HomeMy WebLinkAbout1999-12-07; Municipal Water District; Resolution 1070I
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RESOLUTION NO. 1070
A RESOLUTION OF THE CARLSBAD MUNICIPAL WATER DISTRICT OF
CARLSBAD, CALIFORNIA, FOR APPROVAL OF REIMBURSEMENT
AGREEMENT WITH PRESLEY HOMES, INC., FOR THE CONSTRUCTION OF SANTA FE I4 TRANSMISSION MAIN; PROJECT 38241, CMWD
PROJECT NO. 96-306.
WHEREAS, Presley Homes, Inc. is developing the Meadowlark Estates in the City of San
4arcos; and
WHEREAS, the District owns, operates, and maintains an existing 36-inch water
:ransmission main and appurtenances which is aligned through portions of Meadowlark Estates
Nhich is planned to be preserved in open space, and the District desires to cause a portion of the
:ransmission main to be relocated to lie within portions of the right-of-way of certain public and
Irivate roads which Presley Homes, Inc. has designed and will construct within Meadowlark
Estates, and
WHEREAS, Presley Homes, Inc. has requested Board of Directors approval of a
3eimbursement Agreement (attached hereto marked Exhibit “A and incorporated by this
,eference) for the construction of Rancho Santa Fe II Transmission Main; and
WHEREAS, Presley Homes, Inc., desires to begin construction of the utilities and roads
Hithin Meadowlark Estates; and
WHEREAS, additional funds in the amount of $ 60,000 are needed to be appropriated
’rom the water replacement fund to pay for construction of the Santa Fe II Transmission Main;
md
WHEREAS, the Planning Director has reviewed this project and issued Negative
leclaration EIA 99-01 on February 15, 1999;
NOW, THEREFOR, BE IT RESOLVED by the Board of Directors of the Carlsbad
dunicipal Water District of Carlsbad, California, as follows:
1. That the above recitations are true and correct.
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2. That the Reimbursement Agreement by and between the Presley Homes, Inc. and
Carlsbad Municipal Water District is hereby approved and the President is authorized
and directed to sign said agreement on behalf of the Board of Directors.
3. That the appropriation of Water Replacement funds totaling $ 60,000 is hereby
approved for the Santa Fe II Transmission Main project.
PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad City Council
held on the 7th day of DECEMBER , 1999 by the following vote, to wit:
AYES: -,-Z%aid Members Lewis, Hall, Finnila, Nygaard, Kulchin
ATTEST:
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(SEAL)
AGREEMENT FOR REIMBURSEMENT OF COSTS FOR
IMPROVEMENTS; CMWD Project No. 96-306
CONSTRUCTION OF WHITE SANDS DRIVE 36-INCH PIPELINE
THIS AGREEMENT FOR REIMBURSEMENT OF COSTS FOR CONSTRUCTION OF WHITE SANDS DRIVE 36-
December 13 INCH PIPELINE IMPROVEMENTS; CMWD PROJECT NO. 96-306, dated as of t%wem$w -, 1999, (“Agreement”), is
made at Cailsbad, California, between PRESLEY HOMES, INC., a California corporation (“Presley”), and the CARLSBAD
MUNICIPAL WATER DISTRICT, a Public Agency organized under the Municipal Water District Act of 191 1, and a
Subsidiary District of the City of Carlsbad (“District”), with reference to the following recitals:
RECITALS
A. Presley is the record owner of certain real property located in the City of San Marcos, California, more
particularly described as: A portion of Section 17, 18, 19 and 20 Township 12 South, Range 3 West, San Bernadine Base
and Meridian; APN 221 -01 0-1 3, 222-010-23; 221-021-09, 221-031 -(25-28) (“Meadowlark Estates”).
B. Meadowlark Estates lies within the jurisdiction of, and does and will continue to receive all of its water services
directly from and through, the Vallecitos Water District. Meadowlark Estates does not lie within the jurisdiction of the
District and does not and will not receive water services directly from the District.
C. The District owns, operates, and maintains an existing 36-inch water transmission main and appurtenances
which is aligned through portions of Meadowlark Estates planned to be preserved in open space (“Old Water Main”). The
District would like to cause a portion of the Old Water Main to be relocated to iie within portions of the right-of-way of
certain public and private roads, named White Sands Drive and Emerald Sea Way, respectively, which Presley has
designed and will construct within Meadowlark Estates (that portion of the relocated old Water Main is referred to in this
Agreement as the “Work”).
D. The District has requested Presley to install the Work as Presley constructs White Sands Drive and Emerald
Sea Way. The District and Presley recognize and acknowledge that the Work exceeds the infrastructure otherwise
required of Presley in connection with its build-out of Meadowlark Estates.
P:0133982.07:46058.008 24-Nov-99 1
Meadowlark Estates required as a result of the design and alignment of the Work are set forth on Exhibit “B) (together,
“Total Cost”). The Total Cost, including the costs estimated on Exhibit “B”, is currently estimated to be $278,584.80.
(b) The District shall reimburse Presley an amount ( the “Reimbursement Amount” ) equal to: ( i ) the
actual Total Cost (regardless of whether the actual Total Cost meets or exceeds the estimated Total Cost set forth in
Subsection 3(a), above); plus, ( ii ) an overhead allocation of four percent ( 4% ) of the actual Total Cost in lieu of other
reimbursement for Presley’s cost incurred for salary and benefits for staff of Presley’s home offices, supervision above the
level of on-site superintendent, general corporate, legal, and accounting fees, the cost of borrowed funds, insurance and
bond premiums, expenses for meetings with and presentations to governmental agencies which issue permits or otherwise
regulate project approval, (collectively, the “Overhead Costs”); plus, (iii) an additional two and one-half percent (2.5%) of
the actual Total Cost for construction administration, construction fees and permit fees advanced by Presley, and other
incidental costs. The actual Total Cost shall include all costs associated with the installation of the Work and the facilities
described on Exhibit “B.”
4. ACCOUNTING OF COSTS.
(a) Upon completion of the Work, Presley shall present the District with a complete and detailed
accounting of the costs and expenses advanced’ by Presley in connection with the Work and the facilities described on
Exhibit “B.” Upon its receipt of a written request therefor from the District, Presley will allow an audit of such costs and
expenses to be prepared at the District’s expense by certified public accountants specified by the District. Any audit
undertaken by the District pursuant to this Subsection 4(a) shall not extend the District‘s time for performance due under
the following subsections of this Section 4 and Section 5, below.
(b) The District acknowledges that Presley has selected Burtech Pipeline (the “Contractor”) as contractor’
to install the Work because the Contractor submitted the lowest responsive bid to install the Work, and the District hereby
approves Presley’s selection of the Contractor as contractor to install the Work.
(c) During the installation of the Work, Presley shall retain detailed payment records for all items of the
Reimbursement Amount for use by the District in auditing the costs and expenses advanced by Presley in’connection with
the Work and the facilities described on Exhibit “B.” Presley’s request for final payment pursuant to Subsection 5(c),
below, shall include copies of change orders, invoices, lien releases, and receipts for payments made (“Work
Documentation”) to evidence the completion and payment for each item of the Reimbursement Amount. Prior to the
P:0133982.07:46058.008 24-NOV-99 3
submission to the District Engineer of its request for final payment, Presley shall obtain necessary lien releases from the
Contractor.
(d) Presley shall send its request for final payment to the “District Engineer” of the District together with
the Work Documentation. The District Engineer shall consider and approve the request pursuant to this Agreement. If the
District Engineer objects to any items comprising the Reimbursement Amount, the District Engineer shall notify Presley in
writing, together with reason(s) for objection, within ten (10) calendar days of receipt of Presley’s request. Failure to timely
notify Presley shall be deemed the District Engineer’s approval of the request. In the event the District Engineer does
object, Presley and the District Engineer shall meet within five (5) calendar days of Presley’s receipt of the District
Engineer’s written objection(s) to discuss the disputed amount and attempt to resolve the matter through good-faith
negotiation.
(e) Notwithstanding the foregoing, if Presley disputes the District Engineer’s determination of the
Reimbursement Amount or believes that a sum established by the District Engineer is not consistent with the specific
provisions of this Agreement, then Presley may elect to: ( i ) appeal the District Engineer’s decision to the Board of
Directors (and thereafter, at Presley’s option, a Court of proper jurisdiction) for final determination; or ( ii ) submit the
dispute for the review and recommendation of a neutral and independent civil engineer qualified in engineering, design,
and construction and mutually approved by the District and Presley; provided, however, said engineer’s recommendation
shall be non-binding and shall not preclude Presley from thereafter appealing the District Engineer’s decision as described
in item ( i ), above.
5. REIMBURSEMENT SCHEDULE.
(a) Upon the Contractor’s commencement of the Work (which commencement shall be deemed to occur
upon the issuance to the Contractor of any permits necessary to begin the Work, or, if no permits are necessary, the date
the Contractor begins trenching to install the Work), the District shall remit to Presley a payment of $74,173.20, that being
equal to 25% of the estimated Reimbursement Amount (the “Mobilization Payment”). The Mobilization Payment shall be
deemed an off-set against, and not in addition to, the total Reimbursement Amount owing upon completion of the Work.
(b) Upon the Contractor’s installation of the Work (which installation shall be deemed to occur upon the
installation of the 36-inch steel waterline within the trenches and the backfilling of the trenches), the District shall remit to
Presley a payment of $207,684.96, that payment being equal to 70% of the estimated Reimbursement Amount (the
P:0133982.07:46058.008 24-Nov-99 4
“Installation Payment”). The Installation Payment shall be deemed an off-set against, and not in addition to, the total
Reimbursement Amount owing upon completion of the Work.
(c) Upon Presley’s submittal to the District Engineer of the Work Documentation and all approvals,
certificates, and other documents necessary to indicate the completion of the Work and the ability to put the Work into use,
if any, the District shall remit to Presley a payment equal to the Reimbursement Amount less the Mobilization Payment and
the Installation Payment.
6. ADDITIONAL OBLIGATIONS OF THE DISTRICT.
(a) The District acknowledges that Presley intends to remove a portion of the Old Water Main after
Presley has completed installation of the Work and before Presley completes grading of Unit 5 of Meadowlark Estates.
The District agrees to complete inspection and approval of the removal of the portion of the Old Water Main within 48
hours of Presley’s request for that inspection and approval.
(b) The District acknowledges that Presley is planning to begin construction of model homes on Unit 5 of
Meadowlark Estates on or about January 1, 2000, and that Presley requires the District to timely conduct periodic
inspections of Presley’s installation of the Work and to timely accept the Work upon its completion, but in no event later
than December 15, 1999. The District hereby agrees to conduct periodic inspections of Presley’s installation of the Work
so as to enable the District to accept the completed Work no later than December 15, 1999.
(c) Notwithstanding anything to the contrary in this Section 6 or in any other provision of this Agreement,
nothing in this Agreement shall be construed to require Presley to begin grading Unit 5 of Meadowlark Estates prior to any
specific date, to begin construction of the model homes on Unit 5 of Meadowlark Estates prior to any specific date, or to
begin any other improvements, including without limitation improvements to Emerald Sea Way or White Sands Drive by
any specific date.
(d) The District certifies that it has obtained all permits or other governmental approvals, if any, required
for the installation for the Work and the removal of the portion of the Old Water Main.
7. INDEMNIFICATION.
(a) The District hereby agrees to indemnify, defend, protect, and hold harmless Presley, its officers,
agents, employees, consultants, inspectors, contractors, subcontractors, successors, and assigns (individually, an
“Indemnitee”, collectively, the “lndemnitees”) from and against any and all liens, claims, causes of action, damages, just
compensation, restitution, judicial or equitable relief, liabilities, demands, suits, obligations, losses, penalties, fines, costs,
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d, e
and expenses of every kind, nature, and description (including actual attorneys’ fees and costs) resulting directly or
indirectly from: (i) the District‘s design of the Work; (ii) selection of the Contractor; or (iii) wage provisions, including without
limitation any injury to or death of persons, or damage to or loss of property, and any mechanic’s liens or claims of liens,
arising therefrom or related thereto (collectively, the “Activities”). The District‘s obligations under this Section 7 shall
survive the termination of this Agreement.
(b) The District hereby waives, releases, acquits, and forever discharges each of the lndemnitees to the
maximum extent permitted by law, of and from any and all claims, actions, causes of action, demands, rights, liabilities,
damages, losses, costs, expenses, or compensation whatsoever, direct or indirect, known or unknown, foreseen or
unforeseen, that now exist or which may arise in the future on account of or in any way growing out of or connection with
the Activities. THE DISTRICT EXPRESSLY WAIVES ANY OF ITS RIGHTS GRANTED UNDER CALIFORNIA CIVIL
CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:
“A general release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.”
Notwithstanding the foregoing, the release set forth above is not intended to, and shall not, release or discharge
any tortuous acts or omission of Presley in any way related to this Agreement.
8. CONTRACTORS INSURANCE AND INDEMNIFICATION.
The District acknowledges that Presley intends to enter into a contract for the work with the Contractor in
substantially the form set forth on Exhibit “C” (the “Construction Contract”). Presley shall require the Contractor to enter
into an Addendum to Contract in substantially the form set forth on Exhibit “D” (the “Addendum”), concurrent with the
Contractor’s execution of the Construction Contract. The Addendum requires the Contractor to add the District and the
City of Carlsbad as additional insureds pursuant to Section lO.l(e) of the Construction Contract and to name the District
and the City of Carlsbad as third-party beneficiaries to the Construction Contract, including without limitation as third-party
beneficiaries under Section 8: Indemnification of the Construction Contract.
9. MISCELLANEOUS.
(a) Disputes: Claims. If a dispute should arise regarding the performance or interpretation of this
Agreement, the following procedure shall be used to resolve any question of fact or interpretation not formally resolved by
the parties. Such questions, if they become identified as a part of a dispute among persons operating under the provisions
P:0133982.07:46058.008 24-Nov-99 6
of this Agreement, shall be reduced to writing by an ofticer of Presley (“OftkeP) or the District‘s Executive Manager
(“Executive Manager”). A copy of such documented dispute shall be forwarded to both parties involved along with
recommended methods of resolution which would be of benefit to both parties. The Executive Manager, or Officer, upon
receipt, shall reply to the letter, including a recommended method of resolution, within ten calendar (IO) days. If the
resolution thus obtained is unsatisfactory to the aggrieved party, a letter outlining the dispute shall be forwarded to the
Board of Directors for their resolution through the office of the City Manager of the City of Carlsbad:The Board of Directors
may, but is not obligated to resolve the dispute. If the Board of Directors considers the dispute, and directs a solution, the
action of the Board of Directors shall be binding upon the parties involved, although nothing in this procedure shall prohibit
the parties seeking remedies available to them at law.
(b) Jurisdiction. Presley agrees and hereby stipulates that the proper venue and jurisdiction for resolution
of any disputes between the parties arising out of this agreement is San Diego County, California.
(c) Obliaations and Benefits Not Runnina With Land; No Third Partv Beneficiaries. This Agreement shall
bind and inure to the benefit of the parties and their respective successors and assigns. However, it shall not run with the
land or be recorded, and all payments due from the District shall be made to Presley or such assignee as Presley
designates in writing. This Agreement shall not be deemed to confer any rights upon any individual or entity which is not a
party hereto; the parties hereto expressly disclaim any such third-party benefit.
(d) Notice. Unless otherwise specifically provided herein, all notices, demands or other communications
given hereunder shall be in writing and shall be deemed to have been duly delivered upon personal delivery, or by Federal
Express (or similar reputable express delivery service), or by facsimile transmission with back-up copy mailed the same
day, or as of the second business day after mailing by United States certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to Presley: Presley Homes, Inc.
Attention: Mr. Sean R. Dyer
Presley Homes
15373 Innovation Drive, Suite 380
San Diego, CA 92128
Telephone: (61 9) 451 -6300
Facsimile: (619) 487-7307
P:0133982.07:46058.008 24-NOV-99 7
with a copy to: Cynthia L. Eidred, Esq.
Solomon Ward Seidenwurm & Smith, LLP
401 “B Street, Suite 1200
San Diego, CA 92101
Telephone: (619) 238-4814
Facsimile: (619) 213-4755
If to District: Carlsbad Municipal Water District
Attention: Mr. William Plummer
5950 El Camino Real
Carlsbad, California 92008
Telephone: (760) 438-2722, Extension 7126
Facsimile: (760) 431-1601
or to such other address or to such other person as any party shall designate to the others for such
. purpose in the manner set forth above.
(f) Counteroarts. This Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which, taken together, shall constitute one and the same instrument.
(9) Governina Law. This Agreement shall be governed by, and construed in accordance with, the laws of
the State of California.
(h) Comolete Aareement. This agreement contains the entire agreement between the parties with respect
to the matters set forth herein, and supersedes all prior or contemporaneous agreements (whether oral or written) between
the parties with respect to the matters set forth herein.
(i) Amendment. This agreement may be amended by a written instrument executed by the District and
Presley (including for this purpose any successors of Presley, to the extent of their ownership of real property within
Meadowlark Estates), except that no amendment regarding the provisions for reimbursement to Presley shall be valid
unless executed by Presley.
(j) Term. This Agreement shall be effective as of the date hereof, and shall terminate on the earlier of (i)
the date the District fully reimburses Presley the Reimbursement Amount, or (ii) January 1, 2005.
P:O133982.07:46058.008 24-NOV-99 8
0
(k) No Third Partv Beneficiaries. This Agreement shall not be deemed to confer any rights upon any
individual or entity which is not a party hereto, and the parties hereto expressly disclaim any such third-party benefit.
(I) Pavments to Preslev. Any payments to Presley by the District hereunder shall be made payable to
Presley Homes, Inc. and shall be forwarded to the following address, or to such other address as Presley specifies in
writing to the General Manager of District:
c/c Presley Homes, Inc.
Attention: Mr. Sean R. Dyer
15373 Innovation Drive, Suite 380
San Diego, CA 92128
(n) District Authority. The District warrants, represents and agrees that it has the legal authority to
collect the funds that it will use to reimburse Presley. The District further warrants, represents and agrees that it
has the legal authority to pay these funds to Presley. These warranties, representations and agreements are a
material inducement to Presley to enter into this Agreement. In the event the District lacks legal authority to collect
the fees necessary to pay Presley, the District shall pay the amount due Presley out of other funds at the same
rate as if it had collected the fees.
P:0133982.07:46058.008 24-NOV-99 9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first Set forth above.
Executed by DISTRICT this 1s day of %L Executed by PRESLEY this -24 day of
November, 1999. December, 1999.
PRESLEY:
PRESLEY HOMES, INC.,
~.-
-' Sign here
ATTEST:
By:
(SEAL)
(Proper notarial acknowledgment of execution of PRESLEY must be.attached.)
(Chairman, president or vice-president and secretary or assistant secretary, CFO or assistant treasurer must sign for corporations. Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under
corporate seal empowering that officer(s) signing to bind the corporation.)
(If signed by an individual partner, the partnership must attach a statement of partnership authorizing the partner to
execute the instrument.)
APPROVED AS TO FORM:
RONALD R. BALL, City Attorney MA&/, /
BY : (
ant City Attorney
I P:0133982.07:46058.008 24-NOV-99 10
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO 1 ".
) ss.
/'
()wf&w L$, 1999, before ~g?( ,~~..-.~~~~~~~,.~,~~, (../. ; $2~ -?.; -_- , personally appeared
person($) whosei.hame(gS is/* subscribed to the within instrument and acknowledged to me that he/sk/they executed
the same in his/W/tReir authorized capacityfi, and that by his/Mtheir signature on the instrument the personM, or the
entity upon whose behalf the personw acted, executed the instrument.
I. -
;$*CLMy :{, ;>J ,~ , personally known to me (or]proved to me on the basis of satisfactory evidence) to be the
WITNESS my hand and official seal.
[SEAL]
P:0133982.07:46058.008 24-NOV-99
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P:0133982.07:46058.008 24-NOV-99
EXHIBJT “A
DESCRIPTION OF THE WORK
[TO BE ATTACHED]
12
NOU-81-1999 15:26
a.
Exhibit A
Estimated Total Construction Cost for 36” Watertine:
36” Steel Waterline
Remove interfering 33” Waterline
Construct SOW0 & Blind Flanges
Install 36” to 33” Reducer
Install 36” Butterfly Valve
Install 2” AVAR Assy.
Install 6” B.O. Assy.
Install Cathodic Bonding
install Cathodic Test Stations
Field Fabricate 36” Bends
Repair Slope
Traffic Control
Restore Paved Surface (if needed)
Backfill Trench (above pipe zone)
Haul Trench Spoil to Parksite
Connect to Existing
Construction Staking
’.
2,572 LF
73 LF
2 EA
1 EA
2 EA
7 EA
2 EA
4 EA
3 EA
6 EA
1 LS
1 LS
1 LS
5,500 Ton
6,038 Cy
2 EA
1 LS
$4 1.40
$35.00
$2,500.00
$3,500.00
$3,500.00
$3,250.00
$5,600.00
$750-00
$2,750.00
$2,500.00
$t,OO0.00
$950.00
$1,200.00
$5.50 .
$3.50
$7,550.00
$1 120.00
. LL
$106,480.80
$2,555.00
$5,000.00
$3,500.00
$7,000.00
$22,750.00
$1 1,200.00
$3,000.00
$8,250.00
$1 5,000 .OO
$1,000.00
$950.00
$1,200.00
$30,250.00
$21,133.00
$15,100.00
$1 > 120.00
0 e
Construction Staking Calculations 1 LS $172.00 $172.00
Engineering ReviewlCoordination 1 LS $1,978.OO $1,978.00
Soils Engineering 1 LS $ 5,350.00 $ 5,350.00
Estimated Total Construction Cost: $262,988.80
J.
4
EXHIBIT “B”
ESTIMATED COSTS OF ENGINEERING RE-DESIGN, MATERIALS AND INSTALLATION OF WATER FACILITIES
WITHIN UNITS 2 &5 OF MEADOWLARK ESTATES REQUIRED AS A RESULT OF THE DESIGN AND ALIGNMENT OF THE WORK
VO BE ATTACHED]
P:O133982.07:46058.008 24-NOV-99 13
NUV-81-199Y 15:27
-ey
r.bLI;) . *
Exhibit B
Estimated Total Design Changes to Unit 2 and Unit 5:
t
Add. Manholes Per New Design 5 EA $2,500.00 $12,500.00
Engineering Design and 1 LS $3,096.00 $3,096.00
Drafting Changes to Existing
Improvement Plans.
""""""~yY""""""""""""""""""""~""-"""""~""~
Estimated Total Cost: $15,596.00
TOTFlL P.04
P:O133982.07:46058.008 24-Nov-99
EXHIBIT SHEET “C
FORM OF CONSTRUCTION CONTRACT
IT0 BE ATTACHED]
14
PRESLEY HOMES San Oiego
0.
CONTRACT FOR- MEADOWLARK INFRA- CONTRACT NUMBER: 402510 OFIOOO
UNITS 2, 3, 4, 5, 6 t853P4
TRACT NUMSER: VENDOR NO: 2591 78
WATER SYSTEM
PROJECT: Meadowlark Infra VENDOR NAME: Burtech Pipelhe, lnc.
COST CENTER 71164520001 VENDOR PHONE NUMBER: (760) 634-2822
COST CODE: 2460
OFFSlTE SUBCONTRACT AGREEMENT
THE SUBCON.TRACT AGREEMENT (“Agreement”) is made November 22, 1999, by and between
PRESLEY HOMES. &Califomla Cornoration. whose offices are located at 15373 Innovation Drive. SUlte 380, San
Diego, California 92128 (”Contractor“) and Burtech Pipeline, Inc., whose offices are located at 102 Second St.,
Encinitas, CA 92024-3203 (“Subcontractor“).
Please review the plans and all appropriate specifications. carefutly before you sign this contract If you have.
any questions or concerns about any of the materiais speclqed Or any of the designs or methods of cunstruction
called for on the plans or speciffcations, please dlscuss It with the purchasing agent before signing the contract By signing the contract, you are agreelng to perfom any work you contract for in strict oornpiiance with the plans
and specifications. No substitutions of materials will be allowed, and no changes h-orn the plans and
specifications will be allowed. If you do not perform your work in strict compiiance with the plans and
specifications. you will be held responsible, In addition to any. other remedies the Contractor or Owner may have,
to perform all work, supply all materials and pay all costs necessary to-bring your work into compliance with the
plans and specifications.
SECTION 1: DESCRIPTION OF THE WORK
1.1 This Agreement pertalns exclusively to TraCtdLots located in the State of California (“Job).
1.2 Subcontractor agrees to furnish at Subcontractor‘s own cost and expense alt labor, equipment. power.
supplies, materials, machinery, tools, cartage, Insurance, services and other facilities of every kind and
description (“Labor and Materials”) requlred for the prompt and efficlent execution of the work generally described in Exhibit “6” attached. Subcontractor shall exert Subcontractor‘s best efforts. skill and judgment and shall
exercise all due diligence to complete the work in accordance with the hlghest standards of the industry and in the
most expeditious, sound and econarnlcai manner.
1.3 In the event the work to be performed by Subcontractor shall be described by reference to a section of
the Contract Documents (as defined in paragraph 4.2 below) such reference shall not be deemed to limit the
Subcontractor‘s obligation to perform only such work, but rather the work shall include any Item of Labor and
Materials reasonably inferred from the Contract Documents or customarily furnished by a subcontractor
perfarming work in this trade whether or not such work is shown or mentioned in the Contract Documents. All
work performed by Subcontractor shall conform strictly to the Contract Documents. and ell extra work and
changes shall be made pursuant to and In strict compliance with this Agreement.
1.4 Subcontractor shall not assign, subcontract or otherwise transfer any portion of the work to be performed
by Subcontractor without first obtaining the express written consent of Contractor.
1.5 Subcontractor agrees to meet the production scheclule as directed by Contractor.
1.6 Promptly after the execution of this Agreement, Subcontractor shall furnish the Contractor with (i) a list of
material Suppliers that will deliver material to the Job sIte, (il) a list of subcontractors that will perfom work at thec
Job site, and (iii) an estimate of the cost of such materials and subcontract work so that the Cantador can audit
the preliminary notices received for materials delivered to Subcontractor at the Job slte and subcontract work
performed at the Job site.
SECTION 2: CONTRACT PRICE
2.1 Contractor agrees to pay to Subcontractor, at the time and In the manner provided for in Section 3
below, the sum of $606,998.00 (Contract ,. prFce) .
CONTRACTOR’S INITIALS SUBCONTRACTOR’S INITIALS-
Page 1 of 13
SSLPTEZ + S3WOH A31S32dd as :ZT 66/EZ/T T
..
I' . hi! It is understod and e 2ed that the Contract Price shall not Q! ,creased or decreased except in
' accordance with the proviolons of this Agreement. and excepting those in ase6 In the Contract Price made pursuant to the provisions of this Agreement, Subcontractor shall be liable for end shall Indemnify and hold
Contractor free and harmless from all other increases in the cost of the work to be perfOlTlled by Subcontractor-
SECnON 3: PAYMENT SCHEDULE
3-1 Subcootrador shall be entitled to receive progress payments for each phase of the work, provided,
however, that Subcontractor shall not be paid until Subcontractor has complied with alt the provisions of this
Section. Subcontractor shall prepare and maintain separate records and invoices for the work described in this
Agreement and for extra work and changes performed pursuant to a work order as described in Section 5 below.
3.2 Wgth respect to each application for a progress payment for work performed pursuant to this Agreement,
Subcontractor shall submit to Contractor such documentailon as may be required by Contractor. including,
without limitation, (i) an invoice in a form satisfactory to Contractor: (li) labor and material lien releases executed
by Subcontractor. SubcontractoVs laborers, Subcontractor's subcontractors and all suppliers who furnished
materials to the Job through the date of the Invoice. all in a form satisfactory to Contractor. (iii) any other
documents required by Contractor to verify that all indebtedness for the Labor and Materials used in performance
of the work through the date of the invoice has been fully paid by Subcontractor; and (iV) if the progress payment
includes payment for extra work or changes in the work, a copy of the work order executed by Contractor
authorizing such extra work or change.
3.3 Prior to submittal by Subcontractor to Contractor of Subcontactor% invoice for a progress. payment
pursuant to Section 3.2 above, Subcontractor and Contractor's superintendent for the Job shall agree on the
quantity of work completed for whlch payment shall be Included in such progress payment-
3.4 Subcontractor shall submit to Contractor for Contractor's approval the invoices and other documents
referred to in paragraphs 3.2 and 3.3 above promptly after completion of Zhe work specifred therein.
3.5 Provided that Subcontractor is not In default under this Agreement or any other agreement with
Contractor, that Subcontractor has complied with all of the provisions of this Section, and that Contmctor
approves the invoices and other documents submitted by Subcontractor, Contractor agrees to pay Subcontractor
the amounts requested in the application for progress payment (less the amounts retained or charged against
Subcontractor pursuant to this Agreement) In approximately 3040 days from the date of receipt by the Contractor
of the progress payment documents. All of the above referenced conditions are conditions precedent to any
money being owed to Subcontractor for all offsite work. Contractor shall retain an amount equal to or up to 10%
percent (Ten) of the requested amounts ("Retention"), which Retention shall be paid to Subcontractor after a)
Contractor has received all of the documentatfon required pursuant to Section 3.2, and b) forty days have passed
since the work of irnpmvement has been approved and accepted by the City, County or other governmental
agency having jurisdiction of the work of improvement. or if no governmental approval and acceptance is necessary. then forty days have passed slnce the recording of the notice of completion or if no notice of
completion has been recorded and no governmental approval and acceptance is necessary. ninety five days have
passed since the approval and acceptance of the work by the Contmctor. Contractor shall also have the tight, in
addition to any other retention rights hereunder, to retaln from payments due to Subcontractor amounts sufficient
to cover alt contracts for which Contractor or Owner have received preliminary notices or for which mechanic's or
other liens have been recorded, until releases satisfactory to Contractor have been delivered to Contractor.
Payments for quantities of Labor or Materials in excess of the quantities specified as to be provided by
Subcontractor in connection with the work shall be made only after verification by Contractofs civil engineer, soils
engineer and/or job superintendent that such Labor or Materials have actually been provided.
3.6 Any payment made hereunder shall not be construed as evidence of acceptance of any part of the work.
AI( sums received by Subcontractor under this Agreement ere recelved in trust for the express use and purpose of
paying in full all Labor and Materials furnished to Subcontractor In the performance of this Agreement. No title to
any payment, or any part of it. shall vest in Subcontractor or be used for any other purpose. until Subcontractor
has first paid in full all Labor and Materials furnished as of the date of the invoice to Subcontractor by 811 persons
who may have supplied Labor andlor Materiats used in the work described herein. Gontractor shall have the right
to make payments to Subcontractor by checks payable jointly to Subcontractor and his employees,
subcontractors, suppliers. or any of them, and to make payments directly to persons or entities supplying labor or
material to Subcontractor if preliminary notices have been filed by the persons or entities supplying such Labor Or
Materials to Subcontractor-
SECnON 4: INDEPENDENT lNVESTlGATlQN
4-1 Subcontractor Warrants that Subcontractor has read and is fully familiar with &e provisions of the Contmct Documents, as defined in paragraph 4.2 below, that Subcontractor Is satisfied by its own investigation
regarding all the conditions affecting the work to be done and materials to be furnished, and that Subcontractor
agrees to perform the work described In this Agreement in strict accordance with the Contract Documents based
upon SUCh investigation and research and not upon any estimate or other Information rewived from Cofibactor, or
any other person. Sased on Subcontractor's Independent investigation, Subcontractor agrees and acmowldges
that the COntEICt Price is just and reasonable compensation for all the work to be performed by Subcon&aCfor
CONTWGTOR'S INWIALS SUBCONTRACTOR'S lNI7lALS
Page 2 of 11
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estimate or bid nor any verbal agreement or tonversatian between me ps&s hereto or with any other person.
either before or after the execution of this Agreement, shall affect or modify any of the provisions or obligations
set forth herein.
4.2 "Contract Documents" as used herein shall mean and refer to (a) this Agreement, (b) the drawings, plans
and specifications and all written modifications thereto made in accordance with thts Agreement and (c) any work,
purchase or change orders issued during the course of the work. The Contract Documents are Incorporated
herein by this reference and shall have the same farce and effect as if said Documents were set forth at length
herein. Subcontractor understands and agrees that he is and will be bound by said Contract Documents insafar
a5 they relate in part or in any way, directly or Indirectly, to the work which Is the subject of this Agreement. .
SECTION 5: EXTRA WORK AND CHANGES IN THE WORK
5.1 Subcontractor agrees to make all changes in the work, either as additions.or deletions. and to Perform all
extra wok mat Contractor may require pursuant to this Section, and the same shall not nullify this Agreement
Under no. clrcumsfances shall Subcontractor make any change in the work or perform any extra work until
Contractor has issued a written work order authorizing such work and agreeing to the amount of compensation to be paid to Subcontractor, Nothing contained in this Agreement shall be construed to modify COntmctOfs right to
eliminate any portion of the work which Contractor deems unnecessary for the completion of the work as a whole
or to make such changes as Contractor may deem necessary. In the event Contractor shall eliminate a portion of
the work, the Contract Price shall be decreased in an amount equal to the actual reduction in cost.
5.2 If Subcontractor shall make any unauthorlred change in work Or perform any unauthorized extra work
which affects the scope of the work or the expense of other trades, Subcontractor shall be liable for all costs and expenses incurred by Gontmctor as the result thereof.
5.3 Subwntractor shall not perform any work directly for a potential homebuyer on a home under
construction prior to the transfer of title from Contractor to said homebuyer.
SECTION 6: COMMENCEMENT AND PROGRESS OF THE WORK
6.1 Subcontractor shall commence work within three (3) days after notification from Contractor and shall
continue said work diligently to completion with sufficient Labor and Materlals an the Job at all times.
6-2 Subcontractor shall maintain a competent superintendent acceptable to Contractor ofl the Job at all times
when Subcontractor's work is in progress to insure that the work Is completed in strict accordance with Contract
Documents, and the superintendent shall be authorized to represent Subcontractor a5 to a11 phases of the work.
Subcontractor shall notify Contractor prior to the commencement of the work who Subcontractofs superintendent
shall be and shall glve prior notice to Contractor before any change of superintendents shall become effective.
Subcontractor shall remove any employee from the Job who is unacceptable to Contractor.
6.3 Contractor shall have access to any and all parts of Subcontractar's storage facilities and construction
grounds. and may at any time inspect. sample or require tests to be tatcen on any materials furnished or to 'be
furnished by Subcontractor. Subcontractor shall be responsible for the good condition of the work until final
acceptance thereof by Contractor. All goods and materials placed on the fob-site by Subcontractor, or delivered
to the jobsite for the account of Subcontractor, shall remain the responsibllity of Subcontractor until installed
under this Agreement and accepted by Contractor. Subcontractor bears all risk of loss until such installation and
acceptance. Subcontractor shall take proper care of all building materials belonging to Subcontcactor or other
parties on the project. end shall pay for all buildings. building materials, landscaping, sidewalks, curbs or other
property wasted or damaged as a result of Subcontractor's operations, whether belonging to Subcontractor or
other parties.
6.4 All work is to be done in strict compliance with the plans and specifications. There are to be no
substitutions of materials or van'ations in contract, any way whatsoever from the plans and specifications without
the written approval of the project architect and, where appropriate, the project structural or soils engineer.
Whenever any manufactured article, implement or series of articles or implements is mentioned in the Contract
Documents by trade name, it is intended to establish a standard of quality or merit and Subcontractor shall furnish
such specific article of implement. The intent of this paragraph is to require quality materials and wol-kfnanship.
Substitutes of equal merit may be used by Subcontractor only upon the- prior written cansent of Conmctor. If the
work described herein shall require the installation of materials or equipment furnished by others, it shall be the
responsibility Of Subcontractor to examine the items 50 provided and thereupon to handle, store and fnstall with
such skill and care as to insure a Satisfactory Installation. Loss'or damage due to acb of Subconbctor shalt be
charged to Subcontractor.
66 Subcontractor warrants that goods or materials furnished as part of the work shall conform to me
Contract Documents andlor other descriptions furnished by Contractor and that the goods or materials shall be
merchantable. free ftom defect, new, of good workmanship and qualtty. and fit for any particular p~rpo~e far which
goods and shall extend to future performance Of the goods or materials. If the goods or materials fail to mnfom
CONTRACTOR'S INITIALS SUBCONTRACTOR'S INtTtALS
me goods or materials ere r-uired. All such warranties shall survive inspection, testing and acceptance of the
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to.&& Contract Documents on other descrlptlons, Subcontractor shall pay replace same. No payment or
aeeptance by Contractor shall wnstitute a waiver of the foregoing, nor shall enythlng hereln be construed to
exclude or limit any warranties Implied by law. All materials SUpptieU shall be free of hazardous substances.
including. but not limited to. asbestos.
6.6 Subcontractor shall. at his own cost and expense, (I) rnaintaln Subcontractor's contractor's license and all
other Jicenses required by law; (il) pay ell taxes end fees of every kind that may be Imposed by any governmental
authority on the Labor and Materials furnished by SuhcontraCtor. and (iii) keep himself fully informed of and
comply with all Fedeml and State laws, City and County ordinances, codes and regulations which affect those
employed on the Job, the materials to be used, or the conduct Of the work. Subcontractor warrants and
represents that Subcontractor and Subcontractor's personnel perfoming services hereunder are properly ilcensed
and will remain properly licensed during the term hereof under all appticable laws and regulations for the
perfomance of the work to be performed hereunder. Further, Subcontractor shall CompIete the work in strict
accordance with all such laws, ordinances, codes and regulations. If the Contract Documents do not conform
with the requirements of the above speciffed authorities, the requirements of such authorities shall prevail and the work shall be completed by Subcontractor In conformance with such requirements, and no additional compensa-
tion shall be allowed therefor, with the exception that Subcontractor shall be reimbursed for any additional work
resulting from the enactment or rnodiflcation of any law, ordinance, code or regulation (excluding labor union
agreements) after the date of this Agreements, which enactment or modification was not contemplated by the
Contract Oacuments.
6.7 Subcontractor shall be charged for all costs and expenses incuri-ed in connection with re-inspections
necessitated by unacceptable materials or workmanship.
6.8 Subcontractor shall check all figures, dimensions and measur6ments set forth in the plans and
specifications prior to commencing work, and any discrepancies apparent to him must be reported to the
Contractor immediately for adjustment. Failure to comply In this respect, and any additional costs resulting from
such noncompliance, shall be charged to the Subcontractor.
6.9 Subcontractor is solely responslble and liable for executing Its work in a safe and prudent manner. for
establishing safety procedures and for protecting Its employees and the public from property damage andlor injury
during the performance of the Agreement. Safe Job-site conditions and safe working practices are solely the
responsibility of Subcontractor and shall be followed at all times. Any unsafe conditions or working practice
caused by or attributable to Subcontractor shall be immediately remedied by and at the sole expense of
Subcontractor, and Contractor shall not be liable to Subcontractor's employees or any third party for unsafe
conditions related to or caused by Subcontractor's performance of this Agreement. Subcontractor is specifically
responsible and liable for all aspects of ita use of work space jointly used by different subcontractors, and
Contractor specifically does not retain supervisory control of such joint use areas for purposes of liability for
unsafe conditions.
SECTlON 7: GUARANTEE
7.q Subcontractor expressly guarantees Contractor against all loss Of damages arising from any defect in
materials or workmanship furnished under this Agreement for a period of two (2) years from the date me work of
improvement has been approved and accepted by the City, County or other governmental agency having
jurisdiction of the work of improvement. or if no governmental appravat and acceptance is necessary, then two
years from the date the notice of completion Is recorded or if no notice of completion has been recorded, two
years from the date the work of improvement Is approved and accepted by the Contractor.
7.2 upon receipt Of notification from Contractor, Su&ontractor shall correct at SubcontractofS sole and
expense any defects or deficiencies in the materials or workmanship which arise during the period of
Subcontractor's guarantee. If Subcontractor shall fail to correct the defects andlor deficiencies within seventy-two
(72) hours of receipt of notice from Contractor, Contractor may without further notice provide the Labor and
Materials necessary to krrect the defects and/or deficiencies and the cost thereof shall be charged to the
Subcontractor. In the event there are not sufficient funds to satisfy such deduction. Subcontractor shall reimburse
Contractor for such cost immediately upon receipt of written demand from Contractor.
SECTION 7(A).1: LIQUIDATED DAMAGES
7{A).l If Subcontractor fails to complete the work on or before the time schedu(ed far ampietion,
Subcontractor. in addition to all other remedies hereunder, shall pay Contractor the sum of N/A as liquidated
damages for such delay for each day after the scheduled time fqr campletion that the wok remains unfinished. If
no liquidated damages are specified in this paragraph. Contractor may still pursue any other remedy set forth in
this Agreement, or available at law or in equity. If liquidated damages are specified in this paragraph. the Pam's
recognize that the general damages caused by any such breach by Subcontractor are vety dificult or impossibte
t0 estimate aaUEitdy. and that the liquidated damages amount listed is their best rea-nabte forecast of
damages.
CONTRACTOR'S lNlTlALS
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SECTlON 8: INOEMNlFlCATl e
8-1 me insurance maintained by Subcontractor In accordance with the Insurance Requirements shaB insure me perfomence of Subcontractor's lndernniftcatian obligations as set forth herein. All worK cavered by thls
agreement dane at the Project Slte. or In preparing Or delivering materials or equipment (Or providing services for
me Project). or any or all of them to or for the Probct, shall be et the sole rlsk of the Subcontractor. Subcontractor
shall, to the fullest extent permitted by law, wlth respect to all such work which Is covered by or incfdental to this
agreement defend all claims through legal counsel acceptable to Contractor and indemnify end hold Contractor
and any of its partners, Lender and any other party In interest designated by Contractor. or their egents,
employees or representatlves (COlkctlVely refe~red to as 'Indemnltees") harmless from and sgainst any claim,
liability, loss, damage, cost, expense, attorneys' fees including all such expenses incurred in any attempt to
enforce this indemnification provision. awards, fines, or judgments by reason of the death or bodily injury to persons, injury or damage to tangible property, including the loss of use therefrom, and arising, dlrecUy or
indirectly. om of Subcontractor's Operations. Subcontractor shall indemnify and defend Contractor under this
section regardless of Subcontractor's negligence or lack thereof, for ctaims by third parties against Contractor on
the basis of smct liability arising out Of or related to Subcontradoes operations Or work as described in this
agreement. Provided, however, that the Subcontractor shall not be obligated under this agreement to lndernniv
the Indemnitees with respect to damages which are ultimately determined by a court of competent jurisdiction to
be du0 to the sole negligence or willful misconduct of the lndemnltees. THiS INDEMNIN EXPRESSLY
INDEMNIFIES CONTRACTOR AND OWNER AGAINST ALL LIASILITY. CLAIMS, SUITS. DAMAGE, LOSS,
JUDGMENT OR €XPENSE, INCLUDING ATTORNEY'S FEES, WHICH CONTRACTOR OR OWNER MIGHT
INCUR BECAUSE OF CONTRACTOR'S OR OWNER'S NEGLIGENT FAILURE TO DISCOVER OR REMEDY A DANGEROUS CONDITION CREATE0 BY SUBCONTRACTOR.
8.2 In any and all claims against the lndemnitees by any employee of the Subcontractor, or Sub-
subcontractor, anyone directly or indirectly employed by any of them or anyone for whose act any of them may be
liable, the indemnification obligation under this paragraph shall not be limited in any way by any limitation on the
amount or type of damages, Compensation or benefits payable under any Workers' or Workers' Compensation
acts, disability benefit acts or other employee beneflt acts. Said indemnity is intended to apply during the period
of this Subcontract and shall SUWive the expiration or termination of the Subcontract until such time as action or
account of any matter covered by such indemnity is barred by the applicable statute of limitations.
8.3 Subcontractor shall be responsible for the safety of Subcontractor's agents. employees. independent
contractor and suppliers. Subcontractor shaif indemnify, defend and hold Contractor harmless against all loss,
damage, claims. liabitities, cost or property damage suffered by Subcontractor, or Subcontractor's agents.
employees, independent contractors or suppfiers.
8-4 Subcontractor shall defend, protect, indemnify and hold Contractor harmless against all claims, liability.
costs, expenses or other losses arising by reason of any liens for Labor and/or Materials furnished to the job.
Subcontractor agrees that Subcontractor shall within ten (10) days of receipt of notice from Contractor cause the
effect of any such lien to be removed from the job and any legal procaedings relating thereto to be dismissed. In
the event Subcontractor shall fail to do so. Contractor may take any action It may deem appropriate to cause any
lien to be removed andfor action dismissed and the cost thereof, together with reasonable attorney's fees. shall be
immediately due and payable to Contractor from Subcontractor.
825 Subcontractor shall be liabls for and shall reimburse Contractor for all damages, costs, expenses and
other losses resulting from Subcontractor's Uelay in prosecution of the work and for any damage or other losses to
Contractofs pmperty or to the units being constructed resulting from the negligence or misconduct of
Subcontractor or SubcantractoCs employees or agents.
8.6 In the event Contractor is Sewed with my Writ of Attachment, Writ of Execution, Stop Notice, Notice of
Levy (Federal or State), or other legal process pertaining to any debt or alleged debt of Subcontractor's arising out
Of Work performed under this Agreement, Contractor shall be entitfed to retain any and all monies then due
Subcontractor for Labor and Materials furnished by Subcontiactor. It is understood and agreed that the purpose
of the retained monies is tb guarantee that Contractor rhail have sufflclent funds witti which to cQmp[&e
Subcontractor's obligations under this Agreement h the event that the legal proceedings Out of which such
Process arose should. in the Contractor's opinion, make it difficult or impossible for Subcontractor to finish the work described herein.
8.7 Each of the foregoing paragraphs in this Section creates independent duties on me part of Subcontractor
t0 defend Subcontractor's expense by counsel satisfactory to Contractor and to indemnify Contractor as provided
in said paragraphs. Each duty shalt extsnd to a11 claims, liability, losses, damages, costs and expenses (including
reasonable attOrnf$S fees) arising before or after the completion of the work performed by Subcontractor. In no
event. however. shall Subcontractor be obligated to defend or indemnify Contractor with respect to the sole
nE@igenCe Or Willful misconduct Of Contractor or Contractor's employees or agents other than Subcontractor.
SECTION 9: LABOR
9-1 In the event the Subcontractor is a union sfgnatory. Subcontractor agrees that all work performed by SUbcOntractor, and its material men and suppliers, in pllrsuance of this Agreement shall be performed by such
CONTRACTOR'S INITIALS
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. * peribns as are acceptzfble sppllcable union requlrements. ctor further agrees to comply with
' all -of the provisions of ati master and/or short form labor agreements now in existence and any revisions or I extensions thereof.
9.2 Subcontractor shall not be excused from full performance under this Agreement by reason of union
picketing or any other labor activltles. Delays are failure to diligently prosecute performance under this
Agreement shall constitute a default, regardless of whether or not such delay was a result of labor disputes.
9.3 Subcontractor agrees to present to Contractor, immediately upon determination and prior to
commencement of any work hereunder, a complete llst of subcontractors. mateial men and suppliers that will be
performing at and/or providlng materials to the Job and the names, addresses and telephone numbers of the
unions, if any, said subcontractors, materiat men and suppliers are affiliated with.
I 9.4 Subcontractor agrees to e%erclse good faith and best Sfforts to prevent labor disputes at the Job-site and
agrees to fully cooperate with Contractor in every manner possible to resolve labor trouble, and mitigate its impact
on Vta Job-site, if necessary.
SECTION 10: INSURANCE
10.1 Subcontractor shall procure and malntaln, at its sole cost and expense. the following insurance
coverages:
(a) Worker's ComDensation:
Coverage A. Statutory Benefits. Coverage 6. Employer's Liability
Bodiiy Injury by accident $7,000,000 each accident
60dily Injury by disease $1,000,000 policy limit Bodify Injury by disease 81,000,000 each employee
Coverage must include a waiver of subFogation.endorsement.
(b) Commercial Auto Coveraae:
Auto Liability limits of not less than $1,000,000 each accident, combined Bodily Injury and Property
Damage Liability insurance including but not limited to owned autos. hired or nonswned autos.
(c) Comorehensive General Liabititv or Commercial General Liabifitv:
The limits of liability shall not be less than:
(1) Comprehensive General Liability:
$1 ,OW,OOO Combined Single Limit
Bodily injury/Proporty Damage per Occurrence
7 OR
(2) Commercial General Llabffity:
The limits of liability shall not be less than:
Each Occurrence Limit $1,000,000
Personal Advertising Injury Lirnlt $1,000.000
Products/Completed Operations Aggregate Limit SI .ooo,ooo General Aggregate Limit $1.000,000
(other than Products/Completed Operations)
(3) Both policy forms must include:
((a)) Premises and Operations coverage with no explosion. collapse. or underground damage
(XCU) exclusions.
((b)) Products and Completed Operations coverage. Subcontractor agrees to maintain this
coverage for a minimum of one (1) year followlng completion of the Project and to continue
to name Contractor and any other parties in interest as Additional Insured(s) for the entire
one year Perlad.
((c)) Blanket contractual coverage with Employee Exclusion deleted, or its equivalent
80Q
Oamage Coverage including co ted opefations or its equivalent.
An endorsement naming Contractor and any other patties in interest as additional insured(5) under the coverage specified under lnsuranoe Requirement 3. Such
endorsement shall contain the following provlskn:
"it is understood and agreed that coverage afforded by this Policy shall also apply to Presley Homes, its officers, directors, agents, servants,
employees, divisions, subsidlaries, partners, shareholders and affiliated
companies as additional insureds but only with respect to legal liability or
claims caused by, arising out of. or resulting from the acts of omissions
of the named insured or of others performed on behalf of the nam6d
insured."
The above endorsement shall be acceptable as well as IS0 forms CG20106 11/85
or CG2026 11/85 or equivalent. IS0 forms CG2010A or CGZOlOB 10193 or their
equivalent are not acceptable. Any form that does not grant additional insured status
under the products/cornpleted operatlons coverage IS NOT ACCEPTABLE.
((0) An endorsement stating: "Such coverage as is afforded by this policy for the benefit of
the additional Insured(s) Is prlmary and any other coverage maintained by such additional
insured(s) shall be noncontributing with the coverage provided under this policy.'
((9)) Coverage on an noccurrence" form. "Claims Made" and " Modifled Occurrence" forms
are not acceptable.
((h)) An endorsement stating that any aggregate limits apply on a 'per project" basis.
10.2 Additional Insurance Requirements
(a) The Commercial General Liability policies obtained and maintained by Subcontractor shall be written
to apply to all bodily injury, property damage, personal injury and other covered loss. however occasioned,
occurring during the policy term; shall contain endorsements naming the Contractor and any other interested
parties designated by the Contractor (e.g. the owner of the Property or a lender) as additional insureU[s); shall
contain endorsements providing that such insurance as is afforded under Subcontractor's policy is primary as
respects Contractor and that other insurance maintained by Contractor is excess and noncontributory with the
insurance required hereunder; shall provide for severability of interests; shall provide that an act or omission af
one of the named insured shall not reduce or avoid cqvemge to the other named insured; shall afford coverage
for all claims based on acts, omissions, injury and damage. which claims occurred or arose (or the onset of which
occurred or arose) in whole or in part durfng the policy period; and shall include the following coverage's:
Personal Injury; Employees as additional insureds; Equipment Liability Coverage; Premises and Operations
Coverage, including Operation of Independent Contractors; Explosion Collapse and Underground Property
Coverage; Broad Form Property Damage Coverage, including Completed Operations or its equivalent; Water
Damage Legal Liability Coverage; Fire Legal Liability Coverage: Premises Medical Payments Coverage;
Extended Bodily fnjury Coverage; lncldental Malpractice Coverage; Broad Form Contractual Liability Coverage
specifically covering all liability, including Subcontractor's indemnity obligations, assumed by Subcontractor in this
Agreement; and Products Liability and Completed Operatians Coverage whlch.6haII 6peGifimlly cover liability for
the work and materials provided for herein. Claims made and modified occurrence policies are not acceptable.
(b) If this agreement is for services related or arising out of grading, movement of soil, erosion control,
soils testing. design or construction of drainage, lots, pads or any other earth or soils work. the policies shall not
contain or be subject to any provision or endorsement whlch excludes coverage for subsidence. The certificate of
insurance for any such Agreement shall contain a statement that the policy is not subject to any provision or
endorsement which excludes coverage for subsidence or earth movement.
(c) The Susiness Auto Insurance shatl. include the following forms and shall provide the following
coverage with combined single limits of llabillty for bodily injury and property damage of not lass than bl,000.OOQ:
Owned Automobiles; Hired Automobiles and Non-Owned Automobiles.
(d) All policies must contain an endorsement affording Contractor an unqualified thirty (30) days notice of
cancellation, nonrenewal. expiration or reduction in coverage. *
(e) Afl policies shall be in a Form satisfactoty to Contractor and shall be issued by companies listed in the
most recent Best's rating guide as having not less than an A:V rating.
(9 Subcontractor shall furnish Contractor with certificates of insurance with the required endorsements
for each policy required hereunder and caples of such policies before Contractor's entrance onto the Job-site and
commencement of the work hereunder. In addition, Subcontractor shall require each subcontractor to furnish
CONTRACTOR'S INITIALS SUBCONTRACTOR'S INITIALS
Page 7 of 11
. . Co&xactor with certificates o 4ance evldencing the insurance requir J be maintained by Subcantractofs
subcontractors hereunder before such subcontractor's entrance onto the Job-site and commencement of such
subcontncbfs work. Subcontractor shall 8hO furnish to Contractor, at least thirty (30) days before the expiration
date of expiring policies, certiicates of Insurance, showing that all premiums have been paid for the entire
forthcoming policy perlod.
.. #, b
(9) At the time of a loss, Subcontractor shall promptly provide Contractor with a written report of the loss.
(h) In the event of any reductton or exhaustion of an aggregate annual limit of tiability or any geneml
aggregate policy limit of liability, Subcontractor shall then obtain additional insurance to repknish the limits of
liability herein provided.
(i) Subcontractor shall require that each of its subcontractors also separately maintain all insurance
coverage's that Subcontractor is requir6d to malntaln herein.
(j} Any and all other Commercial General Liability policies or coverages obtained, maintained or
otherwise available to the Subcontractor which Include or are applicable to Contractor as an additional insured
shall also cover liability arising out of or related to the work and materials provided for in this Agreement and be
primary and non-cantnbutory.
10.3 Subcontractof's obligation to carry Insurance as herein provided shall not limit or modify in any way any
other obligation of Subcontractor under this Agreement, including, without limitation, the obligations of
Subcontractor under Paragraph 8 of this Agreement.
10.6 If Subcontractor fails to secure andlor pay the premiums for any of the policies of insurance as required
herein. orfails to maintain such insurance, Contractor shall have the right, but not the obtigation. in addition to any
other action it may have at law or in equity, to secure such policy or policies of insurance For the account of
Subcontractor and charge Subcontractor for the premiums paid therefor, or withhold the amount thereof from
such sums otherwise due from Contractor to Subcontractor. Neither Contractor's right to secure such policy or
poltcies nor the securing thereof by Contractor shall constitute an undertaking by Contractor on behalf of or far the
benefit of Subcontractor or others to determine or warrant that such policles are in effect
10.5 Contractor reserves the right, in its sole discretion, to require higher limits of liability coverage if, in
Contractor's opinion, operations by or on behalf of Subcontractor create higher than normal hazards and. to
require Subcontmctor to name additional parties in Interest to be Additlonal Insureds.
10.8 In the event that rental of equipment is undertaken to complete andlor perform the work, Subcontractor
agrees that it shall be solely responsible for such rental equipment. Such responsibility shall indude. but not be
limited to. theft, fire, vandalism and use by unauthorized persons.
In the event that materials or any other type of personal property ["personal property") is acquired for the Project
or delivered to the Project site, Subcontractor agrees that it shall be solely responslble for such property until it becomes a fixture on the Profect, or otherwise is installed and incorporated as a final part of the Project. Such
responsibility shalt include, but not be limited to, theft, fire, vandalbm and use by unauthorized persons.
Subcontractor shall maintain "all risk" insurance. on a replacement cost basis, covering loss or damage to
property (for which it has title andlor risk of loss) which becomes a final part of the Project, during its off-Project
situs, in transit and while stored or worked upon away from the Project situs. Contractor shall be additional
insured under such insurance.
SECTION 11: DEFAULT, TERMINATION, SUSPENSION AND RECOURSE 6Y CONTRACTOR
+4.1 Subcontractor shall be In default of this Agreement if at any time during the progress of the work
Subcontractor shall be adjudged a bankruptcy, or shall file or there is filed against it any proceeding under the
Federal Bankruptcy laws, or shall make a general assignment for the benefit of creditors, or shall become
insolvent or have a receiver appointed on accaunt of its insolvency. or shall become delinquent in any
contributions required to be made to any employee benefit program, or if Subcontractor shall fail or refuse to
supply sufficient properly skilled workmen or sufficient materials of proper quality, or othewise fail or refuse to
prosecute diligentfy the work described herein. or shall fail to perform fully any of the provisions of this if
Agreement. Upon the Occurrence of any such events of default, Contractor shall give written notice of such
default to Subcontractor and its surety, if any. If Subcontractor shall fail to cure said default within fortysight (48)
hours after the giving of such notice. Contractor may, at its option and without prejudice to any right or remedy it
may have at bw or in equity. eject Subcontractor from the Job and for purposes of completing the work take
possession of Subcontractor's tools, equipment and material and/or employ any other person or persons to
complete the work. and the cost thereof shall be deducted from the unpaid balance of the Contract Price. Atf
amounts necessary to either obtain lien releases tor mechanic's of ather statutory liens filed against the Job-site
for Labor and/or Materials furnished at the Job or otherwise remove the effect of any such lien on the Job-slte
shall be included within the meaning of cost to complete the work and shall be deducted from the Contract Price. in the event the cost of completing the work (including additional managerial and administrative expenses
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be dmmediately due and payable from Subcontractor to Contractor.
119 Subcontractor shall be liable because of his default for all damages suffered by Contractor, and
Contractors exercise of the option to eject Subcontractor from the Job shall not relieve Subcontractor from such
liability. Upon occurrence of any event of default, Subcontractor shall have no right to receive any further
payment whatsoever until the work has been completed and Contractof's damages, if any. have been
ascertained.
Tl.3 In the event that Subcontractor or any of his Subcontractors causes or is involved In any labar trouble
on the job or if they are listed by the administration office of the appropriate health and weifare. pension. vacation
or apprenticeship funds as being delinquent in payment or payments to said fund or funds, they shall be deemed
to be in default under this Agreement and may be ejected from the job.
11.4 In addition to the right of Contractor to terminate this Agreement pursuant to Paragraph I 1.1 herein. this
Agreement may be terminated by Contractor at any time and for any reason with ten (10) calendar days prior
written notice to Subcontractor. On tennfnation of this Agreement by Contractor pursuant to this provision.
Contractor shall pay to Subcontractor as payment in full for all tabor, work and services performed and all
materials supplied and expenses incurred by Subcontractor under this Agreement that portion of the Contract
Price applicable to all work and approved extra work actually performed by Subcontractor under this Agreement
up to the effective date of termination for which Subcontractor has not preViOusly received payment. As used
herein, the "effective date of termination" shall be that date which is ten (IO) calendar days aiter Subcontractor's
receipt of the notice of termination described in this paragraph. Subcontractor shall not undertake any new work
after receipt of the notice of termination referred to in this paragraph. Unless othewise instructed in writing by
Contractor. Subcontractor shall continue all work in progress until the effective date of termination. If the Job is
merely temporarily suspended for any reason, in whole or in part. Contractor shall notify Subcontractor in writing
as soon as reasonably practicable, and the above stated procedure shalt apply except that this Agreement and its
rights and obligations shall only be suspended until Contractor notifies Subcontractor that the Job has started
again, that this Agreement is reinstated and that the Subcontractor is to continue Subcontmctor's services again.
i1.5 Failure of Contractor to exercise any of the rights given it under this Agreement shall not cbnstitute a
waiver of that or any other right and shall not excuse the Subcontractor from compliance with the pravisions of
this Agreement, nor prejudice any rights of the Contractor to recover damages for such defauit No right or
remedy of Contractor under this Agreement shall be to the exclusion of any other right or remedy hereunder, or at
law or at equity. all such rights and remedies being cumulative.
SECTION 12: CLEAN UP
72-1 Subcontractor shall at all times keep the Jab free from accumulations of waste materials or rubbish. On
completion of his work, Subcontractor shall promptly remove all rubbish, surplus materials. tools. scaffolding. and
equipment from the Job and shall leave the Job in a dean condition satisfactory to Contractor. In the event of a
dispute as to the responsibility for removal of rubbish from the Job, Contractor may remove the rubbish and
charge the cost to the Various subcontractors responsible for it In such ratio as Contractor. in its sole discretion,
shall determine to be just, and this allocation shall be binding on Subcontractor.
SECTION 13: AlTORNEYS FEES
13.1 In the event that Contractor shall institute legal action against Subcontractor. or any surety, to enforce
the provisions of this Agreement, or In the event that any legal action is brought against Subcontractor by third
parties in which Contmctor is joined as a party, whether the same shall proceed to judgment or not Subcontractor
hereby agrees to pay to Contractor all reasonable costs and expenses incurred by Contractor in connection with
any such action, including but not limited to. expert witness fees and reasonable attorney's fees.
SECTION 14: tNOEPENDENT CONTRACTOR AND TAXES
14.1 Subcontractor warrants that he is an independent contractor within the purview of the Jntemal Revenue
Code, Fedeal Social Security Act. and all other applicable laws and regulations and is not acting in the name of
Contractor or as an agent of Contractor.
14.2 Unless otherwise provided herein or required by law. Subcontractor assumes exclusive liability for. and
shall pay before delinquency, all taxes, charges or contributions of any kind now, or hereafter imposed on. or with
respect to, the wages. salaries or other remuneration's paid to persons employed in connection with the
performance of this Agreement, and Subcontractor shall indernnw and hold Contractor ,harmless from any liability
and expense by reason of Subcontractor's failure to pay such taxes, charges or contributions.
SECTION 15: SONO
11.7 Contractor may, at any time during the progress of the work by written notice. require Subcontractor to
furnish a corporate surety bond issued by a surety or sureties acceptable .to Contractor guaranteeing the faithful
performance of .this Agreement by Subcontractor and the payment for all Labor and Materials furnished by
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' ~ Subda'ntractor in pursuance of Aareement. The bond. shall be in an required by Contractor. not
~ weeding the Contract Price specified-herein, and shall provlde fpr the PaymGnt of any iwn that a claimant may
recover, together with costs of suit and attorneye' feeo. In the went Subcontractor fails to furnish said bond within
twenty (20) days after receipt of written notice, Contractor may, at its option, obtain such bond for the
Subcontractor and deduct the cost thereof ftam the monies then due or thereafter becoming due to
Subcontractor, or may deem Subcontractor to be in default of this Agreement.
SECTiUN 16: MISCELLANEOUS
16.1 All notices permitted or required to be given as provided herein shall be in writing and may be served
personally on the superintendent or other duly authorized representative of either party hereto, or may be served
by certified mail, postage prepaid, return receipt requested, or by telegram sent to the party at the address shown
hereinabove. Said notice shall be deemed received one day after deposited in the mail or one day after the
telegram has been sent.
162 Subcontractor understands and agrees that time is of the essence of thls Agreement.
16.3 At1 additions and modifications to the Contract Oocuments shall be valid only if in writing and signed by
both parties hereto and same shall then become a part of the Contract Documents and subject to the provisions
of this Agreement.
16.4 The Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65) prohibits employers from
knowingly discharging or releasing a chemical known to the State Of California to cause cancer, birth. defects or
other reproductive harm into water or onto land where the chemlcal passes or probably will pass into any source of drinking water. Notwithstanding any provision in such Act exempting Subcontractor on the basis that is has
less than ten (10) employees, Subcontractor hereby agrees to comply with all provisions of such Act relating to
the discharge of hazardous chemicals of the Job-site. Subcontractor furlher agrees that Subcontractor,
Subcontractor's employees and Subcontractor's Subcontractors shall not discharge such chemicals on the Job-
site, shall not engage in dean-up or repair activltles on the Job-site which will result in the discharge of such
chemicals, and shali. upon completion of performance of all duties under this Agreement. remove all supplies,
materials and waste remainlng on the Job-site which. if exposed. could result in the discharge of such chemicals.
Subcontractor shall bear full financlal responsibility, as between the parties of this contract, for the compliance of
all persons mentioned in the previous sentence, Should Subcontractor, Subcontractor's emptoyees or
Subcontractofs subcontractors or their employees fall to comply with the provisions hereof within 24 hours from
the time Contractcr issues Subcontractor a written notice of noncompliance or within the time of an abatement
period specified by any governing agency, whichever period is shorter, Contractor may give notice of default to
Subcontractor. Failure of Subcontractor to cure such default within 24 hours afkr such notice shall give Contractor the option to elect an all rights or remedies set forth in this Agreement.
16.S Subcontractor shalt abide by and conform to any and all procedures and schedules established by
Contractor. including those which may be necessitated by Act5 of Gad, Subcontractofs failure to comply with tnis
Agreement. or other reasons unknown st this time.
16.6 Contractors are required by taw to be licensed and regulated by the Contractors State License Board. Any questions concerning a contractor may be referred to this registrar of the board whose address is:
CONTRACTOR'S STATE LICENSE BOARD
9835 Goethe Road
Sacramento, California 95828
MAlLfNG ADDRESS: P.O. BOX 26000
Sacramento. California 95826
16.1 This Agreement shall be construed and Interpreted under all shall be governed and enforced according
to the laws of the State of California.
16.8 Whenever the context hereof shall so require, the Singular shall include the plural, the make gender
shaIl include the female and the neuter, and vice versa.
16.9 In the event any one or more of the provisions contained in this Agreement shall for any reason be held
to be invalid. illegal or otherwise unenforceabte In any respect, such provision shall be severed h&refrom, and
such invalidity. illegality or unenforceabIIlty shall not affect any 'other provision hereof and the remainder of the
provisions of this Agreement shall continue In full force and effect without impairment
16-10 This agreement and the covenants contained herein shall be binding upon and shall inure to the benefit of the parties hereto and their respectlve heirs and administrators, executors, permitted assigns and
successors in tnterest.
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. ;&I1 During all disputes, e .... JOS, claims Of Other matters arising out t , relating to this Agreement or the
breach thereof, Subcontractor shall carry on its duties hereunder and maintain the schedule for performance of
the work, unless otherwise instructed in writing by Contractor or unless otherwise ordered by a court of Competent
jurisdl&ion. provfded Subcontractor Is paid for performance, of undisputed wark in accordance with the terms Of
this Agreement.
16.12 So long 8s Contractor Is not In default under this Agreement, Subcontractor agrees that it will file no
mechanics or other liens against the project. In the event that any of Subcontractor's permitted subcontractors,
materialmen, employees or laborers file a mechanics or other lien egainst the project. so long as Contractor is not
in default under this Agreement, Subcontractor shall immediately procure and record a lien release bond issued
by a corporation authorized to issue surety bonds in the State of California. The bond shall meet the
requirements of California Civil .Code Section 3143 or any successur statute and shall provide for the payment of
any sum that the claimant may 'recover on the claim, together wlth costs of suit, if such is recovered in the action.
In the event Subcontractor fails to procure and record such bond, Contractor may. at its option and at the sole
expense of Subcontractor, procure and record Such bond end deduct the cost thereof from the Contract Amount.
16.13 Wthout limiting the survival of any express provision to that effect, the terms of the Paragraphs titles
"Insurance" and "indemnification" shall be continuing covenants which shall survive the termination of this
Agreement
IN WITNESS WHEREOF. the parties hereto have executed this Agreement on the day and year fiwt above
written.
CONTRACTOR SUBCONTRACTOR
PRESLEY HOMES, a California Corporation Burtech PSpellne. lnc. Contractor's Lic. No. 527293
By: By:
Bob Montgomery
Vice President of Construation Printed Name:
Date: Title:
ey: State License No.
Expiration Date:
Date: Workers Comp. No.:
Presley Homes - Presley Homes
15373 Innovation Drive, Suite 380
San Diego, California 92 128
(619) 451-6300
Expiration Date:
General Liabitity
No.:
Expiration Date:
CONTRACTOR'S INITIALS
Tt.9 'ON
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EXHIBIT “D
FORM OF ADDENDUM TO CONSTRUCTION CONTRACT
ADDENDUM TO PRESLEY HOMES SAN DIEGO OFFSITE SUBCONTRACT AGREEMENT FOR MEADOWLARK
INFRAWATER SYSTEM UNITS 2,3,4,5,6, - CONTRACT NUMBERS 402510,402704,402712
This Addendum (this “Addendum”) to Presley Homes San Diego Offsite Subcontract Agreement For Meadowlark
InfraWater System Units 2, 3, 4, 5, 6, - Contract Numbers 402510, 402704, 402712 this (“Addendum”) is made as of
November 22, 1999, by and between PRESLEY HOMES, a California Corporation (“Contractor”) and Burtech Pipeline, Inc.
(“Subcontractor”) with reference to the following recitals:
1. Recitals.
1 .I Concurrent with execution of this Addendum, Contractor and Subcontractor have entered into that certain
Presley Homes San Diego Offsite Subcontract Agreement For Meadowlark InfraWater System Units 2, 3, 4, 5, 6, -
Contract Numbers 40251 0,402704, 402712 (the “Agreement”).
1.2 Contractor and Subcontractor now mutually desire to amend the Agreement in the following particulars.
2. Third Partv Beneficiaries. Contractor and Subcontractor extend the Agreement to include the Carlsbad Municipal
Water District, a public agency organized under the Municipal Water District of 191 1 (“District”) and the City of
Carlsbad (“City”) as third party beneficiaries under the Agreement, including without limitation beneficiaries under
Section 8: Indemnification.
3.
4.
5.
6.
Additional Insureds. Subcontractor shall procure and maintain, at its sole cost and expense, an endorsement naming
the District and the City as additional insured(s) under the coverage specified under insurance requirements of the
Construction Contract consistent with the provisions of Section IO: Insurance.
Full Force and Effect. Except as expressly amended or modified in this Addendum, the Agreement shall remain in full force and effect. In the event of any inconsistency between the terms and provisions of the Agreement and the terms
and provisions of this Addendum, the terms and provisions of this Addendum shall govern.
CounterParts. This Addendum may be executed in one or more counterparts, all of which when taken together shall
constitute one original document.
Definitions. Unless otherwise expressly defined in this Addendum, all capitalized terms used in this Addendum shall
have the meanings subscribed to them in the Agreement.
CONTRACTOR PRESLEY HOMES, a California Corporation
Contractor’s Lic. No. 527293
SUBCONTRACTOR
Burtech Pipeline, Inc.
By: By: Bob Montgomery
Vice President of Construction
Printed Name: -
Date:
By:
Title: State Licens
Expiration Date:
e No. ~
Date:
P:0133982.07:46058.008 24-NOV-99
Workers Comp. No.:
15
Presley Homes - Presley Homes Expiration Date:
15373 Innovation Drive, Suite 380 General Liability No:
San Diego, California 92128 Expiration Date:
(619) 451-6300
CONTRACTORS INITIALS
P:0133982.07:46058.008
P:0133982.07:46058.008 24-NOV-99
SUBCONTRACTORS INITIALS
16