members, employees, agents and/or representatives, in the carrying out of
Owner's duties under this Agreement, and/or any Event of Default under this Agreement by
Owner; provided, however(and though Owner shall in all cases accept any tender of defense of
any action or proceeding in which Developer or an indemnified party hereunder is named or
made a party and/or commence the defense of Developer or an indemnified party upon written
notice of any allegation being made against such party and shall, notwithstanding any allegations
of negligence or misconduct on the part of such party, defend such party as provided herein),
Owner shall not be liable for such damage or injury (and shall be reimbursed the costs of
defense) to the extent and in the proportion that the same is ultimately determined by a court of
competent jurisdiction to be attributable to the negligence or willful misconduct of such
indemnified party. This obligation to indemnify shall include all of the indemnified party's
attorneys fees, litigation costs, investigation costs and court costs and all other costs. expenses
and liabilities incurred by such party or its counsel from the first notice that any claim or demand
is to be made or may be made. Owner's obligations under this Section 8.13(b) shall survive the
termination or expiration of this Agreement.
8.14. Additional Documents. Each party shall execute or cause to be executed
all such instruments or agreements as may be reasonably necessary in order to carry out the
purpose of this Agreement.
8.15. Ownership of Documents. All documents related to the development,
construction and operation of the Project, including. without limitation, all development plans,
specifications, blueprint, budget, books, records, promotional materials, lease, and purchase and
sale agreement forms shall be and remain the sole and exclusive property of Owner, and
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12281-00003-1477196 7
Developer shall acquire no rights in such documents; provided, however, that Developer, at its
option. may retain copies of any such documents and materials.
8.16. Time. Time is of the essence of this Agreement.
8.17. Interpretation of Agreement. The parties hereto hereby acknowledge and
agree that(i) each party hereto is of equal bargaining strength. (ii)each such party has actively
participated in the drafting, preparation, and negotiation of this Agreement. (iii)each such party
has consulted with such party's own independent counsel, and such other professional advisors
as such party has deemed appropriate, relative to any and all matters contemplated under this
Agreement, (iv) each such party and such party's counsel and advisors have reviewed this
Agreement, (v) each such party has agreed to enter into this Agreement following such review
and rendering of such advise, and(vi) any rule of construction to the effect that ambiguities are
to be resolved against the drafting party shall not apply in the interpretation of this Agreement,
any portion thereof, or any amendment hereto.
8.18. Taxes and Contributions. Developer assumes full and exclusive
responsibility and liability for withholding and paying. as may be required by law, all federal.
state, and local taxes and contributions, with respect to, assessed against,or measured by
Developer's earnings under this Agreement or by salaries or other contributions or benefits paid
or made available to any persons retained, employed, or used by Developer, and for other taxes
and contributions for which Developer may be responsible under any laws or regulations or
under this Agreement. Developer shall timely file all returns and/or reports required in
connection with any and all laws, regulations, taxes, contributions, and benefits described in this
Section.
8.19. No Third Party Beneficiary. Any agreement to pay any amount and any
assumption of liability herein contained, expressed or implied, shall be only for the benefit of the
parties hereto and their respective successors and assigns, and such agreements and assumptions
shall not inure to the benefit of the obligees of any indebtedness or any other party, whomsoever,
otherwise deemed to be a third-party beneficiary of this Agreement.
8.20. Licenses. Developer shall, at Developer's own expense,qualify to do
business and obtain and maintain such licenses as may be required for Developer's performance
of Developer's obligations and duties under this Agreement.
8.21. Remedies Cumulative. Each right, power, and remedy provided for herein
or now or hereafter existing at law, in equity, by statute, or otherwise shall be cumulative and
shall be in addition to every other right, power, or remedy provided for herein or now or
hereafter existing at law, in equity, by statute, or otherwise. and the exercise, the commencement
of the exercise, or the forbearance of the exercise by any party of anyone or more of such rights,
powers, or remedies shall not preclude the simultaneous or later exercise by such party of any or
all of such other rights, powers or remedies.
8.22. Limitation of Liability. Except to the extent of such parties' interest in
Developer or Owner(as the case may be). and except in connection with any fraudulent act or
omission on the part of the subject individual, no present or future partner, member, manager,
• 27
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director, officer, shareholder,employee or advisor of or in any party to this Agreement shall have
any personal liability, directly or indirectly, under or in connection with this Agreement. or any
amendment or amendments to this Agreement made at any time or times, heretofore or hereafter.
and, except as otherwise set forth above, each party and its successors and assigns and, without
limitation, all other persons and entities, shall look solely to the assets of the other party for the
payment of any claim or for any performance and each party hereby waives any and all such
personal liability. The limitations of liability contained in this Section 8.22 shall survive the
termination of this Agreement,and are in addition to,and not in limitation of, any limitation on
liability applicable to any party provided by law.
8.23. Incorporation of Exhibits. The following exhibits are expressly
incorporated into this Agreement by this reference:
EXHIBIT A Real Property Description
EXHIBIT B Business Plan
EXHIBIT C Consultants and General Contractor
EXHIBIT D Payment Procedures
EXHIBIT E Certificate of Insurance
EXHIBIT F Proposed Form of Construction Contract
Executed the day and year first above written.
OWNER: PALM DESERT REDEVELOPMENT
AGENCY, a public body, corporate and politic
By:
Name:
Title:
28
1 2 2 8 1-00003-1.477196 7
ATTEST:
Secretary
DEVELOPER: COMDYN PD, LLC,
a California limited liability company
By: ComDyn, LLC,
Managing Member
By:
Name:
Title:
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12281-00003-1477196 7
EXHIBIT A
Real Property Description
A-1
12281-00003-1477196 7
EXHIBIT B
Business Plan
B-1
12281-00003-1 477196 7
Exhibit B.1
List of Contract Documents
A. Tract map:
1. Tentative Tract Map No. 30795, sheets 1-8, dated for revisions
2. Final Tract Map No. 30795, sheets = , dated for recordation (to be
added)
B. Schematic architectural documents prepared by Kristi Hanson Architects, Inc.:
1. "Site Plans and Elevations - Single-Family Units" (7 pages) incorporated
as Appendix 2 in the Agency RFP issued February 2005
2. "Site Plans and Elevations - Senior Units" (4 pages) incorporated as
Appendix 3 in the Agency RFP issued February 2005
C. Construction documents:
1. Civil engineering documents prepared by MSA Consulting, Inc.:
i. Rough Grading Plans, sheets 1-4 dated for revisions (date)
ii. Street/Storm Drain Improvement Plans, sheets 1-9 dated for
revisions (date)
iii. Sewer Improvement Plans, sheets 1-6 dated for revisions (date)
iv. Water Improvement Plans, sheets 1-4 dated for revisions (date)
v. SWPP, dated
vi. PM-10 Plan, dated
2. Civil engineering documents prepared by •
i. Block wall, dated
3. Dry utility plans:
i. Electric, prepared by Southern California Edison, dated
ii. Gas, prepared by The Gas Company, dated _
iii. Telephone, prepared by Verizon, dated
iv. Cable T.V., prepared by Time Warner, dated
4. Construction documents for Rental Housing prepared by Kristi Hanson
Architects, Inc., et al (to be added)
5. Construction documents for For-Sale Housing prepared by KTGY Group,
Inc., et al (to be added)
6. Landscape architecture documents prepared by RGA Landscape
Architects, Inc. (to be added)
Exhibit B2
Project Budget
AFFORDABLE HOUSING RFP: SFH&SENIOR APTS COMBINED
PALM DESERT.CA
EXHIBIT B.2- PROJECT BUDGET
June 30.2005
UNITS 121
ACRES 21
.CONTINGENCY Vanable
BUDGET SUMMARY
ORIG.BUDGET TOTAL BUDGET
CODE DESCRIPTION 4.19.2005 INFRASTRUCTURE 5.23.05
1000 LAND 0 0 0
1500 BONDS AND FEES 1,650,098 88,372 1,738.470
2000 SITE IMPROVEMENTS 1.000 3,780,000 3,781,000
2300 COMMON AREAS 1,128,135 92,966 1,221,101
2500 ENGINEERING 58,800 228,100 286.900
3000 ONSI TE(DIRECTS) 10.076.760 0 10.076,760
3900 LOT IMPROVEMENTS 1.358.862 0 1,358,862
4000 GENERAL REQUIREMENTS 1.204,567 250,904 1,455,471
5000 PROJECT DEVELOPMENT 312.000 0 312.000
5900 DEVELOPER&CONTRACTOR'S I 2.208.730 211.846 2,420.576
5900 GENERAL ADMINISTRATION 760.538 191,191 951,729
5900 PROPERTY TAXES 0 0 0
6000 FINANCE 0 0 0
7000 SALES COMPLEX&COMM RM 317,355 0 317,355
8000 SALES AND MARKETING 524.266 0 524.266
CONTINGENCY 804.946 425,409 1.230.356
TOTAL 20.406.057 5,268,788 25.674,845
APPROVED BY:
Stei.e Roberts,Deselopment Project Manager
Dempsey Yearout,Vice President of Constriction
INITIAL BUDGET APPROVAL.
Christine Dillon.Controller
CURRENT REVISION TIME: 2:01 PM
PROJECT NUMBER:
UNIT TOTAL
PLAN SUNITS %MIX SQ FT. SQ.FT.
A-SF11 27 22.3% 1,556 42,012
B-SFH 26 21 5% 1,495 38,870
C-SFH 20 16.5% 1.637 32,740
I)-SFH 21 17.4% 1,637 34.377
1 -Sr 12 9.9°u 718 8,616
2-Sr 12 9.90,0 615 7.380
3-Sr I 0.8°0 615 615
4-Sr I 0.8% 615 615
5-Sr 1 0.8°'0 718 718
Comm Rm 1 0 8°'0 1.103 1.103
TOTAL 121 100.8% 1.381 167.046
NET ACRES 21 NET DENSITY 5.8
AFFORDABLE HOUSING RFP: SFH&SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
LAND
June 30.2005
UNITS 121'
ACRES 21
CONTINGENCY 5.0%
BUDGET SUMMARY
TOTAL
CODE DESCRIPTION PER UNIT PER ACRE BUDGET
10-0001 OPTION PAYMENTS 0 0 0
10-10003 PURCHASE PRICE 0 0 0
10-0005 EXTENSION FEES 0 0 0
10-0007 BROKER'S COMSSION 0 0 0
10-0009 CLOSING COSTS 0 0 0
10-00I0 CONTINGENCY 0 0 0
TOTAL 0 0 0
AFFORDABLE HOUSING RFP: SFH&SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
June 30.2005
BUDGET DETAIL
CODE DESCRIPTION QTY. UNIT PRICE EXTENSION BUDGET
10-0001 OPTION PAYMENTS 0
Option payments 0 LS 0 0
10-0003 PURCHASE PRICE 0
Initial Deposit 0 LS 0 0
Addtioinal Deposits 0 LS 0 0
Balance of purchase price I LS 0 0
10-0005 EXTENSION FEES 0
Due diligence 0 LS 0 0
Closing 0 LS 0 0
10-0007 BROKER'S COMSSION 0
Commission 0 LS 0 0
Adjustments 0 LS 0 0
10-0009 CLOSING COSTS 0
Title insurance I LS 0 0
Escrow fees I LS 0 0
10-0010 CONTINGENCY 0
General 1 LS 0 0
TOTAL BUDGET 0 0
AFFORDABLE HOUSING RFP: SFH&SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
BONDS AND FEES
June 30.2005
UNITS 121
ACRES 21
CONTINGENCY 154u
BUDGET SUMMARY
Original TOTAL
CODE DESCRIPTION Budget Infrastruct. BUDGET
15-1501 FEES-SYSTEMS/FACILITIES 0 0 0
15-1502 FEES-ENTI1 I.EMENT PROCESSING 0 0 0
15-1503 FEES-ROAD'TRAFFIC 37,333 6.050 43,383
15-1504 FEES-SC1100L 338,375 0 338.375
15-1505 FEES-PARK 0 0 0
15-1506 FEES-SEWER CONNECTION 0 0 0
15-1507 FEES-SANI I.ATION 361.911 0 361,911
15-1508 FEES-ENVIRONMENTAL 0 12.600 12.600
15-1509 FEES-TRACT MAP 0 0 0
15-1512 FEES-STORM DRAIN 2.000 30.036 32.036
15-1513 FEES-WATER 575.460 -52,383 523.077
15-1515 PERMITS-DEMOLITION 0 0 0
15-1527 PLAN CHECK/PERMITS-FIRE 2.069 t) 2.069
15-1530 PLAN CIIECK:PERMIT-GRADING 0 15.442 15.442
15-1535 PLAN CHECK/INSPECTION-LANDSCAPING 0 0 0
15-1536 PLAN CHECK/INSPECTION-STREETS 0 14.240 14.240
15-1537 PLAN CHECK/INSPECTION-WALL 500 0 500
15-1538 PLAN CHECK/PERMIT-OTHER 0 0 0
15-1540 PLAN CIEECK•PERMITS-BUILDING 332.450 0 332,450
15-1550 IMPROVEMENT BONDS 0 62,387 62,387
15-1560 DEPOSITS/FEES-ELECTRICAL 0 0 0
15-1561 DEPOSITS:FEES-GAS 0 0 0
15-1564 DEPOSITS/FEES-UTILITIES/OTHER 0 0 0
15-1562 DEPOSITS:FEES-TELEPHONE 0 0 0
15-1597 PRELIMINARY ESTIMATE 0 0 0
15-1598 CONTINGENCY 24.751 1.326 26.077
TOTAL 1,674,849 89,698 I,764,547
AFFORDABLE HOUSING RIP SFH&SENIOR APTS COMBINED
PALM DESERT-CA
MASTER BUDGET BREAKDOWN
BONDS AND FEES
June 30.2005
BUDGET DETAIL
Original TOTAL
CODE DESCRIPTION Budget Infrastruct. Subtotal BUDGET
15-1501 FEES-SYSTEMS/FACILITIES
0 0.00 •
15-1502 FEES-ENTITLEMENT PROCESSING
Preliminary estimate 0 0.00
15-1503 FEES-ROAD:TRAFFIC 43,383
Signalization(paid by others at time of site grading pmt) 0 00 6.050.00 6050.00
I ransponation Unifom Mitigation Fee(47 du low income exempt) 37.332 57 0.00 37332.57
15-1504 FEES-SCHOOL 338,375
Desert Sands Unified School Distnct 338.374.68 0.00 338374.68
15.1505 FEES-PARK
Ordinance No 128(value based' tax rolls show$1 assessed saluc)
15-1506 FEES-SEWER CONNECTION
15-1507 FEES-SANITATION 361.911
CVWD: Sanitation Capacity Charge 361.911.00 0.00 36191100
15-1508 FEES-ENVIRONMENTAL 12,600
Fnnge Toed Lizard Impact Fee 0.00 12,600.00 12600.00
15-1509 FEES-TRACT MAP 0.00
0.00
15-1512 FEES-STORM DRAIN 32,036
Drainage Impact Fee 0.00 31,500.00 3I500 00
SWPP 0.00 536.00 536 00
NPDES Permit 2.000.00 -2,000.00 0.00
15-1513 FEES-WATER 523,077
CVWD.Water system backup facility 318230.00 000 318230.00
CVWD: Supplemental Imported Water Supply Charge 226.479.94 -52,382 52 174097.42
CVWD Meter charge 30.750.00 0 00 30750.00
15-1515 PERMITS-DEMOLITION
0.00
15-1527 PLAN CHECK/PERMITS-FIRE 2.069
AFFORDABLE HOUSING RFP SIB&SENIOR APTS COMBINED
PALM DESERT.CA
MASTER BUDGET BREAKDOWN
BONDS AND FEES
June 30.2005
BUDGET DETAIL
Original TOTAL
CODE . DESCRIPTION „ Budget Infrastruct. Subtotal BUDGET
Plan Check 314 44 0.00 314 44
Permit Fees 1.754.59 0.00 1754.59
15-1530 PLAN CHECK/PERMIT-GRADING 15.442
Application processing 0.00 3911.00 398.00
Grading Inspection 000 14.508.00 1-1508.00
PM-10 Plan 0.00 268 00 268.00
SWPP 0.00 268.00 268.00
15-1535 PLAN CHECK/INSPECTION-LANDSCAPING
0.00
15-1536 PLAN CHECK'INSPEC PION-STREETS 14,240
Permit Fees: Full street 0.00 10 416.00 10416.00
Permit Fees HaliStreet 0.00 3,452.16 3452.16
Permit Fees: Signing&striping 0 00 372.00 372.00
0.00
15-1537 PLAN CHECK'(NSPECTION-WALL 500
Perimeter Wall 500.00 0.00 500.00
Inspection Fees 0.00
15-1538 PLAN CHECK/PERMIT-OTHER
Electrical Permit 0.00
Mechanical Permit 0.00
Plumbing Permit 0.00
15-1540 PLAN CHECKrPERMITS-BUILDING 332.450
Plan Check (Resolution No.04-84) 32,400.95 0.00 32400.95
Construction Tax(Ordinance no.2161 66.813.60 0.00 66813 60
SM1P Fees 1.335.12 0.00 1335.12
Microfilm fees 6.681.00 0.00 6681 00
Permit Fees 188.250.42 0.00 188250.42
Art In Public Places 33,555 29 0 00 33555.29
TUMF(See cost code 15-1503) 0.00 0.00 0 00
Architectural Review 0 00 0 00 0 00
Job Valuation 3.413.96 0.00 3413.96
15-1550 IMPROVEMENT BONDS 62.387
CompletionTerformancc Bonds(Street Improvements) 0.00 62.386.50 62386.50
Monumentation 0 00
15-1560 DEPOSIFSiTEPS-ELECTRICAL
General 0 00
Deposits/Fees 0.00
Street Lights 0 00
Advance Enerev Deposit 0.00
Refunds 0 00
15-1561 DEPOSITS/FEES-GAS
Distribution Fee 0.00
Meter install 0 00
Air test 0 00
Refunds 0.00
Other 0.00
Deposits:Fees 0.00
Other 0.00
15-1564 DEPOSITS/FEES-UTILITIES.:OTHER
General 0.00
Refunds 0.00
15-1562 DEPOSITS/FEES-TELEPHONE
General 0.00
15-1597 PRELIMINARY ESTIMATE
General 0.00
15-1598 CONTINGENCY 26,077
General 24.75146 1.325.58 26077.05
TOTAL BUDGET 1.674.849 89,698 1.764.547 1.764.547
AFFORDABLE HOUSING RFP: SFH& SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
SITE IMPROVEMENTS
June 30,2005
UNITS 121
ACRES 21
CONTINGENCY 9 9%
BUDGET SUMMARY
Original TOTAL
CODE DESCRIPTION _ —..,,...._,»....;cr- ; aggas• —�^ j e" Budget Infrastruct. BUDGET
20-2001 DEMOLITION/REMEDIALS 1.000 0 1.000
20-2012 ROUGH GRADING 0 0 0
20-2013 RETAINING WAILS 0 0 0
20-2020 PURIME1 ER FENCING/WALLS 0 0 0
20-2031 SANITARY SEWER 0 0 0
20-2032 STORM DRAIN 0 0 0
20-2040 WATER SYSTEMS 0 0 0
20.2041 WATER METERS 0 0 0
20-2050 UTILITY TRENCHING 0 0 0
20-212I PAVING 0 0 0
20.2122 CURB R GUTTER 0 0 0
20-2123 SIDE WALK&APPROACHES 0 0 0
20-2154 STREET LIGHTING 0 0 0
20-2175 CIVIL ENGINEERING-FIELD 0 0 0
20-2176 SOILS ENGINEERING-FIELD 0 0 0
20-2177 DEPUTY INSPECTIONS 0 0 0
20-2214 EROSION CONTROL 0 0 0
2(1-2217 WEED ABATEMENT 0 0 0
20-2224 SIGNS/BARRICADES/STRIPING 0 0 0
20-2227 TRAFFIC CONTROL MISCELLANEOUS 0 0 0
20-7229 REPAIR AND REMOVAL 0 0 0
20-2296 PRELIMINARY ESTIMATE 0 3,780,000 3,780,000
20-2297 PREVAILING WAGE PREMIUM 0 0 0
20-2298 CONTINGENCY 99 374.319 374.418
TOTAL 1,099 4,154,319 4,155,418
•
AFFORDABLE.HOUSING RFP: SFH&SENIOR APTS COMBINED
PALM DESERT.CA
MASTER BUDGET BREAKDOWN
SITE IMPROVEMENTS
June 30.2005
BUDGET DETAIL
Original TOTAL
CODE, DESCRIPTION Budget Infrastruct. Subtotal BUDGET
20-200I DEMOL►TION'REMEDIALS 1.000
General 1.000 00 0.00 1.000.00
20-2012 ROUGH GRADING
Mobilization
Site Preparation(clear and grub)
Oyer Excavation 15'dcpih)fill areas
Trim and Finish Common Areas
Water
Finish Pads
Assumed Earthwork Quantities
Import Dirt
Fine Grade Streets
20-2013 RETAINING WALLS
General
Block
Precision Block
Split face Block
Slump Stone Block-4'Height
Stucco Finish
Back drain
Slough Wall
Dirt Removal
Misc.In-Tract Retaining Walls
Pilasters/Caps
20-2020 PERIMETER FENCINGWALLS
Perimeter Walls
Decorative Pilasters
Perimeter Fencing
20-2031 SANITARY SEWER
AC Remo\al/Replacement
Main Line •
Join Existing
8"Sewer Main
Std 48"Manhole
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AFFORDABLE HORSING REP SFH&SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
SITE IMPROVEMENTS
June 30.2005
BUDGET DETAIL
Original TOTAL
CODE DESCRIPTION , _ Budget Infrastruct. Subtotal BUDGET
Dirt Removal
Base Move in
Fog Seal
Slurry Seal
Prime Coat
Striping
Street Balance
Add')More-in
20-2122 CURB&GUTTER
Concrete Cross Gutters
8"Rolled Curb&Gutter
Curb/Gutter 6"
Curb Only(6"CE)
R&R Existing-Joins:Transitions
20.2123 SIDE WALK&APPROACHES
R&R Existing-Joins:Transitions
R&R Existing
Fine Grade&Prep
Dirt Haul
Sidewalk Sub grade
Concrete Approach
PCC Drive Approach w Base
4'FCC Sidewalk
Handicap Ramps
20-2154 STREET LIGHTING
Street Lights
Street Lights(Jefferson)
Conduit
Connect to Existing
Other
20-2175 CIVIL ENGINEERING-FIELD
Surrey/Field Control
20-2176 SOILS ENGINEERING-FIELD
Tesung:Compactton
Field Testing
Rough Grading Observation
Infrastroct.Ptecise Grading Ohs
20.2177 DEPUTY INSPECTIONS
Field Obsen anon Report
20-2214 EROSION CONTROL
Temporary Desalting Basin
Seasonal Erosion Control
20-2217 WEED ABATEMENT
General
Weed Abatement
Other
20-2224 SIGNS:BARRICADES:STRIPING
General-Bumper/Striping
Miscellaneous(Sign.St.Name,Etc.)
Street Name Signs
Traffic Signs
Blue Dot Marken
Barricades/Temp Signage
20-2227 TRAFFIC CONTROLMISCELLANEOUS
General
Traffic Signs
Miscellaneous
20-2229 REPAIR AND REMOVAL
General
20-2296 PRELIMINARY ESTIMATE 3,780,000
General 0 00 3.78(1,000.00 3,780,000.00
20-2297. PREVAILING WAGE PREMIUM
General
20-2298 CONTINGENCY 374.418
General 99.03 374,319 20 374.418.23
TOTAL BUDGET 1,099 4.154,319 4,155,418 4,155,418
AFFORDABLE HOUSING RFP: SFH&SENIOR APTS COMBINED
PALM DESERT.CA
MASTER BUDGET BREAKDOWN
COMMON AREAS
June 30.2005
UNITS 121
ACRF.S 21
CONTINGENCY 5.0°0
BUDGET SUMMARY _
Original TOTAL
CODE DESCRIPTION Budget Infrastruct. BUDGET
23.2301 ENTRY MONUMENTS 0 0 0
23-2305 MAILBOXES:STRUCTURES 5,000 0 5.000
23-2312 FLATWORK-Common 49.375 0 49.375
23-2320 PAVING 40,800 0 40,800
23-2326 ELECTRICAL 20.000 0 20.000
23-2327 LIGHTING FIXTURES 20.000 0 20,000
23-2340 FINISH GRADING/SOIL PREPARATION 5.000 0 5,000
23-2341 PLANTING 0 0 0
23-2347 RECREATION EQUIPMENT 0 0 0
23-2371 PERIMETER FE:NCING'WALLS 73,500 16.300 89,800
23-2296 PELIMINARY ESTIMATE 914.460 76,666 991.126
23.2297 PREVAILING WAGE PREMIUM 0 0 0
23-2298 CONTINGENCY 56.407 4,648 61.055
___ , TOTAL _ _ , 1.1841 W2 97,614 1282,156
AFFORDABLE HOUSING REP. SFH&SENIOR APTS COMBINED
PALM DESERT.CA
MASTER BUDGET BREAKDOWN
COMMON AREAS
June 30.2005
BUDGET DETAIL
Original BUDGET
CODE DESCRIPTION' Budget Infrastruct. Subtotal TOTAL
23.2301 ENTRY MONUMENTS 0
0.00 0 00 0.00
23-2305 MAILBOXES./STRUCTURES 5,000
5.000.00 0.00 5.000.00
23-2312 FLATWORK-Common 49,375
Paseo and Rec Area 49,375 00 0.00 49.375.00
23-2320 PAVING 40.800
Parking Areas&Western Vehicle Lane 40,800.00 0.00 40,800.00
0.00
000
23-2326 ELECTRICAL 20.000
General(Meter Pedestal) 0 00
Conduit.Trench 20.000 00 0.00 20.000.00
23-2327 LIGHTING FIXTURES 20.000
Recreation Area 0.00
Paseos 20,000 00 0 00 20,000.00
23-2340 FINISH GRADING/SOIL PREPARATION 5.000
Common Area&Slopes 5,000 00 0.00 5,000 90
23-2341 PLANTING 0
Street Trees.24"Box 0.00
Street Trees,36"Box 0.00
Median Trees 0.00
Shruhs&Groundcoser 0 00
'Furl,hrdroseedcd 0.00
23-2347 RECREATION EQUIPMENT 0
Tot Lot Equipment 0.00 0
Tot Lot-Curbing.Matting.Sand and Drain 0.01)
Picnic Tables 0.00
BBQ's 0.00
Trash Receptacle 0.00
23-2371 PERIMETER FENCING/WALLS 89.800
Perimeter wall.general 73.500.00 16,300.00 89,800 00
Decorative Pilasters 0.00 0
Community Park Basin/Tubular Fence 0.00 0
Entry Basin(Tubular Fence) 0.00 0
End Walls 0.00 I)
23-2296 PELIMINARY ESTIMATE 991.126
General Landscaping&irrigation 914.460 00 76,666.00 991,126.00
23-2297 PREVAILING WAGE.PREMIUM 0
General 0.00 0
23-2298 CONTINGENCY 61.055
General 56.406 75 4,648.30 61,055 05
TOTAL BUDGET 1,184,542` 97,614 1.282,156 1.282,156
AFFORDABLE HOUSING RFP: SFH& SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
ENGINEERING
June 30,2005
UNITS 121
ACRES 21
CONTINGENCY 8 3%
BUDGET SUMMARY
Original TOTAL.
CODE _ DESCRIPTION Budget Infrastruct. BUDGET
25.2303 CIVIL ENGINEERING-OFFICE 0 0 0
25-2505 CIVIL ENGINEERING-FIELD 29.400 120.600 150,000
25-2507 SOILS ENGINEERING-OFFICE 10,000 15,000 25.000
25-2509 SOILS ENGINEERING-FIELD 19,400 50.000 69.400
25-2511 ENVIRONMENTAL ENGINEERING 0 7,500 7.500
25-2513 UTILITY ENGINEERING 0 35.000 35,000
25-2515 TRAFFIC ENGINEERING 0 0 0
25-2517 CONTINGENCY 4.8g0 18.932 23.813
TOTAL 63,680 247,032 310,713
AFFORDABLE HOUSING REP'. SFII&SENIOR API S COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
June 30.2005
BUDGET DETAIL
Original BUDGET
CODE ...,DESCRIPTION Budget Infrastruct� Subtotal TOTAL
25-2503 CIVIL ENGINEERING-OFFICE
Preliminary Design
Construction Documents
Rcimbursables
25-2505 CIVIL ENGINEERING-FIELD 150.000
AI,TA Sunev
Field Control 29,400.00 120,600.00 150.000 00
25-2507 SOILS ENGINEERING-OFFICE 25.000
Geotechnical site investigation 10.000.00 15.000.00 25,000 00
25-2509 SOILS ENGINEERING-FIELD 69,400
Footings inspections 9.400,00 0.00 9,400.00
Infrastructure 0.00 30,000.00 30,000.00
Rough Grading 0 00 20,000 00 20,000.00
Footings&Trenches 10,000.00 0.00 10.000 00
25-2511 ENVIRONMENTAL ENGINEERING 7,500
Phase 1 0.1)0 7,500 00 7,500.00
Phase 2 0.00
Phase 3 0.00
25-2513 UTILITY ENGINEERING 35.000
Consulting r coordinating 0 00 35,000.00 35,000.00
25-2515 TRAFFIC ENGINEERING 0
Study 0 00
Reports 0 00
25-2547 CONTINGENCY 23,813
General 4,880 40 18.93230 23.812.70
TOTAL BUDGET 63.680 247.032 310.713 310.713
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AFFORDABLE HOUSING REP SFH&SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
ON SITES
June 30,2005
BUDGET DETAIL
Original BUDGET
CODE DESCRIPTION Budget Infrastruct. Subtotal TOTAL
30-3014 CONCRETE FOUNDATIONS
General 0
30-3079 STRUCTURAL STEEL
General 0
30-3082 TERMITE TREATMENT
General 0
0
30-3092 WATERPROOFING
General 0
30-3104 CABLE.1V PREWIRE
General 0
30-3107 CARPENTRY ROUGH
General 0
30-3117 SEWER CONNECTIONS
General 0
30-3125 ELECTRICAL WIRING
General 0
30-3128 FIREPLACES
General 0
30-3130 FIRE SPRINKLERS
General 0
30-3143 HVAC
General 0
30-3144 INSULATION
General 0
30-3149 LIGHTWEIGHT CONCRETE
General 0
30-3162 PLUMBING
General 0
30-3165 ROOFING
General 0
30-3168 SASH&SCREEN
General 0
30-3171 SECURITY PREWIRE
General 0
30-3172 SMELT METAL
General 0
30-3181 TELEPHONE PREWIRE.
General 0
30-3205 CARPENTRY FINIS'I
General 0
30-3206 CARPENTRY FINISH-STAIRS
General 0
30-3208 CARPENTRY FINISH-SHELVING
General 0
30-3210 CLEAN-UP ROUGH
General 0
30-3222 DRYWALL
General 0
30-3252 MASONRY VENEER
General 0
30-3259 PRECAST STONE
General 0
30-3280 STUCCO
General 0
30.3301 APPLIANCES
General 0
30-3303 CABINETS
General 0
30-3309 CERAMIC TII.F.
General 0
30-3313 CONCRFTE FLATWORK
General 0
30-3319 DECKING
General 0
30.3324 ELECTRICAL FIXTURES
General 0
30-3327 SHOWER ENCLOSURES
General 0
30-3336 CARPORTS 54.000 •
General 54,000.00 0 00 54.000.00
30-3337 GARAGE OPENERS
General 0
30-3341 FINISH HARDWARE
AFFORDABLE HOUSING RFP. SFH&SENIOR APTS COMBINED
PALM DESERT.CA
MASTER BUDGET BREAKDOWN
ONSITES
June 30.2005
BUDGET DETAIL
Original BUDGET
CODE DESCRIPTION Budget Infrastruct. Subtotal TOTAL.
General 0
30.3346 ORNAMENTAL IRONWORKS
General 0
30-3350 LUMINOUS CEILINGS
General 0
30-3351 FIREPLACE FACES
General 0
30-3353 MIRRORS
General 0
30-3355 MUSIC SYS1 EM PRE WIRE
General 0
30.3357 MIRROR DOORS
General 0
30-3360 PAINTING
General 0
30-3366 GUI TER&DOWNSPOUTS
General 0
30-3382 COUNTER TOPS-STONE
General 0
30-3383 COUNTER TOPS-MARBLE
General 0
30-3384 COUNTER TOPS-FORMICA
General 0
30-3385 COUNTER TOPS-CORIAN
General 0
30-3388 FIBERGLASS TUBS SHOWERS
General 0
30-3391 WARDROBE DOORS-VINYL
General 0
30-3394 WEATHERSTRIP
General 0
30-3411 CLEAN-UP FINAL.
General 0
30-3431 FLOORING-CARPET
General 0
30-3432 FLOORING-CERAMIC
General 0
30-3433 FLOORING-RESILIENT
General 0
30-3435 FLOORING-WOOD
General 0
30-3458 WINDOW COVERING
General 0
30-3496 PRELIMINARY ESTIMATE 10.022,760
General .a::za.nuze. 0.00 10.022.760.00
30-3497 PREVAILING WAGE PREMIUM
General 0
30-3498 CONTINGENCY 503.838
General 503,838.00 0.00 503,838.00
TOTAL.BUDGET 10,580.598 0 10,580.598 10.580.598
AFFORDABLE HOUSING RFP: SFH & SENIOR APTS COMBINED
PALM DESERT, CA
MASTER BUDGET BREAKDOWN
LOT IMPROVEMENTS
June 30, 2005
UNITS 121
ACRES 21
CONTINGENCY 3.0%
BUDGET SUMMARY
Original TOTAL
CODE -. . __DESCRIPTION .,,„s.,,,,._..,,r,,.,,,,N*11NJsi Budget Infrastruct. BUDGET
39-3930 MAILBOXES 0 0 0
39-3940 FINISH GRADING 56.400 0 56,400
39-3941 YARD&.PARKWAY LANDSCAPING 470,000 0 470,000
39-3971 YARD FENCING 673,050 0 673.050
39-3990 FLATWORK 159,412 0 159.412
39-3996 PRELIMINARY ESTIMATE 0 0 0
39-3997 PREVAILING WAGE PREMIUM 0 0 0
39-3998 CONTINGENCY 40,766 0 40,766
TOTAL 1,399,628 0 1,399,628
AFFORDABLE HOUSING RFP: SFH&SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
LOT IMPROVEMENTS
June 30.2005
BUDGET DETAIL
Original BUDGET
CODE DESCRIPTION( . Budget Infrastruct. Subtotal TOTAL
39-3930 MAILBOXES
Mailboxes 0.00 0.00 0.00
39-3940 FINISH GRADING 56.400
Lot Pulls(Rough) 28.200.00 0.00 28.200.00
Fine Grade(Finish) 28,200.00 0.00 28,200.00
39-3941 YARD& PARKWAY LANDSCAPING 470,000
4"PVC Drain line and Catch Basin 0.00 0.00 0.00
Front Yard Trees, 15 Gallon 0.00 0.00 0.00
Shrubs&Groundcover 0.00 0.00 0.00
Turf.Hydroseed 0.00 0.00 0.00
Irrigation 0.00 0.00 0.00
Soil Prep&Fine Grading 0.00 0.00 0.00
Preliminary estimate 470,000.00 0.00 470,000.00
39-3971 YARD FENCING 673.050
Block 658,950.00 0.00 658,950.00
Gates 14,100.00 0.00 14,100.00
39-3990 FLATWORK 159,412
6"Step tu;Stoop 0.00 0.00 0.00
Driveways 94.000.00 0.00 94,000.00
Sidewalks 16,920.00 0.00 16,920.00
Porches 48,492.00 0.00 48,492.00
39-3996 PRELIMINARY ESTIMATE 0
General 0.00 0.00 0.00
39-3997 PREVAILING WAGE PREMIUM 0
General 0.00 0.00 0.00
39-3998 CONTINGENCY 40,766
General 40.765.86 0.00 40,765.86
TOTAL BUDGET 1,399,628 0 1,399,628 1,399,628
AFFORDABLE HOUSING RFP: SFH&SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
GENERAL REQUIREMENTS
June 30,2005
UNITS 121
ACRES 21
CONTINGENCY 8.00.
BUDGET SUMMARY
_ - • Original TOTAL
CODE DESCRIPTION , s, -- Budget Infrastruct. BUDGET
40-4002 BREAKAGE'VANDALISM 12,100 0 12,100
40-4003 INSURANCE 212.192 66.599 278.791
40.4004 PROJECT MANAGEMENT 140,875 48,125 189,000
40.4020 SUPERVISION 320.100 99.000 419.100
40-4023 CONSTRUCTION LABOR 93,000 16.480 109,480
40-4125 GUARD SERVICE 120.000 0 120,000
40-4130 FIELD OFFICE/STORAGE 36.500 5.200 41.700
40-4132 EQUIPMENT 11.250 1.000 12,250
40-4133 TEMPORARY FENCE 18,000 0 18.000
40-4134 f EMPORARY POWER 37.000 0 37,000
40-4135 TEMPORARY SANITATION 18,250 14,500 32.750
40-4137 TEMPORARY WATER 15.500 0 15,500
40-4138 STREET CLEANING 10,000 0 10,000
40-4403 WARRANTY SERVICE RESERVE 159,800 0 159,800
40-4996 PRELIMINARY ESTIMATE 0 ll 0
40-4997 PREVAILING WAGE PREMIUM 0 0 0
40-4998 CONTINGENCY 96,681 20,138 116.819
TOTAL 1,301,248 271,042 1,572,290
AFFORDABLE HOUSING RFP: SF11&SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
GENERAL REQUIREMENTS
June 30,2005
BUDGET DETAIL
Original BUDGET
CODE DESCRIPTION Budget Infrastruct. Subtotal TOTAL
40-4002 BREAKAGE/VANDALISM 12.100
Breakage/Vandalism 12.100.00 0.00 12.100 00
Other 0.00
40-4003 INSURANCE 278.79I
Completion Bond 21?192.00 66,599 00 278.791 00
40-4004 PROJECT MANAGEMENT 189.000
Constr.Project Manager 140,875.00 48,1 25.00 189,000.00
40-4020 SUPERVISION 419,100
General Superintendent 0.00
Project Superintendent 105,000.00 66.000.00 171.000.00
Assistant Supenntcndents 60,000.00 0.00 60,000.00
Asst Supt: Site improvements 0.00 24.000.00 24,000 00
Asst Supt. Rough 72.000 00 0.00 72,000.00
Asst Supt. Finish 54,000 00 0 00 54,000.00
Bonuses&Reimb 29,100.00 9,000.00 38,100 00
40-4023 CONSTRUCTION LABOR 109,480
Misc.Labor 78,000.00 12.480.00 90.480 00
Temporary Labor 15,000.00 4.000.00 19.000 00
40-4125 GUARD SERVICE 120.000
Miscellaneous Service 120,00(1.00 0 00 120.000.00
40-4130 FIELD OFFICE'STORAGE 41.700
Trailer 8.750.00 1.400 00 10.150.00
Trailer set-up 4,000 00 0.00 4,000.00
AC Pad/Parking • 0.00
Trailer supplies 5.000 00 800.00 5,800 00
Telephone 15.000.00 2,400.00 17.400.00
Bin Rental 3.750 00 600.00 4350.00
40.4132 EQUIPMENT 12.250
Equipment Rentals 6250.00 1.000.00 7,250.00
Equipment Purchase 5.000.00 0.00 5,000 00
40-4133 TEMPORARY FENCE 18,000
Chain Link Fencing Set up 2.000.00 2.000.00
Monthly rental 10,000.00 )0.000.00
Gates 0.00
Wind Screen 0.00
Maintenance/Relocation 4.000 00 4,000.00
Site Signs 2,000.00 2,000.00
40-4134 TEMPORARY POWER 37.000
Power Poles 35.000 00 35.000.00 •
Power Pole Install 2,000.00 2.000 00
Power Service 0.00
AFFORDABLE IIOUSING REP: SF1l&SENIOR APTS COMBINED
PALM DESERT.CA
MASTER BUDGET BREAKDOWN
GENERAL.REQUIREMENTS
June 30,2005
BUDGET DETAIL
Original BUDGET
CODE DESCRIPTION •,__ Budget Infrastruct. Subtotal TOTAL
Generator 0 00
All Inclusive 0.00
40-4135 TEMPORARY SANITATION 32.750
Setup 2,000.00 3,000.00 5,000.00
Month!}rental 16.250.00 11,500.00 27./50.00
40-4137 TEMPORARY WATER 15,500
Construction Water 12.500 00 12.500(30
Imgation-Establishment period 3,1100.00 3,000.00
40-4138 STREET CLEANING 10,000
Interior Street Cleaning 10,000 00 10 000,00
40-4403 WARRANTY SERVICE RESERVE 159,800
Warrant) Service Reserve 50,000 00 50,000 00
Customer Service 109,800.00 109.800 00
40-4996 PRELIMINARY ESTIMATE 0
General
40-4997 PREVAILING WAGE PREMIUM 0
General
40-4998 CONTINGENCY 116.819
General 96,681.28 20,138.12 1 16,810 40
TOTAL BUDGET 1,301,248 271.042 1,572,290 1,572,290 0
AFFORDABLE HOUSING REP: SFH&SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
PROJECT DEVELOPMENT
June 30.2005
UNITS 121
ACRES 21
CONTINGENCY 5.0%
BUDGET SUMMARY
Original ' TOTAL
CODE , . DESCRIPTION ti --- -- — Budget Infrastruct- BUDGET
50-5003 ARCHITECT-SFR 75.000 0^ 75,000
50-5005 LANDSCAPE-ARCHITECT 79,500 0 79,500
50-5007 GRAPHICS-CONSULTANT 5.00n 0 5.000
50-5009 COLOR-CONSULT.ANT 14,500 0 14,500
50-5010 MARKET RESEARCH-CONSULTANT 0 0 0
50-5013 ACOUSTICAL ENGINEERING 0 0 0
50-5015 STRUCTURAL ENGINEERING 26.000 0 26,000
50-5018 MECHANICAL/PLUMBING ENGINEERING U 0 0
50-5019 ELECTRICAL ENGINEERING 0 0 0
50-5020 TITLE 24 ENGINEERING 2.000 0 2.000
5U-5109 BLUEPRINTS/DELIVERY 60.000 0 60.000
50.5110 AERIAL PHOTOGRAPHY 0 0 0
50.5111 TRAVEL EXPENSES 0 0 0
50-5345 BUDGET PREP 0 0 0
50-5362 LEGAL-PROJ DEV -DDA 50,000 0 50,000
50-5365 MISC 0 0 0
50-5997 PREI IMIN.ARY ESTIMATE 0 0 0
50-5998 CONTINGENCY 15,600 0 15.600
_ - - _ - - _ - - _ - __ __TOTAL __ - - ,_ _ __ _ -, - _ _ 327,600 0 327,600.
AFFORDABLE HOUSING REP: SFH&SENIOR APTS COMBINED
PALM DESERT.CA
MASTER BUDGET BREAKDOWN
PROJECT DEVELOPMENT
June 30.2005
BUDGET DETAIL
Original BUDGET
CODE . __ DESCRIPTION— Budget Infractruct. Subtotal TOTAL
50-5003 ARCHITECT-SFR 75..001)
Concept-ERN/MOU - . -
Prelim Design-DDA - - -
Schematic Design - - -
Design Development 20.000 00 - 20.000.00
Construction Documents 40,000.00 - 40.000.00
Revisions/Red Line Chances 5.000.00 - 5,000.00
Reimbursable Allowance 5,000 00 - 5,000.00
Construction Observation 5.000.00 - 5,000.00
Additional Plans/Engineering - - -
50-5005 LANDSCAPE-ARCIIITEC1 79.500
Retainer - - -
Schematic Design&Cost Estimate 43,000.00 - 43,000.00
Construction Documents&Specifications 21,500 00 - 21.500.00
Construction Observation 10.000.00 - 10,000.00
Reimbursable Allowance 5,000 00 - 5,000 00
50-5007 GRAPHICS-CONSULTANT 5.000
Phasing Plan - - -
Pre-Develop Studies misc.exhibits:REP - - -
Misc.Presentation 5.000.00 - 5.000 00
Presentation Site Plan - - -
Project Manual - - -
Reimbursable Allowance - - -
Other - - -
50-5009 COLOR-CONSULTANT 14.500
Color Program 11,000.00 - 11,000.00
Plotting Studies 3,500 00 - 3.500.00
50-5010 MARKET RESEARCH-CONSULTANT 0
Pre-Develop.Studies - - -
50-5013 ACOUSTICAL ENGINEERING 0
Sound Study - - -
Perimeter Wall Design - - -
50-5015 STRUCTURAL-ENGINEERING 26.000
Design(Intl In Arch) - - -
Construction Documents 16.000.00 - I6.000 00
Miscellaneous Common.Area Engineering 5.000 00 - 5,000.00
Field Observation 5.000.00 - 5.000.00
Revisions - -
Reimbursable Allowance - - -
AFFORDABLE HOUSING RFP SFII&SENIOR AP1 S COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
PROJECT DEVELOPMENT
June 30.2005
BUDGET DETAIL
Original BUDGET
CODE DESCRIPTION � .. Budget Infrastruct. Subtotal TOTAL
50-5018 MECHANICAUPLUMBINCi ENGINEERING 0
General - - -
50-5019 ELECTRICAL ENGINEERING - 0
General - - -
50.5020 TITLE 24 ENGINEERING 2.000
General 2.000 00 - 2,000.00
Reports(Incl.in Arch) - - -
50-5109 BLUEPRINTS/DELIVERY 60.000
Development 10.000.00 - 10.000.00
Construction 50,000 00 - 50,000.00
50-5110 AERIAL PHOTOGRAPHY 0
General - - -
50-5I I1 1RAVEL EXPENSES 0
General - - -
50-5345 BUDGET PREP 0
General - -
5(1-5362 LEGAL-PROJ.DE.V.-DDA 50.000
Project 50.000.00 - 50,000.00
EntitlemenUDDA -
50-5365 MISC. 0
Bank Charge - - -
Miscellaneous - - -
50-5997 PRELIMINARY ESTIMATE 0
General - - -
50-5998 CONTINGENCY 15.600
General 15,600.00 - 15.600.00
TOTAL BUDGET 327.600 0 327.600 327.600
AFFORDABLE HOUSING RFP: SFH & SENIOR APTS COMBINED
PALM DESERT, CA
MASTER BUDGET BREAKDOWN
GENERAL ADMINISTRATION & FINANCE
June 30, 2005
UNITS 121
ACRES 21
CONTINGENCY 1.5%
BUDGET SUMMARY
Original TOTAL
CODE - DESCRIPTION ..._ _y ;,,,� Budget Infrastruct. BUDGET
59-5901 FEES 2,208.730 211,846 2,420,576
59-5903 INSURANCE-GEN LIAB. 591.013 179,116 770,129
59-5905 PROJECT MANAGEMENT 134.525 12,075 146,600
59-5907 ACCOUNTING AUDITING 15,000 0 15,000
59-5909 LEGAL 20,000 0 20,000
59-5911 ASSOCIATION DUES 0 0 0
59-5913 PROPERTY TAX 0 0 0
60-6001 A&D LOAN 0 0 0
60-6010 CONSTRUCTION LOAN 0 0 0
60-6020 MORTGAGE FINANCE 0 0 0
60-6030 CONTINGENCY 44,539 6,046 50,585
TOTAL 3,013,807 409,083 3,422,890
AFFORDABLE HOUSING RFP: SFH & SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
GENERAL ADMINISTRATION &FINANCE
June 30, 2005
BUDGET DETAIL
Original BUDGET
CODE DESCRIPTION Budget Infrastruct. Subtotal TOTAL
59-5901 FEES 2,420,576.00
Contractor's Ovhd&Profit 988,730.00 21 1,846.00 ##########
Developer's Ovhd& Profit ########## ###### ##
59-5903 INSURANCE-GEN. LIAB. 770.129.00
Comprehensive: 10 year tail 559,346.00 169.509.00 728,855.00
Course of construction 31,667.00 9,607.00 41,274.00
59-5905 PROJECT MANAGEMENT 146,600.00
Development Project Manager 134,525.00 12,075.00 146,600.00
59-5907 ACCOUNTING/AUDITING 15,000.00
General 15,000.00 - 15,000.00
59-5909 LEGAL 20,000.00
DRE 20,000.00 - 20,000.00
59-5911 ASSOCIATION DUES
Capitalization
Monthly Dues
59-5913 PROPERTY TAX
General
60-6001 A&D LOAN
Appraisal Fee
Origination Fee
Legal Fee
Escrow
Title
Interest
60-6010 CONSTRUCTION LOAN
Appraisal Fee
Origination Fee
AFFORDABLE HOUSING RFP: SFH&SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
GENERAL ADMINISTRATION& FINANCE
June 30,2005
BUDGET DETAIL
Original BUDGET
CODE . DESCRIPTION _ Budget Infrastruct. Subtotal TOTAL
Legal Fee
Escrow
Title
Interest
60-6020 MORTGAGE FINANCE
Origination Fee
Legal Fee
Escrow
Title
Interest
60-6030 CONTINGENCY 50,584.58
General 44,539.02 6,045.56 50.584.58
TOTAL BUDGET 3,013,807 409,083 3,422,890 3,422,890
AFFORDABLE HOUSING RFP: SFH&SENIOR APTS COMBFNED
PALM DESERT.CA
MASTER BUDGET BREAKDOWN
SALES COMPLEX&COMMUNITY ROOM
June 30.2005
UNlrs 121
:ACRES 21
CONTINGENt 30°0
BUDGET SUMMARY
Original TOTAL
CODE . _ DESCRIPTION ..,, . - ,,.-•;.,:_ , Budget Infrastruct. BUDGET
70-7000 MODEL COMPLEX CONSTRUCTION 0 0 0
70-7019 HARDSCAPE UPGRADES 0 0 0
70.7020 IRRIGATION SYSTEMS 10,000 0 10.000
70-7021 SURFACE DRAINAGE 0 0 0
70.7024 PLANTING 20,000 0 20,000
70-7111 TRAP FENCING 2,500 0 2.500
70-7185 MODEL INFERIOR UPGRADES 10.000 0 10,000
70-7186 MODEL CONSTRUCTION/DESIGN CHANGES 0 0 0
70-7186 MODEL CHANGES 0 0 0
70-7187 MUSIC SYSTEM INSTALLATION(SALES OFFICE) 0 0 0
70-7188 SECURITY SYSTEM INSTALLATION(SALES OFFICE) 6,000 0 6,000
70-7290 OFFSITF CONVERSION 0 0 0
70-7291 MODEL LANDSCAPE CONVERSION 0 0 0
70-7292 MODEL INTERIOR CONVERSION 0 0 0
70-7293 SALES OFFICE CONVERSION 20.000 0 20,000
73.7306 DECORATING 228.355 0 228.355
73-7311 PRE SALES OFFICE'TRAILER 14,000 0 14.000
73-7320 DESIGN CENTER 0 0 0
73.7340 PLANT INSTALLATION-INTERIOR 6.500 0 6.500
73-7341 EXTERIOR POT INSTALLATION 0 0 0
73.7351 ONSITE SIGN INSTALLATION 0 0 0
73-7361 CONTINGENCY 9.521 0 9,521
TOTAL 326.876� 0 326,876•
AFFORDABLE HOUSING RFP. SFH&SENIOR APTS COMBINED
PALM DESERT.CA
MASTER BUDGET BREAKDOWN
SALES COMPLEX&COMMUNITY ROOM
June 30.2005 '
BUDGET DETAIL
Original BUDGET
CODE DESCRIPTION Budget Infrastruct. Subtotal TOTAL
70-7000 MODEL COMPLEX CONSTRUCTION
General - 0 -
70-7019 FI:IRDSCAPE UPGRADES
Rear Patio - 0 -
Mtscellaneous - 0 -
70-7020 IRRIGATION SYSTEMS 10,000
Yard Irrigation 10,000 00 0 10.000 00
70.7021 SURFACE DRAINAGE
Other - 0 -
70-7024 PLANTING 20.000
Planting Lump Sum 20,000 00 0 20.000.00
70-7111 TRAP FENCING 2.500
Trap Fence 2.500.00 0 2.500 00
70-7185 MODEL INTERIOR UPGRADES 10,000
Other 10.000.00 0 10.000.00
70-7186 MODEL CHANGES
Miscellaneous - 0 -
70-7187 MUSIC SYSTEM INSTALLATION(SALES OFFICE)
System - 0 -
70-7188 SECURITY SYSTEM INSTALLATION(SAL ES OFFICE( 6,000
Other 6,000 00 0 6,000 00
70-7290 OFFSITE CONVERSION 1
Offsite Conversion - 0 -
70-7291 MODEL LANDSCAPE CONVERSION
Conversion - 0 •
-
70-7292 MODEL INTERIOR CONVERSION
Conversion - 0 -
70-7293 SALES OFFICE CONVERSION 20.000
Conversion 20.000.00 0 20.000 00
73-7306 DECORATING 228.353
General -Model&Sales 011icc 189,750.00 0 189,750.00
General -Community Room 38.605.00 0 38,605.00
73.7311 PRE SALES OFFICE'TRAILER 14.000 '
Office Set up 5.000.00 0 5.000.00
Rental 9,000 00 0 9,0(10.00
AFFORDABLE HOUSING RFP: SFII&SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
SALES COMPLEX&COMMUNITY ROOM
June 30.2005
BUDGET DETAIL
Original BUDGET
CODE DESCRIPTION Budget Infrastruct. Subtotal TOTAL
Garage Conversion 0 -
Decorating - 0 -
73-7320 DESIGN CENTER 0
General - 0
73.7340 PLANT INSTALL\TION-INTERIOR 6,500
General-SFR 5,000.00 0 5.000.00
General-Community Room 1.500.00 0 1.500.00
73.7341 EXTERIOR POT INSTALLATION
General - 0 -
73.7351 ONSITE SIGN INSTALLATION
General - 0
73-7361 CONTINGENCY 9.521
General 9.520 65 - 9.520.65
TOTAL BUDGET 326.876 0 326,876 326.876
AFFORDABLE HOUSING RFP: SFH&SENIOR APTS COMBINED
PALM DESERT,CA
MASTER BUDGET BREAKDOWN
SALES AND MARKETING
June 30,2005
UNITS 121
ACRES 21
(CONTINGENCY I5°o,
BUDGET SUMMARY
Original TOTAL
CODE DESCRIPTION .,.ecr raw.s Budget Infrastruct. BUDGET
80-8105 SIGNS MAINTENANCE 0 0 0
80-8115 MODEL FURNITURE RENTAL 0 0 0
80-8120 LANDSCAPE MAINTENANCE. 9.600 0 9.600
80.8121 MODEL CLEANING 10.694 0 10.694
80-8122 MODEL REACCESSORIZING 600 0 600
80-8123 INTERIOR PLANTS 3.600 0 1.600
80.8126 UTILITIES 18.000 0 18.000
80-8128 SECURITY 1.800 0 1.800
80-8129 COMPUTER SERVICES 1.800 0 1.800
80-8130 MUSIC 0 0 0
80-8183 SALES OFFICE&MAINTENANCE SUPPLIES 9.000 0 9.000
85.8007 CONSULTANTS 5.000 0 5.000
85-8062 LEGAL-SALES DOGS ORE. 0 0 0
85 8089 DRE FEES 7.500 0 7.500
85-8150 BROCHURES(include in ad agency fees) 0 0 0
85-8151 COLLA1 ERAL.(included in ad agency fees) 0 0 0
55-8181 SALE FORMS 0 0 0
85-8182 HOMEOWNERS MANUAL 0 0 0
85.8240 AD AGENCY FEES 65.000 0 65.000
85-8241 PR AGENCY FEES 12.000 0 12.000
85-8242 AD MEDIA 120.000 0 120.000
85.3260 SPECIAL EVENTS 5.000 0 5.000
85-8262 PHOTOGRAPHY 0 0 0
85.8280 I.ETFER PROGRAM 0 0 0
85.8283 MORTGAGE FINANCING 0 0 0
85-8284 MOVE-IN GIFTS 0 0 0
85-8373 SALES TRAINING 0 0 0
85-8385 CLOSING COSTS 0 0 0
85.8400 SALES STAFF 254 672 0 254.672,
85-8410 SALES AGENT 0 0 0
85-8440 CONTINGENCY 7.864 0 7.864
TOTAL 532,I30 0 532,130
• - - - . i . . _ _---- -- .._ - - - - . -
AFFORDABLE HOUSING RFP SFH&SENIOR APTS COMBINED
PALM DESERT.CA
MASTER BUDGE! BREAKDOWN
SALES AND MARKETING
June 30.2005
BUDGET DETAIL.
Original BUDGET
CODE - DESCRIPTION Budget Infrastruct. Subtotal TOTAL.
50-8105 SIGNS MAINTENANCE
General - 0 00 0.00
80-5115 MODEL FURNITURE RENTAL
General . 0.00 0 00
80.8120 LANDSCAPE MAINTENANCE 9.600
Monthly 7.200 00 0 00 7.200 00
Plant Rotation 2400.00 0 00 2.400 00
Potted Plant Maintenance • 0 00 0 011
Pest Control - 0.00 0.00
80•8121 MODEL CLEANING 10.694
Grand Opening Cleaning 5(10 00 0.00 500 00
Carpet Cleaning 2.400 00 0 00 2.400 00
Monthly 7.794 00 0.00 7.794 00
80-8122 MODEL REACCESSORIZING 600
Monthly 600 00 0 00 600 00
80-8121 INTERIOR PLANTS 3.600 '
Monthly 3.600 00 0.00 3.600.00
80-8126 UTILITIES 18.000
Electrical(as•Water Phone(comm outreach) 2.400.00 0 00 2.400 00
Electrical Gas.Water'Phone(sales) 15 600 00 0.00 15.600.00
80-8128 SECURITY 1.800
Monitoring Fee 1.200 00 0.00 I.200.(10
False Alarm Fee 600.00 0 00 600.00
80-8129 COMPUTER SERVICES 1.800
Monthly 1.80000 0.00 1.80000
MLS Fees - 000 01)0
80-8130 MUSIC
Ails, MamtCD's - 0.00 000
AFFORDABLE HOUSING RFP SFH&SENIOR APTS COMBINED
PALM DESERT.CA
MASTER BUDGET BREAKDOWN
SALES AND MARKETING
June 30.2005
BUDGET DETAIL
Original BUDGET
CODE DESCRIPTION Budget Infrastruct. Subtotal TOTAL.
80-8183 SALES OFFICE&MAINTENANCE SUPPLIES 9.000
Set up purchased equipment(see 731 I) - 0 00 0.00
Monthly Leases 4.500.00 0 00 4.500.00
Monthly Supplies 4.500 00 0 00 4 500 00
85-8007 CONSULTANTS 5.000
DRE Budget 2.500 00 0 00 2.500.00
Translation 2.500.00 0 00 2.500 00
85.8062 LEGAL•SALES DOGS DRE
General (See 59091 - 0 00 0 00
85-8089 DRF FEES 7.500
General 7.500 00 0 00 7.500.00
85.8150 BROCHURES(include in ad agency fees)
General
Print 4 3r 150 S 1.40 -
85-8I51 COLLATERAL(included in ad agency fees)
General
Reprints Handouts -
85-8181 SALE FORMS
Per Unit- 15 per -
85.8182 HOMEOWNERS MANUAL
General Per Unit -
85.8240 AD AGENCY FEES 65.000
General 65.000 00 0.00 65.000 00
85-8241 PR AGENCY FEES 12.000
Monthly 12.000 00 0.110 12.000 00
85-8242 AD MEDIA 120.000
Monthly 120.000.00 0 00 120.000 00
Magaziner•Gatefo(d -
85-8260 SPECIAL EVENTS 5•000
Grand Opening Event 5.000 00 0(8) 5.000 00
Special Events Seminars -
85-8262 PHOTOGRAPHY
General -
85-8280 LETTER PROGRAM
Per Month -
85-8283 MORTGAGE FINANCING
Forward Committment&Inspection Fees •
VA FHA Processing -
Buy down
85.828-1 MOVE-IN GIFTS
Per Unit -
85-8373 SALES TRAINING
Seminars -
85.8385 CLOSING COSTS
Closing Costs-Sellers -
Closing Costs-Buyer -
35-8400 SALES STAFF 251.672
Sales Manager(included in 151.80(100 0 00 151.800 00
Sales Assistant Hostess 87.692.00 000 87.692 00
Bonus 15.180 00 000 15.180 00
85.8410 SALES AGENT
General
85.8440 CONTINGENCY 7.864
General 7.863.99 - 7.863.99
TOTAL.BUDGET 532.130 0 532.130 532.130 •
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Exhibit B.3
Development & Construction Plan
A. Owner's Role
Owner previously(i) processed and obtained Tentative Map approval for the Project, (ii)
procured and processed permit ready engineered drawings for rough grading and
improvements in the public right of way, permit ready architectural documents for the
senior apartments, and schematic drawings for the single family homes. Owner, as
Owner of the Property, is contracting with the Developer for fee based development and
construction services as defined below, and retains the right and responsibility to review
and approve all major decisions affecting the Project.
B. Developer's Role
The Developer will, on Owner's behalf, (i)contract for and oversee portions of the design,
engineering and construction documentation for the Project, (ii)process plan check, and pay
fees and permits, and (iii) contract for and oversee construction, all as more specifically set
forth below.
C. Design, Engineering and Construction Documentation
Owner has delivered or will deliver to the Developer permit ready construction documents
prepared by MSA Consulting, Inc. for all rough grading and improvements in the public right
of way, the PM-10 plan, the Project SWPP and any other documents required by the NPDES
permit program.
Owner has delivered or will deliver to the Developer permit ready construction documents
prepared by Kristi Hanson Architects for the senior apartments.
Owner has delivered or will deliver schematic design drawings for the single family homes
prepared by Kristi Hanson Architects, along with evidence of that firm's assignment of the
schematic design drawings to Owner for construction documentation by others.
The Developer will retain KTGY Group, Inc. as Architect of Record, along with a consulting
structural engineer and mechanical design consultants to create permit ready construction
documents from the above referenced schematics for the single family homes.
The Developer will retain an architect and structural/civil engineer to create permit ready
construction documents for the carports serving the senior rental units and for block walls.
The Developer will retain RGA Landscape Architects to deliver conceptual and permit ready
construction documents for all landscape, irrigation and hardscape in accordance with the
design review requirements of the City of Palm Desert.
All consultants will indemnify both Owner and Developer against any claims for errors,
omissions and/or defects in their work. Owner shall indemnify the Developer against any
claims for errors, omissions and/or defects in the work of MSA Consulting, Inc., Kristi
Hanson Architects, and all other consultants involved in the preparation of construction
documents for the senior apartments. The Developer will indemnify Owner against any
claims for errors, omissions and/or defects in the work of KTGY Group, Inc. and all other
consultants involved in the preparation of construction documents for the single family
homes.
D. Design Review and Plan Check Processing
The Developer will pay for, submit and oversee the processing of all design review and plan
check applications and such approvals as are necessary for the construction, completion, use
and occupancy for the single family homes, the block walls, common areas, senior rental unit
carports and the landscape architectural plans in accordance with the requirements of the City
of Palm Desert and other agencies having jurisdiction, collectively"Remaining Approvals".
E. Permits, Fees and Bonds
The Developer and/or Community Dynamics, Inc. as its general contractor("General
Contractor"), will pay for and obtain/submit all permits, fees and subdivision
improvement bonds, and file the approved Final Map for recordation, as required by the
City of Palm Desert's Public Works Department prior to commencing rough grading and
improvements in the public right of way.
Provided that the General Contractor proceeds with vertical construction and common
area and lot improvements, the Developer and/or its General Contractor, will pay for and
obtain/submit all permits, fees and performance and payment bonds for 100% of the costs
of such construction as required by the City of Palm Desert's Public Works and Building
Departments and this Agreement prior to commencing such work. Owner and the City of
Palm Desert recognize that time is of the essence and shall endeavor to prioritize and
expedite the processing of all Project plans and permits.
F. General Contracts
Developer will divide all construction related costs into two separate categories, (i) those
associated with rough grading and improvements in the public right of way("First Stage
Improvements"), and (ii) those associated with vertical construction and lot and common
area improvements ("Second Stage Improvements").
General contract for First Stage Improvements: The Developer will enter into a contract
with the General Contractor for the First Stage Improvements within 60 days of the date
of this Agreement for an amount not to exceed total costs for this category of
construction as shown in the Budget. Cost increases due to Owner Caused Delays, as
well as delays resulting from Force Majeure, as defined in Section 8.11 of this
Agreement, shall not be included in the Contract Sum.
General contract for Second Stage Improvements: During the construction of the First
Stage Improvements, the Developer will oversee the delivery of permit ready
construction documents for the single family homes and the landscape, hardscape and
irrigation of the Project. Within 60 days of the date Developer submits those documents
into plan check with the City of Palm Desert, the General Contractor will submit a bid to
the Developer for its consideration. If the total of the General Contractor's line items for
vertical, common area and lot improvement construction exceeds the Developer's
budgeted total of S13,164,768 for the Second Stage 2300, 3000 and 3900 categories by
not more than 10%, excluding the cost of any owner approved changes to the scope of the
original agreement, then the Developer shall enter into a contract with the General
Contractor for the Second Stage Improvements, and the Stipulated Sum as defined in
Section 4 of the Agreement shall be adjusted to include the above referenced excess
amount. The General Contractor shall indemnify the Developer and Owner against any
claims for construction defects in its work on the Project.
If the total of the General Contractor's line items for vertical, common area and lot
improvement construction exceeds the Developer's budgeted total budgeted total of
S 13,164,768 for the Second Stage 2300, 3000 and 3900 categories by more than 10%,
excluding the cost of any owner approved changes to the scope of the original agreement,
then the Developer shall have not less than 10 days to present to, and document its
General Contractor's costs for, Owner. If Owner approves the costs, then the Developer
shall enter into a contract with the General Contractor for the Second Stage
Improvements, and the Stipulated Sum as defined in Section 4 of the Agreement shall be
adjusted to include the above referenced excess amount. The General Contractor shall
indemnify the Developer and Owner against any claims for construction defects in its
work on the Project.
If, following its review, Owner so chooses, it shall notify the Developer of its decision
not to approve the Developer's proposed contract with the General Contractor for the
Second Stage Improvements.
In the event Owner notifies the Developer of its decision not to approve the Developer's
proposed contract with the General Contractor for the Second Stage Improvements, then
Owner shall have the right to either(i) suspend /terminate the Project, or (ii) solicit bids
from third party general contractors. If Owner elects to solicit bids, then the Developer
shall (i) in the course of a 30 day pre-bid period, prepare bid specifications for a
guaranteed maximum contract on Owner's behalf, and (ii) in the course of a 30 day bid
period, obtain proposals from not less than three general contractors subject to Owner's
prior review and approval of the proposed bidding contractors and specifications. At no
time prior to or during the 30 day bid period will the Developer, Owner or their
employees or agents disclose to any third party the amount of the General Contractor's
prior bid. Owner will reimburse the Developer for all additional costs associated with
soliciting bids from and negotiating with third party contractors subject to the
Developer's submittal of documentation for reimbursement verification.
If the Developer is able to solicit a bid for the construction of the Second Stage
Improvements for a contract sum which is less than that which the General Contractor
first proposed, and provided said sum reflects a scope of work and specifications which
are equal to or better than those of the General Contractor, then Owner shall have the
right to select the low bidder as the new general contractor for the Second Stage
Improvements ("New General Contractor"). If Owner selects a New General Contractor
for the Second Stage Improvements, then the Developer shall continue to serve as the
Project's Developer and receive its full Developer Fee. The Developer shall enter into a
guaranteed maximum contract with the New General Contractor for the Second Stage
Improvements, and the Stipulated Sum as defined in Section 4 of the Agreement shall be
adjusted to include the above referenced amount. The New General Contractor shall
indemnify the Developer and Owner against any claims for defects in its work on the
Project.
Documented material cost increases for three material groups (lumber& plywood,
concrete, and copper) for all phased construction of the single family homes following
construction of the models and phase 1 will be excluded from the contract sum for the
guaranteed maximum contract for Stage Two Improvements if said increases exceed 5%
of the phase 1 material unit costs. Said increases must be documented as follows. First,
the affected subcontractor must provide a certified quote from its phase 1 supplier re:
anticipated material costs by phase for all phases of single family construction prior to the
time the contract for the Stage 2 Improvements is awarded. Second, if the material costs
increase in phases subsequent to phase 1 by more than 5%, then the subcontractor
claiming such an increase must present the revised quote from its supplier documenting
the increase for the subsequent phases. Additionally, the subcontractor must solicit and
submit at least two additional independent quotes from other suppliers at prices equal to
or higher than the revised quote from its original supplier.
G. Development and Construction Strategy
Developer will, to the best of its ability and to the extent such matters are within its
control, manage the development and processing of all construction documentation, and
the prosecution all construction in accordance with the Project Schedule (See Exhibit
B.5). Developer shall submit an updated Project Schedule to Owner with each of its
monthly reports as required under this Agreement.
Efficient execution of this Development and Construction Plan is predicated on (i)
Owner's timely delivery to the Developer of permit ready construction documents for
rough grading, and all construction in the proposed public right of way and public utility
easements, as well as the senior rental community, (ii) Developer's timely development
of plan check ready construction documents for the single family homes and all
landscape, hardscape and irrigation for the Project, (iii) Developer's timely processing of
said plans through plan check, and (iv) Owner's assistance in obtaining the City of Palm
Desert's cooperation in expediting the processing of said documents.
Developer will commence construction of First Stage Improvements upon the later of(i)
60 days following execution of this Agreement or(ii) 10 working days following the
City's issuance of a rough grading permit.
Based on current assumptions that Owner will make (i) 50%of the single family homes
affordable to lower income households, and (ii) the balance of the single family homes
affordable to moderate income households in accordance with requirements of the
California Health and Safety Code, and further assuming sales absorption of 15 units per
month for the low income and 5 units per month for the moderate income units, the
Developer intends to (i) commence construction of the single family model complex and
the senior apartments simultaneously, (ii) divide construction of the single family homes
into three phases as shown in the Project Schedule and, (iii) construct 30 single family
residences in each phase with the first phase in the NW corner of the Site, the second
phase in the central portion of the Site, and the third phase in the SE corner of the Site.
The construction phasing proposed in this plan is subject to change until Owner and
Developer approve a final phasing program.
Following the completion of construction, the Developer will (i) proactively monitor
homebuyer performance for a period of 3 months, and (ii) maintain, with the cooperation
of the general contractor, a construction warranty service program for a period of not less
than one year.
The Developer will ensure that the general contractor adequately staffs the project.
H. Costs of Development
Costs of development include Budget categories 2500, 5000 and 5900 (less Contractor's
Overhead and Profit).
I. Costs of Construction
Costs of construction include Budget categories 1500, 2000, 2300, 3000, 3900, 4000 and
the Contractor's Overhead and Profit in line item 5901.
Exhibit B.4
Sales & Marketing Plan
A. Owner's Role
Owner, as Owner of the Property, is contracting with the Developer for fee based sales
and marketing services as defined below, and retains the right and responsibility to
review and approve all major decisions affecting the Project. Owner will assume sole
responsibility for the leasing, operation and management of the senior apartments upon
the issuance of a Certificate of Occupancy for the buildings.
B. Developer's Role
The Developer, on Owner's behalf, will develop and implement financing, marketing/
community outreach and programming for sales, all as more specifically set forth below.
C. Defining the challenge — analyzing market trends
Current home pricing in Palm Desert and surrounding communities in the Coachella
Valley, even at the low interest rates presently available to the consumer, exceeds an
affordable housing cost for low and moderate income households in Riverside County.
At today's conventional interest rates, in order to comport with the requirements of the
State of California for affordable housing, a three bedroom home would generally have to
sell for an effective cost of less than $125,000 to a low income family, and less than
$200,000 to a moderate income family. Yet in April 2005 the median resale price of a
home in Palm Desert exceeded $482,000.1
D. Meeting the challenge —proposed sales_pricing and marketing policies
In order to meet the above challenge, Owner will endeavor to (i) make available 94 single
family homes at an affordable housing cost to low and moderate income households, (ii)
raise community awareness regarding the availability of said homes and qualifying
requirements, (iii) arrange for a delivery system which is fair and equitable, (iv)provide
more extensive homebuyer education to those who qualify and purchase, and (v) offer
post purchase support to individual homeowners and the HOA in the early stages of the
new community's establishment as is required by this Agreement and by applicable law.
E. Implementation —proposed sales programming/strategy
In order to assist Owner in meeting its goals, the Developer will develop sales
programming in three distinct areas:
1. Financing: The Developer will (i) consult with Owner personnel as they endeavor
to set sales pricing, define the desired mix of low and moderate income housing,
and identify that portion of Owner's investment in the Project which must take the
Source: Data Quick News,L.A.Times Sunday Edition Charts
form of subordinated/deferred financing to the target buyers in order to make the
homes affordable to the targeted homebuyer population, (ii) prepare on Owner's
behalf and subject to Owner's review and approval resale restriction and
subordinated loan documents which serve to secure Owner's ability to enforce
resale restrictions and at the same time comply with the sometimes competing
requirements of various participating and/or regulatory agencies, (iii) identify
third party sources of subsidized financing and/or grants that would serve to
further leverage Owner's investment and/or deepen affordability to the targeted
population, (iv) select and coordinate the efforts of first trust deed community
lending partners familiar with affordable housing finance programs as they assist
in prequalifying low income buyers, and (v) obtain approvals from the secondary
lending market (eg., Fannie Mae, FHA) that may be necessary for original or
subsequent sales.
2. Marketing/Community Outreach: The Developer will employ or contract with a
Sales Manager to assist with sales and marketing of the Project. The Developer
and/or its agents will, subject to Owner review and approval and on Owner's
behalf, (i) prepare collateral material, (ii) coordinate with community based
organizations and Owner to reach the targeted population with news regarding
the availability of the housing and informational assemblies, (iii) develop and
conduct assemblies at which the Project and qualifying guidelines are explained,
and (iv) develop and implement a delivery system which ensures that the
opportunity to prequalify and purchase homes will be awarded in a fair and
equitable manner to the targeted population.
3. Sales: The Developer and/or its agents will, subject to Owner review and
approvals and on Owner's behalf, (i) prepare all sales related documents including
purchase contracts, seller disclosures, and organizational documents for the HOA,
(ii) manage DRE processing, (iii) coordinate the efforts of first trust deed lenders
(and subordinated lenders/grantors, if any) as they endeavor to prequalify
prospective buyers, (iv) arrange for and manage the sale of the homes, (v)
coordinate the efforts of escrow and title, (vi) provide for homebuyer/
homeownership classes for qualified buyers prior to the close of escrow, (vii)
monitor homebuyer performance and provide post purchase support for three
months following the last close of escrow of the project, and (viii) assist Owner in
selecting a community management service provider for the HOA and starting up
the HOA.
F. Absorption - projected rates of sales
For purposes of sales and construction phasing and scheduling, the Developer estimates
absorption as follows: All low income units within a given phase will sell in the first
month that phase is offered. Moderate income units will sell at a rate of not less than five
homes per month. These projected rates of absorption are predicated on the assumption
that Owner will set pricing and terms such that the homes are available to the targeted
buyers in compliance with the requirements of governing sections of the California
Health and Safety Code regarding affordable housing.
Based on these projected rates of absorption, and assuming that half of the homes sell to
low income and half to moderate income families, the Developer has developed a
tentative construction and sales phasing schedule (See Exhibit B.5). The Developer
recognizes Owner's right to modify the mix of low and moderate income buyers, and
Owner recognizes that if it does so the Developer may recommend modified phasing to
protect against the risk of unsold inventory. Changes to pricing and phasing may alter the
Developer's performance schedule in construction and sales, as well as the costs of the
Project. If Owner changes phasing and said changes lead to increased costs or project
delays, these impacts shall be considered owner caused delays.
G. Costs of Sales & Marketing
Estimated costs associated with sales and marketing are covered in the 7000 and 8000
categories of Development, Construction and Sales Budget.
The costs of sales will be paid as is customary in Riverside County and certain costs that
are the seller's responsibility, such as loan and closing costs, will be paid for or provided
by Owner through the escrow, and are not a part of this Agreement.
i
I
Exhibit B.5
Project Schedule
Project Schedule
Palm Desert Affordable Housing
June 2. 2''JS
tic or•.11 Is 94 2005 2606 2001
• 2 3 S 6 r $ 1 1e 1' 12 13 1. IS 1S 1• 1$ 1S >< 21 L 23 :d 25 :6 2' 2e 23 32
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CNSITES.:OM.ION AREAS
Se-c Apal"enis 22 S
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=arse 1 30
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f1NANCING(LOW INCOME)
Select Lenir Partners
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Report
Whte Report
SALES/ESCROW L60 OA`S)
Phase 1(i a.Ifremel 15 Ij
Phase I(Val have: I5 5 5 5
vase 2(Lp.InTone) 15 IS
.ease 2;'.A)J mcor•er 15 5 5 5
Pna e 3(Lae rnwne) 15 15
Phase 3(Ma Incare' 15 5 5 5
Models <
Homy Sae 94 0 C 0 0 0 0 0 0 0 0 0 0 0 0 C 15 C 5 5 5 20 5 20 5 5 5 A 0 C.
Cumuau.e Saes 94 C 0 0 0 0 0 0 0 0 0 0 0 0 0 3 '5 15 20 15 30 5C 55 15 80 65 90 9c 94 14
CLOSING/MOVE INNS
Phase I:Law Inecnel 15
Prune I:Ma-r1CGmeI 15
Chase 2:Loe Inccrlel 15 '5
Phase 2(Mal Ir.ccnle) 15
Phase 3(Law,,come) 15 15
Phase 3(Va0 Irlovnel 15 15
Nodes < 4
MantNy Ctrs ngs 9, C C C C cc 0 C 0 0 0 0 0 0 0 0 0 3 0 0 : C C C 3C C 30 4
Curu'ab•e Clos'gs 96 6 C 0 C ) C 0 0 0 0 C 0 0 0 0 0 0 9 J 0 ^ C C C 10 3060 64 68
EXHIBIT C
Consultants and General Contractor
C-1
12281-00003-I477196 7
Exhibit C
Consultants & General Contractor
A. Civil Engineering:
MSA Consulting, Inc.
34200 Bob Hope Drive
Rancho Mirage, CA 92270
(760) 320-9811 phone
(760) 323-7893 fax
Paul Sepulveda, Senior Project Manager
B. Architecture, Building, For-Sale Housing:
KTGY Group, Inc.
17992 Mitchell South
Irvine, CA 92614
(949) 851-2133 phone
(949) 851-5156 fax
Manuel Gonzalez, Principal
C. Architecture, Building, Rental Housing:
Kristi Hanson, Inc.
72-185 Painters Path, Suite A
Palm Desert, CA 92260
(760) 776-4068 phone
(760) 776-4098 fax
D. Structural Engineer:
TBD
E. Title 24:
Haynal & Company
508 W. Mission Ave., Suite 201
Escondido, CA 92025
(760) 743-5408 phone
(760) 480-6246 fax
Mark Gallant, CEPE/CEA, HERS Rater
F. Architecture, Landscape:
RGA Landscape Architects, Inc.
74020 Alessandro, Suite E
Palm Desert, CA 92260
(760) 568-3624 phone
(760) 773-5615 fax
Ronald Gregory, President
G. General Contractor:
Community Dynamics, Inc.
2800 28th Street, Suite 206
Santa Monica, CA 90405
(310) 399-9555 phone
(310) 399-9777 fax
Loren Bloch, President
EXHIBIT D
Payment Procedures
D-1
12281-00003-1477196 7
Exhibit D
Payment Procedures
Developer shall submit Applications For Payment of all Project Costs (including, without
limitation, applications submitted by the General Contractor, Architect, Consultants and
for all other Project fees and costs) on the 10'h and 25th of each month.
Each Application For Payment shall include a Cover Letter For Application For Payment,
Application For Payment, and a Conditional Release Upon Progress/ Final Payment
conforming to the form documents attached hereto. Developer shall append itemized
statements for each cost category, and supporting invoices documenting all amounts
shown in the Application For Payment.
The Developer shall (i) require Conditional Releases Upon Progress/ Final Payment, or
Stop Notice Releases, from all contractors, subcontractors/ vendors who have filed a 20
Day Preliminary Notice with either Owner, Developer, and/ or the General Contractor,
(ii) append any such releases to the supporting invoices referenced above, and (iii) issue
joint checks to any billing parties and those vendors which provided them with either
labor and /or material lien releases at the time of payment.
Owner shall review each Application For Payment and, provided that (i) the amounts
requested conform with the provisions for payment in Section 4 of this Agreement, (ii)
Developer has presented all supporting documentation as required by this paragraph, and
(iii) the amounts being requested for construction reflect the actual percentage of progress
on the job less any provisions for retention as indicated in Developer's agreement with
the General Contractor, then Owner shall, subject to its review and approval which shall
not be unreasonably withheld, make payment to Developer in the amount set forth in the
Application on or before the thirtieth (30`h) calendar day following Owner's receipt of
Developer's Application For Payment.
Exhibit D.1
Cover Letter for Application for Payment
Date:
Palm Desert Redevelopment Agency
73510 Fred Waring Drive
Palm Desert, CA 92260
RE: Tract #30795, City of Palm Desert, County of Riverside
Enclosed is a copy of our Application For Payment dated , in the amount of
$ , including backup documents for the Project for your
review and funding.
There are no known unbonded mechanic's or material men's liens or stop notices relating
to our work and affecting this Project as of the date of this Application For Payment. All
due and payable bills with respect to our work have been paid or are included in the
amount requested in the current application, and except for such bills not paid by
Contractor but included in this Application For Payment, there is no known basis for the
filing of any mechanic's or material men's liens on, or stop notices in connection with the
work.
If you have any questions regarding this request for payment, please feel free to call.
Sincerely,
By:
Its:
Exhibit D.2
Application for Payment
[Under Separate Cover]
Exhibit D.3
Conditional Waiver and Release Upon Progress Payment
Upon receipt by of the Electronic Funds Transfer from Palm Desert
Redevelopment Agency in the sum of$1,000.00, this document shall become effective to
release any mechanic's lien, stop notice, or bond right the undersigned has on the job of
Palm Desert Redevelopment Agency(Owner) located at Tract No. 30795 in the city of
Palm Desert, county of Riverside to the following extent.
This release covers a progress payment for labor, services, equipment or material
furnished to Palm Desert Redevelopment Agency through _only and does not
cover any retentions retained before or after the release date. Rights based upon work
performed or items furnished under a written change order which has been fully executed
by the parties prior to the release date are covered by this release unless specifically
reserved by the claimant in this release. This release of any mechanic's lien, stop notice,
or bond right shall not otherwise affect the contract rights, including rights between
parties to the contract based upon a recission, abandonment, or breach of the contract, or
the right of the undersigned to recover compensation for furnished labor, services,
equipment, or material covered by this release if that furnished labor, services, equipment
or material was not compensated by the progress payment.
Before any recipient of this document relies on it, said party should verify evidence of
payment to the undersigned.
Date:
By:
Title:
Exhibit D.4
Conditional Waiver and Release Upon Final Payment
Upon receipt by the undersigned of a check from Palm Desert Redevelopment Agency in
the sum of$0,000.00 payable to , and when the
(amount) (development entity)
check has been properly endorsed and has been paid by the bank upon which it is drawn,
this document shall become effective to release pro tanto any mechanic's lien, stop notice,
or bond right the undersigned has on the job of Palm Desert Redevelopment Agency
(Owner) located at Tract 30795 in the City of Palm Desert, County of Riverside to the
following extent.
This release covers the final payment to the undersigned for all labor, services, equipment
or material furnished on the job except for disputed claims for additional work in the
amount of$
(amount)
Before any recipient of this document relies on it, said party should verify evidence of
payment to the undersigned.
Date:
(Company)
By:
Title:
Yk
EXHIBIT E
Certificate of Insurance
E-1
12281-00003-1477196 7
EXHIBIT F
Proposed Form of Construction Contract
F-1
12281-00003-1477196 7
k
CONSTRUCTION CONTRACT
BETWEEN DEVELOPER AND CONTRACTOR
By and Between
ComDyn PD LLC, a California limited liability company
and
TABLE OF CONTENTS
Page (s)
ARTICLE 1 CONSTRUCTION; CERTAIN DEFINED TERMS 1
1 . 1 . Construction 1
1 . 1 . 1 . Project ; Property 1
1 . 1 . 2 . Improvements; Drawings and
Specifications 1
1 . 1 . 3 . Materials and Services; Work 2
1 . 1 .4 . Contract Documents 2
1 . 2 . Defined Terms 2
1 .2 . 1 . Agreement 3
1 . 2 . 2 . Application for Payment 3
1 .2 . 3 . Architect 3
1 . 2 .4 . NOT USED 3
1 . 2 . 5 . Certificate of Occupancy 3
1 . 2 . 6 . Change Order 3
1 . 2 . 7 . Changes 3
1 . 2 . 8 . Change Order Form 3
1 . 2 . 9 . Change Order Request 3
1 . 2 . 10 . Change Order Work 3
1 . 2 . 11 . Commencement Date 3
1 .2 . 12 . Contingency 3
1 . 2 . 13 . Contract Documents 3
1 . 2 . 14 . Contract Sum 3
1 . 2 . 15 . Contractor 4
1 . 2 . 16 . Contractor ' s Fee 4
1 . 2 . 17 . Contractor' s Representative 4
1 . 2 . 18 . Contractor' s Services 4
1 . 2 . 19 . Cost of the Work 4
1 . 2 . 20 . Construction Schedule 4
1 . 2 . 21 . Crucial Non-Local Building
Materials 4
1 . 2 . 22 . Day or Days 4
1 . 2 . 23 . Delay Damages 4
1 .2 . 24 Developer 4
1 .2 . 25 Developer' s Representative 4
1 . 2 . 26 . Drawings and Specifications 5
1 . 2 . 27 . Excusable Delay 5
1 . 2 . 28 . Final Application for Payment 5
1 . 2 . 29 . Final Completion 5
1 . 2 . 30 . General Conditions 5
1 .2 . 31 . General Requirements 5
1 . 2 . 32 . NOT USED 5
1 . 2 . 33 . Improvements 5
1 . 2 . 34 . Itemized Statement 5
2
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4 . 6 . Failure to Meet Schedule; Acceleration of
Schedule 11
4 . 7 . Excusable Delays 11
4 . 8 . Extension and Payment for General Requirements
as Sole Remedy for Excusable Delay 13
4 . 9 . Owner & Developer Damages Upon Delay 13
4 . 10 . Contractor Damages Upon Delays Caused
by Developer 14
4 . 11 . Contractor Damages Upon Excusable Delays Other
than Those Caused by Developer 14
4 . 12 . No Bonus 14
ARTICLE 5 SUBCONTRACTS 14
5 . 1 . Subcontractor Identification 14
5 . 2 . Conformance 15
5 . 3 . Retention Provisions in Subcontracts 15
5 . 4 . Licensing 15
5 . 5 . Payment of Retentions to Subcontractors 15
5 . 6 . Guarantees and Indemnities 16
5 . 7 . Insurance 16
ARTICLE 6 CONTRACT SUM; COST OF WORK; GENERAL REQUIREMENTS;
CONTINGENCY; CONTRACTOR' S FEE 16
6 . 1 . Contract Sum 17
6 . 2 . Cost of Work 17
6 . 3 . Contractor' s Fee 18
6 . 4 . Schedule of Values 18
6 . 5 . Costs Not Included in Contract Sum 19
ARTICLE 7 GENERAL CONDITIONS 19
7 . 1 . Contractor ' s Responsibility 19
7 . 2 . Sole Compensation 20
ARTICLE 8 CHANGES IN THE WORK 20
8 . 1 . Developer May Request Changes 20
8 .2 . Change Order Request 20
8 . 3 . Response of Contractor 20
8 .4 . Completed Change Order 21
8 . 5 . Determination of Cost 21
8 . 6 . Refinements of Drawings and Specifications 21
ARTICLE 9 ACCOUNTING RECORDS 21
ARTICLE 10 PAYMENTS DURING PERFORMANCE OF WORK 22
4
10 . 1 . Timing of Application 22
10 . 2 . Submittal of Application 22
10 . 3 . Form of Application 22
10 . 4 . Amount of Application 22
10 . 5 . Items to Accompany Application 23
10 . 6 . Review of Application 24
10 . 7 . Payments 24
10 . 8 . Retention 24
10 . 9 . Conditions to Payment 24
ARTICLE 11 FINAL PAYMENT 25
11 . 1 . Notice of Completion 25
11 . 2 . Final Application 25
11 . 3 . Amount of Final Application 25
11 .4 . Form of Final Application 25
11 . 5 . Items to Accompany Final Application 26
11 .6 . Review of Final Application for Payment 27
11 . 7 . Payment 27
11 . 8 . Conditions to Final Payment 27
11 . 9 . NOT USED 27
ARTICLE 12 USE OF FUNDS 27
12 . 1 . Application to Work 27
12 . 2 . Payment of Bills 27
ARTICLE 13 FAILURE TO COMPLETE WORK 28
13 . 1 . Damages 28
13 .2 . NOT USED 28
ARTICLE 14 PAYMENTS NOT A WAIVER 28
14 . 1 . Not an Acceptance 28
14 .2 . No Approval 28
ARTICLE 15 LIENS 28
ARTICLE 16 WORK IN PROGRESS 29
16 . 1 . Protection and Maintenance 29
16 . 2 . No Interference 29
ARTICLE 17 DEFECTS 29
17 . 1 . Correction of Defects 30
5
ARTICLE 18 REPRESENTATIVES 30
18 . 1 . Developer' s Representative 30
18 . 2 . Contractor' s Representative 30
ARTICLE 19 INSURANCE 30
19 . 1 . Coverage to Be Maintained By Contractor. 31
19 . 2 . Certificates & Cancellation 31
19 . 3 . Continued Coverage 31
19 . 4 . Waiver of Subrogation 32
19 . 5 . Insurance - General 32
19 . 6 Coverage to Be Maintained by Developer . 32
ARTICLE 20 ASSIGNMENT 33
20 . 1 . By Contractor 33
20 .2 . By Developer 33
ARTICLE 21 CAPTIONS 33
ARTICLE 22 ENTIRE AGREEMENT; MODIFICATION OF AGREEMENT 33
ARTICLE 23 INSPECTION 33
23 . 1 . Matters Reviewed by Contractor 33
23 .2 . Access By Developer and Owner . . . . 34
23 . 3 . No Approval 34
23 .4 . Contractor Review 34
ARTICLE 24 AS-BUILT DRAWINGS AND SURVEYS 34
24 . 1 . As-Built Drawings 34
ARTICLE 25 DISPUTE RESOLUTION AND ATTORNEYS ' FEES 34
25 . 1 . Manner of Resolution 34
25 .2 . Procedure 34
25 . 3 . Referee ' s Fees; Attorneys ' Fees 35
25 . 4 . Selection of a Referee 35
25 . 5 . Pre-hearing Meeting 35
25 . 6 . Situs of Hearing 35
25 . 7 . Conduct During Pendency 35
ARTICLE 26 NOTICES 36
ARTICLE 27 DEVELOPER' S TERMINATION RIGHTS 36
6
27 . 1 . Developer ' s Right in the Event of Owner
Default 36
27 . 2 . Termination With Cause 36
ARTICLE 28 MISCELLANEOUS PROVISIONS 37
28 . 1 . Severability 37
28 . 2 . Interpretation 37
28 . 3 . Waivers 37
28 . 4 . Execution 37
28 . 5 . Survival 37
28 . 6 . Governing Law 37
28 . 7 No Discrimination 37
28 . 8 . Contractor ' s Obligations Regarding
Prevailing Wages 38
28 . 9 . Indemnity Regarding Pre-Existing
Hazardous Substances 38
28 . 10 . Change Order Work Meeting 38
28 . 11 . Exhibits 39
CONSTRUCTION CONTRACT BETWEEN DEVELOPER AND CONTRACTOR
This Construction Contract between Developer and
Contractor (this "Agreement" ) is made and entered into as of the
by and between ComDyn PD, LLC, a California
limited liability company ( "Developer" ) and
a California corporation ( "Contractor" ) .
WITNESSET H:
The Palm Desert Redevelopment Agency ( "Owner" ) has
entered into an agreement with the Developer for, among other
things, the development and construction of 94 single family
homes, a 27 unit senior rental apartment community and related
site improvements on the real property (the "Property" ) located
at California and
legally described in Exhibit "A" attached hereto. The Property
is hereafter referred to as the "Property" or the "Project Site" .
In consideration of the mutual covenants and agreements set forth
herein, Contractor and Developer agree as follows :
ARTICLE 1
CONSTRUCTION; CERTAIN DEFINED TERMS
1 . 1 . Construction.
1 . 1 . 1 . Project . This Agreement is made and entered
into with respect to those certain improvements ( "Project" )
which, when completed, will consist of a 27 unit senior apartment
community (i) a 27 unit senior apartment community, (ii) 94 single
family homes to be built as a model complex and three distinct
phases of production, and related offsite construction pursuant
to the scope of Work as described on the Drawings and
Specifications referenced in paragraph 1 . 1 . 2 . The Project will
be located on the Property.
1 . 1 . 2 . Improvements; Drawings and Specifications .
The " Improvements" are those
referred to in
paragraph 1 . 1 . 1 and described on or which are reasonably
inferable from, or constitute logical extensions of, the drawings
and specifications ( "Drawings and Specifications" ) for the
1
Project which are scheduled in Exhibit "B" and which have
previously been approved by the parties as reflected in such
documents and instruments by the initials of representatives of
Contractor and Developer. Contractor has had ample opportunity
to review the Drawings and Specifications as well as field verify
the information contained therein against existing field
conditions, prior to the execution of this Agreement .
(a) Based on Contractor' s review, Contractor
believes that the Drawings and Specifications are sufficiently
complete and detailed so that a contractor of competence and
skilled in estimating, scheduling, purchasing and prosecuting
construction work of quality and type similar to the Project
could complete the Improvements and commit to a detailed time
schedule. Accordingly, no amplification or further delineation
of the Drawings or Specifications will constitute a Change
(except with respect to Change Order Work initiated pursuant to
Article 8 herein) or otherwise entitle Contractor to request any
increase in its Contractor' s Fee . No such amplification or
further determination shall allow Contractor to request any
extension of the Scheduled Substantial Completion Date .
(b) Contractor warrants that except with respect
to Change Order Work initiated pursuant to Article 8 hereof or as
otherwise specifically provided herein, Contractor will not be
entitled to any compensation or reimbursement in excess of the
Cost of the Work plus Contractor' s Fee provided herein.
1 . 1 . 3 . Materials and Services; Work. Contractor
shall provide and furnish all materials, supplies, apparatus,
appliances, equipment , tools, implements, and all other temporary
and permanent facilities (including, without limitation,
expressage) (collectively, "Materials" ) , and all labor, related
costs, supervision, transportation, utilities, storage, and all
other services (collectively, "Services" ) as and when required
for or in connection with the construction of, or for inclusion
or incorporation in, the Project as set forth in Paragraph 1 . 1 . 1
above . Such construction and such furnishing of Materials and
Services is herein referred to as the "Work" . Contractor will be
responsible for all freight charges, delivery charges, patent
fees or royalties, sales taxes and all other taxes, assessments,
fees, and the like payable with respect to the Materials and
Services . Contractor shall supply all rented equipment , small
tools and supplies required by the Work, or shall require the
same to be provided by Subcontractors . Contractor shall not be
entitled to any compensation in excess of the Cost of the Work
plus Contractor' s Fee in consideration of its compliance with the
requirements of this Paragraph 1 . 1 . 3 .
2
1 . 1 .4 . Contract Documents . The "Contract Documents"
consist of this Agreement , the General Conditions attached to
this Agreement , as the same may be supplemented pursuant hereto
or amended from time to time by Change Order (hereinafter
defined) , and the Exhibits to this Agreement which are
incorporated herein by reference .
1 . 2 . Defined Terms .
1 .2 . 1 . Agreement . The term "Agreement" shall mean
this Construction Contract between Developer and Contractor.
1 . 2 . 2 . Application for Payment . The term
"Application for Payment " shall refer to the twice monthly
applications submitted by Contractor pursuant to Paragraph 10 . 1 .
1 . 2 . 3 . Architect . The term "Architect " when used
herein shall refer to or any other
architectural firm which Developer designates from time to time
to perform the functions of Architect hereunder.
1 . 2 . 4 . NOT USED
1 . 2 . 5 . Certificate of Occupancy. The term
"Certificate of Occupancy" with respect to the Project shall
refer to that temporary or final inspection or certificate issued
by the appropriate city or county with jurisdiction over the
Property allowing initial occupancy of the Project .
1 .2 . 6 . Change Order. The term "Change Order" shall
refer to Developer ' s written approval of Contractor' s detailed
response to a Change Order Request pursuant to Paragraph 8 . 4 .
1 . 2 . 7 . Changes . The term "Changes" shall refer to
those changes authorized in writing by Developer, from time to
time, pursuant to Article 8 .
1 . 2 . 8 . Change Order Form. The term "Change Order
Form" shall mean a form for a change order in the form of
Exhibit "H" attached hereto.
1 . 2 . 9 . Change Order Request . The term "Change Order
Request " shall mean a written change order request from Developer
given to Contractor pursuant to Paragraph 8 .2 .
1 . 2 . 10 . Change Order Work. The term "Change Order
Work" is synonymous with the term "Changes, " as defined in
Paragraph 1 . 2 . 7 .
3
1 .2 . 11 . Commencement Date . The term "Commencement
Date" shall have the meaning set forth in Paragraph 4 . 1
hereunder.
1 . 2 . 12 . Contingency. The term "Contingency" shall
have the meaning set forth in Paragraph 6 . 2 . 2 .
1 .2 . 13 . Contract Documents . The term "Contract
Documents" shall have the meaning set forth in Paragraph 1 . 1 . 4 .
1 . 2 . 14 . Contract Sum. The term "Contract Sum" shall
have the meaning set forth in Paragraph 6 . 1 .
1 . 2 . 15 . Contractor. The term "Contractor" shall mean
having an office at
1 . 2 . 16 . Contractor ' s Fee. The term "Contractor' s
Fee" shall have the meaning set forth in Paragraph 6 . 3 .
1 . 2 . 17 . Contractor' s Representative . The term
"Contractor ' s Representative" shall mean
which person shall have full authority to execute any and all
instruments requiring Contractor' s signature and to act on behalf
of Contractor with respect to all matters arising out of this
Agreement .
1 . 2 . 18 . Contractor ' s Services . The term
"Contractor' s Services" shall mean all of Contractor' s
authorities, duties, obligations, and responsibilities under the
Contract Documents .
1 .2 . 19 . Cost of the Work. The term "Cost of the
Work" shall have the meaning set forth in Paragraph 6 . 2 .
1 . 2 . 20 . Construction Schedule . The term
"Construction Schedule" shall mean the approved critical path
method time schedule for planning, scheduling, performing and
reporting for the Work and the performance of Contractor ' s
obligations hereunder which schedule is attached hereto as
Exhibit "F" .
1 .2 . 21 . Crucial Non-Local Building Materials . The
term "Crucial Non-Local Building Materials" shall mean those
materials provided for in the Drawings and Specifications
requiring unusual delivery lead time due to their manufacture at
or procurement from locations distant to the Project Site.
4
1 . 2 . 22 . Day or Days . The term "Day" or "Days" shall
refer to Monday through Friday, excluding nationally recognized
holidays, unless noted otherwise .
1 .2 .23 . Delay Damages . The term "Delay Damages" is
defined in Paragraph 4 . 9 .
1 . 2 . 24 . Developer. The term "Developer" shall mean
ComDyn PD, LLC, a California limited liability company having an
office at 2800 Twenty eighth Street, Ste. 206, Santa Monica, CA
90405 .
1 . 2 .25 . Developer' s Representative . The term
"Developer' s Representative" shall mean Loren Bloch, which person
shall have full authority to execute any and all instruments
requiring Developer' s signature and to act on behalf of Developer
with respect to all matters arising out of this Agreement .
1 . 2 . 26 . Drawings and Specifications. The term
"Drawings and Specifications" shall have the meaning set forth in
Paragraph 1 . 1 . 2 .
1 .2 .27 . Excusable Delay. The term "Excusable Delay"
when used herein shall refer to those occurrences listed in
Paragraph 4 . 7 . 1 .
1 . 2 . 28 . Final Application for Payment . The term
"Final Application for Payment " shall refer to that final fully
certified application for payment submitted by Contractor to
Developer upon completion of the Work.
1 . 2 . 29 . Final Completion. The term "Final
Completion" shall have the meaning set forth in Paragraph 4 .4 .
1 . 2 . 30 . General Conditions . The term "General
Conditions" shall mean the General Conditions attached to this
Agreement .
1 .2 . 31 . General Requirements . The term "General
Requirements" shall have the meaning set forth in Paragraph
6 . 2 . 1 .
1 . 2 . 32 . NOT USED
1 .2 . 33 . Improvements . The term "Improvements" shall
have the meaning set forth in Paragraph 1 . 1 .2 .
1 .2 . 34 . Itemized Statement . The term " Itemized
Statement" shall refer to that itemized statement , certified and
5
delivered to Developer by Contractor in accordance with the
provisions of Paragraph 10 . 5 . 1 .
1 . 2 . 35 . NOT USED
1 . 2 . 36 . Materials . The term "Materials" shall have
the meaning set forth in Paragraph 1 . 1 . 3 .
1 .2 . 37 . Material Suppliers . The term "Material
Suppliers" shall refer to those suppliers of Materials and
equipment from whom Contractor obtains materials and equipment
for the Work.
1 . 2 . 38 . NOT USED
1 . 2 . 39 . Notice of Completion. The term "Notice of
Completion" shall mean that certain notice required after
Substantial Completion of the Work pursuant to California Civil
Code §3093 pursuant to Paragraph 11 . 1 .
1 .2 . 40 . Owner. The term "Owner" shall refer to the
Palm Desert Redevelopment Agency who shall provide the funds for
the Project .
1 .2 .41 . Owner' s Representative. The term "Owner' s
Representative" shall mean , which person
shall have full authority to execute any and all instruments
requiring Owner ' s signature and to act on behalf of Owner with
respect to all matters arising out of this Agreement .
1 . 2 .42 . Project . The term "Project " shall have the
meaning as set forth in Paragraph 1 . 1 . 1 .
1 .2 . 42a. Project Site . The term "Project Site" shall
have the same meaning as the term "Property" .
1 . 2 . 43 . Property. The term "Property" shall mean
that certain land and existing improvements so identified in
Paragraph 1 . 1 . 1 .
1 . 2 .44 . Punch List . The term "Punch List" shall
refer to the list of all defective or incomplete work which
Contractor will initially submit to Developer after the
Substantial Completion of the Work, as such list is supplemented
and modified by Developer.
1 . 2 . 45 . Retention. The term "Retention" shall have
the meaning set forth in Paragraph 10 . 8 .
6
1 . 2 .46 . Schedule of Values . The term "Schedule of
Values" means the cost breakdown of the Cost of the Work
described in Paragraph 6 .2 of the General Conditions and attached
hereto as Exhibit "G" .
1 . 2 . 47 . Scheduled Substantial Completion Date . The
term "Scheduled Substantial Completion Date" shall mean the date
which is the deadline established for Substantial Completion of
the Work pursuant to the Construction Schedule as the same may be
adjusted only in accordance with Paragraph 4 . 7 and Paragraph 8 . 4 .
1 . 2 .48 . Services . The term "Services" shall have the
meaning as defined in Paragraph 1 . 1 . 3 .
1 . 2 .49 . Subcontractors . The term "Subcontractors"
shall have the meaning set forth in Section 5 . 1 of the General
Conditions .
1 . 2 . 50 . Substantial Completion. The term
"Substantial Completion" with respect to the Work shall mean the
date on which Substantial Completion of all of the Work has
occurred.
1 . 2 . 51 . Work. The term "Work" shall have the meaning
set forth in Paragraph 1 . 1 . 3 .
1 .2 . 52 . NOT USED
ARTICLE 2
ARCHITECT
2 . 1 . Architect . Architect will have such authority to act
on behalf of Developer and / or Owner as may be granted in
writing from time to time by Developer and /or Owner. Developer
shall notify Contractor in writing of the granting or withdrawal
of such authority. Contractor shall be entitled to rely on the
authority of Architect to the extent so notified by Developer
until such time as Contractor has been notified in writing that
such authority has been revoked or modified.
2 . 2 . Contractor - Architect Conflicts . Contractor agrees to
notify Developer promptly in writing if any questions arise as to
the authority of Architect . If any difficulty arises with
respect to communication between Contractor and Architect,
Contractor shall notify Developer promptly upon the occurrence
thereof .
ARTICLE 3
7
CONTRACTOR ' S STATUS; CERTAIN DUTIES
3 . 1 . Independent Contractor. In performing its obligations
hereunder, Contractor shall be deemed an independent contractor
and not an agent or employee of Developer. Subject to the
provisions of the Contract Documents, Contractor shall have
exclusive authority to manage, direct, and control the Work.
3 . 2 . Work to Comply. Contractor shall cause the Work to be
performed in accordance with (i) the Drawings and Specifications
and all things indicated thereon, reasonably inferable therefrom,
or which constitute logical extensions thereof, (ii) all other
Contract Documents, and (iii) requirements of applicable laws,
statutes, ordinances, rules, regulations, and requirements of
governmental bodies and agencies with jurisdiction over the
performance of the Work, including, without limitation, those
dealing with building, mechanical , electrical , health, safety and
environmental matters .
3 . 3 . Charts and Projections . Prior to execution of this
Agreement , Contractor prepared and delivered to Developer each of
the following items, which items have been approved by Developer.
3 . 3 . 1 . NOT USED
3 . 3 . 2 . A list of all Subcontractors and Material
Suppliers selected to date in accordance with the requirements of
Paragraph 5 . 1 (said list is attached hereto as Exhibit "E" ) .
3 . 3 . 3 . The CPM Schedule (said schedule is attached
hereto as Exhibit "F" ) .
3 . 3 . 4 . The Schedule of Values (said schedule is
attached hereto as Exhibit "G" ) .
During the performance of the Work, Contractor shall
update such items not less frequently than monthly and shall
deliver copies thereof to Developer.
3 .4 . Job Meetings . Contractor shall schedule and conduct
weekly job meetings to discuss with Developer the progress of the
Work, and to discuss any actual or anticipated job problems,
revisions or delays . Unless otherwise approved by Developer,
Contractor' s Representative and Developer ' s Representative shall
each attend all such meetings .
3 . 5 . Progress Reports . Contractor' s onsite superintendent
shall maintain a daily log of all work performed onsite, and
Contractor shall submit copies of the prior week' s logs to
8
Developer at the weekly job meetings . The Construction
Schedule, which shall be submitted monthly, shall be in the form
of Exhibit "F" attached hereto.
3 . 6 . NOT USED
3 . 7 . NOT USED
3 . 8 . Warranty Work. Contractor' s onsite superintendent
or other authorized employee will continue to work full time for
a period of three months following Substantial Completion of the
Work in the capacity of Contractor' s authorized customer service
representative to the Project . Developer' s sales agent will
take homebuyers on an orientation tour of their residential
unit , and Contractor' s customer service representative will be
present at each such tour. At the time of such orientation, the
Developer' s sales representative will present to the buyer and
the buyer will execute a form of "Limited Warranty" and
"Declaration of Acceptance" which provides for the performance of
certain work for a limited period after the Substantial
Completion of the Work (said warranty is attached hereto as
Exhibit "H" ) . Warranty work for which the Contractor shall be
responsible will be limited soley to the work performed by
Contractor pursuant to the scope of Work as described on the
Drawings and Specifications . Contractor shall perform all
warranty work requested by the homebuyers and approved by the
Developer for which Contractor is responsible provided that such
requests are consistent with the terms of the Limited Warranty.
3 . 8 . 1 . Requests for Service . Developer shall
provide Contractor ' s representative with copies of all
homebuyers' or homeDeveloper association generated requests for
service for which Contractor is responsible per Paragraph 3 . 8
above . Upon receipt of said requests for service, Contractor
shall schedule its personnel , vendors and subcontractors and
perform all required work within not more than fifteen (15)Days
after the request has been made provided, however, that in the
event of an emergency, Contractor shall schedule and perform such
work immediately. If certain work cannot be performed within
fifteen (15) Days because of the unavailability of certain
Crucial Non-Local Building Materials or equipment or other causes
beyond the Contractor ' s reasonable control , then Contractor shall
have reasonable additional time to complete the same provided
that Contractor shall notify Developer ' s Representative in
writing of the expected completion date and shall thereafter
diligently prosecute the same to completion.
3 . 8 . 2 . Contractor' s Availability For Full Extent of
the Warranty Period. Contractor shall employ and assign, or
otherwise subcontract with third party, personnel capable of
9
scheduling and overseeing all warranty work under the conditions
of performance identified in Paragraph 3 . 8 . 1 above for the entire
warranty period. After the first three (3) months following
Substantial Completion of the Work, such personnel may schedule
the necessary warranty work from a location of Contractor ' s
choosing, and will be required to be on the Project Site on an
as-needed basis only.
ARTICLE 4
TIMING OF WORK
4 . 1 . Commencement . Contractor shall commence the Work
within ten (10) Days following Developer' s delivery to Contractor
of a notice to proceed with the Work. Such notice shall not be
effective unless prior to giving such notice a
permit has been issued for the Work and (b) Developer has
certified to Contractor that all Owner' s conditions for the
commencement of the Work have been satisfied or waived. The
"Commencement Date" shall be that Day on which the Contractor
4 . 2 . Construction Schedule. Contractor and Developer have
reviewed and mutually approved the Construction Schedule attached
hereto as Exhibit "F" .
4 . 3 . Scheduled Substantial Completion Date . Contractor
shall complete each item of the Work required to be completed as
set forth in the CPM Schedule, subject only to delays for which
an extension of time is granted pursuant to Paragraph 4 . 7 or
Paragraph 8 .4 . Contractor shall achieve Substantial Completion
of the Work on or before the Scheduled Substantial Completion
Date, subject only to delays for which an extension of time is
granted pursuant to Paragraph 4 . 7 or Paragraph 8 . 4 . As used
herein the term "Substantial Completion" of the Work shall mean
the date when the last of the following has occurred:
4 . 3 . 1 . A temporary or permanent Certificate of
Occupancy has been issued for the Project ; provided, however, the
issuance of a temporary or permanent Certificate of Occupancy
shall be deemed to have been issued if (i) the same has not been
issued because of Developer ' s failure to perform any acts which
are not Contractor' s responsibility under this Agreement (i .e . ,
payment of fees) or (ii) the City of Palm Desert ' s Department of
10
Building and Safety confirms that (a) signature of a final
inspection card constitutes permission to occupy and (b) the
City, as a matter of policy, does not issue Certificates of
Occupancy.
4 . 3 .2 . All jurisdictional inspections have been
signed-off (except for items of an immaterial nature which are
not required for the issuance of a temporary Certificate of
Occupancy) including but not limited to compliance with all
conditions of building related permits, sewer connection, utility
connections, street improvements and fire inspections;
4 . 3 . 3 . Developer' s Representative and Owner' s
Representative have accepted the Work as having been performed
in accordance with the Contract Documents with the exception of
Punch List items; and
4 . 3 .4 . There are no lawsuits filed for unbonded
recorded mechanic ' s liens against the Project Site or the
Improvements except for those arising out of Developer ' s failure
to make payments in accordance with the applicable provisions of
this Agreement .
4 . 4 . Final Completion; Scheduled Punch List Completion Date .
"Final Completion" of the Work shall be deemed to have occurred
when the Work has been Substantially Completed and when (i)
Contractor has cleaned up the Property, in strict compliance with
the Contract Documents, and (ii) Contractor has cured, to the
reasonable satisfaction of Developer, all defective or incomplete
Work described in each Punch List within twenty-two (22) Days
after the Substantial Completion of the Work (or after delivery
of the Punch List , if later) except that if such Punch List items
are not reasonably susceptible of being completed within said
twenty-two (22) Days, Contractor shall have reasonable additional
time to complete the same so long as Contractor commences
construction within such twenty-two (22) Day period, notifies
Developer in writing of the expected completion date and
thereafter diligently prosecutes the same to completion.
Correction of any Punch List item shall not relieve Contractor of
its obligation to correct any defective Work of which it is
notified after said date in accordance with the applicable
provisions of this Agreement . On or before the date set forth
herein for the completion of the Punch List , Contractor shall
certify that the Work has been Substantially Completed in
accordance with applicable laws, rules and regulations relating
to the performance of the Work.
4 . 5 . Time. The Work shall be Substantially Completed on or
before the Scheduled Substantial Completion Date and shall be
achieved within the applicable time set forth in the approved CPM
11
Schedule . Such dates shall be subject to extension only as
expressly provided in Paragraphs 4 . 7 and 8 .4 hereof . No
extension of the Scheduled Substantial Completion Date as a
result of an Excusable Delay shall occur unless Contractor timely
complies with the requirements of Paragraph 4 . 7 and no extension
of the Scheduled Substantial Completion Date shall occur as a
result of any Change unless Developer has approved a Change Order
in writing pursuant to Paragraph 8 .4 and in such case, the
Scheduled Substantial Completion Date shall only be extended for
the amount of time set forth in Paragraphs 4 . 7 or 8 .4 as
applicable.
4 . 6 . Failure to Meet Schedule; Acceleration of Schedule .
If , at any time during the performance of the Work, Developer
reasonably believes that Contractor will not be able to achieve
Substantial Completion of the Work by the Scheduled Substantial
Completion Date, then Developer may require Contractor to take
necessary steps to achieve the Scheduled Substantial Completion
Date. In such event, Contractor shall prepare for Developer' s
approval (which approval shall not be unreasonably withheld) a
scheduling plan which shall enable Contractor to achieve such
objective. However, the foregoing shall not relieve Contractor
of its liability to pay liquidated damages for failure to meet
the Substantial Completion Date as set forth in Paragraph 4 . 9
below. In such case, the additional cost associated with the
steps to be taken by Contractor shall be included within the Cost
of the Work and the Contract Sum shall not increase .
4 . 7 . Excusable Delays . The Scheduled Substantial Completion
Date shall be subject to adjustment only as provided in this
Paragraph 4 . 7 and pursuant to a Change Order approved in writing
by Developer pursuant to Paragraph 8 . 4 .
4 . 7 . 1 . Excusable Delays Defined. The term
"Excusable Delay" when used herein shall refer to delays caused
by or resulting from Change Orders, governmental delays
(including, without limitation, inspection delays) , adverse
weather, Acts of God, building moratoria, fire, casualty, acts,
neglect, or omissions (including, without limitation, failure to
make or delays in making required payments) of Developer,
Developer' s Agent , Architect , or any employee, agent or
representative of any of them, or of any separate contractor or
consultant of Developer, or any of their employees, agents or
representatives occurring after the date hereof and only if and
to the extent that such delay, either by itself or in conjunction
with other events affects Contractor' s critical path for the
achievement of the Scheduled Substantial Completion Date . In no
event shall the Scheduled Substantial Completion Date be extended
for any reason not permitted by this Paragraph 4 . 7 . 1 or pursuant
to Paragraph 8 . 4 . Without limiting the generality of the
12
foregoing, Contractor acknowledges that as provided in Paragraph
1 . 1 . 2 , there will be no extensions based upon amplification or
further delineation of the Drawings and Specifications or by
reason of any claim of any deficiency therein so long as the
necessary amplifications, further delineations or corrections are
reasonably inferable or are a logical extension of the Drawings
and Specifications .
4 . 7 . 2 . Procedure for Extension. If Contractor
believes that any Excusable Delay has occurred, then the
Scheduled Substantial Completion Date that is affected by such
Excusable Delay shall be extended only for a period equal to the
delay caused by such occurrence if and only if (i) within three
(3) Days after the commencement of any such Excusable Delay,
Contractor delivers to Developer verbal notice of such Excusable
Delay stating the nature thereof, (ii) within five (5) Days after
the commencement of any such Excusable Delay, Contractor delivers
to Developer a written notice of such Excusable Delay stating
the nature thereof, and (iii) within ten (10) Days following the
end of any such Excusable Delay, Contractor provides a written
request for extension of the Scheduled Substantial Completion
Date, by reason of such delay and such request is approved in
writing by Developer. The written request given to Developer
pursuant to clause (ii) of the preceding sentence shall identify
the Scheduled Substantial Completion Date which has been affected
by the Excusable Delay and shall contain a specific proposal for
the amount of time that Contractor requests such date be extended
together with an explanation as to how such proposed extension
was determined.
4 . 7 . 3 . Failure to Give Notice. If Contractor fails
to deliver to Developer either or both of the above-described
written notices within the required time periods (time being of
the essence) , then there will be no extension of the Scheduled
Substantial Completion Date arising from such claim of Excusable
Delay. Contractor acknowledges its awareness that compliance
with the CPM Schedule is vital and that should the Work not be
completed in a timely manner, Developer may incur liabilities .
Accordingly, it is absolutely critical to Developer that
Contractor notify Developer timely of any cause that may impact
on the Scheduled Substantial Completion Date. As a consequence,
Contractor ' s failure to notify Developer timely within the
periods provided herein shall constitute Contractor' s irrevocable
waiver of its right to extend the Scheduled Substantial
Completion Date as a result of such cause .
4 . 7 . 4 . Continuing Delay. In the case of a
continuing delay caused by a single event or circumstance,
Contractor shall be required to deliver only one written notice
to Developer of such delay.
13
4 . 7 . 5 . Other Rights of Developer. No extension of
the Scheduled Substantial Completion Date (or right on the part
of Contractor to request such extension) pursuant to this
Paragraph 4 . 7 shall prejudice any right Developer may have under
this Agreement, or otherwise, to terminate this Agreement or to
seek damages or other relief if otherwise available hereunder.
4 . 8 . Extension and Payment for General Requirements as Sole
Remedy for Excusable Delay. An extension of the Scheduled
Substantial Completion Date and payment for General Requirements
if and as required pursuant to Paragraphs 4 . 10 and 4 . 11 below
shall be Contractor ' s sole remedy with respect to the occurrence
of any Excusable Delay.
4 . 9 . Owner & Developer Damages Upon Delay. Contractor
acknowledges that its completion of the Work (or any portion
thereof) after the Scheduled Substantial Completion Date for the
Work may cause substantial damages (the "Delay Damages" ) to Owner
& Developer consisting of possible damages due to the following,
among other things :
4 . 9 . 1 . Loss of use of property, including, without
limitation, sales proceeds, rents and other revenues;
4 . 9 . 2 . Additional interest expense due to failure of
the construction budget to cover interest for periods of time
after the Scheduled Substantial Completion Date; and
4 . 9 . 3 . Loss of Developer' s commitments for permanent
loan financing.
The amount by which Developer & Owner have been damaged, although
substantial , would be impractical or extremely difficult to fix.
Accordingly, Contractor and Developer hereby agree that in the
event that any Substantial Completion Date for the Work has not
occurred by the Scheduled Substantial Completion Date, then for
the first thirty (30) Days after the Scheduled Substantial
Completion Date, Contractor shall not be required to make any
payments to Developer. However, if any Substantial Completion
Date for the Work occurs on or between the thirty first (31st)
Day and the ninetieth (90th) Day after the Scheduled Substantial
Completion Date, Contractor shall , as Developer ' s sole exclusive
remedy for such delay, pay to Developer the sum of
Dollars ($ ) per Day for each Day beginning on the thirty
first (31st) day after the Scheduled Substantial Completion Date
until the Substantial Completion of the Work. If Substantial
Completion Date for any Work occurs on or after the ninety first
(915') Day after the Scheduled Substantial Completion Date, then
from and after the ninety first Day after the Scheduled
14
Substantial Completion Date, Contractor shall pay to Developer
the sum of Dollars ($ ) per Day
for each day from and after the ninety first (91st) Day after the
Scheduled Substantial Completion Date until Substantial
Completion of the Work. Without limiting any of Developer' s
other rights or remedies, Developer may subtract all of said
amounts from the final Retention payments as they accrue and in
the event such damages exceed the final Retention payments,
Contractor shall pay Developer, upon Developer' s demand, the
amount by which the above amounts exceed the final Retention
payment .
4 . 10 . Contractor Damages Upon Delays Caused by Owner or
Developer. If any Excusable Delay occurs as a result of the act
of Owner or Developer, the amount by which Contractor has been
damaged, although substantial , would be impracticable or
extremely difficult to fix. Accordingly, provided that
Contractor timely furnishes the notices and Developer approves
Contractor ' s written request for extension pursuant to the
requirements of Paragraph 4 . 7 . 2 , then for each Day of the delay
occurring Developer shall pay to Contractor the sum of
Dollars ($ ) per day.
All amounts payable by Developer to Contractor hereunder shall be
due and payable upon Final Completion of the Work.
4 . 11 . Contractor Damages Upon Excusable Delays Other
than Those Caused by Owner or_Developer. If any Excusable Delay
occurs for reasons other than the act of Owner or Developer, the
amounts by which Owner, Developer and Contractor have been
damaged, although substantial , would be impractical or extremely
difficult to fix. Accordingly, provided that Contractor timely
furnishes the notices and Developer approves Contractor' s written
request for extension per the requirements of Paragraph 4 . 7 . 2 ,
then Developer shall not be required to make any payments to
Contractor for the first ten (10) Days of any such Excusable
Delay. However, from and after the tenth (10th) continuous Day
of such an Excusable Delay, the Developer shall pay to Contractor
the sum of Dollars ($ ) per Day for
each day of delay. All amounts payable by Developer to
Contractor hereunder shall be due and payable upon Final
Completion of the Work.
4 . 12 . No Bonus . There will be no additional payment,
bonus or other fee to Contractor for early Substantial
Completion.
ARTICLE 5
SUBCONTRACTS
15
5 . 1 . Subcontractor Identification. ; Contractor shall
provide Developer with a list of all Subcontractors and
Material Suppliers selected, and update such list
periodically as required. This list shall contain,
among other information, the name, address, and
telephone number of the Subcontractor or Material
Supplier, the authorized representative of each, a
description of the work, materials or equipment to be
provided and the exact dollar amount of such work,
materials and equipment . In addition, Contractor shall
provide Developer with a copy of each subcontract
entered into by Contractor.
5 .2 . Conformance . All subcontracts shall conform to the
requirements of the Contract Documents and Contractor shall
furnish each Subcontractor with a copy of the same .
5 . 3 . Retention Provisions in Subcontracts . With the
exception of the subcontracts for the purchase and delivery of
kitchen appliances, lumber, light fixtures, and finish hardware
which shall not require a Retention, each subcontract shall
provide for a retention of not less than ten percent (10%) of the
subcontract price .
5 .4 . Licensing . Contractor shall require that each
Subcontractor have and maintain all licenses required by law or
patent to perform the work contemplated by such subcontract and
shall use due diligence to enforce such requirement .
5 . 5 . Payment of Retentions to Subcontractors . Contractor
shall pay to its Subcontractors all retention amounts from such
Subcontractors when, and only when, all of the following shall
have occurred: (i) Contractor shall have achieved Final
Completion of all Improvements for any given Phase on the Project
Site, (ii) that portion of the Work covered by the
Subcontractor' s subcontract for that Phase shall have been
completed in accordance with such subcontract without defect and
to the written satisfaction of Owner and Developer, (iii) such
Subcontractor shall have delivered waivers of lien and stop
notice rights conditioned only upon the receipt of the amount so
retained, and (iv) thirty (30) days shall have transpired since
Owner received evidence that a valid Notice of Completion for all
lots in that Phase of the Project has been recorded within seven
(7) Days of Substantial Completion of that Phase of the Project .
Notwithstanding the foregoing in consideration of the fact that
certain Subcontractors will complete their work at an early stage
in the construction of the Improvements, Contractor shall pay
16
early Retention to the following Subcontractors who perform the
following tasks (but only with respect to those tasks listed and
not others) : concrete foundations, termite spray, rough
carpentry, insulation and any direct product purchases including
electrical fixtures, windows and appliances . Such early
Retention shall be an amount equal to ten percent (10a) of the
cost of each task as reflected in the Schedule of Values
inclusive of adjustments (if any) necessary to reflect change
orders processed and authorized pursuant to the terms of Article
8 hereof . Contractor shall pay such Retentions only when all of
the following have occurred: (1) the matters described in
subparagraphs (ii) and (iii) above have occurred, (2) there shall
not be recorded any claim or lien for labor done or materials or
services furnished in connection with the construction of the
Improvements, and (3) thirty (30) Days shall have elapsed since
the Subcontractor to whom retention payment is made under this
paragraph completed its subcontract work. If Developer, Owner or
Contractor disputes the satisfactory completion of the Work
covered by any subcontract , Contractor shall not pay any amount
retained from the Subcontractor without Developer' s prior written
approval .
5 . 6 . Guarantees and Indemnities . Contractor shall demand
from all Subcontractors, Material Suppliers, vendors and other
persons from whom it procures machinery, equipment , Materials, or
services written guarantees or indemnities with respect to the
same . The scope and form of such guarantees and indemnities
shall be consistent with the Specifications and otherwise subject
to Developer ' s approval . Such guarantees and indemnities shall be
limited to the rehabilitation pursuant to the scope of Work as
described on the Drawings and Specifications and not to existing
improvements which Contractor did not construct and on which
rehabilitation was not performed. Each such guarantee and
indemnity shall specifically provide that it is made for the
benefit of Developer and Owner and may be enforced by either of
them. Contractor agrees to cooperate with Developer and Owner in
enforcing such guarantees and indemnities and shall promptly take
all steps and action reasonably requested by Developer and Owner
with respect thereto. Such guarantees shall not be in lieu of
any guaranty or warranty provided by Contractor with respect to
such material or equipment following expiration of the period for
correction of defects set forth in Article 17 of this Agreement .
Nothing contained herein will be deemed to relieve Contractor of
its responsibility to correct any defective Work as set forth in
Article 17 below and in Paragraph 4 . 5 . 1 of the General
Conditions .
5 . 7 . Insurance . Contractor shall either (i) require each
Subcontractor to procure and maintain at all times during their
performance of any of the Work all of the insurance coverages
17
required by Paragraph 19 . 1 consistent with the requirements of
Paragraph 19 . 2 provided, however, that Contractor shall determine
at its discretion each Subcontractor' s limits of liability so
long as said limits total at least $1 million per occurrence and
in the aggregate . Subcontractors shall deliver to Contractor
and Developer certificates of such coverage consistent with the
requirements of Paragraph 19 . 2 prior to their furnishing any
labor or Materials in connection with the Work, or (ii) include
each Subcontractor as a named insured under Contractor' s wrap
policy of insurance .
ARTICLE 6
CONTRACT SUM; COST OF WORK;
GENERAL REQUIREMENTS; CONTINGENCY;CONTRACTOR ' S FEE
6 . 1 . Contract Sum. In consideration of the full , timely and
complete performance of the Work and all other obligations of
Contractor hereunder, Developer shall pay to Contractor a sum of
money not to exceed to
(the "Contract Sum" ) . The Contract Sum is comprised of the "Cost
of the Work, " as defined in Paragraph 6 .2 below and the
"Contractor ' s Fee" as defined in Paragraph 6 . 3 below.
6 . 2 . Cost of Work. The "Cost of the Work" shall be
, and shall include the
costs of all Materials and Services necessary to properly perform
and complete all the Work as defined in Paragraph 1 . 1 . 3 above .
With the exception of General Requirements and Contingency,
Contractor shall bill for all aspects of the Cost of the Work on
an as completed basis, it being understood that payments shall be
made in accordance with the provisions of Articles 10 and 11
hereunder.
6 . 2 . 1 . General Requirements . Contractor has
allocated , for General
Requirements, which sum has been included in the Cost of the
work. "General Requirements" shall consist of (i) a pro rata
portion of Contractor' s premium for comprehensive liability
insurance meeting the requirements of Article 19 of this
Agreement as shown in the Schedule of Values, (ii) all of
Contractor ' s onsite and offsite project management payroll ,
payroll burden and general & administrative expenses, (iii)
miscellaneous temporary facilities, utilities and services
necessary to properly complete, but which are not incorporated
in, the Improvements, and (iv) a warranty service reserve equal
to 10 of the Cost of the Work, exclusive of general requirements
and contingency, which shall remain available for warranty
service expenses until the warranty period has expired. Itemized
18
billings for General Requirements shall be prorated monthly in
equal installments of
. Said monthly payments
shall commence on the first calendar month after the Commencement
Date.
6 . 2 . 2 . Contingency. In the event Contractor' s
actual subcontract and or General Requirements costs for any
given portion of the Improvements are less than the projected
amount set forth in the appropriate line item of the Schedule of
Values, Contractor shall adjust the appropriate line item in the
Schedule of Values to reflect the actual cost, and transfer the
resulting difference to the Contingency line item. The
"Contingency" shall be
as shown in the contingency line item of the Schedule of Values,
increased in accordance with the foregoing, and shall serve as an
allowance for Contractor ' s use on an as needed basis to cover the
costs of Contractor' s cost overruns, if any, in the course of
bidding and/or construction of the Improvements from the
following items (but for no other purpose) : (i) If an original
Subcontract or General Requirement line item amount is greater
than Contractor' s original line itemized estimate . (ii) If a
Subcontractor ' s subcontract is terminated and the replacement
Subcontractor ' s subcontract amount is greater than that of the
terminated Subcontractor' s subcontract . (iii) If an item of Work
was not included in the Contractor' s estimate but is properly
considered a part of the Work. Contractor shall bill for and
document contingency expenditures on an as completed basis, it
being understood that payment therefor shall be made with the
provisions of Articles 10 and 11 . All unused funds remaining in
Contingency shall be credited to the Developer at the time of
Final Payment .
6 . 3 . Contractor' s Fee . The "Contractor' s Fee" shall be
, The Contractor ' s Fee shall be paid
in monthly installments over the course of
the Work which correspond to the percentage of the Work which has
been completed.
6 . 4 . Schedule of Values . The Contract Sum has been itemized
in the Schedule of Values attached hereto as Exhibit "G" in
accordance with the provisions of Paragraph 6 . 2 of the General
Conditions . The Schedule of Values has been approved by
Developer and Owner. The Schedule of Values may be adjusted from
time to time in accordance with the provisions of Paragraph 6 . 2 . 2
above.
6 . 5 . Costs Not Included in Contract Sum. The following
costs are not included in the Contract Sum and, subject to the
following, shall be reimbursed to Contractor by Developer
19
separate and apart from and in addition to payment of the
Contract Sum:
6 . 5 . 1 . Building Permits & Fees . Contractor and its
Subcontractors shall pay for, obtain and furnish building permits
and fees as required to perform the Work.
6 . 5 .2 Cost Increases for Specified Materials . The
Cost of the Work for the Project has been calculated based on
current prices for component building materials . However, the
market for (i) concrete, (ii) lumber, trusses and plywood, and
(iii) copper and plastic piping is considered to be particularly
volatile, and sudden price increases could occur. Contractor
agrees to use its best efforts to obtain the lowest possible
prices from available building material suppliers, but should
there be an increase in the prices of these specified materials
purchased after execution of this Agreement for use in the
Project , Developer agrees to reimburse Contractor for the direct
cost only of any such increase in excess of 5% of the originally
quoted cost for any of these materials pursuant to the following
provisions .
The Contractor has provided certified line itemized material cost
subcontract amounts for the construction of the Senior
Apartments, Model Complex and Phase 1 of the Single Family
Homes, as well as line itemized material cost estimates for
Phases 2 and 3 of the Single Family Homes, from its concrete,
framing and plumbing subcontractors, which are attached in
Exhibit "J" . If at the time Contractor locks in its pricing for
Phases 2 and 3 , any of these three subcontractors' proposed
material cost pricing for Phases 2 and 3 of the Single Family
Homes exceeds the originally quoted estimates for those phases by
more than 5%, the Contractor shall instruct that subcontractor
to obtain not less than two (2) additional independent certified
quotations from material suppliers reasonably acceptable to
Developer for the same materials using the same line itemized
quantity breakdown as provided in Exhibit "J" . To the extent the
lowest of the original supplier' s quotes and the two additional
quotes still exceeds the original estimate for that Phase by more
than 5%, then Developer and Contractor shall process a Change
Order for the difference in accordance with the provisions of
Article 8 of this Agreement provided, however, that Contractor
shall not add any charges for profit or general conditions to
such a Change Order.
6 . 5 . 3 . Testing and Inspections . Developer will
select all required consulting surveyors, soils consultants,
deputy inspectors and laboratories and Contractor shall , in
consultation with Developer, schedule all field and laboratory
20
inspections and testing. Developer shall pay for all standard
observation, testing and inspecting required provided, however,
that when initial tests indicate non-compliance with the Contract
Documents, costs of all subsequent retesting occasioned by the
non-compliance, will be paid by Contractor and included as part
of the Contract Sum.
6 . 5 .4 . Damage And/Or Loss From Theft or Vandalism.
Developer has set aside to
reimburse Contractor for possible breakage or loss resulting from
theft or vandalism at the Project Site during performance of the
Work. Except as provided in Paragraph 10 . 10, in the event of any
theft or vandalism which is not covered by the insurance required
to be maintained by Developer pursuant to this Agreement,
Developer shall release to Contractor an amount not to exceed the
actual loss or cost incurred by Contractor resulting from any
such theft or vandalism.
ARTICLE 7
GENERAL CONDITIONS
7 . 1 . Contractor ' s Responsibility. Contractor will provide
and be responsible for the performance all General Conditions
under the Contract Documents, which performance shall constitute
a part of the Work.
7 . 2 . Sole Compensation. Subject only to the provisions of
Article 8 , Contractor acknowledges that its compensation for
performance of General Conditions is included in the Cost of the
Work and thus, Contractor shall be entitled to no additional
compensation or reimbursement on account of General Conditions or
to increase the Contract Sum, whether or not such work is of the
same nature as the components which were set forth on
Contractor' s detailed estimate of general condition costs
heretofore reviewed by Developer or are customarily considered
general conditions work in the industry. The term "General
Conditions" shall include, without limitation, any Work which is
not directly incorporated into the Improvements .
ARTICLE 8
CHANGES IN THE WORK
8 . 1 . Developer May Request Changes . From time to time,
without invalidating this Agreement , Developer may authorize
changes in the Work ( "Changes" or "Change Order Work" ) , require
additional work or direct the omission of work previously ordered
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by giving Contractor a written request setting forth in
reasonable detail the nature of the requested change in
accordance with the requirements of this Article 8 . It is
expressly understood and agreed that any Work described on the
Drawings and Specifications that constitutes Work for which the
Contingency is to be applied shall not be Change Order Work. In
addition, Developer and Contractor understand and agree that the
fact that certain Work is not specifically described on the
Drawings and Specifications shall not automatically establish
that said Work is Change Order Work. Rather, the parties agree
that with respect to any such Work, the parties will meet in
accordance with Paragraph 29 . 10 .
8 . 2 . Change Order Request . If Developer wishes to consider
changes in the Work, Developer shall give Contractor a written
change order request ( "Change Order Request" ) . The delivery of
any such Change Order Request will not constitute Developer ' s
authorization to proceed with the requested Change .
Authorization to proceed with a change may only be given in
writing as provided in Paragraph 8 . 4 .
8 . 3 . Response of Contractor. Within five (5) Days of
Contractor' s receipt of a Change Order Request, Contractor shall
furnish to Developer a proposed Change Order in the form of the
Change Order Form attached hereto as Exhibit " I " and accompanied
by a written statement which shall set forth in detail the
proposed changes, if any, in the Contract Sum attributable to
such Change Order Request . Such statement shall also set forth
any proposed adjustment to the Scheduled Substantial Completion
Date resulting from such Change Order Request, and any proposed
adjustments of time and costs related to unchanged Work resulting
from such Change Order Request . Such statement shall also include
a breakdown by trades and work classifications of the materials
and labor involved, the number of units of materials and labor
involved, the cost per unit of such materials and labor, the
amount of profit and overhead charged by each Subcontractor, and
any other information that Developer may deem necessary to
evidence the effect of a Change Order Request .
8 .4 . Completed Change Order. Developer shall approve or
disapprove the Contractor ' s proposed Change Order as set forth in
the Change Order Form and the accompanying statement within five
(5) days after receipt thereof . Developer shall signify its
approval by executing the appropriate signature block of the
Change Order Form. In such event the Contract Sum, and the
Scheduled Substantial Completion Date shall be adjusted only as
set forth in the signed Change Order Form. Developer ' s failure to
timely execute the Change Order Form shall constitute a
disapproval and such Change Order will not be implemented.
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8 . 5 . Determination of Cost . The cost of any Change Order
shall be determined as follows :
8 . 5 . 1 . Limit on Increase in Cost of the Work. The
Cost of the Work with respect to any Change shall not increase by
more than the amount specified in the Change Order approved in
writing by Developer pertaining thereto. The total cost
attributable to an adjustment, if any, in the Cost of Work, shall
be comprised of the following components : (i) direct labor and
material costs and (ii) profit and general conditions costs, if
any, to Subcontractors . With respect to such cost components of
Change Order Work, the amount of the profit and general
conditions costs which may be charged for any Change Order Work
performed by a Subcontractor shall not exceed ten percent (10%)
of the direct cost of the labor and materials comprising such
Work.
8 . 5 .2 . NOT USED
8 . 6 . Refinements of Drawings and Specifications . Contractor
understands and agrees that the Drawings and Specifications will
be refined and detailed from time to time . As provided in
Paragraph 1 . 1 .2 , there shall be no adjustment in the Contract
Sum, or the Scheduled Substantial Completion Date as a result of
any such refinement or detailing which is reasonably inferable
from or a logical extension of the Drawings and Specifications .
Presentation of such a refinement and detailing shall not
constitute a Change Order Request .
ARTICLE 9
ACCOUNTING RECORDS
Contractor shall keep such full and detailed accounts as may
be necessary for proper financial management under this Agreement
ARTICLE 10
PAYMENTS DURING PERFORMANCE OF WORK
10 . 1 . Timing of Application. Contractor shall submit
twice monthly its Applications for Payment for its services
(i . e . , General Conditions and self-performed Work) , for Work
performed by Subcontractors and the Contractor ' s Fee in the form
required by Paragraph 10 . 3 . As used herein, the term "billing
period" shall , with respect to the monthly application, refer to
the fifteen (15) calendar day period covered by each Application
for Payment . Subject to the consent of Owner, prior to the
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Commencement Date, Developer and Contractor shall agree upon the
first and last Day of each billing period and the two dates of
each month upon which Applications For Payments are to be
submitted.
10 . 2 . Submittal of Application. Contractor shall submit
each Application for Payment to Developer for approval .
10 . 3 . Form of Application. Subject to Contractor' s
reasonable approval , each Application for Payment shall be in
such form as Developer may reasonably require . Without limiting
the generality of the foregoing, it is agreed that each
Application for Payment shall (i) be signed by Contractor or
Contractor ' s Representative, (ii) present the amount of the
payment requested by Contractor and the manner in which such
amount is calculated, and (iii) certify as follows :
"There are no known unbonded mechanic ' s or
materialmen ' s liens or stop notices outstanding,
at the date of this Application for Payment . All
due and payable bills with respect to the Work
have been paid or are included in the amount
requested in the current application, and, except
for such bills not paid by Developer but included
in this Application for Payment , there is no known
basis for the filing of any mechanic ' s or
materialmen' s liens on, or stop notices in
connection with, the Work. "
10 .4 Amount of Application. Each Application for Payment
shall be for a sum equal to (i) the actual aggregate Cost of the
Work to the date of submittal of the Application for Payment ,
plus (ii) a pro rata portion of the Contractor ' s Fee calculated
in accordance with Paragraph 6 . 3 , less (iii) the aggregate amount
of payments made by Developer and Retentions withheld by
Developer pursuant to previously submitted Applications for
Payment . The payment of the amount set forth in the Applications
for Payments shall be subject to the provisions of Paragraph 10 . 7
( "Payments" ) and Paragraph 10 . 8 ( "Retentions" ) below.
10 . 5 . Items to Accompany Application. With each
Application for Payment, Contractor shall furnish each and all of
the following :
10 . 5 . 1 . Itemized Statement . Each Application for
Payment shall provide a breakdown for each of the following:
(a) The original Contract Sum;
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(b) The amount of increases or decreases in the
Contract Sum resulting from authorized Change
Orders (if any) ;
(c) The adjusted Contract Sum;
(d) Prior billings, identifying amounts paid and
Retentions withheld;
(e) Current billings, identifying amounts to be
paid and Retentions to be withheld; and
(f) Total billings to date, identifying amounts
paid and Retentions withheld.
Each Application for Payment shall be line itemized so
as to identify the individual Subcontractors, the aggregate
General Requirements and the Contractor ' s Fee to be paid pursuant
thereto.
10 . 5 . 2 . Subcontractor Invoices . Each Application for
Payment shall include invoices for the current amounts then due
from each Subcontractor or to be paid pursuant to the applicable
Application for Payment .
10 . 5 . 3 . Lien Waivers . Each Application for Payment
shall include the following :
(a) Conditional waiver and lien releases with
respect to progress payments for the Contractor and each of its
Subcontractors, including material and equipment suppliers, for
the current billing period, in the form required by California
Civil Code Section 3262 , which form shall be subject to the
approval of Owner.
(b) Unconditional waiver and lien releases from
the Contractor and each of its Subcontractors, including material
and equipment suppliers, for the preceding thirty (30) calendar
day billing period, in the form required by California Civil Code
Section 3262 , which form shall be subject to the approval of
Owner.
10 . 6 . Review of Application. Developer shall review each
Application for Payment and, if Contractor agrees, may make such
exceptions or deletions as Developer reasonably deems necessary
or appropriate under the existing conditions . However,
Contractor ' s approval shall not be necessary for Developer to
withhold payment pursuant to Paragraph 10 . 9 .
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10 . 7 . Payments . Subject to Paragraphs 10 . 6 and 10 . 9, on or
before the twentieth (20th) calendar day after submission of each
Application for Payment to Developer, Developer shall make
payment to Contractor in the amount set forth in the Application
for Payment, less (i) any amount disallowed by Developer as a
result of failure of Contractor to submit any data supporting
Contractor' s right to payment as may be required by Developer or
Owner, (ii) any other amount disallowed by Developer in
accordance with this Agreement, (iii) any amount for equipment or
Materials not yet incorporated in the Work except as provided in
Paragraph 10 . 10 below and (iv) Retentions, as provided in
Paragraph 10 . 8 .
10 . 8 . Retention. Subject to the provisions of Paragraph
5 . 5 above, Developer shall initially withhold a Retention of ten
percent (10%) of the amount of the Cost of the Work exclusive of
General Requirements requested in each Application for Payment .
In no event shall any interest be due and payable by Developer to
Contractor, any Subcontractor or any other party with respect to
any of the Retentions held by Developer pursuant to any of the
terms or provisions of any of the Contract Documents .
10 . 9 . Conditions to Payment . Notwithstanding any contrary
provision of this Agreement , Developer shall not be obligated to
make full payment to Contractor hereunder if any one or more of
the conditions set forth below exist . In such event , Developer
shall be entitled to withhold from payments otherwise due
Contractor an amount reasonably necessary to protect Developer
from the potential consequences of such condition or conditions .
10 . 9 . 1 . Contractor is in default of any of its
obligations hereunder or otherwise is in default under any of the
Contract Documents after having been given written notice from
Developer;
10 . 9 .2 . Any part of Contractor ' s Application for
Payment covers Work which is defective or not performed in
accordance with the Contract Documents; however, Developer shall
make payment to Contractor for that part of such Application for
Payment which in Developer' s judgment is attributable to Work
which is performed in accordance with the Contract Documents, is
not defective and need not be removed in order to correct other
portions of the Work which are defective;
10 . 9 . 3 . Contractor has failed without good cause to
make payment promptly to any Subcontractor or for material or
labor used in the Work for which Developer has made payment to
Contractor unless Contractor shall have previously posted a good
and sufficient bond covering the amount of such payment ; or
26
10 . 9 .4 . Contractor has failed to provide Developer
with an acceptable plan in accordance with Paragraph 4 . 6 to
remedy delays in the Scheduled Substantial Completion Dates for
more than Seven (7) Days from the date of Contractor' s receipt
thereof .
ARTICLE 11
FINAL PAYMENT
11 . 1 . Notice of Completion. After Substantial Completion
and acceptance of the Work by Developer for Phase 3 , Developer
shall execute and record a "Notice of Completion" in accordance
with the requirements of California Civil Code §3093 for all lots
remaining on the Proeprty for which such Notice of Completion has
not previously been recorded.
11 . 2 . Final Application. Within twenty-two (22) Days
after recordation of said Notice of Completion, completion of the
items referenced in Paragraph 4 .4 , and acceptance of the Work by
Developer, or as soon thereafter as possible, Contractor shall
submit a final application for payment ( "Final Application for
Payment" ) .
11 . 3 . Amount of Final Application. The Final Application
for Payment shall set forth all amounts due and remaining unpaid
to Contractor (including any unpaid portion of Contractor' s Fee,
if any, and all outstanding Retentions) .
11 . 4 . Form of Final Application. The Final Application
for Payment shall , subject to Contractor ' s reasonable approval ,
be in such reasonable form as Developer and/or Owner may require .
Without limiting the generality of the foregoing, it is agreed
that the Final Application for Payment shall (i) be signed and
verified by Contractor ' s Representative, (ii) present the amount
of the payment requested by Contractor, and the manner in which
such amount is calculated, and (iii) certify as follows :
"There are no known unbonded mechanic ' s or
materialmen' s liens or stop notices outstanding at
the date of this Final Application for Payment .
All due and payable bills with respect to the Work
have been paid or are included in the amount
requested in the current application, and, except
27
for such bills not paid by Developer but included
in this Final Application for Payment , there is no
known basis for the filing of any mechanic ' s or
materialmen' s liens on, or stop notices in
connection with, the Work. "
11 . 5 . Items to Accompany Final Application. Contractor
shall furnish each of the following to Developer with the Final
Application for Payment :
11 . 5 . 1 . Itemized Statement ; Subcontractor Invoices . An
itemized statement and Subcontractor invoices in form and
containing the information set forth in Paragraphs 10 . 5 . 1 and
10 . 5 . 2 .
11 . 5 . 2 . Lien Waivers . Complete written waivers and
releases which may be conditional only upon final payment in the
amount set forth in Contractor ' s Final Application for Payment in
the form prescribed by California Civil Code Section 3262 (d) (3)
or (4) executed by Contractor and each Subcontractor, Material
Supplier, materialman, supplier, equipment renter, or other
person who has provided labor, services, equipment or materials
for which Developer shall have provided Contractor with a copy of
the 20-Day Preliminary Notice (however, if any Subcontractor,
Material Supplier, materialman, or supplier refuses to furnish a
release in full , Contractor may furnish at Contractor ' s sole
cost, a bond satisfactory in form and amount to Developer to
indemnify Developer against any lien or stop notice which might
be filed by such Subcontractor, Material Supplier, materialman or
supplier) .
11 . 5 . 3 . Drawinqs . All shop drawings and red-line
drawings required in the Contract Documents, together with a set
of "As-built" drawings as required by the Contract Documents .
11 . 5 .4 . Bound Volume of Warranties and Manuals . In
separate bound volumes which are completely indexed, all written
warranties and operational manuals (including manufacturers '
literature) reasonably required by Developer and the Contract
Documents .
11 . 5 . 5 . List of Subcontractors . A complete list of
Subcontractors and principal vendors including addresses and
telephone numbers .
11 . 5 . 6 . Reports and Permits . In an alphabetically
indexed loose leaf binder, all inspection reports, permits and
temporary certificates of occupancy and licenses necessary for
the occupancy of the Improvements and as required by the Contract
Documents .
28
11 . 5 . 7 . Keys . Tagged and workable keys for all doors
of the Improvements containing locks .
11 . 5 . 8 . Insurance . Such insurance certificates as are
required by Paragraph 19 . 3 .
11 . 6 . Review of Final Application for Payment . Developer,
shall review the Final Application for Payment and may make such
exceptions or deletions as Developer reasonably deems necessary
or appropriate under the existing conditions .
11 . 7 . Payment . Upon approval thereof by Developer,
Developer shall pay to Contractor the amount due under such Final
Application for Payment .
11 . 8 . Conditions to Final Payment . Developer shall not be
obligated to make final payment unless and until the Work with
respect to the Improvements has been completed, all of
Contractor' s obligations hereunder have been fully performed with
respect to the Improvements, Contractor is not then in default
hereunder with respect to any of the Improvements, no liens have
been recorded or stop notices served or threatened against the
Property that have not been paid or bonded by a bond in form and
amount satisfactory to Developer, and thirty (30) Days shall have
transpired since Owner received evidence that a valid Notice of
Completion has been recorded within seven (7) Days of Substantial
Completion of the Project .
11 . 9 . NOT USED
ARTICLE 12
USE OF FUNDS
12 . 1 . Application to Work. Except for Contractor ' s Fee
and amounts remaining in the Contingency to be paid to Contractor
pursuant to Paragraph 6 . 2 .2 above, Contractor shall use the sums
paid to it pursuant to this Agreement solely for the purpose of
performance of the Work in accordance with the Contract
Documents . However, no provision of this Agreement shall be
construed to require Developer to oversee or supervise the proper
disposition or application of the monies paid to Contractor .
12 . 2 . Payment of Bills . Contractor shall promptly pay all
bills for labor and material performed and furnished by others in
connection with the performance of the Work. If at any time
Developer has reason to believe that Contractor has theretofore
failed without good cause to make any payments due for labor or
29
material or into union trust funds, or Contractor will be unable
to do so in the future, then, in addition to Developer ' s rights
provided in Article 15 below or elsewhere in the Contract
Documents, Developer shall have the right to make payments to
Contractor by means of joint checks payable to both Contractor
and any Subcontractor or Material Supplier to whom the amount is
due.
ARTICLE 13
FAILURE TO COMPLETE WORK
13 . 1 . Damages . If Contractor fails to (i) complete all
Work on or before the Scheduled Substantial Completion Date, or
(ii) fails to complete Punch List work in a timely manner, then
Developer shall so notify Contractor in writing. If Contractor
has failed to complete the same within five (5) Days after
delivery of such notice from Developer, Developer shall
thereafter deliver a second five (5) Day notice . If Contractor
fails to complete the Work or Punch List work within said five
(5) Day period, then Developer shall have the right to complete
the same with its own work force or under a separate contract and
the cost thereof, together with an amount equal to the cost
incurred by Developer in connection with the administration of
having such Work performed by others, shall be deducted from the
Contract Sum.
13 . 2 . NOT USED
ARTICLE 14
PAYMENTS NOT A WAIVER
14 . 1 . Not an Acceptance . No partial payment made
hereunder shall be deemed to constitute final acceptance or
approval of that part of the Work to which such partial payment
relates, nor shall such payment relieve Contractor of any of its
obligations hereunder with respect thereto.
14 . 2 . No Approval . The payment of any Application for
Payment by Developer, including the Final Application for
Payment , does not constitute approval or acceptance of any item
of cost in such Application for Payment .
30
ARTICLE 15
LIENS
Contractor shall not permit any mechanics ' lien or stop
notice to be filed or otherwise imposed on any part of the Work
or the Property on which the Work is performed, so long as
payments are made by Developer to Contractor in accordance with
the terms of this Agreement . If any mechanics ' lien or stop
notice is filed, Contractor shall cause the removal thereof prior
to the filing of a lawsuit to perfect the same . If Contractor
does not cause such lien or stop notice to be released and
discharged within ninety (90) calendar days of notice of the
filing thereof, or, with Developer ' s approval , which approval
Developer shall not unreasonably withhold, file a good and
sufficient statutory bond in lieu thereof , Developer shall have
the right to pay all sums necessary to obtain such release and
discharge (without inquiry into the validity of such lien) and to
deduct all amounts so paid from the Contingency line item.
Contractor shall indemnify and hold harmless Developer, Owner and
the Property and Improvements from all claims, losses, demands,
causes of action or suits of whatever nature arising out of any
such lien or stop notice (unless due to Developer ' s failure to
make a required payment) , or that part of the Work covered
thereby, and any costs incurred by Contractor in so indemnifying
and holding Developer harmless shall be at Contractor ' s sole
expense .
ARTICLE 16
WORK IN PROGRESS
16 . 1 . Protection and Maintenance . During the performance
of the Work, Contractor shall take reasonable measures to
protect , maintain and prevent damage to all finished and
unfinished phases of the Work, including but not limited to (i)
protection from damage by the elements, theft, and vandalism, and
(ii) maintenance of the Work so as to have no wear and tear
whatsoever upon acceptance by Developer . If and at such time as
Developer accepts in writing a portion of the Work for homebuyer
occupancy, then Contractor shall be released from its obligation
to protect and maintain such portion of the Work except to the
extent Contractor causes the need for such maintenance .
16 .2 . No Interference . As portions of the Improvements
are completed and occupied, Contractor shall use its commercially
reasonable efforts to ensure that continuing construction
activity will not unreasonably interfere with the use, occupancy
31
and quiet enjoyment of the completed portions thereof and
Developer will use its commercially reasonable efforts to ensure
that the use and occupancy of the completed portions of the Work
will not unreasonably interfere with continuing construction of
the Improvements .
ARTICLE 17
DEFECTS
17 . 1 . Correction of Defects . Contractor shall perform its
services in accordance with the standards of care and diligence
normally practiced by recognized contractors with similar
experience performing services of a similar nature . Contractor
shall (i) re-execute any parts of the Work that fail to conform
with the above standard that appear during the progress of the
Work; (ii) remedy any defects in the Work due to faulty materials
or workmanship which appears and of which Contractor is notified
by Developer in writing within the one-year period commencing
upon Substantial Completion of the Work; (iii) remedy any defects
in any portion of the Work that is repaired or re-executed
pursuant to subparagraph (ii) above which appears within one-year
of such repair or re-execution; and (iv) replace, repair or
restore any parts of the Improvements or furniture, fixtures,
equipment or other items placed therein (whether by Developer or
any other party) that are injured or damaged by any such parts of
the Work done by Subcontractors of Contractor as well as work
done directly by employees of Contractor. The provisions of
this Article 17 shall not apply to corrective work attributable
to the acts or omissions of Developer, separate contractors
(other than Subcontractors engaged by Contractor) , Developer ' s
employees, and invitees or buyers of individual units within the
Project . The cost of the foregoing corrective Work shall not in
any way increase the Contract Sum. The provisions of this
Paragraph 17 . 1 shall survive the expiration or early termination
of this Agreement .
ARTICLE 18
32
REPRESENTATIVES
18 . 1 . Developer' s Representative . Developer' s
Representative shall have full authority to execute any and all
instruments requiring Developer ' s signature and to act on behalf
of Developer with respect to all matters arising out of this
Agreement .
18 . 2 . Contractor' s Representative . Contractor ' s
Representative shall have full authority to execute any and all
instruments requiring Contractor' s signature and to act on behalf
of Contractor with respect to all matters arising out of this
Agreement .
ARTICLE 19
INSURANCE
19 . 1 . Coverage to Be Maintained By Contractor. Prior to
the commencement of the Work, Contractor shall acquire and at all
times during performance of the Work shall maintain in full force
and effect each of the following insurance coverages, naming
Contractor, Developer and Owner as additional insureds .
(a) A policy of Worker' s Compensation Insurance in
accordance with applicable law, and Employer' s Liability
Insurance with limits of not less than One Million Dollars
($1 , 000, 000) .
(b) Comprehensive General Liability Insurance,
including coverage for bodily injury, property damage, personal
injury (employee and contractual liability exclusions deleted)
products and completed operations, contractual liability, owner' s
protective liability and broad form property damage with the
following limits of liability: One Million Dollars ($1 , 000 , 000)
for each occurrence, combined single limit for bodily injury,
property damage and personal injury; and Two Million Dollars
($2 , 000 , 000) aggregate for personal injury and property damage
for products and completed operations .
The maximum deductible amount permitted under any policy of
insurance required pursuant to this Article 19 shall not exceed
Fifty Thousand Dollars ($50, 000) .
Contractor' s policies shall name Developer, Owner and Owner' s
officers, elected and/or appointed officials and employees as
33
additional insureds using ISOCG 2010 forms (version 10 . 93) , and
shall cover losses, costs, expenses, damages and attorneys' fees
resulting from or arising out of the negligence or conduct of the
insured party, its staff members, employees, agents and
representatives . All such coverage shall be afforded to
additional insureds to the same extent it is afforded to
Contractor, and shall not be subject to any exclusion, limitation
or condition to which the coverage afforded Contractor is not
also subject . Contractor' s insurance obtained pursuant to this
Contract agreement shall be deemed primary insurance over and
above any insurance policy which Developer or Owner may obtain
for its own benefit , which policy shall be deemed excess or
secondary and non contributing .
19 . 2 Certificates and Cancellation. Contractor shall
promptly deliver to Developer certificates of insurance, copies
of insurance policies, or other evidence of the minimum levels of
insurance set forth above, as reasonably requested by Developer.
The insurance policies required under this Agreement shall
provide that none of the required coverage may be canceled or
terminated without thirty (30) days' prior written notice to
Owner.
19 . 3 Continued Coverage . Notwithstanding the
expiration or early termination of this Agreement , Contractor
shall maintain insurance coverage such that the insurance
provisions of this Agreement shall survive such expiration or
early termination of this Agreement and Contractor' s insurance
carriers shall remain obligated under the policies for all
occurrences that arise that are within the scope of the
requirements of insurance coverage set forth in this Agreement .
Contractor shall continue to maintain insurance required under
and pursuant to the provisions of Paragraph 19 . 1 until and
including the final date upon which any statute of limitations as
to latent defects applicable to the work shall elapse and expire .
19 . 4 Waiver of Subrogation. Developer, Owner and
Contractor hereby waive any rights each may have against the
other on account of any loss or damage occasioned to Developer,
Owner and /or Contractor as the case may be, arising from any
risk covered by the insurance maintained under this Agreement .
Contractor, Developer and Owner each, on behalf of their
respective insurance companies, waive any right of subrogation
that such insurance company may have against Developer, Owner or
Contractor, as the case may be, and each party shall obtain
endorsements to such insurance policies as are necessary to
effectuate such waivers .
19 . 5 Insurance - General . All insurance required to be
maintained pursuant to this Article 19 shall be written by
34
insurance companies admitted to do business in California and
having a rating of at least B+/VII in the most recent edition of
Best ' s Insurance Guide. At all times during the term of this
Agreement , Developer shall maintain on file with the City Clerk
of Palm Desert , a certificate (or certificates) of insurance in
the form attached hereto as Exhibit E, reflecting that the
insurance policies required to be maintained pursuant to this
Agreement are in effect in the amounts required, naming the
additional insureds required hereunder, and that the policies
cannot be canceled, modified or reduced except after thirty (30)
days' notice by the subject insurance carrier to Owner. All
insurance maintained pursuant to this Agreement shall be primary
to any coverage otherwise available to Owner.
19 . 6 . Coverage Required to Be Maintained by Developer.
Prior to the commencement of the Work, Developer shall acquire
and at all times during the performance of the Work maintain in
full force and effect builders "all risk" insurance in
nonreporting form issued by an insurance company acceptable to
Owner, in an amount not less than the full insurable completed
value of the Property on a replacement cost basis . Said
insurance policy shall insure against loss or damage by hazards
customarily included within such "all risk" policies, and shall
contain a course of construction clause . Developer shall submit
to Contractor evidence of the coverage required by this
Paragraph 19 .4 prior to the Commencement Date .
ARTICLE 20
ASSIGNMENT
20 . 1 . By Contractor. Contractor may not assign its
interests or delegate its duties under this Agreement without the
prior written consent of Developer which Developer may withhold
in its sole and absolute discretion. Any assignment in violation
of those provisions shall be null and void and shall constitute a
default hereunder.
20 . 2 . By Developer . Developer may assign its rights
hereunder to Owner and Contractor shall attorn to Owner should
Owner become the Developer of the Project or any portion thereof .
ARTICLE 21
35
CAPTIONS
The captions used for the articles and paragraphs in this
Agreement are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope or
the intent of this Agreement or any article hereof .
ARTICLE 22
ENTIRE AGREEMENT; MODIFICATION OF AGREEMENT
The Contract Documents contain the entire agreement of the
parties with respect to the subject matters hereof . This
Agreement can be modified or amended only by a written document
duly executed on behalf of the parties hereto.
ARTICLE 23
INSPECTION
23 . 1 . Matters Reviewed by Contractor. Contractor
represents that it has inspected all Contract Documents inclusive
of the Drawings and Specifications , the Project Site, the
location or locations of the Work, and based on the assumption
that the same are accurate has otherwise satisfied or will
satisfy itself as to the condition of the Property including all
foreseen or foreseeable risks and hazards .
23 . 2 . Access By Developer and Owner. Developer and
Owner at all times shall have access to the Work for inspection
thereof, but shall not be obligated to conduct any such
inspection. Contractor shall provide proper and safe facilities
for such access and inspection. If any of the Work is required
to be inspected or approved by any public authority or
Developer ' s insurers, Contractor shall cause such inspection or
approval to be performed.
23 . 3 . No Approval . No inspection performed by
Developer, or failed to be performed by Developer, shall be
36
construed as an approval or acceptance of the Work or any part
thereof .
23 . 4 . Contractor Review. Contractor shall diligently
and promptly inspect and verify all Materials and Services
delivered to the Work in order to assure that they conform in all
material respects to the Drawings and Specifications .
ARTICLE 24
AS-BUILT DRAWINGS AND SURVEYS
24 . 1 . As-Built Drawings . Contractor will provide "as-
built" drawings in form acceptable to Developer which accurately
depict the "as-built" condition and location of all Improvements
installed and furnished by the Contractor.
ARTICLE 25
DISPUTE RESOLUTION AND ATTORNEYS ' FEES
25 . 1 . Manner of Resolution. Claims, disputes or other
issues with respect to this Agreement , Contractor ' s performance
hereunder, or any reimbursement or compensation due or allegedly
due hereunder shall be resolved by a referee proceeding. The
referee shall be selected in accordance with the provisions of
Paragraph 25 . 4 below and California Code of Civil Procedure §638
et seq.
25 . 2 . Procedure . The referee shall render a binding
decision as to which all parties to the reference hereby waive
the right to appeal , other than an appeal based on misconduct or
fraud on the part of the referee . The parties intend this
reference agreement to be specifically enforceable in accordance
with California Code of Civil Procedures §638 et . seq. The
parties further agree that the referee shall set the rules of
procedure for the reference proceeding, but that each party will
have the right to discovery, consistent with the California Code
of Civil Procedure and Evidence Code, subject to the right of the
referee to place reasonable limits on said right to discovery
upon his own motion or the motion of any party consistent with
the party' s intent to have a fair, prompt , and inexpensive means
of dispute resolution.
25 . 3 . Referee ' s Fees; Attorneys ' Fees . The fees for the
referee shall , in the first instance, be equally borne by the
37
parties . However, the parties agree that the prevailing party to
any dispute shall recover from the other reasonable attorneys '
fees and costs, including the referee ' s fee, and the referee
shall have authority to make such award of costs and fees to the
prevailing party. The referee shall also have the authority to
ascertain which party, if any, has prevailed, by considering all
relevant factors, including, without limitation, the overall
result obtained and the significance of that result in light of
the matters in dispute.
25 .4 . Selection of a Referee. Within ten (10) calendar
days after service of a demand for reference as set forth above,
each party shall designate four (4 ) judges from a list of retired
judges then maintained by the clerk of the Los Angeles County
Supreme Court . Each party shall submit the names of the four (4)
judges which it wishes to designate to the others . Within five
(5) days thereafter, each party shall have the right to eliminate
two of the judges designated by the other party. Either party
may then petition the Los Angeles County Superior Court to choose
a referee from the list of four retired judges then remaining
(i . e . , two of the four judges designated by each party shall be
listed) .
25 . 5 . Pre-hearing Meeting . Within five (5) Days after
selection of the referee, the referee shall meet with the
parties, either separately or jointly, to discuss the matters in
dispute . The referee shall then have the right to inspect all
relevant books and records of each of the parties and such other
information as the referee may deem appropriate, the parties
hereby agreeing to make available to the referee all such books,
records and other information requested.
25 . 6 . Situs of Hearing . If the referee deems
appropriate, any dispute may be tried in whole or in part at the
Project Site in the construction trailer. The referee shall have
the authority to provide for stenographic transcripts of
proceedings or to order the same to be recorded on audiotape or
videotape.
25 . 7 . Conduct During Pendency. During the pendency of
any dispute resolution proceeding under this Article 25,
Developer shall continue to pay Contractor any undisputed sums
which may be due Contractor under the Contract Documents . Within
seven (7) Days after such dispute has been resolved, the parties
shall take such actions as are necessary to bring themselves into
compliance with the decision of the referee .
ARTICLE 26
38
NOTICES
Any notice, demand or document which any party is required
or may desire to give, deliver or make to any other party shall
be in writing, and may be personally delivered or given or made
by United States registered or certified mail , return receipt
requested, by overnight delivery service (e .g . , Federal Express) ,
or by telecopied transmission addressed as follows :
To Developer: ComDyn PD, LLC
2800 Twenty eighth Street , Ste . 206
Santa Monica, CA 90405
Telecopy: (310) 399 . 9555
Attention: Loren Bloch
To Contractor:
Any party may designate a different address for itself by notice
similarly given. Any notice, demand or document shall be deemed
to have been given upon actual delivery or attempted delivery,
provided such attempted delivery is made on a Federal business
day.
ARTICLE 27
DEVELOPER' S TERMINATION RIGHTS
27 . 1 . Developer ' s Right in the Event of Owner Default .
If the Owner is in default of its agreement with Developer
regarding the development and construction of this Project , and
Owner fails to cure said Event of Default in accordance with the
terms of said agreement, Developer may in its sole and absolute
discretion and by written notice to Contractor terminate the
rights and obligations of the parties hereunder.
27 . 2 . Termination With Cause . In addition to the
termination right specified in Paragraph 27 . 1 , Developer shall
have the right to terminate this Agreement pursuant to Article 10
of the General Conditions in case of Contractor' s default .
ARTICLE 28
MISCELLANEOUS PROVISIONS
39
28 . 1 . Severability. A final determination that any
provision of this Agreement or any part thereof is illegal or
unenforceable shall not cancel or invalidate the remainder of
such provision or any other provision of this Agreement which
shall remain in full force and effect .
28 .2 . Interpretation. The captions of articles or
paragraphs of this Agreement are to assist the parties in reading
this Agreement and are not part of the terms or provisions of
this Agreement . Wherever required by the context of this
Agreement , the singular shall include the plural and the plural
shall include the singular. The masculine, feminine, and neuter
gender shall each include the other.
28 . 3 . Waivers . In order to be effective all waivers
must be in writing and duly executed by the parties sought to be
charged.
28 . 4 . Execution This Agreement may be executed in
counterparts and, when all counterparts are executed, the
counterparts shall constitute a single and binding instrument .
Developer ' s delivery of this Agreement shall not be deemed to be
an offer and shall not be binding upon either party until
executed and delivered by both parties .
28 . 5 . Survival . All representations and warranties
shall survive the termination of this Agreement .
28 . 6 . Governing Law. This Agreement shall be governed
by, and construed and enforced in accordance with, the laws of
the State of California .
28 . 7 . No Discrimination. During the performance of this
Agreement , Contractor and its Subcontractors shall not unlawfully
discriminate against any employee or applicant for employment
because of race, color, religion, creed, national origin,
ancestry, age, marital status, medical condition, physical
handicap, sex, or sexual orientation. Contractor and its
Subcontractors shall insure that the evaluation and treatment of
their employees and applicants for employment are free from such
discrimination. Contractor and its Subcontractors shall comply
with the provisions of the Fair Employment and Housing Act
(California Government Code §12900 et . seq. ) and the applicable
regulations promulgated thereunder (California Code of
Regulations, Title 2 , Section 7284 . 0 et . seq. ) . The applicable
regulations of the Fair Employment and Housing Commission
implementing California Governmental Code §12990 , set forth in
Chapter 5 of Division 4 of Title 2 of the California Code of
Regulations are incorporated into this Contract by reference and
40
made a part hereof as if set forth in full . Contractor and its
Subcontractors shall give written notice of their obligations
under this clause to labor organizations with which they have a
collective bargaining or other agreement .
28 . 8 . Contractor ' s Obligations Regarding Prevailing
Wages . Developer understands and acknowledges that Contractor has
agreed to the Contract Sum in reliance, among other things, upon
Developer' s representation that Contractor shall not be required
by law or otherwise to pay prevailing union wages in connection
with the Work. If despite Developer ' s representation to the
contrary, Contractor is required, pursuant to the final decision
of a court with jurisdiction over the project or the mandate of
any governmental agency with jurisdiction over the Project, to
pay prevailing union wages to the laborers providing Services in
connection with the Work, then Developer shall be required to
pay, in addition to the Contract Sum and any other amounts
payable by Developer under this Contract, the difference between
the sum of the prevailing union wages and any penalties
Contractor is required to pay and the amount of wages Contractor
would have paid if Contractor had not been required to pay
prevailing union wages . In such an event , Contractor shall
provide and cause its Subcontractors to provide Developer with
all payroll documentation necessary to substantiate the above
referenced differential .
28 . 9 . NOT USED
28 . 10 . Change Order Work Meeting. Developer and
Contractor understand and agree that the fact that certain Work
is not specifically described on the Drawings and Specifications
shall not automatically establish that said Work is Change Order
Work. Rather, the parties agree that with respect to any such
work, the parties will meet and attempt to agree on whether such
Work is properly considered part of the Work covered by the
Contract Sum or whether the Work is properly considered Change
Order Work. In so determining, the parties shall act reasonably
and attempt , in good faith, to apply the standards of the
residential construction industry to the situation at hand. That
is, if, in the parties ' reasonable determination, it would be
standard in the residential construction industry to include an
item of Work in the Contract Sum despite the fact that said Work
is not specifically described on the Drawings and Specifications,
said Work shall for the purposes of this Agreement be deemed to
be a part of the Work covered by the Contract Sum.
41
28 . 11 . Exhibits . All exhibits referred to below and
attached to this Agreement are incorporated herein by this
reference as though set forth in full :
Exhibit "A" Property Description
Exhibit "B" Schedule of Drawings and Specifica-
tions
Exhibit "C" Not Used
Exhibit "D" Not Used
Exhibit "E" Subcontractors List
Exhibit "F" Construction Schedule
Exhibit "G" Schedule of Values
Exhibit "H" Developer' s Limited Warranty
Exhibit "I" Change Order Form
Exhibit "J" Material Cost Documentation
IN WITNESS WHEREOF this Agreement is executed as of the
date first above set forth.
"DEVELOPER"
ComDyn PD, LLC
a California limited liability
company
By:
Its :
"CONTRACTOR"
a California corporation
By:
Its :
42
GENERAL CONDITIONS OF THE MASTER CONSTRUCTION
CONTRACT BETWEEN DEVELOPER AND CONTRACTOR
TABLE OF CONTENTS
Page (s)
ARTICLE 1 1
1 . 1 DEFINITIONS 1
1 . 2 EXECUTION, CORRELATION AND INTENT 2
1 . 3 OWNERRSHIP AND USE OF DOCUMENTS 5
ARTICLE 2 6
2 . 1 DEFINITION 6
2 . 2 ADMINISTRATION OF THE CONTRACT DOCUMENTS 6
ARTICLE 3 8
3 . 1 DEFINITION 8
3 . 2 INFORMATION AND SERVICES REQUIRED OF THE
DEVELOPER. 8
3 . 3 DEVELOPER' S RIGHT TO STOP THE WORK 9
ARTICLE 4 9
4 . 1 DEFINITION 9
4 . 2 REVIEW OF CONTRACT DOCUMENTS 9
4 . 3 SUPERVISION AND CONSTRUCTION PROCEDURES 10
4 .4 LABOR AND MATERIALS 12
4 . 5 WARRANTIES 13
4 . 6 TAXES 15
4 . 7 PERMITS, FEES AND NOTICES 15
4 . 8 PROJECT PERSONNEL 16
4 . 9 PROGRESS SCHEDULE 17
4 . 10 DOCUMENTS AND SAMPLES AT THE SITE 17
4 . 11 SHOP DRAWINGS, PRODUCT DATA AND SAMPLES 17
4 . 12 USE OF SITE 18
4 . 13 CUTTING AND PATCHING OF WORK 19
4 . 14 CLEANING UP 19
4 . 15 COMMUNICATIONS 19
4 . 16 ROYALTIES AND PATENTS 19
4 . 17 INDEMNIFICATION 19
4 . 18 OWNER' S CONSULTANT 21
ARTICLE 5 21
5 . 1 DEFINITION 21
5 . 2 AWARD OF SUBCONTRACTS AND OTHER CONTRACTS FOR
PORTIONS OF THE WORK 21
5 . 3 SUBCONTRACTOR RELATIONS 22
ARTICLE 6 22
6 . 1 CONTRACT SUM 22
6 . 2 SCHEDULE OF VALUES 23
6 . 3 APPLICATIONS FOR PAYMENT 23
6 . 4 CONTRACTOR WAIVER 23
ARTICLE 7 24
7 . 1 SAFETY PRECAUTIONS AND PROGRAM 24
7 . 2 SAFETY OF PERSONS AND PROPERTY 24
7 . 3 EMERGENCIES 26
ARTICLE 8 26
8 . 1 AGREEMENT 26
ARTICLE 9 26
9 . 1 UNCOVERING OF WORK 26
9 .2 CORRECTION OF WORK 27
ARTICLE 10 27
10 . 1 DEFAULT BY CONTRACTOR 27
10 . 2 DEVELOPER' S DEFAULT 28
10 . 3 NO DEFAULT DURING DISPUTE RESOLUTION 28
10 .4 BANKRUPTCY OF CONTRACTOR 28
10 . 5 CONTRACTOR ' S DUTIES UPON TERMINATION 29
ARTICLE 11 29
ARTICLE 12 29
ii
ARTICLE 13 30
13 . 1 RESTRICTION 30
13 .2 BREACH OF RESTRICTION 30
ARTICLE 14 30
14 . 1 GOVERNING LAW 30
14 .2 SUCCESSORS AND ASSIGNS 30
14 . 3 NOTICE 31
14 .4 CLAIMS FOR DAMAGES 31
14 . 5 TESTS 31
14 . 6 WORK DURING PENDENCY OF DISPUTES 31
14 . 7 TIME 32
ARTICLE 15 32
•
GENERAL CONDITIONS OF THE CONSTRUCTION CONTRACT
BETWEEN DEVELOPER AND CONTRACTOR
ARTICLE 1
CONTRACT DOCUMENTS
1 . 1 DEFINITIONS
1 . 1 . 1 THE CONTRACT DOCUMENTS
The Contract Documents are defined in the Construction Contract
between Developer and Contractor (the "Agreement" ) to which these
General Conditions are attached. All capitalized terms used
herein shall have the same meaning as defined in the Agreement .
1 . 1 . 2 THE CONTRACT ✓
The Contract Documents represent the entire and integrated
agreement between the parties hereto and supersede all prior
negotiations, representations, or agreements, either written or
7
oral . The Contract Documents shall not be construed to create
any contractual relationship of any kind between Architect and
Contractor or Owner and Contractor. Nothing contained in the
Contract Documents shall create any contractual relationship
between Developer or Architect and any Subcontractor. Nothing
contained in the Contract Documents is intended to modify or
amend any agreement between Developer and Architect or Owner and
Architect and in the event of any conflict between the provisions
of any such agreement and the provisions of the Contract
Documents, the provisions of the agreement between Developer and
Architect shall prevail with respect to Developer and Architect ,
and the provisions of the agreement between Owner and Architect
shall prevail with respect to Owner and Architect . However, the
Developer/Architect and Owner/Architect agreements shall not
affect Contractor' s obligations or rights under the Contract
Documents .
1 . 1 . 3 THE WORK AND THE IMPROVEMENTS
The Work and the Improvements shall be as defined in the Agree-
ment . The Agreement , the General Conditions, and the Drawings and
Specifications are intended to be complementary and to supplement
one another. Conflicts between the aforementioned documents
shall be resolved in accordance with the Agreement . Subject to
the foregoing, the Specifications shall prevail over the
Drawings, the General Conditions shall prevail over the Drawings
and Specifications, and the Agreement shall prevail over all such
documents whether or not stated in each instance. If any Work is
displayed on the Drawings but not called for in the
Specifications, or if any Work is called for in the
Specifications but not displayed on the Drawings, Contractor
shall be required to perform the Work without Change Order as
though it were called for in both the Drawings and Specifications
in order to make that portion of the Work a complete unit,
functional where applicable, in accordance with good trade
practices . Contractor shall not unfairly use any error or
omission in the Drawings or Specifications to its advantage in
order to develop an increase in the Contract Sum or extension of
time in whole or in part where the intent of the Contract
Documents is clear.
1 . 2 EXECUTION, CORRELATION AND INTENT
1 .2 . 1 By executing the Agreement, Contractor represents that
it has thoroughly inspected the Project Site, familiarized itself
with the local conditions under which the Work is to be
performed, and correlated its observations with the requirements
8
of the Contract Documents . Contractor has, by careful
examination, ascertained the scope, character, quality and
quantity of labor, Materials, supplies, equipment and facilities
necessary to complete the Work and has contributed substantial
input with regard to such matters . Contractor has had adequate
access to Developer, Architect , and engineers regarding the Work.
1 . 2 . 2 The intent of the Contract Documents is to include all
items necessary for the proper execution and completion of the
Work. The Contract Documents are complementary, and what is
required by any one shall be as binding as if required by all
(subject to the provisions of Paragraph 1 . 1 . 3 above) . Words and
abbreviations which have well-known technical or trade meanings
are used in the Contract Documents in accordance with such
recognized meanings, except to the extent expressly defined or
limited in the Contract Documents . Where detailed information is
lacking in the Contract Documents, Contractor has referred the
matter to Developer. In addition, in the future whenever
Contractor determines such detailed information is lacking,
Contractor shall immediately upon notice, and in any event before
proceeding with the applicable Work, refer the matter to
Developer for further information.
1 . 2 . 3 The organization of the Drawings and Specifications
shall not control Contractor in dividing the Work among
Subcontractors or in establishing the extent of Work to be
performed by any trade.
1 . 2 .4 When dimensions are not written on drawings, Developer
will obtain interpretations from Architect . Dimensions shall not
be obtained by scaling drawings . Large-scale drawings take
precedence over small-scale drawings and full size drawings shall
be followed in preference to both small and large scale drawings .
1 . 2 . 5 In general , Drawings indicate dimensions, positions and
details of construction. Specifications describe qualities of
materials, performance, installation and erection procedures, and
workmanship.
1 . 2 . 6 In the case of a difference between Specifications and
Drawings with reference to size, shape or dimension, and where
there are typographical errors in Specifications or notational
errors on Drawings, Developer will consult with Architect and
shall decide upon the correct intent . As soon as Contractor
becomes aware of an error in Specifications or Drawings or in
work done by others, affecting the Work, Contractor shall notify
Developer at once for instructions as to procedure. If
Contractor proceeds with any further Work without such
9
instructions, Contractor shall make good any resulting damage or
defects and the cost of same shall not be considered a Cost of
the Work.
1 . 2 . 7 Should a conflict occur in or between Drawings and
Specifications or where detail references on Drawings have been
omitted, Contractor is deemed to have estimated the most
expensive material and construction cost .
1 . 2 . 8 Drawings and diagrams for mechanical and electrical
work shall be followed only for work for which they were
especially prepared and shall be considered as diagrammatic only.
They shall not be used for any structural guidance nor for
architectural layout .
1 . 2 . 9 Architect may furnish miscellaneous details, large
scale and full size details to further clarify the Work. Such
details shall be considered a part of the Contract Documents .
Provided the details are furnished to Contractor prior to the
commencement of the Work affected thereby and prior to letting
subcontracts therefor, any Work executed, if not in accord with
such details, shall be removed and replaced or adjusted as
directed, which expense shall not be grounds for a Change Order
or for any increase in the Contract Sum.
1 . 2 . 10 Articles or Materials specified by proprietary name or by
name of vendor or manufacturer shall be furnished by Contractor.
Requests for substitutions of Materials or methods may be allowed
with Developer' s prior written approval , provided that they are
submitted to Developer and separately qualified as follows :
1 . 2 . 10 . 1 Requests by Contractor for Developer ' s approval of
substitutions shall be submitted in writing, and shall be
accompanied by manufacturer' s specifications, guarantees and
technical data sheets, setting forth in detail the physical and
chemical properties and other characteristics of the proposed
substitution of material or equipment, adequate to enable
Developer and Architect to determine the acceptability of the
proposed substitute. It shall be Contractor' s responsibility to
demonstrate equality of the proposed substitute item or material .
Insufficient supporting data will be cause for disapproval of the
proposed substitution. Any request for Developer ' s approval
shall indicate the amount of credit attributable to the proposed
substitution. Contractor shall assume full responsibility for
having all substitute items comply in all respects with the
Specifications other than as specified in writing in the request
for substitution. Contractor shall be solely responsible for any
cost and/or adjustments of Materials or dimensions incurred by
10
other trades which are a result of a substitution of material or
equipment .
1 . 2 . 10 . 2 Approval of any proposed substitution is entirely at
the discretion of Developer, upon consultation with Architect,
and subject to the requirements that the substitution be :
A. Equal in quality of material and structural
assembly;
B . Equal in performance, mechanically and technically;
C. Equal in finish, including surface preparation and
undercoats ;
D. Equal in arrangement of plan. If substitutions for
specified products require rearrangement of partitions,
openings for pipe work or ducts, intakes, exhausts, or
other items, then such arrangements must, in Developer ' s
opinion after consultation with Architect , be equal in
convenience and practicability to original arrangements;
E . Equal in maintenance cost . An important condition in
determining equality of substitute Materials or
equipment is availability of replacement parts and
maintenance service . Inequality in this respect, as
between proposed substitutions and specified products,
may be the determining factor in whether or not approval
is granted;
F. Equal in warranties and guarantees . Warranties and
guarantees on the proposed substituted Materials and
equipment shall be at least equal to in scope and
duration as the specified materials and equipment ; and
G. Acceptance of an alternate or substitute item shall not
affect Contractor' s warranties and obligations under
this Agreement .
1 . 3 OWNERSHIP AND USE OF DOCUMENTS
1 . 3 . 1 Developer shall furnish all Drawings and
Specifications . With the exception of one contract set for each
party to the Agreement , such documents shall be suitably
accounted for to Architect on request at the completion of the
Work. Submission or distribution to meet official regulatory
requirements or for other purposes in connection with financing
of the Property is not to be construed as publication in
I1
derogation of Architect ' s common law copyright or other reserved
rights.
1 . 3 .2 All plans, Drawings, Specifications and copies thereof
furnished by Developer, or copies made for Contractor, are and
shall remain Developer' s property provided, however, Contractor
and Subcontractors shall be entitled to retain copies of all such
documents for their records . Contractor may not use the same for
or in connection with any other project and shall return the same
to Developer upon completion of the Work or termination of the
Agreement , whichever occurs first .
ARTICLE 2
ARCHITECT
2 . 1 DEFINITION
2 . 1 . 1 The Architect is an entity lawfully practicing
architecture, identified as such in the Agreement . The term
Architect means the Architect or its authorized representative.
2 . 2 ADMINISTRATION OF THE CONTRACT DOCUMENTS
2 . 2 . 1 Architect ' s duties and responsibilities shall in all
respects be subject to Owner' s and Developer' s written approval
regarding all matters arising under the Contract Documents .
Architect ' s acceptance of the Work, and any design, plan,
specification or other planning decision shall be subject to
prior written approval of Owner and Developer.
2 .2 . 2 Contractor acknowledges that Architect may occasionally
visit the site to familiarize itself generally with the progress
and quality of the Work and to determine in general if the Work
is proceeding in accordance with the Contract Documents .
However, Architect will not be required to make exhaustive or
continuous on-site inspections to check the quality or quantity
of the Work.
2 . 2 . 3 Architect will not be responsible for, and will not
have control or charge of , construction means, methods,
techniques, sequences or procedures, or for safety precautions
and programs in connection with the Work and will not be
12
responsible for Contractor' s failure to carry out the Work in
accordance with the Contract Documents except to the extent
provided in the agreement between Developer and Architect .
Architect will not be responsible for or have control or charge
over the acts or omissions of Contractor, Subcontractors, or any
of their agents or employees, or any other persons performing any
of the Work.
2 . 2 . 4 Architect shall at all times have access to the Work
wherever it is in preparation and progress .
2 .2 . 5 At Developer ' s request, Architect will make
recommendations on the requirements of the Contract Documents and
performance thereunder which recommendations shall be subject to
the written approval of Developer.
2 . 2 . 6 At Developer ' s request , Architect will render
interpretations necessary for the proper execution or progress of
the Work, with reasonable promptness and in accordance with any
time limit agreed upon.
2 . 2 . 7 All interpretations and recommendations of Architect
shall be consistent with the intent of and reasonably inferable
from the Contract Documents and will be in writing or in the form
of Drawings . In its capacity as interpreter, Architect will
endeavor to secure faithful performance by both Developer and
Contractor and will not show partiality to either.
2 .2 . 8 Developer ' s decisions in matters relating to artistic
effect will be final if consistent with the intent of the
Contract Documents .
2 .2 . 9 Developer will have authority to reject Work which does
not conform to the Contract Documents . Whenever, in its opinion
Developer considers it necessary or advisable for the
implementation of the intent of the Contract Documents, Developer
will have authority to require special inspection or testing of
the Work in accordance with the Contract Documents whether or not
such Work is then fabricated, installed or completed. However,
neither Developer' s authority to act under this Paragraph 2 . 2 . 9,
nor any decision made by it in good faith shall give rise to any
duty or responsibility of Developer to Contractor, any
Subcontractor, any of their agents or employees, or any other
person performing any of the Work.
2 . 2 . 10 Contractor will forward duplicate copies of all
submittals to Architect . Architect will review and approve or
take other appropriate action upon Contractor ' s submittals such
13
as shop drawings, product data and samples, but only for
conformance with the Work and with the Contract Documents . Such
action shall be taken with reasonable promptness so as to cause
no delay in the Work. Architect ' s approval of a specific item
shall not indicate approval of an assembly of which the item is a
component .
2 . 2 . 11 Contractor acknowledges that Developer will conduct
inspections to determine the date of Substantial Completion of
the Work, the date of completion of Punch List Work, and will
receive, act upon and review written warranties, operations
manuals, Subcontractor test reports, and related documents
required to be assembled by Contractor.
2 . 2 . 12 In case of the termination of the employment of
Architect , Developer shall appoint a substitute architect whose
status under the Contract Documents shall be that of Architect
named in the Agreement .
2 .2 . 13 In no event shall any recommendation by Architect which
has the effect of increasing the Contract Sum, or extending any
Scheduled Substantial Completion Date be effective without the
express prior written consent of Developer. Contractor shall not
be responsible for the performance of any recommendations until
it receives such written notice .
ARTICLE 3
DEVELOPER
3 . 1 DEFINITION
3 . 1 . 1 Developer is the person or entity identified as such in
the Agreement . The term Developer means Developer or its
authorized representative .
3 . 2 INFORMATION AND SERVICES REQUIRED OF THE DEVELOPER
3 . 2 . 1 Developer has furnished Contractor with a survey
describing the physical characteristics, legal limitations and
existing utility locations of the Project Site, as well as a
legal description thereof . Contractor shall verify all site
dimensions where feasible or where necessary for the proper
execution of the Work.
14
3 .2 . 2 Developer shall furnish to Contractor upon written
request information or services under Developer' s control with
reasonable promptness to avoid delay in the orderly progress of
the Work.
3 . 2 . 3 Contractor will be furnished, free of charge, complete
sets of Drawings and Specifications, along with one set of
reproducibles .
3 . 2 .4 Developer shall forward all instructions directly to
Contractor with copies to Architect if Developer deems it
advisable.
3 . 3 DEVELOPER ' S RIGHT TO STOP THE WORK
3 . 3 . 1 Developer shall have the right to stop the Work to
ensure the safety of any person performing Work on the
Improvements . Developer shall not be obligated to exercise any
such rights for the benefit of Contractor or any other person.
3 . 3 . 2 In addition, Developer may elect by written notice to
Contractor to suspend the Work for up to one hundred twenty (120)
consecutive calendar days as a result of the occurrence of
unforeseen conditions . In such event , unless the unforeseen
condition resulted from the negligence or breach of Contractor or
any Subcontractor, a Change Order shall be prepared by Developer
and the Construction Schedule shall be adjusted accordingly.
Such Change Order shall provide for payment to Contractor of an
amount equal to Contractor ' s reasonable and actual cost to
remobilize after any suspension of the Work. If Developer
suspends the Work for more than one hundred twenty (120)
consecutive calendar days, Contractor shall have the right to
terminate the Contract Documents in which case contractor shall
be entitled to compensation for all Work performed.
ARTICLE 4
CONTRACTOR
4 . 1 DEFINITION
4 . 1 . 1 Contractor is the person or entity identified as such
in the Agreement . The term Contractor means Contractor or
Contractor' s Representative designated in accordance with the
provisions of the Contract Documents.
4 . 2 REVIEW OF CONTRACT DOCUMENTS
15
4 . 2 . 1 Contractor has, with competent personnel , carefully
studied and compared the Contract Documents and has reported to
both Developer and Architect in writing any error, inconsistency
or omissions which it discovered. Contractor shall not perform
any portion of the Work at any time without Contract Documents
or, where required, approved shop drawings, product data or
samples for such portion of the Work.
4 . 2 . 2 Contractor and all Subcontractors, by their act of
submitting bids, acknowledge that they have informed themselves
fully regarding requirements of the Contract Documents, and all
applicable laws, ordinances and regulations regarding the perfor-
mance of the Work.
4 . 3 SUPERVISION AND CONSTRUCTION PROCEDURES
4 . 3 . 1 Contractor shall supervise and direct the Work, using
Contractor' s diligent skill and attention. Contractor shall be
solely responsible for all construction means, methods, tech-
niques, sequences and procedures and for coordinating all
portions of the Work. Contractor shall furnish efficient
business and contract administration and shall provide competent
supervision of all phases of the Work. Contractor shall furnish
at all times an adequate supply of workmen and Materials, and
shall perform the Work in a workmanlike, expeditious, safe and
economical manner consistent with the interests of Developer.
Contractor covenants to exercise its diligent skill and judgment
and to cooperate with Architect in furthering the interests of
Developer.
4 . 3 .2 Contractor shall be responsible to Developer for the
acts and omissions of its employees, Subcontractors, their
respective agents and employees, and other persons performing any
portion of the Work under any agreement with Contractor.
4 . 3 . 3 All personnel used by Contractor in the performance of
the Work shall be qualified by training and experience to perform
their assigned tasks . At Developer' s request, Contractor shall
not use in the performance of the Work any personnel or
Subcontractor deemed by Developer to be incompetent, careless,
unqualified to perform the relevant portion of the Work.
4 . 3 .4 Contractor shall maintain an adequate inspection system
and perform such inspections as will assure that the Work
performed under the Contract Documents conforms to requirements
of the Contract Documents and to all requirements of law and
16
shall maintain and make available to Developer and Architect
adequate diaries and/or checklists relating to such inspections .
4 . 3 . 5 Prior to submission to Developer and Architect ,
Contractor shall have all shop drawings, brochures, and other
construction data checked for quantity, size and dimensions by
qualified personnel especially assigned for this purpose . In
cases of omissions and obvious error and in cases of conflict ,
either between Drawings and Specifications or between details on
contract drawings, Contractor shall advise Developer and
Architect of the same in writing and Developer shall promptly
respond.
4 . 3 . 6 Contractor shall be responsible for coordinating Work
of its Subcontractors and trades so that the Work as a whole will
conform to the approved Construction Schedule and Scheduled
Substantial Completion Date and so that the Work will be
completed efficiently and expeditiously in accordance with the
Contract Documents . This coordination includes, but is not
limited to, the following:
4 . 3 . 6 . 1 Contractor and each of the Subcontractors shall be
responsible for examining all Drawings, all Specifications and
all items of addenda to inform themselves of requirements for
their part of the Work.
4 . 3 . 6 .2 NOT USED
4 . 3 . 6 . 3 Contractor shall supervise the taking of all measure-
ments in the field necessary to ensure timely fabrication,
delivery, and proper fitting together of the entire Work.
4 . 3 . 6 .4 Contractor shall coordinate Work of all crafts to
eliminate interferences, duplication of Work, and unfinished gaps
between operations .
4 . 3 . 6 . 5 Contractor shall regulate and schedule installation and
erection of each trade and craft involved in the Work so as to
eliminate delays due to overlapping in time of starting work of
various trades and lack of erection or installation of contiguous
or underlying work upon which installation or erection of Work of
any trade is dependent .
4 . 3 . 6 . 6 Contractor shall advise the relevant Subcontractors and
trades as to features of construction required in their Work to
receive, engage and support parts of other Work, and of easements
and tolerances required. It is Contractor ' s responsibility to
ensure that each of the Subcontractors leaves its Work in proper
17
condition to receive subsequent application of Work of other
trades .
4 . 3 . 6 . 7 Contractor shall ensure that placement of all Work by
applicable trades is accomplished on schedule .
4 . 3 . 6 . 8 Contractor shall ensure that each applicable trade and
Subcontractor furnishes and receives all drawings, templates and
other information required for the Work as a whole .
4 . 3 . 6 . 9 Contractor shall ensure that all sleeves, inserts,
boxes, piping, conduit, blocking, anchor bolts, and other
required items are built into the Work at the proper time in the
required manner.
4 . 3 . 6 . 10 Contractor shall prepare and protect the Work as
required for Developer' s installation of such materials,
fabrications, furniture, and equipment as are not required to be
furnished by Contractor.
4 .4 LABOR AND MATERIALS
4 .4 . 1 Contractor shall provide and pay for all labor,
materials, equipment , tools, construction equipment and
machinery, water, heat , utilities, transportation, and other
facilities and services necessary for the proper execution and
completion of the Work, whether temporary or permanent and
whether or not incorporated or to be incorporated in the Work.
4 .4 . 2 Contractor shall at all times enforce strict discipline
and good order among its employees and Subcontractors . Contrac-
tor shall not employ on the Work any unfit person or anyone not
skilled in the task assigned to him. Any employee or worker who
lacks such sufficient knowledge, skill or experience, or who
appears on the Project Site while under the influence of alcohol
and/or other drugs, or is otherwise troublesome or undesirable,
shall be discharged immediately and such person shall not be
reemployed or permitted on the Project Site . Neither alcohol nor
other drugs shall be consumed within the Project Site .
4 . 5 WARRANTIES
4 . 5 . 1 Subcontractors and the Materials manufacturers on the
same or on a separate form, shall jointly furnish Developer at
the time or times required in the Contract Documents their
written warranty for the specified period in accordance with this
subparagraph. Such warranties shall be on Subcontractor ' s or
manufacturer' s form, or on a trade association form, all subject
18
to Developer' s prior written approval , which approval shall not
be unreasonably withheld.
4 . 5 . 2 Contractor shall cause every Subcontractor who performs
any significant portion of the Work and each Material Supplier
who furnishes any substantial amount of the Material to submit to
Developer a written guarantee of such Work or Material , in the
following form:
(SUBCONTRACTOR'S LETTERHEAD)
Dated , 199
GUARANTEE FOR
We hereby guarantee that the which we have
supplied and/or installed at (the
"Project " ) has been done in strict accordance with the Drawings
and Specifications and all applicable building codes and other
governmental requirements and that the Work installed and mate-
rials supplied will fulfill the requirements of the Specifica-
tions . We agree, at our expense, to repair or replace any or all
of our Work which may prove to be defective in workmanship or
materials, within periods set forth in the Contract Documents
(but in no event for a period less than one (1) year from the
date of Substantial Completion) , together with any adjacent Work
which requires repair or replacement because of our defective
Work and/or material , ordinary wear and tear and unusual abuse or
neglect excepted.
If we fail to commence compliance with the above paragraph within
ten (10) calendar days after receipt of written notice from the
Developer of the Project to do so, or fail to pursue such
compliance with diligence, we, jointly and severally, do hereby
authorize Developer to proceed to have the defects and any
affected other component repaired and made good at our sole
expense, and we will honor and pay the costs of labor and
materials therefor plus ten percent (10%) of such costs as
Developer ' s overhead, upon demand, plus interest at the maximum
rate permitted to be charged by non-exempt lenders in business
related transactions from the date expended by Developer until
the date of repayment . If we fail to fulfill the preceding
obligations, and if Developer brings an action to enforce this
guarantee, we agree to pay Developer' s attorney' s fees and costs
of litigation and investigation incurred in connection therewith .
Authorized Agent of
Subcontractor: Signed:
19
Countersigned
(Telephone # (
4 . 5 . 3 Contractor shall secure and furnish evidence to
Developer, as a condition precedent to final acceptance of the
Work and prior to the Final Application for Payment, the
existence of all written guarantees and warranties .
4 . 5 . 4 Contractor represents and warrants to Developer that
Contractor has the skill and professional competence, expertise
and experience to undertake the obligations imposed by the
Agreement and these General Conditions and imposed by the
necessary requirements of a project of the magnitude of the Work.
Contractor understands that Developer has relied upon this
representation and warranty as a material inducement to enter
into the Agreement and these General Conditions .
4 . 5 . 5 Contractor represents and warrants that Contractor
holds a license, permit or other special license to perform the
Work included in the Agreement and these General Conditions, as
required by law, or employs or works under the general
supervision of the holder of such license, permit or special
license .
4 . 5 . 6 Contractor represents and warrants to Developer that
all Materials and equipment furnished for incorporation in the
Improvements will be new unless otherwise specified in the
Contract Documents .
4 . 6 TAXES
4 . 6 . 1 The incidence of all real property taxes on the
Property shall fall upon Owner. However, Contractor and its
Subcontractors shall by lawful payment relieve Developer and
Owner from any federal , state or municipal sales, consumer, use,
and other taxes under laws now applying to the performance of the
Agreement and these General Conditions, and Contractor hereby
indemnifies and agrees to hold harmless Developer from the
payment of all contributions of payroll taxes imposed by federal ,
state and municipal authority under any unemployment,
compensation or insurance laws and under any old age benefit
laws, as well as union trust fund contributions . The payment of
the taxes referred to in the foregoing sentence shall constitute
a Cost of the Work but shall not increase the Contract Sum.
Contractor may withhold the payment of any such amount if in good
faith Contractor believes that any such tax is not rightfully
20
owing and the nonpayment of such tax during the pendency of such
contest will not subject Developer or the Property to potential
liability, foreclosure, or slander of title . Contractor shall
diligently prosecute any such contest to completion and shall pay
any amounts found to be owing immediately upon the conclusion of
such contest . Developer retains the right (but not the
obligation) to pay directly any taxes which are Contractor ' s
responsibility, regardless of the source of the Materials, and
any amounts so paid will be an offset against amounts due
Contractor under the Agreement . Should Contractor fail to pay
any amount required to be paid by it when and as due, Developer
is authorized by Contractor to pay the same, and all amounts so
paid shall be deducted from any amounts due to Contractor under
the Agreement . If such monies owing to Contractor are
insufficient to reimburse Developer, Contractor shall reimburse
Developer for such deficiency within seven (7) Days of demand,
including interest thereon at the maximum rate permitted to be
charged by non-exempt lenders in business related transactions
from the date expended by Developer until the date paid by
Contractor.
4 . 7 PERMITS, FEES AND NOTICES
4 . 7 . 1 Subject to the provisions of Paragraph 6 . 5 of the
Agreement , Contractor shall secure all permits and pay all
governmental fees, licenses and inspections necessary for the
proper execution and completion of the Work which are legally
required during the performance of the Work, including without
limitation all demolition and building permits, all occupancy
permits and the temporary certificate of occupancy. Contractor
shall give all notices necessary and incidental to the due and
lawful prosecution of the Work. Certificates of inspection of
the Work shall be delivered to Developer upon Substantial
Completion of the Work in sufficient time for occupation of
thereof , on or prior to the applicable Scheduled Substantial
Completion Date .
4 . 7 . 2 Contractor shall confer with and provide information to
Developer, and cooperate with Developer in meeting requirements
imposed by any public authority.
4 . 7 . 3 Contractor shall give all notices and comply with all
laws, ordinances, rules, regulations and lawful orders of any
public authority.
4 . 7 .4 If Contractor reasonably determines that any of the
Contract Documents is at variance in any respect with applicable
21
laws, statutes, building codes or regulations, it shall promptly
notify Developer in writing.
4 . 8 PROJECT PERSONNEL
4 . 8 . 1 Contractor shall employ a Project Manager and
Superintendent who shall be in attendance at the Project Site as
necessary to properly monitor and perform the Work. Contractor ' s
Representative shall represent Contractor and all communications
given to Contractor ' s Representative or his designated
representatives shall be binding as if given to Contractor.
4 . 8 . 2 Contractor shall ensure that Contractor' s
Representative shall at all times be familiar with the progress
of the Work and shall be available to meet with Developer and
Architect, at least weekly concerning the performance and/or
progress of the Work.
4 . 8 . 3 Contractor shall employ personnel who shall bring into
order and relate the Work to avoid interference, shall establish
and preserve clearances between related parts of the Work, and
shall maintain the indications on the Drawings and the
requirements of the Specifications .
4 . 8 .4 Communications required to be in writing pursuant to
the Contract Documents and other important communications shall
be in writing . Other communications shall be confirmed in
writing on written request by either party in each case .
4 . 9 PROGRESS SCHEDULE
4 . 9 . 1 Contractor shall prepare progress reports as provided
in the Agreement .
4 . 9 . 2 Contractor shall make every effort to expedite and
monitor production, ordering and delivery of Materials and equip-
ment as required to maintain the Construction Schedule .
4 . 10 DOCUMENTS AND SAMPLES AT THE SITE
4 . 10 . 1 Contractor shall maintain at the Project Site for
Developer one record copy of all Drawings, Specifications, Change
Orders and other modifications and shall currently record all
changes made during construction to approved shop drawings,
product data and samples. These shall be available to Architect
22
and Developer for inspection at all times and shall be delivered
to Developer upon completion of the Work.
4 . 11 SHOP DRAWINGS, PRODUCT DATA AND SAMPLES
4 . 11 . 1 Shop drawings are drawings, diagrams, schedules and
other data specially prepared for the Work by Contractor or any
Subcontractor, manufacturer, supplier or distributor to
illustrate some portion of the Work. Contractor shall prepare a
separate schedule for shop drawing submittal and approval .
4 . 11 .2 Product data are illustrations, standard schedules,
performance charts, instructions, brochures, diagrams and other
information furnished by Contractor to illustrate a material ,
product or system for some portion of the Work.
4 . 11 . 3 Samples are physical examples which illustrate mate-
rials, equipment or workmanship and establish standards by which
the Work will be judged.
4 . 11 . 4 Contractor shall as part of the Work prepare or cause
to be prepared, and shall review, approve and submit, with
reasonable promptness and in such sequence as to cause no delay
in the Work, all shop drawings, product data and samples required
by the Contract Documents or otherwise required in the
performance of Contractor ' s obligations .
4 . 11 . 5 By approving and submitting shop drawings, product data
and samples, Contractor represents that it has determined and
verified all materials, field measurements, and field
construction criteria related thereto and that it has checked and
coordinated the information contained within such submittals with
the requirements of the Work and the Contract Documents .
4 . 11 . 6 Contractor shall not be relieved of responsibility for
any deviation from the requirements of the Contract Documents by
Architect ' s and Developer' s approval of shop drawings, product
data or samples under Paragraph 2 . 2 . 10 unless Contractor has
specifically informed Developer and Architect in writing of such
deviation at the time of submission and Developer and Architect
have given written approval of the specific deviation.
Contractor shall not be relieved from responsibility for errors
or omissions in the shop drawings, product data or samples
approved by Architect or Developer.
23
4 . 11 . 7 Contractor shall direct specific attention, in writing
or on resubmitted shop drawings, product data or samples, to
revisions of previous submittals.
4 . 11 . 8 No portion of the Work requiring submission of a shop
drawing, product data or sample shall be commenced until the
submittal has been approved by Architect and Developer as
provided in Paragraph 2 . 2 . 10 . All such portions of the Work
shall be in accordance with approved submittals .
4 . 12 USE OF SITE
4 . 12 . 1 Contractor shall confine operations at the Project Site
to areas permitted by law, ordinances, permits and the Contract
Documents and shall not unreasonably encumber the Project Site
with any materials or equipment .
4 . 13 CUTTING AND PATCHING OF WORK
Contractor shall perform all cutting and patching of the
Work in accordance with the Plans and Specifications .
4 . 14 CLEANING UP
Contractor shall perform all Clean Up as required to
maintain a safe and orderly Site.
4 . 15 COMMUNICATIONS
4 . 15 . 1 Contractor shall forthwith upon receipt forward all
communications addressed to Developer or Contractor directly to
Developer and, when applicable, with copies to Architect .
4 . 16 ROYALTIES AND PATENTS
4 . 16 . 1 If Contractor has reason to believe that any design,
process or product specified in the Contract Documents is an
infringement of a patent , it shall immediately give such informa-
tion to Architect and Developer in writing.
4 . 17 INDEMNIFICATION
24
4 . 17 . 1 Contractor shall indemnify, hold harmless and defend
Developer, and Developer' s officers, directors, employees,
agents, and partners (together the "Indemnified Parties" ) , from
and against any and all judgments, decrees, fines, penalties,
claims, actions, damages , losses, expenses, including but not
limited to attorneys ' fees and costs of investigation and
litigation, arising out of or resulting from (a) claims by the
Developers of the units within the Project of construction
defects as set forth in Paragraphs 3 . 8 and 3 . 8 . 1 in the Agreement
(but not design defects) or defective workmanship and (b) the
negligence or willful misconduct of Contractor or its officers,
directors, partners, subcontractors, consultants, agents, or
employees during the performance of the Work, if any such claim,
damage, loss or expense is pursuant to this subparagraph (b)
attributable to:
1 bodily injury, sickness, disease or death; or
2 injury to or destruction of tangible property
including the loss of use resulting therefrom,
caused by any negligent act or omission or willful act of
Contractor, any Subcontractor, or employee or agent of any of the
foregoing, or anyone directly or indirectly employed by any one
of them or anyone for whose acts any of them may otherwise be
liable, to the extent of Contractor ' s negligence . In the event
of one or more acts of concurrent negligence by Contractor and
others for whose acts Contractor is not responsible, Contractor
shall only be liable for, and this indemnity shall apply only
with respect to, Contractor' s proportionate share of such
negligence and Contractor shall not be liable for the
proportionate negligence of any party for whose acts Contractor
is not responsible.
4 . 17 . 2 At Developer' s option and with counsel reasonably
satisfactory to Developer, Contractor shall , at Contractor' s sole
cost and risk defend any and all suits, actions or other legal
proceedings that may be brought or instituted against Developer
with respect to any matter to which the indemnity referred to in
Paragraph 4 . 17 . 1 applies .
4 . 17 . 3 Should any employee of Contractor, any Subcontractor or
anyone directly or indirectly employed by any of them, assert any
claim against the Indemnified Parties, the indemnification
obligation under Paragraph 4 . 17 . 1 shall not be limited in any way
by any limitation on the amount or type of damages, compensation
25
or benefits payable under workers ' compensation acts, disability
benefit acts or other employee benefit acts .
4 . 17 . 4 The indemnification obligations of Contractor under
subparagraph 4 . 17 . 1 shall not extend to the liability of Archi-
tect, its agents or employees, arising out of (1) the preparation
or approval of maps, drawings, opinions, reports, surveys, Change
Orders, designs or Specifications, or (2) the giving of or the
failure to give directions or instructions by Architect , its
agents or employees to the extent such giving or failure to give
is the cause of the injury or damage .
4 . 17 . 5 Nothing contained in Paragraph 4 . 17 .4 shall relieve
Contractor of its responsibility for construction procedures, for
safety precautions, or any other requirements established by
Paragraph 4 . 3 .
4 . 17 . 6 Contractor' s obligations under this Paragraph 4 . 17
shall survive the completion of the Work and/or the termination
of the Agreement .
4 . 18 OWNER' S CONSULTANT
4 . 18 . 1 Owner reserves the right to retain a consultant to
review the Drawings and Specifications for the Improvements and
to make occasional visits to the Project Site during the course
of construction for the purpose of inspecting the condition and
progress of the Work and verifying payment requests . The
continuation of the Work shall be contingent upon such approval
of the Work and the progress thereon, and Developer ' s final
acceptance of the Work shall be conditioned upon such approval
of the completed Work.
ARTICLE 5
SUBCONTRACTORS
5 . 1 DEFINITION
5 . 1 . 1 A Subcontractor is a person or entity who has a direct
contract with Contractor to perform any of the Work at the
Project Site . The term Subcontractor includes both the
Subcontractor itself or its authorized representative . The term
Subcontractor does not include any separate contractor or its
subcontractors .
26
5 . 2 AWARD OF SUBCONTRACTS AND OTHER CONTRACTS FOR PORTIONS OF
THE WORK
5 . 2 . 1 Subcontracts shall be awarded and governed by the
provisions of the Agreement and Paragraph 5 . 3 .
5 . 3 SUBCONTRACTOR RELATIONS
5 . 3 . 1 By an appropriate written agreement , Contractor shall
require each Subcontractor, to the extent of the Work to be
performed by such Subcontractor, to be bound by the terms of the
Contract Documents and to assume all the obligations and
responsibilities of Contractor hereunder. Such agreement shall
preserve and protect the rights of Developer and Architect under
the Contract Documents with respect to the Work to be performed
by the Subcontractor so that the subcontracting thereof will not
prejudice such rights . Contractor shall make available to each
proposed Subcontractor copies of the Contract Documents to which
the Subcontractor will be bound pursuant to this Paragraph 5 . 3 ,
and shall identify to the Subcontractor in writing any terms and
conditions of the proposed subcontract which may be at variance
with the Contract Documents . Any such variance shall also be
subject to Developer ' s prior written approval .
5 . 3 .2 Contractor shall cause each subcontract to provide that
if Developer or Contractor terminates the Agreement, such Subcon-
tractor will , at Developer' s option, allow Developer, Owner, or
Developer' s designee to assume the obligations of Contractor
under such subcontract, as such obligations accrue from and after
the date of termination of the Agreement . Upon such a
substitution, each such Subcontractor shall agree to be bound
contractually under such subcontract to Developer or Developer ' s
designee just as if Developer or such designee were Contractor,
and such subcontracts, as so amended, will remain in full force
and effect . Any party designated by Developer to assume the
obligations of Contractor hereunder shall be a general
contracting firm with experience in construction of improvements
of the same type as the Work and with specific knowledge of
applicable contracting and subcontracting practices and
procedures .
ARTICLE 6
27
PAYMENTS AND COMPLETION
6 . 1 CONTRACT SUM
6 . 1 . 1 Developer shall pay Contractor the Contract Sum set
forth in the Agreement , subject to all of the other terms,
conditions and provisions of the Contract Documents .
6 . 2 SCHEDULE OF VALUES
6 . 2 . 1 Contractor shall check all Materials, equipment and
labor entering into the Work and shall keep such full and
detailed accounts as may be necessary for proper financial
management under this Agreement . All such systems shall be
satisfactory to Developer.
6 . 2 . 2 Before the first Application for Payment, Contractor
shall submit to Developer a Schedule of Values allocated to the
various portions of the Work which shall be prepared in such form
and supported by such data to substantiate its accuracy as
Developer may require. This schedule shall be used only as a
basis for Contractor ' s Applications for Payment .
6 . 3 APPLICATIONS FOR PAYMENT
6 . 3 . 1 Applications for Payment shall be made and approved in
accordance with the Agreement .
6 . 3 . 2 Contractor warrants that title to all Work, Materials
and equipment covered by an Application for Payment will pass to
Developer upon the receipt of payment by Contractor free and
clear of all liens, claims, security interests or encumbrances .
Contractor further warrants that no Work, Materials or equipment
covered by an Application for Payment will have been acquired
subject to an agreement under which an interest therein or an
encumbrance thereon is retained by the seller. At Developer ' s
request, Contractor shall prepare, execute and deliver to
Developer all documents necessary to effect and perfect any such
transfer of title .
6 . 4 CONTRACTOR WAIVER
6 . 4 . 1 Contractor ' s acceptance of Final Payment shall
constitute its waiver of all claims except those previously and
timely made in writing in accordance with the terms of the
28
Contract Documents and which Contractor identifies in writing as
unsettled at the time of the Final Application for Payment .
ARTICLE 7
PROTECTION OF PERSONS AND PROPERTY
7 . 1 SAFETY PRECAUTIONS AND PROGRAMS
7 . 1 . 1 Contractor shall be responsible for initiating, main-
taining and supervising all safety precautions and programs in
connection with the Work including development and implementation
of a comprehensive safety and emergency medical aid program for
the Project Site to be submitted to Developer for Developer' s
review and approval prior to the commencement of the Work.
7 . 2 SAFETY OF PERSONS AND PROPERTY
7 . 2 . 1 Contractor shall be solely responsible for compliance
with all applicable governmental requirements and with the
requirements of any insurance company which writes any insurance
dealing with health and safety at the Project Site except for
compliance by Developer, Developer' s employees and Developer ' s
separate contractors and shall take all reasonable precautions
for the safety of , and shall provide all reasonable protection to
prevent damage, injury or loss to:
7 . 2 . 1 . 1 All employees engaged in connection with the Work;
7 . 2 . 1 . 2 All the Work and all Materials and equipment to be
incorporated therein, whether in storage on or off the Project
Site, under the care, custody or control of Contractor; and
7 . 2 . 1 . 3 Other property at the Project Site or adjacent thereto,
including trees, shrubs, lawns, walks, pavements, roadways,
structures and utilities not designated for removal , relocation,
replacement, or rehabilitation in the course of construction.
7 . 2 . 2 Contractor shall give all notices and comply with all
applicable laws, ordinances, rules, regulations (including all
applicable provisions of the Developer ' s insurance program) and
lawful orders of any public authority bearing on the safety of
persons or property or their protection from damage, injury or
29
loss . If Contractor observes that any of the Contract Documents
require the improper installation or use of any toxic or
hazardous or potentially toxic or hazardous materials, Contractor
shall promptly (and in any event prior to installation) notify
Developer and Architect in writing, and any necessary changes
shall be accomplished by appropriate Change Order.
7 .2 . 3 Contractor shall erect and maintain, as required by
existing conditions and progress of the Work, all reasonable
safeguards for safety and protection, including posting danger
signs and other warnings against hazards, promulgating safety
regulations and notifying Developers and users of adjacent
utilities .
7 . 2 .4 When the use or storage of explosives or other
hazardous materials or equipment is necessary for the execution
of the Work, Contractor shall exercise the utmost care and shall
carry on such activities under the supervision of properly
qualified personnel .
7 . 2 . 5 Provided that Developer makes available to Contractor
the proceeds of Developer ' s "all risk" insurance required to be
maintained pursuant to paragraph 19 . 4 of the Agreement,
Contractor shall promptly remedy all damage or loss to any
property referred to in Paragraphs 7 .2 . 1 .2 and 7 . 2 . 1 .3 caused in
whole or in part by Contractor, any Subcontractor or anyone
directly employed by any of them. The Contract Sum shall not be
increased on account thereof . The foregoing obligation of
Contractor is in addition to its obligations to indemnify
Developer pursuant to the provisions of the Agreement and these
General Conditions .
7 . 2 . 6 Contractor shall assign a Superintendent who has been
approved by Developer to the Project Site to manage and supervise
the safety programs .
7 . 2 . 7 Contractor shall not use asbestos materials or any
other materials which are presently known to affect the health
and safety of workers or future building occupants, and will take
necessary and appropriate precautions to secure the Project Site
in order to prevent the unauthorized dumping or other disposal of
Hazardous Materials on the Project Site . Upon completion of the
Work, Contractor shall deliver a written certificate to Developer
that the Work contains no materials known to be hazardous as of
the date of performance of the Work which may affect health or
safety.
30
7 . 2 . 8 Parts of Work in place that are subject to damage,
because of operations being carried on adjacent thereto, shall be
covered, boarded up or substantially enclosed with adequate
protection.
7 . 2 . 9 Permanent openings used as thoroughfares for the intro-
duction of Work and Materials to any structure shall have heads,
jambs and sills well blocked and boarded. Upon completion, the
entire Work will be delivered to Developer in proper, whole and
unblemished condition.
7 . 3 EMERGENCIES
7 . 3 . 1 In any emergency affecting the safety of persons or
property, Contractor shall act , at its discretion, to prevent
threatened damage, injury or loss .
ARTICLE 8
CHANGES IN THE WORK
8 . 1 AGREEMENT
8 . 1 . 1 Changes in the Work shall be made only in accordance
with the provisions of the Agreement .
ARTICLE 9
UNCOVERING AND CORRECTION OF WORK
9 . 1 UNCOVERING OF WORK
9 . 1 . 1 If any portion of the Work should be covered contrary
to the request of Architect or Developer, contrary to law, or
contrary to the requirements specifically expressed in the
Contract Documents, Developer may order the same to be uncovered
for observation. In such event Contractor shall comply with such
order and cause the same to be replaced at Contractor ' s sole
expense . Replacement shall include correction or removal of any
defective Work, installation of Work which complies with the
Contract Documents, and the recovering of the Work. No extension
of any deadline specified in the Agreement, nor "out of sequence"
charges, shall be allowed for work done to correct any defective
Work.
31
9 . 1 . 2 If any portion of the Work has been covered which
Developer or Architect has not specifically requested to observe
prior to being covered, Developer may request to see such Work
and it shall be uncovered by Contractor. If such Work is found
to be in accordance with the Contract Documents and with all
applicable legal requirements, the cost of uncovering and
replacement shall , by appropriate Change Order, be added to the
Cost of the Work and increase Contract Sum. If such Work is
found not to be in accordance with the Contract Documents,
Contractor shall pay all such costs and shall remedy all
defective Work.
9 . 2 CORRECTION OF fective Work shall be corrected in accordance with
Article 17 o the Agreement .
;It) 1C' ` ARTICLE 10
DEFAULT AND BANKRUPTCY
10 . 1 DEFAULT BY CONTRACTOR
10 . 1 . 1 If Contractor fails to commence the Work or fails to
prosecute the Work to completion in accordance with the
provisions of this Agreement, or is guilty of negligence, willful
misconduct or abandons the Work, then Contractor shall cure any
such default within seven (7) Days ' after written notice thereof
except if the default results in the immediate danger to any
person performing Work on the Improvements, then Contractor shall
immediately cure such default . If Contractor fails to do so
within five (5) Days after a second written notice from
Developer, Developer may (i) terminate Contractor' s employment
hereunder, (ii) take possession of and use all or any part of
Contractor ' s Materials, equipment, tools, supplies, and other
property of every kind used by Contractor in the performance of
the Work and to use such property in the completion of the Work,
and/or (iii) complete the Work in a reasonable manner, including
engaging the services of other parties . In such event ,
Contractor shall be compensated for all Work performed through
the date of termination and for the use of its materials,
equipment, tools, supplies and other property, less any damages
sustained by Developer as a result of Contractor ' s breach or
default . Nothing contained herein will be deemed to limit
Contractor ' s liability or Developer ' s rights at law or in equity
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should Contractor be in breach of its obligations under the
Contract Documents .
10 .2 DEVELOPER' S DEFAULT
10 . 2 . 1 If Developer fails to perform any of its obligations
hereunder, Contractor shall give Developer a written notice
thereof, stating the specific nature of the default . In such
event , Developer shall cure such default within seven (7) Days
after receipt of such notice if the default involves the payment
of money or any other default that can reasonably be cured within
such period. If the default does not involve the payment of
money and cannot reasonably be cured within such period, then
Developer shall within such period present a plan for
expeditiously curing such default which is reasonably
satisfactory to Contractor and shall thereafter proceed to cure
such default in accordance with the plan. If Developer fails to
do so, then Contractor shall have the right to terminate the
Agreement by giving Developer written notice thereof at any time
thereafter while such default remains uncured. In such event
Developer shall pay Contractor for all Work properly executed (so
long as Contractor has provided all documentation, including
mechanics lien releases, warranties, manuals and bonds, for such
Work as required in the Contract Documents) and for any actual ,
reasonable and demonstrable loss sustained upon any Materials,
equipment , tools, construction equipment and machinery, and
reasonable demobilization costs and for that portion of
Contractor' s Fee earned to date of termination.
10 . 3 NO DEFAULT DURING DISPUTE RESOLUTION
10 . 3 . 1 No party shall be deemed to be in breach of its
obligations hereunder with regard to any matter which is in
dispute between the parties while the same is being resolved
through the dispute resolution mechanism provided in Article 25
of the Agreement ; provided that such party is not in default with
respect to any matter that has been decided by the referee
referenced in Article 25 of the Agreement .
10 .4 BANKRUPTCY OF CONTRACTOR
10 . 4 . 1 Contractor acknowledges and agrees that if (a) Contrac-
tor is adjudicated a bankrupt , or (b) Contractor makes a general
assignment for the benefit of creditors, or (c) a receiver is
appointed for the benefit of Contractor' s creditors, or (d) a
receiver is appointed on account of Contractor' s insolvency, the
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same is likely to impair or frustrate Contractor' s performance
under the Agreement and these General Conditions . Accordingly,
Developer and Contractor agree that upon the occurrence of any
such event , Developer shall be entitled to either receive from
Contractor or its successor in interest prompt assurance,
satisfactory to Developer, of Contractor' s current and future
performance under the Agreement and these General Conditions (the
cost of which shall be paid by Contractor) , and/or to proceed
with the Work with Developer' s own forces or with other
contractors on a time and material or other appropriate basis,
and, in addition to any other remedies, deduct the cost of having
such Work performed by others from the Contract Sum.
10 . 5 CONTRACTOR ' S DUTIES UPON TERMINATION
10 . 5 . 1 In the event Developer terminates the Agreement ,
Contractor shall immediately discontinue the Work, but shall do
such other Work as is ordered therein to safeguard the Work then
completed and the Materials and equipment then delivered to the
Project Site, and do such other Work as may be ordered by
Developer for the purpose of leaving the Work in a safe and
useful condition.
ARTICLE 11
COMPLIANCE WITH LAWS; NONDISCRIMINATION
Contractor shall observe and abide by and perform all of its
obligations under the Contract Documents in accordance with all
applicable laws, rules and regulations of all governmental
authorities having jurisdiction, including, without limitation,
the Federal Occupational Safety and Health Act and laws, rules
and regulations prohibiting discrimination in employment .
ARTICLE 12
SIGNS AND ADVERTISING
No signs or advertising media of any nature shall be
permitted on or about the Project Site or enclosing structures
without the prior written approval of Developer. Any approved
signs shall comply with all applicable laws, codes and
ordinances .
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ARTICLE 13
CONFIDENTIALITY; MEDIA
13 . 1 RESTRICTION
13 . 1 . 1 Contractor shall treat all information relating to the
Work and all information supplied to Contractor by Developer or
Architect as confidential and proprietary information of
Developer or Architect and shall not permit its release to other
parties or make any public announcement or publicity releases
without Developer' s prior written authorization. Contractor
shall refer all inquiries by the media regarding the Property or
the Work (including emergency matters) to Developer. Contractor
shall require Subcontractors and vendors to comply fully with the
foregoing requirements .
13 . 2 BREACH OF RESTRICTION
13 . 2 . 1 Without limitation upon any other right or remedy of
Developer in the event of Contractor ' s breach or threatened
breach of the requirements of Paragraph 13 . 1 . 1 , Developer may
require Contractor to take, and Contractor agrees to take upon
request by Developer, such action as is reasonably necessary to
cause a retraction of any statement or release of information.
ARTICLE 14
MISCELLANEOUS PROVISIONS
14 . 1 GOVERNING LAW
14 . 1 . 1 These General Conditions shall be governed by the laws
of the State of California .
14 . 2 SUCCESSORS AND ASSIGNS
14 . 2 . 1 The Contract Documents may be assigned only in
accordance with the Agreement .
14 . 3 NOTICE
14 . 3 . 1 All notices shall be given in accordance with Article
26 of the Agreement .
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14 .4 CLAIMS FOR DAMAGES
14 .4 . 1 Should either party to the Agreement suffer injury or
damage to person or property because of any act or omission of
the other party or of any of its employees, agents or others for
whose acts it is legally liable, a written claim shall be made in
writing to such other party within a reasonable time after the
first observance of such injury or damage.
14 . 5 TESTS
14 . 5 . 1 If the Contract Documents, laws, ordinances, rules,
regulations or orders of any public authority having jurisdiction
require any portion of the Work to be inspected, tested or
approved, Contractor shall notify Developer and Architect of its
readiness so Developer and/or Architect may observe such
inspection, testing or approval . All testing will be done by a
testing laboratory designated by Developer.
14 . 5 .2 Required certificates of inspection, testing or
approval shall be secured by Contractor and promptly delivered by
it to Architect and Developer.
14 . 6 WORK DURING PENDENCY OF DISPUTES
14 . 6 . 1 Unless otherwise instructed by Developer in writing,
Contractor shall carry on the Work and maintain its progress
during the pendency of any dispute hereunder (including
extensions of time relating to a Change Order but excluding any
dispute concerning increases in the Contract Sum to be included
in any Change Order) , and Developer shall continue to make
undisputed payments to Contractor in accordance with the
Agreement . Nothing contained herein shall release Contractor
from its obligation to notify Developer of matters Contractor
considers to require changes prior to commencing work on such
matters .
14 . 7 TIME
The Work shall be performed within the time set forth in the
Agreement and shall be subject to extension only as expressly
provided therein.
ARTICLE 15
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AUTHORITY
Each individual executing these General Conditions on behalf
of Contractor represents and warrants that Contractor is a duly
authorized and existing corporation, that Contractor has and is
qualified to do business in the State of California, that
Contractor has full right and authority to enter into these
General Conditions, that Contractor has and will maintain
throughout the term of the Agreement a current and valid license
for purposes of executing the Work from the California State
Contractor' s License Board, and that each person signing these
General Conditions on behalf of Contractor is duly authorized to
do so.
IN WITNESS WHEREOF, these General Conditions of the Master
Construction Contract are executed as of the date set forth
below.
"DEVELOPER"
ComDyn PD, LLC
A California limited liability company
By:
Its :
"CONTRACTOR"
A California corporation
By:
Its :
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