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Standard Form of Agreement Between
Owner and Contractor where the basis of payment is
the Cost of the Work Plus a Fee with or
without a Guaranteed Maximum Price

    AIA Document A111—Electronic Format

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES: CONSULTATION WITH AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.

The 1987 Edition of AIA Document A201, General Conditions of the Contract for Construction, is adopted in this document by reference. Do not use with other general conditions unless this document is modified. This document has been approved and endorsed by The Associated General Contractors of America.

Copyright 1920, 1925, 1951, 1958, 1961, 1967, 1974, 1978, 1987 by The American Institute of Architects, 1735 New York Avenue N.W., Washington D.C. 20006-5292. Reproduction of the material herein or substantial quotation of its provisions without written permission of the AIA violates the copyright laws of the United States and will be subject to legal prosecution.

AGREEMENT
made as of the Twenty-Second (22nd) day of October in the year of Nineteen Hundred and Nineteen Hundred Ninety-Nine

BETWEEN the Owner:
(Name and address)
ADC Telecommunications, Inc.
P.O. Box 1101
Minneapolis, Minnesota 55440-1101

and the Contractor:
(Name and address)
Kraus-Anderson Construction Company
Building Division
2500 Minnehaha Avenue
Minneapolis, Minnesota 55404

the Project is:
(Name and address)
ADC Telecommunications, Inc.
Phase I-ADC Telecommunications
World Headquarters & Technology Campus
Mitchell Road and Technology Drive
Eden Prairie, Minnesota 55347-1669

The Architect is:
(Name and address)
Hammell Green and Abrahamson, Inc.
1201 Harmon Place
Minneapolis, Minnesota 55403-1985

AIA DOCUMENT A111—OWNER-CONTRACTOR AGREEMENT—TENTH EDITION—AIA—COPYRIGHT 1987—THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE N.W., WASHINGTON, D.C. 20006-5292. Unlicensed photocopying violates U.S. copyright laws and is subject to legal prosecution. This document was electronically produced with permission of the AIA and can be reproduced without violation until the date of expiration as noted below.

Electronic Format A111-1987
User Document: AIA—10/22/1999. AIA License Number 105495, which expires on 10/31/99—Page #1

The Owner and Contractor agree as set forth below.

ARTICLE 1
THE CONTRACT DOCUMENTS

1.1     The Contract Documents consist of this Agreement, Conditions of the Contract (General, Supplementary and other Conditions), Drawings, Specifications, Addenda issued prior to execution of this Agreement, other documents listed in this Agreement and Modifications issued after execution of this Agreement; these form the Contract, and are as fully a part of the Contract as if attached to this Agreement or repeated herein. The Contract represents the entire and integrated agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or oral. An enumeration of the Contract Documents, other than Modifications, appears in Article 16. If anything in the other Contract Documents is inconsistent with this Agreement, this Agreement shall govern.

ARTICLE 2
THE WORK OF THIS CONTRACT

2.1     The Contractor shall execute the entire Work described in the Contract Documents, except to the extent specifically indicated in the Contract Documents to be the responsibility of others, or as follows:

To be determined as the Scope of Work is defined.

ARTICLE 3
RELATIONSHIP OF THE PARTIES

3.1     The Contractor accepts the relationship of trust and confidence established by this Agreement and covenants with the Owner to cooperate with the Architect and utilize the Contractor's best skill, efforts and judgment in furthering the interests of the Owner; to furnish efficient business administration and supervision; to make best efforts to furnish at all times an adequate supply of workers and materials; and to perform the Work in the best way and most expeditious and economical manner consistent with the interests of the Owner. The Owner agrees to exercise best efforts to enable the Contractor to perform the Work in the best way and most expeditious manner by furnishing and approving in a timely way information required by the Contractor and making payments to the Contractor in accordance with requirements of the Contract Documents.

ARTICLE 4
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION

4.1     The date of commencement is the date from which the Contract Time of Subparagraph 4.2 is measured; it shall be the date of this Agreement, as first written above, unless a different date is stated below or provision is made for the date to be fixed in a notice to proceed issued by the Owner.

(Insert the date of commencement, if it differs from the date of this Agreement or, if applicable, state that the date will be fixed in a notice to proceed.)

The commencement date will be on or about July 26, 1999.

Unless the date of commencement is established by a notice to proceed issued by the Owner, the Contract shall notify the Owner in writing not less than five days before commencing the Work to permit timely filing of mortgages, mechanic's liens and other security interests.

4.2     The Contractor shall achieve Substantial Completion of the entire Work not later than (To Be Determined and agreed upon by Owner and Contractor).

(Insert the calendar date or number of calendar days after the date of commencement. Also insert any requirements for earlier Substantial Completion of certain portions of the Work, if not stated elsewhere in the Contract Documents.)

Portions of the building will be turned over to the Owner as they become available, providing all life safety elements are in place and the City of Eden Prairie is willing to issue partial certificates of occupancy.

, subject to adjustments of this Contract Time as provided in the Contract Documents.

(Insert provisions, if any, for liquidated damages relating to failure to complete on time.)

ARTICLE 5
CONTRACT SUM

5.1     The Owner shall pay the Contractor in current funds for the Contractor's performance of the Contract the Contract Sum consisting of the Cost of the Work as defined in Article 7 and the Contractor's Fee determined as follows:

(State a lump sum, percentage of Cost of the Work or other provision for determining the Contractor's Fee, and explain how the Contractor's Fee is to be adjusted for changes in the Work.)

Contractors Fixed Fee Two Million Seven Hundred Sixty-Two Thousand Five Hundred Dollars ($2,752,500), based on a 3.25% Contractor Fee, for all work performed within the Scope of Work covered by the original agreed upon Guaranteed Maximum Price, plus 3.25% for the cost of any changes mutually agreed upon by the parties in excess of the original agreed upon Guaranteed Maximum Price.

5.2     GUARANTEED MAXIMUM PRICE (IF APPLICABLE)

5.2.1    The sum of the Cost of the Work and the Contractor's Fee is guaranteed by the Contractor not to exceed To Be Determined and agreed upon by Owner and Contractor Dollars ($85,000,000), subject to additions and deductions by Change Order as provided in the Contract Documents. Such maximum sum is referred to in the Contract Documents as the Guaranteed Maximum Price. Costs which would cause the Guaranteed Maximum Price to be exceeded shall be paid by the Contractor without reimbursement by the Owner. The fee and cost in Paragraph 5.1 and 5.2.1 is a good faith estimate at this time and will be finalized and agreed to by ADC Telecommunications, Inc. & Kraus-Anderson Construction Company on/or before December 31st, 1999.

(Insert specific provisions if the Contractor is to participate in any savings.)

One Hundred Percent (100%) of any and all savings shall accrue to the Owner.

5.2.2    The Guaranteed Maximum Price is based upon the following alternates, if any, which are described in the Contract Documents and are hereby accepted by the Owner:

(State the numbers or other identification of accepted alternates, but only if a Guaranteed Maximum Price is inserted in Subparagraph 5.2.1. If decisions on other alternates are to be made by the Owner subsequent to the execution of this Agreement, attach a schedule of such other alternates showing the amount for each and the date until which that amount is valid.)

To Be Determined.

5.2.3    The amounts agreed to for unit prices, if any, are as follows:

(State unit prices only if a Guaranteed Maximum Price is inserted in Subparagraph 5.2.1.)

None at this time/provided upon request.

ARTICLE 6
CHANGES IN THE WORK

6.1     CONTRACTS WITH A GUARANTEED MAXIMUM PRICE

6.1.1    Adjustments to the Guaranteed Maximum Price on account of changes in the Work may be determined by any of the methods listed in Subparagraph 7.3.3 of the General Conditions.

6.1.2    In calculating adjustments to subcontracts (except those awarded with the Owner's prior consent on the basis of cost plus a fee), the terms "cost" and "fee" as used in Clause 7.3.3.3 of the General Conditions and the terms "costs" and "a reasonable allowance for overhead and profit" as used in Subparagraph 7.3.6 of the General Conditions shall have the meanings assigned to them in the General Conditions and shall not be modified by Articles 5, 7 and 8 of this Agreement. Adjustments to subcontracts awarded with the Owner's prior consent on the basis of cost plus a fee shall be calculated in accordance with the terms of those subcontracts.

6.1.3    In calculating adjustments to this Contract, the terms "cost" and "costs" as used in the above-referenced provisions of the General Conditions shall mean the Cost of the Work as defined in Article 7 of this Agreement and the terms "fee" and "a reasonable allowance for overhead and profit" shall mean the Contractor's Fee as defined in Paragraph 5.1 of this Agreement.

6.2     CONTRACTS WITHOUT A GUARANTEED MAXIMUM PRICE

6.2.1    

6.3     ALL CONTRACTS

6.3.1    If no specific provision is made in Paragraph 5.1 for adjustment of the Contractor's Fee in the case of changes in the Work, or if the extent of such changes is such, in the aggregate, that application of the adjustment provisions of Paragraph 5.1 will cause substantial inequity to the Owner or Contractor, the Contractor's Fee shall be equitably adjusted on the basis of the Fee established for the original Work.

ARTICLE 7
COSTS TO BE REIMBURSED

7.1     The term Cost of the Work shall mean costs necessarily incurred by the Contractor in the proper performance of the Work. Such costs shall be at rates not higher than the standard paid at the place of the Project except with prior consent of the Owner. The Cost of the Work shall include only the items set forth in this Article 7.

7.1.1    LABOR COSTS

7.1.1.1  Wages of construction workers directly employed by the Contractor to perform the construction of the Work at the site or, with the Owner's agreement, at off-site workshops.

7.1.1.2  Wages or salaries of the Contractor's supervisory and administrative personnel when stationed at the site with the Owner's agreement.

(If it is intended that the wages or salaries of certain personnel stationed at the Contractor's principal or other offices shall be included in the Cost of the Work, identify in Article 14 the personnel to be included and whether for all or only part of their time.)

7.1.1.3  Wages and salaries of the Contractor's supervisory or administrative personnel engaged, at factories, workshops or on the road, in expediting the production or transportation of materials or equipment required for the Work, but only for that portion of their time required for the Work.

7.1.1.4  Costs paid or incurred by the Contractor for taxes, insurance, contributions, assessments and benefits required by law or collective bargaining agreements and, for personnel not covered by such agreements, customary benefits such as sick leave, medical and health benefits, holidays, vacations and pensions, provided such costs are based on wages and salaries included in the Cost of the Work under Clauses 7.1.1.1 through 7.1.1.3.

7.1.2    SUBCONTRACT COSTS

Payments made by the Contractor to Subcontractors in accordance with the requirements of the subcontracts.

7.1.3    COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED CONSTRUCTION

7.1.3.1  Costs, including transportation, of materials and equipment incorporated or to be incorporated in the completed construction.

7.1.3.2  Costs of materials described in the preceding Clause 7.1.3.1 in excess of those actually installed but required to provide reasonable allowance for waste and for spoilage. Unused excess materials, if any, shall be handed over to the Owner at the completion of the Work or, at the Owner's option, shall be sold by the Contractor; amounts realized, if any, from such sales shall be credited to the Owner as a deduction from the Cost of the Work.

7.1.4    COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES AND RELATED ITEMS

7.1.4.1  Costs, including transportation, installation, maintenance, dismantling and removal of materials, supplies, temporary facilities, machinery, equipment, and hand tools not customarily owned by the construction workers, which are provided by the Contractor at the site and fully consumed in the performance of the Work; and cost less salvage value on such items if not fully consumed, whether sold to others or retained by the Contractor. Cost for items previously used by the Contractor shall mean fair market value.

7.1.4.2  Rental charges for temporary facilities, machinery, equipment, and hand tools not customarily owned by the construction workers, which are provided by the Contractor at the site, whether rented from the Contractor or others, and costs of transportation, installation, minor repairs and replacements, dismantling and removal thereof. Rates and quantities of equipment rented shall be subject to the Owner's prior approval and inventory transfers thereof will not exceed One Hundred Thirty percent (130%) of contractor's original cost for equipment rentals per contractors schedule, and Eighty percent (80%) of the fair market value for expendable tools.

7.1.4.3  Costs of removal of debris from the site.

7.1.4.4  Costs of telegrams and long-distance telephone calls, postage and parcel delivery charges, telephone service at the site and reasonable petty cash expenses of the site office.

7.1.4.5  That portion of the reasonable travel and subsistence expenses of the Contractor's personnel incurred while traveling in discharge of duties connected with the Work.

7.1.5    MISCELLANEOUS COSTS

7.1.5.1  That portion directly attributable to this Contract of premiums for insurance and bonds.

7.1.5.2  Sales, use or similar taxes imposed by a governmental authority which are related to the Work and for which the Contractor is liable.

7.1.5.3  Fees and assessments for the building permit and for other permits, licenses and inspections for which the Contractor is required by the Contract Documents to pay.

7.1.5.4  Fees of testing laboratories for tests required by the Contract Documents, except those related to defective or nonconforming Work for which reimbursement is excluded by Subparagraph 13.5.3 of the General Conditions or other provisions of the Contract Documents and which do not fall within the scope of Subparagraphs 7.2.2 through 7.2.4 below.

7.1.5.5  Royalties and license fees paid for the use of a particular design, process or product required by the Contract Documents; the cost of defending suits or claims for infringement of patent rights arising from such requirement by the Contract Documents; payments made in accordance with legal judgments against the Contractor resulting from such suits or claims and payments of settlements made with the Owner's consent; provided, however, that such costs of legal defenses, judgment and settlements shall not be included in the calculation of the Contractor's Fee or of a Guaranteed Maximum Price, if any, and provided that such royalties, fees and costs are not excluded by the last sentence of Subparagraph 3.17.1 of the General Conditions or other provisions of the Contract Documents. *(Provided such royalties, license fees and costs are based upon an activity for which the Contractor is not responsible and which arises due to the Contractor complying with the Owner's instructions).

7.1.5.6  Deposits lost for causes other than the Contractor's fault or negligence.

7.1.6    OTHER COSTS

7.1.6.1  Other costs incurred in the performance of the Work if and to the extent approved in advance in writing by the Owner.

7.2     EMERGENCIES: REPAIRS TO DAMAGED, DEFECTIVE OR NONCONFORMING WORK

The Cost of the Work shall also include costs described in Paragraph 7.1 which are incurred by the Contractor:

7.2.1    In taking action to prevent threatened damage, injury or loss in case of an emergency affecting the safety of persons and property, as provided in Paragraph 10.3 of the General Conditions.

7.2.2    In repairing or correcting Work damaged or improperly executed by construction workers in the employ of the Contractor, provided such damage or improper execution did not result from the fault or negligence of the Contractor or the Contractor's foremen, engineers or superintendents, or other supervisory, administrative or managerial personnel of the Contractor.

7.2.3    In repairing damaged Work other than that described in Subparagraph 7.2.2, provided such damage did not result from the fault or negligence of the Contractor or the Contractor's personnel, and only to the extent that the cost of such repairs is not recoverable by the Contractor from others and the Contractor is not compensated therefor by insurance or otherwise.

7.2.4    In correcting defective or nonconforming Work performed or supplied by a Subcontractor or material supplier and not corrected by them, provided such defective or nonconforming work did not result from the fault or neglect of the Contractor or the Contractor's personnel adequately to supervise and direct the Work of the Subcontractor or material supplier, and only to the extent that the cost of correcting the defective or nonconforming Work is not recoverable by the Contractor from the Subcontractor or material supplier.

ARTICLE 8
COSTS NOT TO BE REIMBURSED

8.1     The Cost of the Work shall not include:

8.1.1    Salaries and other compensation of the Contractor's personnel stationed at the Contractor's principal office or offices other than the site office, except as specifically provided in Clauses 7.1.1.2 and 7.1.1.3 or as may be provided in Article 14.

8.1.2    Expenses of the Contractor's principal office and offices other than the site office.

8.1.3    Overhead and general expenses, except as may be expressly included in Article 7.

8.1.4    The Contractor's capital expenses, including interest on the Contractor's capital employed for the Work.

8.1.5    Rental costs of machinery and equipment, except as specifically provided in Clause 7.1.4.2.

8.1.6    Except as provided in Subparagraphs 7.2.2 through 7.2.4 and Paragraph 13.5 of this Agreement, costs due to the fault or negligence of the Contractor, Subcontractors, anyone directly or indirectly employed by any of them, or for whose acts any of them may be liable, including but not limited to costs for the correction of damaged, defective or nonconforming Work, disposal and replacement of materials and equipment incorrectly ordered or supplied, and making good damage to property not forming part of the Work.

8.1.7    Any cost not specifically and expressly described in Article 7.

8.1.8    Costs which would cause the Guaranteed Maximum Price, if any, to be exceeded.

ARTICLE 9
DISCOUNTS, REBATES AND REFUNDS

9.1     Cash discounts obtained on payments made by the Contractor shall accrue to the Owner if (1) before making the payment, the Contractor included them in an Application for Payment and received payment therefor from the Owner, or (2) the Owner has deposited funds with the Contractor with which to make payments; otherwise, cash discounts shall accrue to the Contractor. Trade discounts, rebates, refunds and amounts received from sales of surplus materials and equipment shall accrue to the Owner, and the Contractor shall make provisions so that they can be secured.

9.2     Amounts which accrue to the Owner in accordance with the provisions of Paragraph 9.1 shall be credited to the Owner as a deduction from the Cost of the Work.

ARTICLE 10
SUBCONTRACTS AND OTHER AGREEMENTS

10.1    Those portions of the Work that the Contractor does not customarily perform with the Contractor's own personnel shall be performed under subcontracts or by other appropriate agreements with the Contractor. The Contractor shall obtain bids from Subcontractors and from suppliers of materials or equipment fabricated especially for the Work and shall deliver such bids to the Owner. The Owner will then determine, with the advice of the Contractor and subject to the reasonable objection of the Architect, which bids will be accepted. The Owner may designate specific persons or entities from whom the Contractor shall obtain bids; however, if a Guaranteed Maximum Price has been established, the Owner may not prohibit the Contractor from obtaining bids from others. The Contractor shall not be required to contract with anyone to whom the Contractor has reasonable objection.

10.2    If a Guaranteed Maximum Price has been established and a specific bidder among those whose bids are delivered by the Contractor to the Owner (1) is recommended to the Owner by the Contractor; (2) is qualified to perform that portion of the Work; and (3) has submitted a bid which conforms to the requirements of the Contract Documents without reservations or exceptions, but the Owner requires that another bid be accepted; then the Contractor may require that a Change Order be issued to adjust the Guaranteed Maximum Price by the difference between the bid of the person or entity recommended to the Owner by the Contractor and the amount of the subcontract or other agreement actually signed with the person or entity designated by the Owner.

10.3    Subcontracts or other agreements shall conform to the payment provisions of Paragraphs 12.7 and 12.8, and shall not be awarded on the basis of cost plus a fee without the prior consent of the Owner.

ARTICLE 11
ACCOUNTING RECORDS

11.1    The Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this Contract; the accounting and control systems shall be satisfactory to the Owner. The Owner and the Owner's accountants shall be afforded access to the Contractor's records, books, correspondence, instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to this Contract, and the Contractor shall preserve these for a period of three years after final payment, or for such longer period as may be required by law.

ARTICLE 12
PROGRESS PAYMENTS

12.1    Based upon Applications for Payment submitted to the Owner by the Contractor and Certificates for Payment issued by the Architect, the Owner shall make progress payments on account of the Contract Sum to the Contractor as provided below and elsewhere in the Contract Documents.

12.2    The period covered by each Application for Payment shall be one calendar month ending on the last day of the month, or as follows:

12.3    Provided an Application for Payment is received by the Owner not later than the First (1st) day of a month, the Owner shall make payment to the Contractor not later than the Twentieth (20th) day of the same month. If an Application for Payment is received by the Owner after the application date fixed above, payment shall be made by the Owner not later than Twentieth (20th) days after the Owner receives the Application for Payment.

12.4    With each Application for Payment the Contractor shall submit payrolls, petty cash accounts, receipted invoices or invoices with check vouchers attached, and any other evidence required by the Owner or Architect to demonstrate that cash disbursements already made by the Contractor on account of the Cost of the Work equal or exceed (1) progress payments already received by the Contractor; less (2) that portion of those payments attributable to the Contractor's Fee; plus (3) payrolls for the period covered by the present Application for Payment; plus (4) retainage provided in Subparagraph 12.5.4, if any, applicable to prior progress payments.

12.5    CONTRACTS WITH A GUARANTEED MAXIMUM PRICE

12.5.1   Each Application for Payment shall be based upon the most recent schedule of values submitted by the Contractor in accordance with the Contract Documents. The schedule of values shall allocate the entire Guaranteed Maximum Price among the various portions of the Work, except that the Contractor's Fee shall be shown as a single separate item. The schedule of values shall be prepared in such form and supported by such data to substantiate its accuracy as the Owner may reasonably require. This schedule, unless reasonably objected to by the Owner, shall be used as a basis for reviewing the Contractor's Applications for Payment.

12.5.2   Applications for Payment shall show the percentage completion of each portion of the Work as of the end of the period covered by the Application for Payment. The percentage completion shall be the lesser of (1) the percentage of that portion of the Work which has actually been completed or (2) the percentage obtained by dividing (a) the expense which has actually been incurred by the Contractor on account of that portion of the Work for which the Contractor has made or intends to make actual payment prior to the next Application for Payment by (b) the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values.

12.5.3   Subject to other provisions of the Contract Documents, the amount of each progress payment shall be computed as follows:

12.5.3.1 Take that portion of the Guaranteed Maximum Price properly allocable to completed Work as determined by multiplying the percentage completion of each portion of the Work by the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values. Pending final determination of cost to the Owner of changes in the Work, amounts not in dispute may be included as provided in Subparagraph 7.3.7 of the General Conditions, even though the Guaranteed Maximum Price has not yet been adjusted by Change Order.

12.5.3.2 Add that portion of the Guaranteed Maximum Price properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the Work or, if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing.

12.5.3.3 Add the Contractor's Fee, less retainage of Five percent (5%). The Contractor's Fee shall be computed upon the Cost of the Work described in the two preceding Clauses at the rate stated in Paragraph 5.1 or, if the Contractor's Fee is stated as a fixed sum in that Paragraph, shall be an amount which bears the same ratio to that fixed-sum Fee as the Cost of the Work in the two preceding Clauses bears to a reasonable estimate of the probable Cost of the Work upon its completion.

12.5.3.4 Subtract the aggregate of previous payments made by the Owner.

12.5.3.5 Subtract the shortfall, if any, indicated by the Contractor in the documentation required by Paragraph 12.4 to substantiate prior Applications for Payment, or resulting from errors subsequently discovered by the Owner's accountants in such documentation.

12.5.3.6 Subcontract amounts, if any, for which the Owner has reasonable withheld.

12.5.4   Additional retainage, if any, shall be as follows:

(If it is intended to retain additional amounts from progress payments to the Contractor beyond (1) the retainage from the Contractor's Fee provided in Clause 12.5.3.3, (2) the retainage from Subcontractors provided in Paragraph 12.7 below, and (3) the retainage, if any, provided by other provisions of the Contract, insert provision for such additional retainage here. Such provision, if made, should also describe any arrangement for limiting or reducing the amount retained after the Work reaches a certain state of completion.)

A retainable of five percent (5%) of all labor, material and subcontractors will be withheld until the work is completed. Upon substantial completion, payments to be made to the Contractor in the amount of one hundred percent (100%) less substantially a hold back of one hundred fifty percent (150%) of the value of any uncompleted work. This hold back cost shall be paid from time to time as the uncompleted work is finished.

12.6    CONTRACTS WITHOUT A GUARANTEED MAXIMUM PRICE

12.6.1   

12.6.2   

12.6.2.1 

12.6.2.2 

12.6.2.3 

12.6.2.4 

12.6.2.5 

12.6.3   

12.7    

12.7.1   

12.7.2   

12.7.3   

12.7.4   

12.7.5   (If it is intended, prior to Substantial Completion of the entire Work of the Contractor, to reduce or limit the retainage from Subcontractors resulting from the percentages inserted in Subparagraphs 12.7.1 and 12.7.2 above, and this is not explained elsewhere in the Contract Documents, insert here provisions for such reduction or limitation.)

12.8

12.9

ARTICLE 13
FINAL PAYMENT

13.1    Final payment shall be made by the Owner to the Contractor when (1) the Contract has been fully performed by the Contractor except for the Contractor's responsibility to correct defective or nonconforming Work, as provided in Subparagraph 12.2.2 of the General Conditions, and to satisfy other requirements, if any, which necessarily survive final payment; (2) a final Application for Payment and a final accounting for the Cost of the Work have been submitted by the Contractor and reviewed by the Owner's accountants; and (3) such final payment shall be made by the Owner not more than 45 days after the completion by the Owner's Accountants of the final Application for Payment and final accounting of the Cost of the Work.

13.2    The amount of the final payment shall be calculated as follows:

13.2.1   Take the sum of the Cost of the Work substantiated by the Contractor's final accounting and the Contractor's Fee; but not more than the Guaranteed Maximum Price, if any.

13.2.2   Subtract amounts, if any, for which the Owner reasonably withholds, in whole or in part,

13.2.3   Subtract the aggregate of previous payments made by the Owner.

If the aggregate of previous payments made by the Owner exceeds the amount due the Contractor, the Contractor shall reimburse the difference to the Owner.

13.3    The Owner's accountants will review and report in writing on the Contractor's final accounting within 45 days after delivery of the final accounting to the Owner by the Contractor. The time periods stated in this Paragraph 13.3 supersede those stated in Subparagraph 9.4.1 of the General Conditions.

13.4    If the Owner's accountants report the Cost of the Work as substantiated by the Contractor's final accounting to be less than claimed by the Contractor, the Contractor shall be entitled to demand arbitration of the disputed amount. Such demand for arbitration shall be made by the Contractor within 30 days after the Contractor's receipt of a copy of the report from Owner's Accountants; failure to demand arbitration within this 30-day period shall result in the substantiated amount reported by the Owner's accountants becoming binding on the Contractor. Pending a final resolution by arbitration, the Owner shall pay the Contractor the amount which is not in dispute.

13.5    If, subsequent to final payment and at the Owner's request, the Contractor incurs costs described in Article 7 and not excluded by Article 8 to correct defective or nonconforming Work, the Owner shall reimburse the Contractor such costs and the Contractor's Fee applicable thereto on the same basis as if such costs had been incurred prior to final payment, but not in excess of the Guaranteed Maximum Price, if any. If the Contractor has participated in savings as provided in Paragraph 5.2, the amount of such savings shall be recalculated and appropriate credit given to the Owner in determining the net amount to be paid by the Owner to the Contractor.

ARTICLE 14
MISCELLANEOUS PROVISIONS

14.1    Where reference is made in this Agreement to a provision of the General Conditions or another Contract Document, the reference refers to that provision as amended or supplemented by other provisions of the Contract Documents.

14.2    Payments due and unpaid under the Contract shall bear interest from the date payment is due at the rate stated below, or in the absence thereof, at the legal rate prevailing from time to time at the place where the Project is located.

(Insert rate of interest agreed upon, if any.)

Invoices due and unpaid shall accrue interest at a rate of daily prime plus two percent (2%) as determined by US Bank.

(Usury laws and requirements under the Federal Truth in Lending Act, similar state and local consumer credit laws and other regulations at the Owner's and Contractor's principal places of business, the location of the Project and elsewhere may affect the validity of this provision. Legal advice should be obtained with respect to deletions or modifications, and also regarding requirements such as written disclosures or waivers.)

14.3   Other provisions:
Project Manager's time spent on this project, whether in the Contractor's main office or on the jobsite. This is to be recorded on weekly time cards and charged out at a rate of $70.00 per hour with a maximum of 40 hours per week for each Project Manager assigned to this project. Safety Directors time spent on this project will be billed at the rate of $55.00 per hour. General Superintendent time spent on this project will be billed at the rate of $70.00 per hour which is part of the not-to-exceed cost.

Kraus-Anderson's payroll taxes and insurance will be charged out at the standard rate of 24% for field superintendents and 32% for all other labor under the direct employment of Kraus-Anderson for this project which is part of the not-to-exceed cost.

Cost for Excess Liability Insurance Umbrella are included in the Contractor's Fee in Paragraph 5.1.

ARTICLE 15
TERMINATION OR SUSPENSION

15.1    The Contract may be terminated by the Contractor as provided in Article 14 of the General Conditions; however, the amount to be paid to the Contractor under Subparagraph 14.1.2 of the General Conditions shall not exceed the amount the Contractor would be entitled to receive under Paragraph 15.3 below, except that the Contractor's Fee shall be calculated as if the Work had been fully completed by the Contractor, including a reasonable estimate of the Cost of the Work for Work not actually completed.

15.2    If a Guaranteed Maximum Price is established in Article 5, the Contract may be terminated by the Owner for cause as provided in Article 14 of the General Conditions; however, the amount, if any, to be paid to the Contractor under Subparagraph 14.2.4 of the General Conditions shall not cause the Guaranteed Maximum Price to be exceeded, nor shall it exceed the amount the Contractor would be entitled to receive under Paragraph 15.3 below.

15.3    If no Guaranteed Maximum Price is established in Article 5, the Contract may be terminated by the Owner for cause as provided in Article 14 of the General Conditions; however, the Owner shall then pay the Contractor an amount calculated as follows:

15.3.1   Take the Cost of the Work incurred by the Contractor to the date of termination.

15.3.2   Add the Contractor's Fee computed upon the Cost of the Work to the date of termination at the rate stated in Paragraph 5.1 or, if the Contractor's Fee is stated as a fixed sum in that Paragraph, an amount which bears the same ratio to that fixed-sum Fee as the Cost of the Work at the time of termination bears to a reasonable estimate of the probable Cost of the Work upon its completion.

15.3.3   Subtract the aggregate of previous payments made by the Owner. The Owner shall also pay the Contractor fair compensation, either by purchase or rental at the election of the Owner, for any equipment owned by the Contractor which the Owner elects to retain and which is not otherwise included in the Cost of the Work under Subparagraph 15.3.1. To the extent that the Owner elects to take legal assignment of subcontracts and purchase orders (including rental agreements), the Contractor shall, as a condition of receiving the payments referred to in this Article 15, execute and deliver all such papers and take all such steps, including the legal assignment of such subcontracts and other contractual rights of the Contractor, as the Owner may require for the purpose of fully vesting in the Owner the rights and benefits of the Contractor under such subcontracts or purchase orders.

15.4    The Work may be suspended by the Owner as provided in Article 14 of the General Conditions; in such case, the Guaranteed Maximum Price, if any, shall be increased as provided in Subparagraph 14.3.2 of the General Conditions except that the term "cost of performance of the Contract" in that Subparagraph shall be understood to mean the Cost of the Work and the term "profit" shall be understood to mean the Contractor's Fee as described in Paragraphs 5.1 and 6.3 of this Agreement.

ARTICLE 16
ENUMERATION OF CONTRACT DOCUMENTS

16.1    The Contract Documents, except for Modifications issued after execution of this Agreement, are enumerated as follows:

16.1.1   The Agreement is this executed Standard Form of Agreement Between Owner and Contractor, AIA Document A111, 1987 Edition.

16.1.2   The General Conditions are the General Conditions of the Contract for Construction, AIA Document A201, 1987 Edition.

16.1.3   The Supplementary and other Conditions of the Contract are those contained in the Project Manual dated      , and are as follows:

Document                               Title                                Pages

To be determined and included

16.1.4   The Specifications are those contained in the Project Manual dated as in Paragraph 16.1.3, and are as follows:

(Either list the Specifications here or refer to an exhibit attached to this Agreement.)

Section                                 Title                                Pages

To be determined and included

16.1.5   The Drawings are as follows, and are dated unless a different date is shown below:

(Either list the Drawings here or refer to an exhibit attached to this Agreement.)

Number                                Title                                Date

To be determined and included

16.1.6   The Addenda, if any, are as follows:

Number                                Date                                Pages

To be included upon their completion and as agreed to by the Owner and Contractor.

Portions of Addenda relating to bidding requirements are not part of the Contract Documents unless the bidding requirements are also enumerated in this Article 16.

16.1.7   Other Documents, if any, forming part of the Contract Document are as follows:

(List here any additional documents which are intended to form part of the Contract Documents. The General Conditions provide that bidding requirements such as advertisement or invitation to bid, Instructions to Bidders, sample forms and the Contractor's bid are not part of the Contract Documents unless enumerated in this Agreement. They should be listed only if intended to be part of the Contract Documents.)

Kraus-Anderson Proposal "to be determined and included".

ADC's Confidential Information Rider.

Addendum #1 Revisions to Standard Form of Agreement between ADC Telecommunications, Inc. and Kraus-Anderson Construction Company dated October 22, 1999.

This Agreement is entered into as of the day and year first written above and is executed in at least three original copies of which one is to be delivered to the Contractor, one to the Architect for use in the administration of the Contract, and the remainder to the Owner.

ADC CONFIDENTIAL INFORMATION RIDER

1.

ADC (Owner) Confidential Information shall mean all information disclosed by Owner to Contractor whether verbal, written, or in the form of samples, which relates to Owner's past, present or future research, technology, designs, know-how, computer programs, products, markets and business plans which relate directly or indirectly to the purpose(s) of Contractor's services described in the Agreement. All information, specifically including samples, proto types, software, drawings, designs, specifications, notes and memoranda disclosed by Owner relating to such purpose(s) shall be deemed to be confidential to Owner.

2.

Information shall not be deemed to be confidential Owner which:

A.

is, at the time of disclosure or thereafter becomes, a part of the public domain without breach of this Agreement by Contractor (provided, however, that the act of copyrighting shall not cause or be construed as causing the copyrighted materials to be in the public domain);

B.

is lawfully in Contractor's procession prior to disclosure by Owner as shown by written records;

C.

is lawfully disclosed to Contractor by a third party which did not acquire the same under an obligation of confidentiality to Owner; or

D.

is independently developed by Contractor without use of Owner Confidential Information.

3.

Except as may be authorized by Owner in writing, Contractor agrees; (1) not to disclose Owner Confidential Information to any third party, (2) to limit dissemination of Owner Confidential Information only to Contractor's employees having a "need to know," (3) to have an appropriate written agreement with Contractor's employees sufficient to enable them to comply with all of the provisions of this Agreement, and (4) to use the Owner's Confidential Information only for the purposes stated in the first paragraph of this rider.

4.

Contractor agrees to secure all Owner Confidential Information and any work product incorporated Owner Confidential Information, when not in use, in a locked file, desk, cabinet, or other suitable container or furniture in a locked room with restricted access to prevent its unauthorized disclosure.

5.

Contractor agrees to maintain adequate procedures to prevent loss of any Owner Confidential Information, and, in the event of any loss, shall notify Owner immediately.

6.

Upon request by Owner, Contractor shall send all drawings, designs, specifications, notes, memoranda, Owner furnished materials and any other materials that embody Owner Confidential Information to Owner as Owner may instruct.

7.

Notwithstanding any language to the contrary, Owner shall not be obligated to disclose any particular information to Contractor.

ADDENDUM 1
Revisions
To
Standard Form of Agreement
Between
ADC Telecommunications, Inc.
And
Kraus-Anderson Construction Company
Dated
October 22, 1999

I.  AIA Document A111 - 1987 Agreement

A.

Add a new SubSection 15.5 as follows:





"Notwithstanding anything in this Agreement to the contrary, the Owner has the right, at any time, to terminate the Work, the Project, and/or the Contract in part or in whole for its convenience by giving written notice thereof to the Contractor. The Contractor shall discontinue its operations as promptly as reasonably practical, secure the site against trespassers and vandals and store all the material on the site in such a manner as to reasonably protect materials and so as to prevent fire hazards and/or safety hazards. The Contractor may recover from the Owner payment for all work executed, and for any commitments made or sustained upon any work performed, whether on or off the site, and upon any materials, equipment, tools, construction equipment and machinery which represent costs to be reimbursed under Article 7 of the Agreement and the Contractor's Fee as specified in Section 5.1 of this Agreement, but not anticipated profit. This will include the actual costs incurred by the Contractor in terminating subcontracts and purchase orders as well as costs associated with the return or reshelving of material, supplies and inventory. The Contractor shall also be paid its reasonable labor and equipment costs incurred in demobilizing off the site. The Contractor shall have no obligation to secure the site until the Owner provides the Contractor with reasonable assurance of payment therefor." In addition, the Contractor and its subcontractors shall be paid a reasonable amount for general administrative costs and profit for all work performed to the date of termination for convenience and work associated with the termination for convenience.

II.  AIA Document A201 - 1987 General Conditions

A.

Section 3.18.1, replace the existing text with the following text:





"To the fullest extent permitted by law, the Contractor shall defend, indemnify and hold harmless the Owner, the Owner's lessor (if any) at the Project, and their respective present or future officers, employees, directors, invitees, licensees, trustees, shareholders, and subsidiaries from and against any and all claims, demands, suits, proceedings, judgments, liabilities, losses, penalties, fines, costs, expenses, fees, injuries, or damages of every nature (including, without limitation, reasonable attorneys' fees and other costs and expense incident thereto) resulting from the performance of or the failure to perform the Work, any breach of this Agreement, any defective material or workmanship in the materials or services furnished, any failure of any materials to comply with the applicable drawings, specifications or express warranties furnished, or any unlawful, negligent, intentional or otherwise tortious act or omission, by Contractor or its agents, employees, subcontractors or vendors. Such obligations shall not be construed to negate, abridge or reduce other rights or obligations of indemnity or contribution which would otherwise exist as to a party or person described in this paragraph. The rights and obligations described in this paragraph shall survive the completion or termination of this Agreement."

B.

Section 4.2.12, in the second sentence, delete the words "results of interpretations or decisions so rendered in good faith" and substitute the following words:





"the execution of the Architect's interpretations or decision or incorrect execution of such interpretation or decision; however, the Architect shall be liable for the execution of its interpretations or decisions by any person who faithfully follows such interpretation or decision,"

C.

Section 4.5.2, add a new sentence as follows:





"The location of the arbitration hearing shall occur within the county in which the Project is located."

D.

Section 4.5.5, delete the first three sentences and substitute the following sentence: "Any arbitration arising out of or relating to this Agreement may include, by consolidation, joinder or in any other manner, the Architect, the Contractor, subcontractors or suppliers and Contractor shall include an appropriate provision in each subcontract providing for arbitration and for such inclusion of the subcontractor in any arbitration with the Owner, Architect or Contractor. In addition, the Contractor will engage its best efforts to include an appropriate provision in each purchase order with suppliers to provide for the consolidation, joinder or inclusion of the supplier in any arbitration with the Owner, Architect, or Contractor.



E.

Section 11.1.2, the first sentence should be revised to read as follows:





"Each insurance coverage required by Section 11.1.1 shall be written with a combined single limit of at lease $1,000,000.00 or as required by law, whichever is greater."

F.

Section 11.1.3, the second sentence should be revised by adding the word "reduced," before the work "canceled" and add the following words at the end of the sentence:





"by the insurance carrier named in the Certificates."

Delete the fourth sentence of this Section.

G.

All general liability policies maintained by the general contractor shall be endorsed to name the Owner and Mortgagee/Lessor as additional insurer's under all policies required under sections 11.1.1 and 11.1.2 with severability of interests permitted under such policies, the contractor's policies would be primary and that the contractors maintain excess/umbrella liability insurance coverage with an annual aggregate limit of at least Fifty Million dollars ($50,000,000) in excess of claims covered by the insurance coverage's listed in sections 11.1.1.1 through 11.1.1.7





11.2  CONTRACTOR'S LIABILITY INSURANCE

11.2.1  The Contractor shall obtain and maintain insurance coverage for the following claims which may arise out of the performance of this Agreement, whether resulting from the Contractor's operations or by the operations of any Subcontractor, anyone in the employ of any of them, or by an individual or entity for whose acts they may be liable:

.1

workers' compensation, disability and other employee benefit claims under acts applicable to the Work;



.2

under applicable employers liability law, bodily injury, occupational sickness, disease or death claims of the Contractor's employees;



.3

bodily injury, sickness, disease or death claims for damages to persons not employed by the Contractor;



.4

usual personal injury liability claims for damages directly or indirectly related to the person's employment by the Contractor or for damages to any other person;



.5

damage to or destruction of tangible property, including resulting loss of use, claims for property other than the Work itself and other property insured under Paragraph 11.5;



.6

bodily injury, death or property damage claims resulting from motor vehicle liability in the use, maintenance or ownership of any motor vehicle; and



.7

contractual liability claims involving the Contractor's obligations under Subparagraph 11.1.1.





11.2.2  The Contractor's Commercial General and Automobile Liability insurance as required by Subparagraph 11.2.1 shall be written for not less than the following limits of liability;

11.2.3  Commercial General Liability Insurance may be arranged under a single policy for the full limits required or by a combination of underlying policies and an Excess or Umbrella Liability policy.

11.2.4  The policies shall contain a provision that coverage will not be canceled or not renewed until at least thirty (30) days' prior written notice has been given to the Owner. Certificates of Insurance showing required coverage to be in force shall be filed with the Owner prior to commencement of the Work.

11.2.5  Products and Completed Operations insurance shall be maintained for a minimum period of at least two (2) years and either ninety (90) days follow the date of Substantial Completion or final payment, whichever is earlier.

H.

Insert a "." after "Paragraph 9.10" of the Eleventh Line of Section 11.3.1 and delete the balance of the second sentence thereof.



I.

Section 11.3.6, delete the words "copy of each policy" in the first sentence and substitute the following words: "Certificate of Insurance."



J.

Section 14.2.4 should be revised by adding the word "not" following the word "shall" in the first sentence. The third sentence should be revised to read as follows: "The amount to be paid to the Owner shall survive termination of the Contract."

General Conditions of the Contract for Construction
AIA Document A201—Electronic Format

THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES: CONSULTATION WITH AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. AUTHENTICATION OF THIS ELECTRONICALLY DRAFTED AIA DOCUMENT MAY BE MADE BY USING AIA DOCUMENT D401.

This document has been approved and endorsed by the Associated General Contractors of America.

Copyright 1911, 1915, 1918, 1925, 1927, 1951, 1958, 1961, 1963, 1967, 1970, 1976, 1987 by The American Institute of Architects, 1735 New York Avenue N.W., Washington D.C. 20006-5292. Reproduction of the material herein or substantial quotation of its provisions without written permission of the AIA violates the copyright laws of the United States and will be subject to legal prosecutions.

TABLE OF ARTICLES

AIA DOCUMENT A201—GENERAL CONDITIONS OF THE CONTRACT FOR CONSTRUCTION—FOURTEENTH EDITION—AIA—COPYRIGHT 1987—THE AMERICAN INSTITUTE OF ARCHITECTS, 1735 NEW YORK AVENUE N.W., WASHINGTON, D.C. 20006-5292. WARNING: Unlicensed photocopying violates U.S. copyright laws and is subject to legal prosecution. This document was electronically produced with permission of the AIA and can be reproduced without violation until the date of expiration as noted below.

Electronic Format A201-1987
User Document: AIA—10/22/1999. AIA License Number 105495, which expires on 10/31/1999—Page #1

INDEX