DESIGN-BUILD AGREEMENT
BY AND BETWEEN
ISLE OF CAPRI BLACK HAWK L.L.C., AS OWNER
AND
XXXXXXXX CONSTRUCTION, INC., AS CONTRACTOR
TABLE OF CONTENTS
RECITALS..................................................................... 1
ARTICLE 1: CONTRACTOR'S SERVICES............................................ 1
1.1 GENERAL DESCRIPTION OF THE WORK............................. 1
1.2 INTENT OF AGREEMENT......................................... 2
1.3 PRIORITY OF DOCUMENTS....................................... 2
1.4 GENERAL REQUIREMENTS........................................ 2
1.4.1 Performance of the Work.......................... 2
1.4.2 Professional Standards........................... 2
1.4.3 Licensing and Other Qualifications............... 2
1.4.4 Sufficient Personnel............................. 3
1.4.5 Contractor's Key Personnel....................... 3
1.5 NATURE OF DESIGN-BUILD AGREEMENT............................ 3
1.5.1 Design and Engineering Generally................. 3
1.5.2 Previous Design Work............................. 3
1.6 DESIGN AND ENGINEERING WORK................................. 4
1.6.1 Schematic Design Documents....................... 4
1.6.2 Design Development Documents..................... 4
1.6.3 Construction Documents........................... 4
1.6.4 Consistency...................................... 5
1.6.5 Approval......................................... 5
1.6.6 Replacement...................................... 5
1.6.7 Design Schedule.................................. 5
1.6.8 Compliance with Laws............................. 5
1.7 CHANGES IN THE WORK......................................... 5
1.7.1 Changes.......................................... 5
1.7.2 Contract Adjustments............................. 6
1.7.3 No Contractor Changes............................ 6
1.7.4 Change Orders.................................... 6
1.7.5 Construction Change Directive.................... 6
1.7.6 Necessity for Prior Written Authorization........ 8
1.7.7 Disputes Reflecting Changes in the Work.......... 8
1.7.8 Compliance with Construction Documents........... 8
1.7.9 Effect of Changes in the Work on Surety Bonds.... 8
1.7.10 Authorized Change Order Signatory................ 9
1.7.11 Restriction on Time Extension.................... 9
1.8 CONTRACTOR'S REPRESENTATIONS
1.9 "AS-BUILT" DRAWINGS......................................... 9
1.9.1 Maintenance of Drawings at the Site.............. 9
1.9.2 Mylar Drawings and "As-Built" Survey............. 9
1.10 FINANCING CONTINGENCY...................................... 9
1.11 NOTEHOLDERS' INTEREST IN THE WORK..........................10
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1.12 HOTEL ALTERNATE............................................10
ARTICLE 2: CONSTRUCTION OF THE WORK;
SUBSTANTIAL COMPLETION; EXCUSABLE EVENTS;
WORKMANSHIP; COMPLIANCE WITH LAWS............................................11
2.1 SCHEDULES AND SUBMITTALS....................................11
2.1.1 The Schedule......................................11
2.1.2 Submission of Shop Drawings, Details, Samples.....11
and Data
2.1.3 Submission of other Necessary Materials...........11
2.1.4 Material Purchasing Schedule......................11
2.1.5 Information as to Progress of Work................12
2.1.6 Revisions to Schedule Due to Owner's Suspension
of Work...........................................12
2.2 TIME AND PROSECUTION OF WORK................................12
2.2.1 Time of the Essence...............................12
2.2.2 Notice to Proceed.................................12
2.2.3 Substantial Completion of Casino..................13
2.2.4 Substantial Completion of Hotel...................13
2.2.5 Owner's Right to Direct Overtime and Multiple.....13
Shifts
2.2.6 Owner's Right to Request Expedite.................13
2.2.7 Owner's Right to Require Additional Labor.........13
2.3 SUBSTANTIAL COMPLETION OF WORK..............................14
2.3.1 Definition of Substantial Completion..............14
2.3.2 Further Conditions on Substantial Completion......14
2.4 DELAYED/EARLY COMPLETION....................................15
2.4.1 Liquidated Damages................................15
2.4.2 Early Completion Incentive........................15
2.5 EXCUSABLE EVENTS............................................16
2.5.1 Adjustments in Schedule Because of................16
Excusable Event
2.5.2 Adjustments in Guaranteed Maximum Price
Because of Excusable Event......................17
2.5.3 Excusable Events Defined..........................18
2.5.4 Rights Limited....................................18
2.5.5 Contractor's Acknowledgment of Extreme Weather
Conditions......................................18
2.6 WORKMANSHIP AND PERFORMANCE OF WORK.........................19
2.6.1 Site Conditions...................................19
2.6.2 Local Conditions..................................19
2.6.3 Contractor's Responsibility for Proper Layout.....20
2.6.4 Contractor's Workmanship Standard.................20
2.6.5 Contractor's Work in Areas Prepared by Others.....20
2.6.6 Owner's Inspection Rights.........................20
2.6.7 Storage on Site...................................20
2.6.8 Owner's Access to the Work........................21
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2.6.9 Rejected Workmanship and Material During Construction.............. 21
2.6.10 Removal or Tearing Out Work to Inspect............................. 21
2.6.11 Responsibility..................................................... 21
2.6.12 Control............................................................ 21
2.7 COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS................................... 22
2.7.1 Taxes.............................................................. 22
2.7.2 Legal Requirements................................................. 22
2.7.3 Permits and Licenses............................................... 22
2.7.4 Building Inspections............................................... 22
2.7.5 Corrections of Legal Violations.................................... 22
2.7.6 Ownership of Design Documents...................................... 22
2.7.7 Patents and Other Proprietary Rights............................... 23
2.8 CONTRACTOR'S SUBCONTRACTORS..................................................... 23
2.8.1 Bidding Process.................................................... 23
2.8.2 Identification of Subcontractors................................... 24
2.8.3 Rejection by Owner of Subcontractors............................... 24
2.8.4 Liquidated Damages In Subcontracts................................. 25
2.9 LABOR........................................................................... 25
2.9.1 Contractor's Duty to Staff the Work................................ 25
2.9.2 Owner's Approval of Labor Force.................................... 25
2.9.3 Notice of Occurrence With Respect to Employees..................... 25
2.10 MAINTENANCE OF THE SITE AND PROTECTION OF PERSONS AND PROPERTY.................. 25
2.10.1 Safety............................................................. 26
2.10.2 Safety of Persons and Property..................................... 26
2.10.3 Placement of Signs................................................. 27
2.10.4 Orderly Maintenance of Site........................................ 27
2.10.5 Liability for Work in Place and on the Site........................ 27
2.10.6 No Unreasonable Interference with Owner's Operations............... 27
2.10.7 Protection of and No Interference with Adjoining Properties........ 28
2.11 USE OF OWNER'S FACILITIES....................................................... 28
2.11.1 Prohibition of Use Without Consent................................. 28
2.11.2 Indemnification Against Loss....................................... 28
ARTICLE 3: REPRESENTATIVES OF OWNER AND CONTRACTOR................................................ 28
3.1 DESIGNATION OF OWNER'S AGENT AND CONTRACTOR'S AGENT............................... 28
3.2 RIGHTS OF OWNER'S AGENT........................................................... 29
ARTICLE 4: OWNER'S RIGHT TO OUTSIDE INSPECTION..................................................... 29
4.1 RIGHT TO DESIGNATE................................................................ 29
4.2 LIMITATION OF OWNER'S LIABILITY................................................... 30
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ARTICLE 5: OWNER'S RIGHT OF ENTRY AND OCCUPANCY FOLLOWING SUBSTANTIAL COMPLETION...................... 30
5.1 RIGHT TO ENTER........................................................................ 30
5.2 NO INTERFERENCE WITH CONTRACTOR'S REMAINING WORK...................................... 30
5.3 OWNER APPROVALS....................................................................... 30
5.4 OWNER INFORMATION..................................................................... 31
ARTICLE 6: PUNCH LISTS AND FINAL COMPLETION........................................................... 31
6.1 PREPARATION OF PUNCH LIST........................................................... 31
6.2 FINAL COMPLETION.................................................................... 32
ARTICLE 7: CONTRACTOR'S WARRANTY OF CONSTRUCTION...................................................... 32
7.1 WARRANTY............................................................................ 32
7.1.1 Warranty with Respect to Professional Services.......................... 32
7.1.2 Warranty with Respect to Construction Work.............................. 32
7.1.3 Warranty With Respect to Materials and Equipment........................ 32
7.1.4 Period of Warranty...................................................... 32
7.2 EXTENT OF WARRANTY.................................................................... 32
7.3 NON-APPLICABILITY OF WARRANTY......................................................... 33
7.4 SURVIVAL OF WARRANTY.................................................................. 33
7.5 ASSIGNMENT OF WARRANTIES.............................................................. 33
7.6 MANUALS AND TRAINING.................................................................. 33
ARTICLE 8: CONTRACT SUM............................................................................... 34
8.1 TOTAL COMPENSATION.................................................................... 34
8.1.1 Cost of the Work......................................................... 34
8.1.2 Contractor's Fee......................................................... 34
8.2 CONTRACTOR'S GUARANTEED MAXIMUM PRICE................................................. 34
8.2.1 Guaranteed Maximum Price................................................ 34
8.2.2 Owner Furnished FF&E Excluded........................................... 34
8.3 EXCESS AND SAVINGS.................................................................... 35
8.3.1 Excess Cost Above Guaranteed Maximum Price.............................. 35
8.3.2 Savings Below Guaranteed Maximum Price.................................. 35
8.4 COST OF THE WORK...................................................................... 35
8.4.1 Salaries or Wages....................................................... 35
8.4.2 Overtime Payments....................................................... 36
8.4.3 Contractor Self-Perform Trade Work...................................... 36
8.4.4 Cost of Employee Benefits............................................... 36
8.4.5 Travel and Subsistence Expenses......................................... 36
8.4.6 Cost of Material and Supplies........................................... 36
8.4.7 Design Fees............................................................. 36
8.4.8 Subcontractor's Payments................................................ 36
8.4.9 Cost of Tools, Equipment and Facilities................................. 37
8.4.10 Cost of Major Construction Equipment.................................... 37
8.4.11 Insurance Premiums...................................................... 37
8.4.12 Taxes................................................................... 37
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8.4.13 Fees, Royalties and Deposits................................................ 37
8.4.14 Uninsurable Losses.......................................................... 37
8.4.15 Communication Expenses...................................................... 37
8.4.16 General Conditions.......................................................... 37
8.4.17 Clean-up.................................................................... 38
8.4.18 Emergency................................................................... 38
8.4.19 Other Agreement Cost........................................................ 38
8.4.20 Pre-Approved Cost........................................................... 38
8.5 CREDITS TO COST OF THE WORK............................................................ 38
8.5.1 Proceeds of Sale............................................................ 38
8.5.2 Discounts and Refunds....................................................... 38
8.5.3 Material Retained by Contractor............................................. 38
8.5.4 Deposits.................................................................... 38
8.5.5 Proceeds of Sale of Excess Equipment........................................ 38
8.5.6 Proceeds of Existing Property and Furniture................................. 38
8.5.7 COST NOT TO BE REIMBURSED............................................................ 39
8.5.8 Office Personnel Expenses................................................... 39
8.5.9 Office Expenses............................................................. 39
8.5.10 Capital Expenses............................................................ 39
8.5.11 Unpermitted Rental Cost..................................................... 39
8.5.12 Overhead and General Expenses............................................... 39
8.5.13 Warranty and Corrective Work................................................ 39
8.5.14 Preconstruction............................................................. 39
8.5.15 Unincluded Items............................................................ 39
8.5.16 Excluded Items.............................................................. 39
8.5.17 Guaranteed Maximum Price Excess............................................. 39
8.6 AUDIT.................................................................................. 39
8.6.1 Right to Conduct Audit...................................................... 39
8.6.2 Imposition of Requirement on Subcontractors................................. 40
ARTICLE 9: PAYMENT OF COMPENSATION.................................................................... 40
9.1 APPLICATIONS FOR PROGRESS PAYMENTS.................................................... 40
9.1.1 Time of Submission.......................................................... 40
9.1.2 Contents of Application for Payment and Attachments......................... 40
9.1.3 Failure to Submit Proper or Timely Application for Payment.................. 42
9.2 CONTRACTOR'S ARCHITECT CERTIFICATE.................................................... 42
9.3 DEDUCTIONS............................................................................ 42
9.4 WITHHOLDING........................................................................... 42
9.4.1 Right to Withhold........................................................... 42
9.4.2 Conditions for Release of Withheld Amounts.................................. 43
9.5 RETAINAGE............................................................................. 44
9.5.1 Achievement of Final Completion............................................. 44
9.5.2 Final Inspection............................................................ 44
9.5.3 Certificate of Occupancy.................................................... 44
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9.5.4 Remaining Obligations...........................................44
9.5.5 No Further Retainage Withheld...................................44
9.6 PAYMENT OF CONTRACTOR'S FEE................................................44
9.7 PAYMENT OF PROGRESS PAYMENTS...............................................45
9.8 FINAL PAYMENT..............................................................45
9.9 PAYMENT NOT ACCEPTANCE.....................................................45
9.10 RELEASE OF CLAIMS..........................................................45
9.11 CONTRACTOR'S LIABILITY FOR EXCESS OVER GUARANTEED
MAXIMUM PRICE..............................................................46
9.12 CONTINGENT ASSIGNMENT OF SUBCONTRACTS......................................46
9.12.1 Assignment of Contractor's Interest in Subcontracts
and Suppliers Contracts......................................46
9.13 INTEREST RATE..............................................................46
ARTICLE 10: INDEMNIFICATION...............................................................46
10.1 Indemnity..................................................................46
10.2 No Limitation..............................................................47
10.3 Liens......................................................................47
10.4 Lost Profits...............................................................47
ARTICLE 11: INSURANCE.....................................................................47
11.1 CONTRACTOR'S INSURANCE.....................................................47
11.1.1 Contractor's Insurance Certificates..............................47
11.1.2 Contractor's Liability Insurance.................................48
11.2 SCHEDULE OF INSURANCE COVERAGE.............................................48
11.2.1 Worker's Compensation Insurance..................................48
11.2.2 Commercial General Liability Insurance...........................48
11.2.3 Comprehensive Automobile Liability Insurance.....................49
11.2.4 Umbrella Liability Insurance.....................................49
11.3 OWNER'S BUILDER'S RISK INSURANCE...........................................49
11.3.1 Builder's Risk Policy............................................49
11.3.2 Deductible.......................................................50
11.3.3 Property of Others...............................................50
11.3.4 Builder's Risk Limits of Liability...............................50
11.3.5 Builder's Risk Deductibles.......................................50
11.3.6 Owner's Use of Project...........................................50
11.4 PROJECT ERRORS AND OMISSIONS INSURANCE.....................................50
11.5 NO COVERAGE CHANGES........................................................51
11.6 LIMITED WAIVERS OF SUBROGATION.............................................51
11.6.1 Owner's Limited Waiver of Subrogation............................51
11.6.2 Contractor's Limited Waiver of Subrogation.......................51
11.6.3 Conditions on Waivers of Subrogation.............................52
ARTICLE 12: DEFAULT.......................................................................52
12.1 Termination by Owner for Cause.............................................52
12.2 Termination by Contractor for Cause........................................53
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ARTICLE 13: TERMINATION BY OWNER WITHOUT CAUSE..........................................................................54
ARTICLE 14: INDEPENDENT CONTRACTOR......................................................................................54
ARTICLE 15: PAYMENT AND PERFORMANCE BOND................................................................................54
15.1 Payment and Performance Bonds.........................................................................54
ARTICLE 16: DISPUTES....................................................................................................54
16.1 Dispute Resolution....................................................................................54
ARTICLE 17: HAZARDOUS SUBSTANCES........................................................................................55
17.1 Hazardous Substances..................................................................................55
ARTICLE 18: MISCELLANEOUS PROVISIONS....................................................................................56
18.1 GOVERNING LAW.........................................................................................56
18.2 ASSIGNMENT AND SUCCESSORS.............................................................................56
18.2.1 No Assignment by Contractor...............................................................56
18.2.2 Assignment By Owner.......................................................................56
18.2.3 Agreement Binding on Successors and Assigns...............................................56
18.3 NOTICES...............................................................................................57
18.4 CUMULATIVE RIGHTS AND REMEDIES........................................................................57
18.5 WAIVER................................................................................................57
18.6 CAPTIONS OR HEADINGS..................................................................................58
18.7 COMPLIANCE WITH NOTEHOLDERS' REQUIREMENTS.............................................................58
18.8 CALENDAR DAYS.........................................................................................58
18.9 PARTIES TO ACT REASONABLY.............................................................................58
18.10 SEVERABILITY OF PROVISIONS............................................................................58
18.11 ENTIRE AGREEMENT......................................................................................59
18.12 NO THIRD PARTY BENEFICIARIES..........................................................................59
18.13 AUTHORITY TO EXECUTE..................................................................................59
18.14 INCORPORATION BY REFERENCE............................................................................59
EXHIBIT..................................................................................................................60
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DESIGN-BUILD AGREEMENT
THIS DESIGN-BUILD AGREEMENT (hereinafter referred to as the
"Agreement") is made and entered into this 22nd day of July, 1997 by and between
XXXXXXXX CONSTRUCTION, INC., a Colorado corporation ("Contractor"), and ISLE OF
CAPRI BLACK HAWK L.L.C., a Colorado limited liability company ("Owner").
Capitalized terms used herein shall have the meanings ascribed to such terms in
Exhibit A attached hereto.
RECITALS
--------
WHEREAS, Owner holds, or proposes to hold, fee simple title to tracts
of land in Xxxxxx County, State of Colorado as more particularly described on
Exhibit B attached hereto (the "Site") and intends to have designed and
constructed thereon the Project;
WHEREAS, Contractor has agreed, as set forth in this Agreement, to
provide all architectural, engineering, interior design, excavation, site
grading and preparation, landscaping, general contracting services, materials,
furnishings, tools, equipment, labor, and all other professional and non-
professional services required to complete the Work described in this Agreement,
and has agreed further that Owner's cost for all such Work shall in no event
exceed the Guaranteed Maximum Price established in this Agreement; and
WHEREAS, Contractor has agreed, as set forth in this Agreement, to
provide and perform all of the Work by hiring its own architectural, engineering
and excavation firm(s), by retaining other consultants and subcontractors, and
by performing other portions of the Work on an "in-house" basis, all as provided
more specifically in this Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises set
forth in this Agreement and the faithful performance by each of them, the
parties agree as follows:
ARTICLE 1: CONTRACTOR'S SERVICES
1.1 GENERAL DESCRIPTION OF THE WORK
The "Work" shall mean and refer to all architectural, engineering,
design, excavation, site grading and preparation, landscaping, general
contracting, construction and other services which are necessary or appropriate
to execute and complete the Project in accordance with this Agreement, and shall
include, without limitation, all services which are specifically required by
this Agreement. Contractor agrees to provide all Work for a cost to Owner not to
exceed the Guaranteed Maximum Price set forth herein. Completion of the Work
shall occur in two phases: first the Casino and then the Hotel. The parties
contemplate that work on these two phases may at times proceed simultaneously in
accordance with the Schedule, and that segregation of the Work into the two
phases is only for the purpose of determining when the Casino and the Hotel are
Substantially Complete.
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1.2 INTENT OF AGREEMENT
The intent of the Agreement is to include all items and services
necessary for the proper execution and completion of the Work by the Contractor,
including, without limitation, all such items and services which are consistent
with, contemplated by, or reasonably inferable from the Agreement, whether or
not such items and services are specifically mentioned therein. The documents
comprising the Agreement are complementary, and what is required by one shall be
as binding as if required by all.
1.3 PRIORITY OF DOCUMENTS
In the event of a conflict or inconsistency among the documents
comprising the Agreement, the following order of precedence shall govern the
interpretation of such documents:
(a) Modifications to this Agreement;
(b) this Agreement (excluding the Project Concept Documents and
the Construction Documents);
(c) the Construction Documents; and
(d) the Project Concept Documents.
1.4 GENERAL REQUIREMENTS
1.4.1 Performance of the Work. The Contractor hereby covenants and
agrees that it shall duly and properly perform and complete the Work in
accordance with the Agreement and all applicable Laws. The Contractor further
covenants and agrees that it shall provide and pay for all items or services
necessary for the proper execution and completion of the Work and the Project,
whether temporary or permanent and whether or not incorporated or to be
incorporated into the Work, including, but not limited to, all design,
engineering, procurement, installation and construction services, all
administration, management, training and coordination services, all labor,
materials, furnishings, equipment, supplies, insurance, bonds, permits,
licenses, tests, inspections, tools, machinery, water, heat, utilities and
transportation, and all other items, facilities and services.
1.4.2 Professional Standards. The Contractor's services, including,
without limitation, its design and engineering services, shall be performed (i)
with care and diligence, (ii) in accordance with generally accepted professional
standards, and (iii) as expeditiously and economically as is consistent with the
best interests of the Owner and with the preceding standards of professional
skill, care and diligence.
1.4.3 Licensing and Other Qualifications. The Contractor covenants and
agrees that all persons who will perform or be in charge of the professional
architectural and design work for the Project shall have experience with the
type of project being undertaken and shall be duly
2
licensed to practice under the Laws of the jurisdiction in which the Project is
located, and that all engineering services provided hereunder shall be performed
by an engineer, or engineers, licensed to practice under the Laws of the
jurisdiction in which the Project is located. Similarly, all construction
services shall be undertaken and performed by qualified construction contractors
and suppliers.
1.4.4 Sufficient Personnel. The Contractor shall, at all times during
the term of this Agreement, keep sufficient personnel employed so that the
services to be performed by the Contractor hereunder are completed in an
efficient, prompt, economical and professional manner.
1.4.5 Contractor's Key Personnel. Attached hereto as Exhibit C is a
list of the Contractor's key personnel who will be responsible for supervising
the performance of the Contractor's services hereunder. The Contractor shall not
remove any such personnel from the Project without the Owner's prior written
consent, which consent shall not be unreasonably withheld. If any such
individual is so removed, any replacement personnel shall be subject to the
prior written approval of the Owner, which approval shall likewise not be
unreasonably withheld.
1.5 NATURE OF DESIGN-BUILD AGREEMENT
1.5.1 Design and Engineering Generally. This Agreement expressly
contemplates that all services necessary to conceive, design, erect and complete
all Work, including without limitation construction, excavation, design,
architectural and engineering services, shall be the responsibility of
Contractor under this comprehensive Agreement. It is expected that Contractor
will retain various architects, engineers, consultants and other professionals
to assist it in designing, inspecting and completing the Work. The services of
such architects, engineers, consultants and other professionals shall be the
sole responsibility of the Contractor pursuant to Contractor's contracts or
subcontracts with such professionals, and Contractor shall be responsible to
Owner, as set forth more specifically in this Agreement, for all acts, services,
duties, responsibilities and omissions of such professionals; it being expressly
understood that Owner shall not have responsibility for any aspect of the design
or engineering of the Project (excluding the design related to the Owner
Furnished FF&E), nor shall Owner have any duties to architects, engineers,
consultants or other professionals retained by Contractor (including without
limitation, architects previously retained by Owner to assist in the planning,
design and development of the Project).
1.5.2 Previous Design Work. It is expressly understood and
acknowledged that Owner previously retained Xxxxxxxx-Xxxxx Architects, P.C.
(hereinafter "Contractor's Architect") to develop preliminary designs for the
Project. Contractor has agreed to retain Contractor's Architect to perform
certain design, architectural and other professional services in connection with
Contractor's design-build responsibilities under this Agreement. It is expressly
understood and agreed that Owner shall have no duties, responsibilities or
liability to Contractor for any professional services performed by Contractor's
Architects for Owner, including without limitation, responsibilities,
liabilities or duties with respect to any design drawings, engineering studies,
site plans, cost analyses, material specifications, or any other professional
services rendered by Contractor's Architect on behalf of Owner. Owner shall make
available to Contractor all design
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drawings, material specifications, engineering analyses, site plans, material
specifications and other documents prepared by Contractor's Architect as part of
its preliminary design work on behalf of Owner, but it is expressly understood
and agreed that all such documents are provided for informational purposes only,
without any warranty or representation whatsoever with respect to their accuracy
or completeness, and that upon execution of this Agreement all design,
engineering architectural and other professional services necessary to complete
the Work shall be the responsibility of Contractor, as set forth in this
Agreement, including design, engineering, architectural and other professional
services rendered by Contractor's Architect for or on behalf of Owner prior to
the execution of this Agreement.
1.6 DESIGN AND ENGINEERING WORK
1.6.1 Schematic Design Documents. Based on the Project Concept
Documents, the Contractor shall prepare, for review and approval by the Owner,
complete "Schematic Design Documents" consisting of drawings and other documents
illustrating the scale and relationship of the various components of the
Project, and outlining the general nature of the structural elements of the
Project. Without altering, modifying or otherwise revising the Guaranteed
Maximum Price, the Contractor shall also submit, for the Owner's review, an
estimated Project budget which reflects the preceding documents. The Owner's
written approval of the Schematic Design Documents must be obtained by the
Contractor prior to the Contractor commencing any work on the Design Development
Documents.
1.6.2 Design Development Documents. Based on the approved Schematic
Design Documents, the Contractor shall prepare, for review and approval by the
Owner, complete "Design Development Documents" consisting of drawings and other
documents which fix and describe the size and character of the Project as to
architectural, structural, mechanical, plumbing and electrical systems,
materials and such other elements as may be appropriate. Without altering,
modifying or otherwise revising the Guaranteed Maximum Price, the Contractor
shall also submit, for the Owner's review, a further refinement of the Project
budget which reflects the preceding documents. The Owner's written approval of
the Design Development Documents must be obtained by the Contractor prior to the
Contractor commencing any work on the Construction Documents.
1.6.3 Construction Documents. Based on the approved Design Development
Documents, the Contractor shall prepare, for review and approval by the Owner,
complete "Construction Documents" consisting of working drawings and
specifications setting forth in detail the requirements for the construction of
the Project. The Construction Documents shall include all drawings and
specifications, and such content and detail, as is necessary to obtain required
permits and regulatory approvals and to properly complete the construction of
the Project, and shall provide information customarily necessary for the use of
such documents by those in the building trades. Without altering, modifying or
otherwise revising the Guaranteed Maximum Price, the Contractor shall also
submit, for the Owner's review, a further refinement of the Project budget which
reflects the preceding documents. The Owner's written approval of the
Construction Documents must be obtained by the Contractor prior to the
Contractor commencing any construction services or activities in relation to the
Project.
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1.6.4 Consistency. The Contractor acknowledges and agrees that (i) the
Schematic Design Documents must be consistent with, and develop in detail, the
intent of the Project Concept Documents and provide for a first-class Project,
(ii) the Design Development Documents must, in turn, be consistent with, and
develop in detail, the intent of the approved Schematic Design Documents and
provide for a first-class Project, and (iii) the Construction Documents must, in
turn, be consistent with, and develop in detail, the intent of the approved
Design Development Documents and provide for a first-class Project.
1.6.5 Approval. Within seven (7) days after the Owner's receipt from
the Contractor of the Schematic Design Documents and the corresponding budget
estimate, and within ten (10) days after the Owner's receipt from the Contractor
of the Design Development Documents and the Construction Documents,
respectively, and the corresponding budget refinements, the Owner shall either
(A) provide written notification to the Contractor that the Owner approves such
Documents, or (B) provide written notification to the Contractor that such
Documents are incomplete and/or do not comply with the requirements of Section
1.6.4. In the event the Owner provides written approval as set forth in the
preceding clause (A), the Contractor shall proceed with the next phase of the
Project. In the event the Owner provides written notice as set forth in the
preceding clause (B), the Contractor shall immediately correct any
incompleteness and/or noncompliance with respect to such Documents. Upon
completing the correction of the Documents, the Contractor shall resubmit the
applicable materials to the Owner and the foregoing procedures shall be repeated
until the Owner provides written approval as to the Documents in question.
1.6.6 Replacement. Once the Construction Documents have been approved
by the Owner, the Owner and the Contractor shall execute a complete set of the
same. Upon such execution, the Project Concept Documents shall be deemed deleted
from this Agreement, and the approved and executed Construction Documents shall
thereupon be deemed as having been incorporated into this Agreement in their
place.
1.6.7 Design Schedule. The Contractor shall complete the various
design documents by the dates set forth in the Schedule.
1.6.8 Compliance with Laws. The Contractor covenants and agrees that
the Construction Documents shall be accurate and free from any errors or
omissions, and shall be in compliance with and accurately reflect all applicable
Laws, including, without limitation, any and all Laws related to gaming and/or
gaming facilities. The Contractor shall, at no expense to the Owner, promptly
modify any such documents which are not in accordance with such legal
requirements or are inaccurate or contain errors or omissions.
1.7 CHANGES IN THE WORK
1.7.1 Changes. Changes in the Work may be accomplished after execution
of this Agreement, and without invalidating this Agreement, by Change Order or
Construction Change Directive. A Change Order shall be based upon agreement
between the Owner and Contractor; a Construction Change Directive may be issued
by the Owner alone and may or may not be agreed
5
to by the Contractor. Changes in the Work shall be performed under applicable
provisions of the Agreement, and the Contractor shall proceed promptly, unless
otherwise provided in the Change Order or Construction Change Directive.
1.7.2 Contract Adjustments. Notwithstanding anything to the contrary
contained in this Agreement, the Guaranteed Maximum Price and the Substantial
Completion Dates may only be adjusted by Change Order or Construction Change
Directive.
1.7.3 No Contractor Changes. Except as otherwise expressly permitted
in this Agreement, the Contractor shall not initiate changes in the scope of the
Work; it being acknowledged and agreed by the Contractor that the Work can be
successfully completed within the Guaranteed Maximum Price and by the
Substantial Completion Dates.
1.7.4 Change Orders. (a) The Owner may request changes in the Work
within the general scope of this Agreement consisting of additions, deletions or
other revisions. If the Owner so desires to change the Work, it shall submit a
change request to the Contractor in writing. Within seven (7) days of its
receipt of any such request, the Contractor shall submit a detailed proposal to
the Owner stating (i) the increase or decrease, if any, in the Guaranteed
Maximum Price which would result from such change, and (ii) the effect, if any,
upon the Substantial Completion Dates by reason of such proposed change. If the
Owner agrees within the Contractor's proposal, the Owner and the Contractor
shall execute a document reflecting the requested change in the Work and the
proposed adjustments, if any, in the Guaranteed Maximum Price and the
Substantial Completion Dates (a "Change Order"). In the event the Owner
disagrees with the Contractor's proposal in relation to the requested change,
the Owner may either (i) notify the Contractor that the Owner has decided to
withdraw its requested change, or (ii) issue a Construction Change Directive as
permitted in the following Section 1.7.5.
(b) In the event the Owner requests a major change in the scope of the Work
and the Owner ultimately decides not to proceed with such requested change, the
Owner shall nevertheless reimburse the Contractor, as a Cost of the Work, for
design fees (as defined in Section 8.4.7) which are incurred by the Contractor
in preparing design documents reflecting such requested change; provided,
however, no such reimbursement shall be made unless the Contractor previously
notified the Owner that the requested change was a major change.
1.7.5 Construction Change Directive. (a) In the event the Owner
disagrees with the Contractor's proposal in relation to the Owner's request for
a change in the Work, the Owner may issue a written order directing a change in
the Work (a "Construction Change Directive"), the Guaranteed Maximum Price and
the Substantial Completion Dates being adjusted, if at all, as hereinafter
provided:
1.7.5.1 (x) If the "actual cost" in performing the Work is
increased by any such change, the Guaranteed Maximum Price shall be
increased (without duplication) so as to reflect the "actual cost" to the
Contractor (or to any tier or level of subcontractor) in performing the
Work attributable to the change plus a percentage fee for overhead and
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profit. As to the Contractor, the percentage fee shall equal the
Contractor's Fee applied against the "actual cost" incurred by the
Contractor for such additional Work. As to any tier or level of
subcontractor, the percentage fee shall equal fifteen percent (15%) of the
"actual cost" incurred by any such subcontractor for such additional Work.
(y) If the "actual cost" in performing the Work is decreased by
any such change, the Guaranteed Maximum Price shall be decreased (without
duplication) so as to reflect the "actual cost" which would have been
incurred by the Contractor (or by any tier or level of subcontractor) in
the absence of such change, plus percentage fees calculated as described in
the preceding Section 1.7.5.1(x).
(z) For the purposes of this Section 1.7.5, "actual cost" in
relation to the Contractor shall be defined and limited to the Cost of the
Work, and "actual cost" in relation to any subcontractor shall be defined
and limited to the cost of the following:
(a) Costs of labor, including social security, old age and
unemployment insurance, fringe benefits required by
agreement or custom, and workers' or workmen's
compensation insurance;
(b) costs of materials, supplies and equipment, including
cost of transportation, whether incorporated or
consumed;
(c) reasonable rental costs of machinery and equipment,
exclusive of hand tools, whether rented from the
Contractor or others; and
(d) costs of premiums for all bonds and insurance, permit
fees, and sales, use or similar taxes related to the
Work.
"Actual cost" shall not be deemed to include any item which could be
considered overhead.
1.7.5.2 (a) The Owner shall propose a basis for adjustment, if any,
in the Substantial Completion Dates in the Construction Change Directive it
issues to the Contractor. If the Contractor does not agree with such proposed
adjustment, then any such adjustment in the Schedule shall be determined in
accordance with the dispute resolution provision in this Agreement.
(b) Upon receipt of the Construction Change Directive, the Contractor shall
promptly proceed with the change in the Work involved. When adjustments in the
Guaranteed Maximum Price and the Schedule are determined as provided in this
Section 1.7.5, such determination shall be effective immediately and shall be
recorded by execution of a Change Order.
7
1.7.6 Necessity for Prior Written Authorization. Contractor waives any
right to compensation for any Change in the Work or any extra work performed
without prior written authorization or written direction from Owner. If extra
work was ordered by the Owner and the Contractor performed the same (but did not
receive a written Change Order or Construction Change Directive), the Contractor
shall be deemed to have waived any claim for extra compensation therefore.
1.7.7 Disputes Reflecting Changes in the Work. If a dispute arises as
to whether any task or work ordered by Owner is or is not a Change in the Work,
Contractor will make known its claim to Owner in writing no later than ten (10)
days following receipt of the order to undertake such work or task and, until
instructed in writing by Owner to cease such task or work, will immediately
comply with Owner's written instructions to perform such task or work. In the
event Contractor does not inform Owner in writing within said ten (10) days of
its claim that the task ordered by Owner constituted a Change in the Work and
its claim for an adjustment to the Guaranteed Maximum Price and/or the Schedule,
Contractor shall be barred from ever asserting such a claim in the future and
Contractor waives any right to thereafter request an adjustment in the
Guaranteed Maximum Price or Schedule. In the event Contractor, within said ten
(10) day period, informs Owner in writing of its claim that the task ordered by
Owner constitutes a Change in the Work, Contractor shall keep written records of
the labor, materials and equipment used to perform such disputed task or work
and shall submit said records to Owner weekly, and the dispute between Owner and
Contractor as to whether the work ordered by Owner is or is not a Change in the
Work shall be determined pursuant to the dispute resolution provisions of this
Agreement. In the event it is determined by dispute resolution that such work
did constitute a Change in the Work, adjustments to the Guaranteed Maximum Price
and the Schedule shall be determined in the manner set forth in Section 1.7.5.
Notwithstanding the outcome of such determination, Contractor hereby waives any
right which it might otherwise have to be compensated (and, such expenses shall
not constitute Cost of the Work) for such work performed on any day for which
the records specified in this Section 1.7.7 are not kept as provided herein.
1.7.8 Compliance with Construction Documents. Contractor shall not
execute any modifications, changes or alterations to the Construction Documents
or to the Work at the request of any person, including without limitation
Contractor's Architect or any subcontractor of Contractor, unless such
modification, change or alteration shall be authorized in writing by Owner as
provided in this Section 1.7.
1.7.9 Effect of Changes in the Work on Surety Bonds. Any Change in the
Work shall not operate to release any surety on any bond furnished by Contractor
hereunder. Contractor agrees that in the event any change to the Work results in
an increase to the Guaranteed Maximum Price, Contractor shall obtain an increase
in the amount of any labor and material bond and performance bonds obtained and
furnished by Contractor in an amount equal to the increase to the Guaranteed
Maximum Price and the cost of increasing said bond amounts shall be incorporated
into the Cost of the Work of performing such Change in the Work.
8
1.7.10 Authorized Change Order Signatory. All Change Orders or
Construction Change Directives issued by Owner under this Agreement shall be in
writing and shall only be effective if executed on behalf of Owner by Xx Xxxxx,
or by Owner's Agent executing Xx Xxxxx'x name as his attorney-in-fact, or by
such other person as Xx Xxxxx may designate from time to time by giving notice
of the designation of such other person.
1.7.11 Restriction on Time Extension. With respect to all Changes in
the Work, Change Orders and Construction Change Directives, Contractor shall not
claim any extensions to the Schedule for changes to the Work which do not affect
the total duration of the Work.
1.8 CONTRACTOR'S REPRESENTATIONS
Contractor acknowledges and hereby affirms and represents to Owner
that Contractor, to the best of its ability (i) has developed a clear
understanding of the Work that is to be performed by Contractor pursuant to this
Agreement, (ii) will resolve and eliminate all discrepancies and ambiguities
from the scope of the Work to the fullest extent and so as to ensure that no
such discrepancies or ambiguities shall arise or be present in the Construction
Documents, (iii) has familiarized itself with the Site and all conditions
affecting said Site, and (iv) has made all other necessary inspections,
sightings and investigations which Contractor, in its sole and absolute
discretion, thought or deemed desirable or necessary for Contractor to represent
to Owner herewith that Contractor is able to fully and completely perform its
obligations under this Agreement, including without limitation, to fully and
completely perform the Work within the Guaranteed Maximum Price and by the
Substantial Completion Dates. The preceding terms and provisions of this Section
1.8 shall not limit or restrict the Contractor's rights set forth in Section
2.6.1.
1.9 "AS-BUILT" DRAWINGS
1.9.1 Maintenance of Drawings at the Site. During the course of
performing the Work, Contractor shall maintain on the Site a complete set of the
Construction Documents and shall update such Construction Documents on a
continuous basis to reflect "as-built" changes to the Work, the cost of such
maintenance to be part of the Cost of the Work.
1.9.2 Mylar Drawings and "As-Built" Survey. Contractor, as part of the
Cost of the Work and prior to final payment, shall transfer such "as-built"
changes to the Work from the Construction Documents kept at the Site to (i) a
true and complete final set of "as-built" Mylar drawings (and in electronic
format), capable of being reproduced, and (ii) a complete set of an original
"as-built" survey for the Site and the Project, indicating the actual location
of the improvements as constructed and as situated on the Site.
1.10 FINANCING CONTINGENCY
Contractor expressly acknowledges that Owner (in conjunction with its
wholly-owned subsidiary) intends to finance the Project by issuing secured first
mortgage notes (the "Notes"). This Agreement, and the obligations of Owner and
Contractor to perform hereunder, are
9
contingent upon the receipt by the Owner, through the sale of the Notes, all
funds necessary to fully complete the Project. If Owner notifies Contractor on
or before August 31, 1997 that, in Owner's sole judgment and discretion, the
foregoing contingency has occurred or has been satisfied (a "Satisfaction
Notice"), then this Agreement shall remain in full force and effect. In the
absence of a Satisfaction Notice by Owner on or before August 31, 1997 the
foregoing contingency shall be deemed unsatisfied, and this Agreement shall
thereupon terminate and be of no further force or effect and the parties hereto
shall have no further rights, duties or obligations hereunder; provided,
however, the Owner shall reimburse the Contractor for those costs which have
been incurred by the Contractor and are enumerated in Article 13.
1.11 NOTEHOLDERS' INTEREST IN THE WORK
Contractor expressly understands, acknowledges and agrees that the
holders from time to time of the Notes, or any notes issued in exchange therefor
("Noteholders"), may have certain interests, secured and unsecured, in the
Project and the successful completion of the Project, as may be set forth more
specifically in said Noteholder's indenture and collateral documents executed
pursuant thereto. Payment to the Contractor for the Work shall be made from a
Construction Disbursement Account established pursuant to a "Cash Collateral &
Disbursement Agreement" utilizing proceeds from the sale of the Notes.
Contractor expressly acknowledges and agrees that a consultant (the "Independent
Consultant") shall be appointed on behalf of the Noteholders to review and
inspect the Work, review payment applications, and control and authorize
disbursements from the Construction Disbursement Account. Contractor also
acknowledges and agrees that the Noteholders may appoint or select such agents
or representatives ("Noteholders' Representatives") to protect the interests of
the Noteholders with respect to the Work. In connection with the foregoing, the
Contractor covenants and agrees (i) that, if requested by the Owner, it shall
execute the documentation establishing the Construction Disbursement Account,
and (ii) that notwithstanding the terms and provisions of this Agreement, the
terms and provisions of the Cash Collateral & Disbursement Agreement and the
Construction Disbursement Account shall govern in relation to matters dealing
with the design and construction of the Project, including without limitation,
matters relevant to progress payments, retainage, and inspection and approval of
the Work by the Independent Consultant.
1.12 HOTEL ALTERNATE
Notwithstanding anything to the contrary contained in this Agreement,
the Hotel shall not be deemed a part of the Work or the Project unless the Owner
provides written notice to the Contractor on or before March 1, 1998 stating
that it so desires to add the Hotel to the Work and to the Project. If the Owner
provides such notice to the Contractor on or before March 1, 1998, the Hotel
shall thereafter be deemed a part of the Work and the Project, the terms and
provisions of this Agreement shall apply to the Hotel and the Guaranteed Maximum
Price shall be increased by an amount equal to Six Million Two Hundred Twenty
Three Thousand Four Hundred Thirty Two And No/100 Dollars ($6,223,432.00). In
the event the Owner fails to provide such a notice on or before March 1, 1998,
the Hotel shall not be deemed a part of the Work or the Project and the terms
and
10
provisions in this Agreement applicable to the Hotel shall have no force or
effect as they relate solely to the Hotel.
ARTICLE 2: CONSTRUCTION OF THE WORK;
SUBSTANTIAL COMPLETION; EXCUSABLE EVENTS;
WORKMANSHIP; COMPLIANCE WITH LAWS
2.1 SCHEDULES AND SUBMITTALS
2.1.1 The Schedule. Attached to this Agreement as Exhibit E is a
critical path method schedule for the performance of the Work by the Contractor
(the "Schedule"). Contractor shall supplement this Schedule continuously
throughout the term of this Agreement by providing to Owner delivery dates for
materials and equipment to be used in the construction of the Work. Contractor
agrees to be bound by the Schedule and to perform all Work in strict compliance
with the Schedule.
2.1.2 Submission of Shop Drawings, Details, Samples and Data. Within a
reasonable time following the Contractor's receipt of the Notice to Proceed, the
Contractor shall prepare and make available to Owner, or Owner's Agent, at the
Site for Owner's information and not for approval, all shop drawings, details,
samples, equipment data or other submittal information as required for the
performance of the Work and thereafter shall continue to so make available for
Owner's information and not for approval, any amendments and modifications made
thereto or any new drawings, details, samples, equipment data or other submittal
information prepared by Contractor with respect to the Work. All items required
to be made available by Contractor pursuant to this Section 2.1.2 shall be made
available to Owner ten (10) business days prior to the commencement of that
portion of the Work encompassed by said items and the making available of such
items (and their review by Owner, to the extent such review is to be undertaken
by Owner, shall not relieve Contractor from responsibility for errors and
omissions in the data or material made available).
2.1.3 Submission of other Necessary Materials. Contractor agrees to
make available at the Site, at no additional cost, all drawings, samples, sample
models, schedules, catalog cuts, test results, certificates and other
documentation necessary and incidental to the proper coordination and
performance of the Work. Such items shall be made available in a timely manner
so that the orderly progress and timely completion of the Work will not be
delayed in accordance with the Schedule. The review of such items by Owner, or
Owner's Agent, to the extent such review is to be undertaken by Owner, or
Owner's Agent, shall not relieve Contractor from responsibility for errors and
omissions in the data or material submitted.
2.1.4 Material Purchasing Schedule. Upon the request of Owner,
Contractor shall prepare a material purchasing schedule, and update it monthly
or otherwise as mutually agreed to by Contractor and Owner, or Owner's Agent, of
all equipment and materials to be furnished and incorporated into the Work by
Contractor, giving the following information:
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2.1.4.1 Identification of the item;
2.1.4.2 Date and amount of purchase;
2.1.4.3 Manufacturer and manufacturer's location;
2.1.4.4 Shipping date;
2.1.4.5 Current status of manufacture;
2.1.4.6 Date delivery is due at Site.
Contractor shall adhere to and comply with the approved material
purchasing schedule in undertaking the Work.
2.1.5 Information as to Progress of Work. Contractor agrees that it
shall keep Owner continually informed as to the progress of the Work and, upon
its own initiative, shall confer with Owner and shall plan and execute the Work
in coordinated sequence so as to insure the timely and efficient completion of
the Work. Contractor shall notify Owner when portions of its Work are
Substantially Complete or ready for any required inspection.
2.1.6 Revisions to Schedule Due to Owner's Suspension of Work. If
Owner decides to suspend the Work in order to accommodate its own interests,
Contractor shall, upon receipt of written notice from Owner or Owner's Agent,
immediately discontinue further progress of the Work until such time as Owner
advises Contractor in writing to resume, which Contractor shall promptly do upon
receipt of such written notice from Owner. In the event the suspension in the
Work was for a period of seven (7) days or less, Contractor hereby releases and
discharges Owner from any liability for damages or expenses of whatever kind or
nature whatsoever which may be caused to or sustained by Contractor by reason of
such suspension in the Work so long as Owner extends the Schedule and the
Substantial Completion Dates for the timely performance by Contractor of the
Work by a period of one weekday (excluding Saturday, Sunday, and legal holidays)
for each weekday (excluding Saturday, Sunday, and legal holidays) lost on
account of such Owner suspension in the Work. In the event the interruption in
the prosecution of the Work was for a period longer than seven (7) days,
Contractor, upon demonstrating that such delay did in fact cause an increase in
the Cost of the Work, shall be entitled, in addition to an adjustment of the
Schedule and the Substantial Completion Dates, to an increase in the Guaranteed
Maximum Price in the manner set forth in Section 1.7.5.
2.2 TIME AND PROSECUTION OF WORK
2.2.1 Time of the Essence. Time is of the essence of this Agreement.
Contractor agrees to punctually and diligently perform all parts of the Work in
accordance with the Schedule.
2.2.2 Notice to Proceed. Upon the waiver or satisfaction by the Owner
of the contingency set forth in Section 1.10 by issuance of the Satisfaction
Notice, the Owner shall provide written notice to the Contractor directing the
Contractor to commence the performance of the Work (the "Notice to Proceed").
The date upon which the Contractor receives the Notice to Proceed shall be
deemed the commencement date and shall be the date from which the various
milestone dates, such as the Substantial Completion Dates, will be measured.
12
2.2.3 Substantial Completion of Casino. The Contractor shall commence
the Work upon its receipt of the Notice to Proceed, and shall successfully
achieve Substantial Completion of the Casino on or before the Casino Substantial
Completion Date.
2.2.4 Substantial Completion of Hotel. The Contractor shall
successfully achieve Substantial Completion of the Hotel on or before the Hotel
Substantial Completion Date.
2.2.5 Owner's Right to Direct Overtime and Multiple Shifts. If
Contractor is not in default under any of the provisions of the Agreement and
if, in order to expedite the completion of the Work, Owner directs Contractor to
work overtime or multiple shifts, Contractor shall work said overtime or
multiple shifts and Owner shall pay for said overtime only the actual extra cost
over the rate for regular time of said overtime. Extra cost for such overtime
work shall be authorized only by Change Order or Construction Change Directive.
2.2.6 Owner's Right to Request Expedite. If at any time Contractor
becomes aware of circumstances relating to the Work that may cause a delay in
the Schedule, including without limitation delays in the manufacture and/or
delivery of materials or equipment, Contractor shall immediately give written
notice of such circumstances to Owner or Owner's Agent. Upon receipt of such
notice, the Owner may direct the Contractor to exert its best efforts, and to
expedite any matters, so as to avoid any such delay in the Schedule.
2.2.7 Owner's Right to Require Additional Labor. In the event that
Contractor should:
(a) fail or refuse to prosecute the Work in strict accordance with the
Schedule, or
(b) fail or refuse to supply sufficient skilled workmen, or
(c) fail to cause materials or equipment to be delivered to the Site
in accordance with the material purchasing schedule, or
(d) fail to commence, perform, finish or deliver different parts of
the Work in accordance with the Schedule, or
(e) otherwise default in its obligations under this Agreement,
then Owner, in addition to any other rights Owner may have under this Agreement,
upon seven (7) days prior written notice to Contractor, shall have the right to
require Contractor to furnish additional labor and to expedite materials and
equipment and, if such additional labor is not available, Owner shall have the
right to require Contractor to work overtime or multiple shifts (and/or weekends
and holidays) to such an extent as will be sufficient in the opinion of Owner,
to expedite and complete the Work in accordance with the Schedule.
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2.3 SUBSTANTIAL COMPLETION OF WORK
2.3.1 Definition of Substantial Completion. For the purposes of this
Agreement, the terms "Substantially Completed", "Substantially Complete" and
"Substantial Completion", when applied to the Casino or the Hotel, shall be
deemed to have occurred upon the latest to occur of the following events:
(i) The Casino or the Hotel, as the case may be, is sufficiently
complete such that it is ready for occupancy, utilization and
continuous commercial operation for the uses and purposes
intended, subject to minor punch list items (the noncompletion of
which does not interfere with the occupancy, use or continuous
commercial operation of the facility in question);
(ii) Certificates of occupancy have been issued by the
appropriate Governmental Authorities for the Casino or the Hotel,
as the case may be;
(iii) Issuance of any other certificate, permit, license, or
similar document from any appropriate Governmental Authority
having jurisdiction thereof which constitutes a prerequisite
legal requirement to the lawful opening to the public or
commencement of occupancy of the Casino or the Hotel, as the case
may be; excluding from the foregoing any certificate, permit,
license, or similar document or approval required to conduct
casino gaming operations at the Project, which shall be the sole
responsibility of Owner;
(iv) Receipt by Owner of a certificate of substantial completion
from Contractor's Architect certifying that all Work as to the
Hotel or the Casino, as the case may be, has been completed in
accordance with the Construction Documents, subject only to the
completion of minor punch list items; and
(v) If required by the Cash Collateral & Disbursement Agreement,
receipt by Owner of a certificate of substantial completion from
the Independent Consultant certifying that all Work as to the
Hotel or the Casino, as the case may be, has been completed in
accordance with the Construction Documents, subject only to the
completion of minor punch list items.
2.3.2 Further Conditions on Substantial Completion. Contractor hereby
acknowledges its agreement and understanding that Substantial Completion of the
Casino and the Hotel shall in any event require that all systems reasonably
necessary for the operation of either facility shall be installed and fully
operational, including but not limited to, heating, ventilating, air
conditioning, life safety, systems controls, fire sprinkler, vertical
transportation, electrical and plumbing.
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2.4 DELAYED/EARLY COMPLETION
2.4.1 Liquidated Damages. Contractor expressly acknowledges that Owner
will incur substantial costs, lost revenues and damages for each day that
Substantial Completion of the Casino or the Hotel is delayed, including but not
limited to, interest charges, obligations to Noteholders, lack of gaming
proceeds, lack of hotel revenues, personnel and administrative costs, loss of
profits, loss of goodwill, loss of market position, and other direct and
indirect losses. In view of the difficulty or impossibility of determining what
Owner's damages will be should Contractor fail to achieve Substantial Completion
of the Casino or the Hotel on or before the respective Substantial Completion
Dates, Contractor agrees to pay Owner as liquidated damages, and not as a
penalty, the following amounts:
(i) For each day Substantial Completion of the Casino is delayed
beyond the Casino Substantial Completion Date, the sum of:
. $0.00 per day for the first fourteen (14) days of delay;
. $12,000 per day for any days of delay during the next fourteen
(14) days; and
. $18,000 per day for any days of delay after such initial
twenty-eight (28) day period.
(ii) For each day Substantial Completion of the Hotel is delayed
beyond the Hotel Substantial Completion Date, the sum of $1,000 for each
day of delay.
No liquidated damages due from the Contractor shall constitute a Cost of the
Work. Contractor hereby specifically acknowledges that it has reviewed together
with Owner all the aspects of Owner's damages, including without limitation,
Owner's daily interest carrying charges, and all data and information supporting
or reflecting such damages, and agrees, represents and confirms that the daily
liquidated damage amounts provided herein represents Owner's and Contractor's
best estimate of a realistic and accurate daily damage to Owner in the event of
Contractor's failure to Substantially Complete any portion of the Project as
provided in the Schedule. The preceding liquidated damages, if any, shall be due
and payable by the Contractor upon demand by the Owner.
2.4.2 Early Completion Incentive. Conversely, if the Contractor
achieves Substantial Completion of the Casino or the Hotel, as the case may be,
prior to their respective Substantial Completion Dates, the Owner shall pay the
Contractor an incentive fee as follows:
(i) For each day Substantial Completion of the Casino precedes the
Casino Substantial Completion Date, the sum of:
. $0.00 per day for the first seven (7) days which precede the
Casino Substantial Completion Date; and
15
. $10,000 per day for each day which precedes the seventh (7th)
day before the Casino Substantial Completion Date.
(ii) For each day Substantial Completion of the Hotel precedes the
Hotel Substantial Completion Date, the sum of $1,000 per day.
The preceding incentive fees, if any, shall be paid with the final payment to
the Contractor.
2.5 EXCUSABLE EVENTS
2.5.1 Adjustments in Schedule Because of Excusable Event. Except as
otherwise specifically provided in this Agreement or as a result of Changes in
the Work as permitted in Section 1.7 of this Agreement, an extension in the
Substantial Completion Dates shall only be granted under the following
circumstances: (a) a delay occurs in the progress of the Work as a result of an
Excusable Event, and (b) the Contractor has complied with the terms and
conditions of the following Sections:
(a) The Contractor, within seven (7) days of the date upon which
the Contractor has knowledge of the Excusable Event,
notifies the Owner, in writing, of the cause of the event
and the approximate number of days the Contractor expects to
be delayed as a result of such event; and the Contractor
makes a request for an extension of time to the Owner, in
writing, within seven (7) days after the cessation of the
Excusable Event specifying the number of days the Contractor
believes that its activities were in fact delayed as a
result of the event. Compliance with this Section is a
condition precedent to receipt of an extension in the
Substantial Completion Dates. In the event of a failure to
comply with this Section, the Contractor shall not be
entitled to an extension of time;
(b) The Contractor can demonstrate, to the reasonable
satisfaction of the Owner, that the activity claimed to have
been delayed was in fact delayed by the Excusable Event, and
that the delay in such activity will result in a delay in
Substantial Completion of the Casino and/or the Hotel beyond
the applicable Substantial Completion Date; and
(c) The initial notice provided by the Contractor under Clause
(a) above describes the efforts of the Contractor that have
been (or are going to be) undertaken by the Contractor to
overcome or remove the Excusable Event and to minimize the
potential adverse effect on the time for performance of the
Work resulting from such Excusable Event.
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Upon satisfaction by the Contractor of the terms and conditions in the preceding
clauses, the Owner and the Contractor will use good faith efforts to agree on
the extent to which the Work has been delayed on account of any such Excusable
Event. Once the parties have mutually agreed as to the extent of such delay,
they shall enter into a Change Order reflecting their agreement as to the
adjustment in the Schedule and the Substantial Completion Dates.
2.5.2 Adjustments in Guaranteed Maximum Price Because of Excusable
Event. Except as otherwise specifically provided in this Agreement or as a
result of changes in the Work as permitted in Section 1.7 of this Agreement, an
increase in the Guaranteed Maximum Price shall only be granted under the
following circumstances: (a) a demonstrable increase in the Contractor's cost of
performing the Work results from the occurrence of an Excusable Event which is
identified in Section 2.5.3.1, 2.5.3.4, 2.5.3.5 or 2.5.3.6, and (b) the
Contractor has complied with the terms and conditions of the following Sections:
(a) The Contractor, within seven (7) days of the date upon which
the Contractor has knowledge of the Excusable Event,
notifies the Owner, in writing, of the cause of the event
and the approximate additional costs the Contractor will
incur as a result of such event; and the Contractor makes a
request for an increase in the Guaranteed Maximum Price to
the Owner, in writing, within seven (7) days after the
cessation of such Excusable Event specifying the additional
cost the Contractor believes it incurred as a result of such
event. Compliance with this Section is a condition precedent
to receipt of an increase in the Guaranteed Maximum Price.
In the event of a failure to comply with this Section, the
Contractor shall not be entitled to an increase in the
Guaranteed Maximum Price;
(b) The Contractor can demonstrate, to the reasonable
satisfaction of the Owner, that the Excusable Event did in
fact cause an increase in the Contractor's cost of
performing the Work; and
(c) The initial notice provided by the Contractor under Clause
(a) above describes the efforts of the Contractor that have
been (or are going to be) undertaken by the Contractor to
overcome or remove the Excusable Event and to minimize the
potential adverse effect on the cost for performance of the
Work resulting from such Excusable Event.
Upon satisfaction by the Contractor of the terms and conditions in the preceding
Clauses, the Owner and the Contractor will use good faith efforts to agree on
the extent to which the Contractor's costs for performing the Work have been
increased as a result of any such Excusable Event. Once the parties have
mutually agreed as to the Contractor's increased costs, they shall enter into a
Change Order reflecting their agreement as to the adjustment in the Guaranteed
Maximum Price.
17
2.5.3 Excusable Events Defined. The occurrence of any of the following
events shall constitute an "Excusable Event":
2.5.3.1 Delays resulting from the acts or omissions of the Owner, to
the extent such delays arise from circumstances beyond the reasonable control
and without the fault or negligence of the Contractor, its subcontractors or
other persons for whom either may be liable;
2.5.3.2 Any of the following acts, events, conditions or occurrences
to the extent that the same are beyond the Contractor's reasonable control,
which could not have been either foreseen or avoided by the exercise of due
diligence, and which has an adverse effect on the Contractor's ability to
perform its obligations hereunder: acts of God, fires, explosions, floods,
earthquakes, tornadoes, epidemics, civil disturbances, war, riots, sabotage,
restraints or injunctions issued by a Governmental Authority, and nationwide
strikes or labor disputes (a "Force Majeure Event");
2.5.3.3 The discovery of any Pre-Existing Hazardous Substance at
the Site;
2.5.3.4 The occurrence of a Change in Law;
2.5.3.5 The Owner fails to issue the Notice to Proceed on or
before August 30, 1997;
2.5.3.6 The discovery of any Unforeseeable Conditions at the
Site as described in Section 2.6.1(b); and
2.5.3.7 Delays resulting from the occurrence of an Extreme Weather
Day; provided, however, no adjustment in the Substantial Completion Dates shall
be permitted until fifteen (15) Extreme Weather Days which actually delayed the
Work have occurred (it being expressly agreed by the Contractor that all delays
arising from the occurrence of such initial fifteen (15) days shall be borne by
the Contractor alone).
2.5.4 Rights Limited. The rights and remedies set forth in this
Section 2.5 shall be the Contractor's sole and exclusive rights and remedies in
the event of an occurrence of an Excusable Event, and the Contractor hereby
waives all other rights and remedies at law and/or in equity that it might
otherwise have against the Owner on account of an Excusable Event.
2.5.5 Contractor's Acknowledgment of Extreme Weather Conditions.
Contractor recognizes and acknowledges that the Work is to be conducted in a
mountainous region of Colorado where extremes in all forms of weather,
temperature and precipitation can be reasonably expected, and that Contractor
has taken into account the possibility of such extremes in weather, temperature
and precipitation in agreeing to the Guaranteed Maximum Price, Schedule and
Substantial Completion Dates. Therefore, the Contractor shall not be entitled to
an adjustment in the Guaranteed Maximum Price as a result of weather conditions,
and shall only be entitled to a
18
Schedule adjustment for weather conditions to the extent expressly permitted in
Sections 2.5.1 and 2.5.3.
2.6 WORKMANSHIP AND PERFORMANCE OF WORK
2.6.1 Site Conditions. (a) The Contractor agrees that it has satisfied
itself as to what the Contractor anticipates will be the character, quality and
quantity of soil, surface and subsurface materials or obstacles that may be
encountered by the Contractor at the Site, and that the entire cost risk of such
matters (as well as any other concealed, latent or unknown conditions) shall be
borne by the Contractor as part of the Guaranteed Maximum Price and that the
Contractor shall not be entitled to an extension in the Substantial Completion
Dates as a result of the same. In furtherance of the foregoing, the Contractor
agrees that it shall have no claim for any increase in the Guaranteed Maximum
Price, or any extension in the Substantial Completion Dates, in the event that
soil, surface or subsurface conditions which differ from what had been
anticipated by the Contractor, or other concealed, unknown or latent conditions,
are encountered or discovered at the Site in the performance of the Work (even
if such conditions are materially different from what the Contractor had
anticipated and/or such conditions are of an unusual nature, differing from
those that could be reasonably anticipated). Notwithstanding the foregoing, the
responsibility for remediating any Pre-Existing Hazardous Substances which are
encountered at the Site shall be as provided in Section 17.1.
(b) Notwithstanding anything to the contrary contained in the preceding
Section 2.6.1(a), if the Contractor encounters conditions at the Site which are
concealed or unknown physical conditions which the Contractor reasonably
believes are Unforeseeable Conditions, then notice by the Contractor as to the
same shall be given to the Owner. If the Owner and the Contractor thereafter
mutually determine that such concealed or unknown physical conditions are in
fact Unforeseeable Conditions, then the Contractor will be entitled to seek an
equitable adjustment in the Guaranteed Maximum Price or the Substantial
Completion Dates, or both, as provided in Section 2.5.
2.6.2 Local Conditions. The Contractor represents that it has taken
steps reasonably necessary to ascertain the nature and location of the Work, and
that it has investigated and satisfied itself as to the general and local
conditions which can affect the Site and/or the performance of the Work,
including but not limited to (1) conditions bearing upon transportation,
disposal, handling, and storage of materials and equipment; (2) the availability
of labor, water, electric power, and roads; (3) uncertainties of weather at the
Site; and (4) the character of equipment and facilities needed preliminary to
and during the performance of the Work. Any failure by the Contractor to take
the actions described and acknowledged in this Section will not relieve the
Contractor from responsibility for estimating properly the difficulty and cost
of successfully performing the Work, or for proceeding to successfully perform
the Work without additional expense to the Owner; provided, however, the terms
and provisions of this Section shall not be construed to limit or restrict the
Contractor's rights set forth in the preceding Section 2.6.1(b) regarding
Unforeseeable Conditions. Notwithstanding the foregoing, the responsibility for
19
remediating any Pre-Existing Hazardous Substances which are encountered at the
Site shall be as provided in Section 17.1.
2.6.3 Contractor's Responsibility for Proper Layout. Contractor shall
be strictly responsible for the proper layout, location, performance, and
accuracy of the lines and levels required for the proper performance of the Work
and for any loss or damage to the Owner resulting from the Contractor's failure
to set out or perform the Work correctly and coordinate its work with the Work
of others. Contractor shall so lay out and perform the Work that actual final
conditions and details result in alignment of finish surfaces in accordance with
the Construction Documents.
2.6.4 Contractor's Workmanship Standard. Every part of the Work shall
be executed by Contractor in strict accordance with the provisions of this
Agreement and in a thorough, sound, workmanlike, substantial manner and in
accordance with the highest construction industry standards. All material and
equipment used in the Work shall be furnished in ample quantities to facilitate
the proper and expeditious execution of the Work and shall be new and the best
of their respective kinds, except such materials as may be expressly and
specifically provided for in the Construction Documents to be otherwise.
2.6.5 Contractor's Work in Areas Prepared by Others. With respect to
any portion of the Work which requires tasks or functions to be performed on
areas constructed or prepared by others, or which includes installation of
materials or equipment furnished by others, Contractor hereby agrees that use of
such items or commencement of the Work by Contractor on such areas shall be
deemed to be and constitute acceptance thereof by Contractor, and Contractor
hereby agrees that it shall be responsible and liable for any loss, expense or
damage attributable to such areas or items, and agrees to protect such areas,
and to inventory, handle, store and install such items with such skill and less
care as to insure compliance with this Agreement.
2.6.6 Owner's Inspection Rights. Contractor shall furnish to Owner
ample facilities at all times for inspecting materials at the Site, or at shops,
or at any place where materials required for the performance of the Work may be
in storage in the course of preparation, process, manufacture or treatment.
Contractor shall furnish to Owner, as often as requested, full reports of the
progress of the Work at any place where materials may be in the course or
preparation, process or manufacture, in such detail as may be required by Owner,
including any purchase orders, schedules, plans, drawings, or diagrams utilized
in the course of preparation, process or manufacture of such materials.
2.6.7 Storage on Site. Contractor shall provide, locate and relocate
and/or maintain adequate sheds and/or tool boxes on the Site as may be
reasonably designated by Owner. Owner shall not be responsible for any of
Contractor's (or its subcontractors' or materialmen's) clothing, tools,
materials, equipment or other items lost, damaged, stolen or destroyed at the
Site or elsewhere, it being the agreement of the parties hereto that all
preparation for the Work, including without limitation the delivery of material
to the Site, shall be at the risk of Contractor alone and Contractor shall
assume the risk for all loss occasioned by fire, theft, mysterious disappearance
or
20
other damage to such items except to the extent such loss is compensated by
insurance required to be provided by Owner pursuant to this Agreement.
2.6.8 Owner's Access to the Work. Owner, the Independent Consultant,
any Governmental Authority, or any other party designated by Owner shall, at all
times, have access to the Work wherever it is in preparation or progress, and
Contractor shall provide sufficient, safe and proper facilities, labor and
material reasonably needed for such access and for inspection by such parties.
2.6.9 Rejected Workmanship and Material During Construction. Owner,
Independent Consultant and any Governmental Authority shall have the right to
reject materials, equipment, fixtures, furniture, workmanship or other Work,
including without limitation, architectural and engineering work, which are
defective or not in conformity with the requirements applicable to the Work and
to require their correction. Rejected workmanship shall be satisfactorily
corrected and rejected materials shall be satisfactorily replaced with proper
materials. The cost of such rejected workmanship and its correction and the cost
of such rejected materials shall be borne by Contractor from its own funds and
shall not constitute Cost of the Work. If Contractor does not commence to
correct such defective workmanship or replace the rejected materials within five
(5) days, Owner may, without prejudice to any other rights or remedies the Owner
may have under this Agreement, correct such deficiencies and deduct an amount
equal to the expenditures incurred by the Owner in doing so from amounts due to
the Contractor.
2.6.10 Removal or Tearing Out Work to Inspect. Should it be
considered necessary or advisable by Owner, Independent Consultant or any
Governmental Authority to make an examination of the Work already completed by
the Contractor by removing or tearing out same, Contractor shall, upon request,
promptly furnish all necessary facilities, labor and materials therefor. If such
Work is found to be defective or nonconforming in any material respect,
Contractor shall bear all the expenses of such examination and of satisfactory
reconstruction from its own funds and such expenses shall not constitute Cost of
the Work. If, however, such Work is found to meet the requirements of this
Agreement, Contractor shall be compensated for such examination and replacement
by an equitable adjustment (if one is appropriate or necessary) in the
Guaranteed Maximum Price and the Schedule by means of a Change Order.
2.6.11 Responsibility. The Contractor shall be responsible to the
Owner for acts and omissions of the Contractor, subcontractors,
subsubcontractors, architects, engineers, suppliers and their respective agents
and employees, and any other persons performing portions of the Work.
2.6.12 Control. The Contractor shall be solely responsible for and
shall have control over all construction means, methods, techniques, sequences
and procedures, and for coordinating all portions of the Work.
21
2.7 COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS
2.7.1 Taxes. The Contractor shall pay all sales, value added,
consumer, use, excise and other taxes, duties and tariffs (whether direct or
indirect) relating to, or incurred in connection with, the performance of the
Work, including, without limitation, all duties, tariffs and taxes (whether
foreign or otherwise) related to the import/export of machinery, equipment,
materials and supplies utilized in the performance of the Work. Notwithstanding
the foregoing, any use tax imposed by the City of Black Hawk, Colorado in
relation to the performance of the Work shall be borne by the Owner, and shall
be paid directly to the City by the Owner upon submission of an invoice and
other supporting documentation from the Contractor.
2.7.2 Legal Requirements. The Contractor shall comply, and shall
cause its subcontractors, sub-subcontractors and others performing portions of
the Work to comply, with all existing and future Laws which are applicable to
the Work, the Project and/or the Site, and shall give all notices pertaining
thereto.
2.7.3 Permits and Licenses. The Contractor shall secure and pay for
any and all permits, licenses, governmental fees, inspections, certifications,
authorizations and approvals necessary for the proper execution and completion
of the Work, including, without limitation, building permits and certificates of
occupancy. Notwithstanding the foregoing, the Owner shall secure and/or pay for
those permits and licenses set forth on Exhibit F attached hereto.
2.7.4 Building Inspections. Contractor shall promptly notify the
respective regulatory departments or official bodies when any portion of the
Work is ready for inspection and Contractor shall, at once, undertake all tasks
required to obtain approvals of such Work, to remove any violations therefrom or
to comply with such inspections, without any additional charge to Owner.
2.7.5 Corrections of Legal Violations. Upon discovering or being
advised that any portion of the Work is or may be in violation of any Laws,
Contractor shall immediately notify the Owner in writing and shall immediately
correct such violation. The cost of such corrective work shall be from
Contractor's own funds, and such costs and expenses shall not constitute Cost of
the Work and Owner, after giving Contractor written notice and five (5) days to
cure the problem, shall have the right to make all required payments to correct
such violations, and any monies expended by the Owner in correcting such
violations may be deducted from payments due to the Contractor.
2.7.6 Ownership of Design Documents. The Construction Documents, and
any other drawings, specifications, designs, plans and other documents, prepared
by or on behalf of the Owner and/or the Contractor shall be deemed the property
of the Owner. Neither the Contractor, nor the Contractor's Architect or any
other party, shall own or claim a copyright in such documents, and the Owner
shall be deemed the author of them and will retain all common law, statutory and
other reserved rights, in addition to the copyright. All copies of them shall be
returned or suitably accounted for to the Owner upon completion of the Project.
The preceding documents and copies thereof are to be used by the Owner solely
with respect to the completion of the Project or for any
22
additions, improvements, changes or alterations to the Project after its
completion; provided, however, the Owner shall indemnify the Contractor and the
Contractor's Architect from any liability which may arise from the misuse or
incorrect use of such documents by the Owner. Such documents are not to be used
by the Contractor on other projects or for any other purpose without the prior
written consent of the Owner. The Contractor is granted a limited license to use
and reproduce applicable portions of such documents appropriate to and for use
in the performance of the Contractor's services under this Agreement. Submittal
or distribution to meet official regulatory requirements in connection with this
Project is not to be construed as publication in derogation of the Owner's
copyright or other reserved rights.
2.7.7 Patents and Other Proprietary Rights. The Contractor shall pay
all royalties and other fees for any patents, trademarks, copyrights or other
proprietary rights necessary for the execution and completion of the Work. The
Contractor shall indemnify, defend and hold harmless the Owner from and against
any and all losses, damages or expenses, including, without limitation, court
costs and reasonable attorneys' fees, arising or resulting from any claim or
legal action that any materials, supplies, equipment, processes or other
portions of the Work furnished by the Contractor under this Agreement
constitutes an infringement of any patent, trademark, copyright or other
proprietary rights. If any such item is held to constitute an infringement, and
the use of such item is enjoined, the Contractor shall, at its own expense,
either procure the right to use the infringing item, or replace the same with a
substantially equal but non-infringing item, or modify the same to be non-
infringing, provided that any substitute or modified item shall meet all the
requirements and be subject to all the provisions of this Agreement. The terms
and provisions of this Section shall survive the termination or expiration of
this Agreement.
2.8 CONTRACTOR'S SUBCONTRACTORS
2.8.1 Bidding Process. In relation to its subcontracting, the
Contractor hereby agrees as follows: (i) no construction trade related to the
Work shall be performed unless and until such construction trade has been
submitted to a competitive bidding process whereby no less than three (3) bona-
fide bidders participate in the bidding for such trade, (ii) all such
construction trades shall be awarded to the lowest bidder, and (iii) all
subcontracts awarded by the Contractor for the Work shall be written on a "lump
sum basis" and not on a "cost plus", "cost of the work" or "reimbursable" basis.
Notwithstanding the foregoing or anything to the contrary contained in this
Section 2.8, the parties hereby agree as follows:
(i) Xxxxxxxx-Xxxxx Architects, P.C. shall perform all professional
architectural services required under this Agreement, provided the
subcontract between Contractor and Xxxxxxxx-Xxxxx shall be subject to the
Owner's prior written approval;
(ii) Kiewit Western Co. shall perform all excavation services required
under this Agreement, provided the subcontract between Contractor and
Kiewit Western Co. shall be subject to the Owner's prior written approval;
23
(iii) U.S. Engineering shall perform all mechanical services required
under this Agreement, provided the subcontract between Contractor and U.S.
Engineering shall be subject to the Owner's prior written approval;
(iv) Rocky Mountain Prestressing shall preform all pre-cast concrete
services required under this Agreement, provided the subcontract between
Contractor and Rocky Mountain Prestressing shall be subject to the Owner's
prior written approval;
(v) Riviera Electric, Inc. shall perform all electrical services
required under this Agreement, provided the subcontract between Contractor
and Riviera Electric, Inc. shall be subject to the Owner's prior written
approval;
(vi) Contractor shall have the right, but not the obligation, to
retain Diversified Builders to perform all drywall services required under
this Agreement, provided any such subcontract shall be subject to the
Owner's prior written approval;
(vii) The Contractor may be a participant in the bidding for any
construction trade; provided (a) the Contractor may not perform any such
trade work unless it submitted the lowest bid, (b) the Contractor's bid
must be on a lump sum basis, and (c) if the Contractor is awarded any such
work because it submitted the lowest bid, the Contractor shall perform all
work outlined in its proposal for an amount equivalent to its lump sum bid
and shall not charge the Owner for any such work as a Cost of the Work
(other than as a Cost of the Work which is payment toward the Contractor's
lump sum bid); and
(viii) No affiliate of the Contractor shall be deemed a bona-fide
bidder for purposes of the foregoing bidding process.
2.8.2 Identification of Subcontractors. Upon completion of the
foregoing bidding process, the Contractor shall furnish to Owner for Owner's
approval, which approval shall not be unreasonably withheld, a list of all
architects, engineers, consultants, purchasing agents, material suppliers or
other subcontractors to be used by Contractor to perform the Work. Owner will
give Contractor written notice of rejection of any such architect, engineer,
consultant, purchasing agent, material supplier or other subcontractor
unacceptable to Owner within seven business days. Contractor shall not permit
any such architect, engineer, consultant, purchasing agent, material supplier or
other subcontractor which either did not appear on such initial list or was
rejected by Owner to perform any of the Work without obtaining Owner's prior
written approval. In the event Owner has not rejected such architect, engineer,
consultant, purchasing agent, material supplier or other subcontractor, such
architect, engineer, consultant, purchasing agent, material supplier or other
subcontractor may be used by Contractor in accordance with the terms of this
Agreement, to perform any such portion of the Work such architect, engineer,
consultant, purchasing agent, material supplier or other subcontractor is
qualified to perform.
2.8.3 Rejection by Owner of Subcontractors. In the event Owner
rejects an architect, engineer, consultant, purchasing agent, material supplier
or other subcontractor as Owner
24
is permitted to do herein, and if, as a result of such rejection, Contractor is
required to accept an architect, engineer, consultant, purchasing agent,
material supplier or other subcontractor whose subcontract amount differs from
that of the rejected one, the difference in cost occasioned by such rejection
shall result in an increase or decrease in the Guaranteed Maximum Price,
approved by Change Order. Once approved by Owner, Contractor shall make no
substitution for any architect, engineer, consultant, purchasing agent, material
supplier or other subcontractor previously approved by Owner for a specified
portion of the Work unless such substitution is again approved by Owner.
Contractor shall require all architects, engineers, consultants, purchasing
agents, material suppliers and other subcontractors to be bound by and comply
with the provisions of this Agreement which relate to their scope, quality and
the schedule of performance of the Work in the same manner that Contractor is
bound to Owner hereunder.
2.8.4 Liquidated Damages In Subcontracts. Contractor shall use its
best efforts to require all subcontracts and purchase orders to include
liquidated damage provisions, providing for liquidated damages in an amount
proportionate to the cost of the Work to be performed by any such party relative
to the Guaranteed Maximum Price.
2.9 LABOR
2.9.1 Contractor's Duty to Staff the Work. Contractor shall supply
and cause its subcontractors to supply a sufficient and adequate number of
properly skilled workmen and competent supervisors to insure the prompt and
efficient performance of the Work.
2.9.2 Owner's Approval of Labor Force. Employment of labor by
Contractor shall be undertaken under conditions which are satisfactory to Owner.
Contractor shall remove, or cause to have removed, from the Site, any employee
or employees who are considered unsatisfactory by Owner, in its reasonable
discretion, provided that such removal is not in violation of EEOC rules and
regulations or any labor contact relating to construction of the Project.
2.9.3 Notice of Occurrence With Respect to Employees. Contractor
shall give to Owner actual notice, immediately after Contractor has knowledge
thereof, of any occurrence, on the Site or otherwise, resulting in (i) bodily
injury or death or (ii) property damage. Said actual notice shall be followed by
written notice from Contractor to Owner of said occurrence within five business
days of the giving of actual notice. Contractor shall notify the local police of
any occurrence requiring an official police record. The notice of Contractor to
Owner should indicate whether the police were notified and, if so, the number of
the police report, if available or if obtainable.
25
2.10 MAINTENANCE OF THE SITE AND PROTECTION OF PERSONS AND PROPERTY
2.10.1 Safety
2.10.1.1 Safety Programs. The Contractor shall be
responsible for initiating, maintaining and supervising all safety precautions
and programs in connection with the performance of this Agreement, including,
without limitation, appropriate precautions and programs for areas in and around
the Site.
2.10.1.2 Applicable Laws. The Contractor shall give notices
and comply with all applicable Laws bearing on the safety of persons or property
or their protection from damage, injury or loss, including, without limitation,
the Federal Occupational Safety and Health Act.
2.10.2 Safety of Persons and Property.
2.10.2.1 Safety Precautions. The Contractor shall take all
reasonable precautions for the safety of, and shall provide all reasonable
protection to prevent damage, injury or loss to:
(a) employees and subcontractors or other persons performing
the Work and all other persons who may be affected
thereby;
(b) the Work and materials and equipment to be incorporated
therein, whether in storage on or off the site, under
care, custody or control of the Contractor or
subcontractors; and
(c) other property at the Site or adjacent thereto, such as
trees, shrubs, lawns, walks, pavements, roadways,
structures and utilities.
2.10.2.2 Safeguards. The Contractor shall erect and maintain,
as required by existing conditions and the performance of this Agreement, all
reasonable safeguards for safety and protection, including posting danger signs
and other warnings against hazards, promulgating safety regulations, and
notifying Owners and users of adjacent sites and utilities.
2.10.2.3 Dangerous Materials. When use or storage of
explosives or other dangerous materials or equipment or unusual methods are
necessary for execution of the Work, the Contractor shall exercise utmost care
and carry on such activities only under the supervision of properly qualified
personnel.
2.10.2.4 Injury and Damage. Contractor shall protect the Work,
employees of Owner, all hotel guests and casino patrons and all other persons
from risk of death,
26
injury or bodily harm arising out of, or in any way connected with, the Work and
shall remedy all damage or loss to any property, in whole or in part, caused by
or attributable to Contractor, Contractor's Architect, or any purchasing agent,
subcontractor, supplier, materialman or manufacturer employed or retained by
Contractor, or any other person or persons employed by them, or any of them, or
anyone else for whose acts any of them may be liable.
2.10.2.5 Safety Personnel. The Contractor shall designate a
responsible member of the Contractor's organization at the Site whose duty shall
be the prevention of accidents.
2.10.2.6 Loading. The Contractor shall not load or permit any
part of the construction or Site to be loaded so as to endanger the safety of
persons or property.
2.10.2.7 Emergencies. In an emergency affecting safety of
persons or property, the Contractor shall act, at the Contractor's discretion,
to prevent threatened damages, injury or loss.
2.10.2.8 Security. The Contractor shall take all precautions
and measures as may be reasonably necessary to secure the Site at all hours,
including evenings, holidays and non-work hours. Such precautions may include
the provision of security guards.
2.10.3 Placement of Signs. Contractor shall not place or permit its
subcontractors to place any temporary or permanent signs on any portion of the
Site or the Work except upon prior written authorization of Owner.
2.10.4 Orderly Maintenance of Site. At all times during the course of
construction, Contractor shall maintain the Site in a clean, safe and orderly
condition. Rubbish, waste material and surplus material shall be collected or
removed by Contractor daily or more often as Owner may require. Upon completion
of the Casino and the Hotel, as the case may be, the Contractor shall remove
from the applicable area all temporary structures, debris and waste placed or
created by Contractor or resulting from the Work and shall clean all surfaces,
fixtures, equipment and parts of the Work. If Contractor fails to perform a
clean up function within seven (7) days after written notification by Owner to
do so, Owner may proceed with such functions as Owner adjudges necessary and in
the manner Owner may deem expedient, and the Owner shall have the absolute right
to deduct the cost thereof from payments due to the Contractor. Written
notification by Owner to Contractor's project manager or superintendent of the
required cleanup functions provided in this Section 2.10.4 shall be considered
proper notice to Contractor.
2.10.5 Liability for Work in Place and on the Site. Contractor shall
be liable for any loss or damage to any portion of the Work in place or to any
equipment, machinery, apparatus, tools and materials on the Site prior to their
installation. Owner shall not be obligated to protect any of the Work, said
obligation being that of the Contractor.
2.10.6 No Unreasonable Interference with Owner's Operations. To the
extent construction is continuing on any portion of the Project after the Casino
is open to the public,
27
Contractor shall fully cooperate with Owner with respect to Owner's proposed
operations of the Casino and shall perform the remaining Work so as to minimize
any unreasonable interference or conflicts with Owner and its employees, guests
and casino patrons and its casino business (including utilization of parking
lots and adjoining streets) and in a manner designed to accomplish and complete
all Work within the Schedule. Contractor shall not commit or permit any act
which will unreasonably interfere with the performance of the Work or with the
operations by Owner of the Project.
2.10.7 Protection of and No Interference with Adjoining Properties.
Contractor shall not obstruct, or permit any subcontractor, purchasing agent,
employee or representative of Contractor to obstruct, any adjoining streets, and
shall not allow any automobiles, trucks, trailers, construction equipment,
materials or supplies belonging to Contractor or any subcontractor, purchasing
agent, employee or representative of Contractor, or be parked or stored on
adjoining streets in locations where parking is prohibited by any governmental
entity having jurisdiction over the Work, nor shall Contractor's Work,
construction equipment, or use of the adjoining streets or the Site disrupt the
orderly flow of vehicles or traffic on adjoining streets or pedestrian traffic.
Contractor shall not, during the course of its construction activities,
interfere with, or permit any architect, subcontractor, purchasing agent,
employee or representative of Contractor to interfere with, the provision of
water, sewer, electricity, gas, telephone and other utility services to
adjoining or neighboring properties (except as such may be necessary in order to
cause such services to be connected).
2.11 USE OF OWNER'S FACILITIES
2.11.1 Prohibition of Use Without Consent. Contractor shall not use
Owner's tools, materials, vehicles, equipment, labor, facilities (including
sanitary facilities), hoists, elevators, scaffolding or any other property of
Owner without the prior written consent of Owner.
2.11.2 Indemnification Against Loss. In the event, following
obtaining Owner's prior written consent, Contractor shall use Owner's tools,
materials, vehicles, equipment, labor, facilities (including sanitary
facilities), hoists, elevators, ladders, scaffolding, or any other property of
Owner, Contractor shall accept full responsibility therefor, shall reimburse
Owner at a predetermined rate (said reimbursement to constitute a Cost of the
Work) and shall indemnify and hold Owner harmless from any and all liability to
persons or property arising out of or in connection with such use.
ARTICLE 3: REPRESENTATIVES OF OWNER AND CONTRACTOR
3.1 DESIGNATION OF OWNER'S AGENT AND CONTRACTOR'S AGENT
Each party hereby agrees to designate, in writing, to the other party
one individual (the "Agent") who shall be authorized to act on such party's
behalf with respect to this Agreement and to make decisions during the course
of the Work. Further, each party acknowledges its understanding that, except
for Change Orders which shall be required to be executed in the manner
28
previously provided in this Agreement, the decisions made by its Agent shall be
binding on such party provided such decisions are expressed in writing and
signed by such Agent. In the event Contractor receives written notification
(other than a Change Order request) from any person other than the designated
Owner's Agent, Contractor, prior to complying therewith, shall have the
obligation to request Owner's Agent to verify in writing that such written
direction binds Owner pursuant to this Agreement. The Agent of each party may
be changed at any time, and from time to time, by giving written notice signed
by such representative of such change to the other party. Initially, the Owner's
Agent shall be:
Xxxxxx X. Xxxxx, Xx.
Casino America, Inc.
000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000-0000
and the Contractor's Agent shall be:
Xx X. Xxxxxxxx, Pres.
Xxxxxxxx Construction Inc.
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
3.2 RIGHTS OF OWNER'S AGENT
Owner's Agent shall have all the rights of access, inspection,
investigation, observation and similar rights provided in this Agreement to be
exercised by Owner, but Owner's Agent shall be under no obligation to visit the
Site or to take any such action with respect to the Work. Further, such visits
and actions, if made, shall not impose any obligations upon Owner and shall not
in any way limit, reduce, diminish or otherwise qualify the obligations of
Contractor hereunder or be deemed a waiver of any rights of Owner under this
Agreement to object to or otherwise seek changes in the work not done in
accordance with the Construction Documents, nor shall the making of any such
action by Owner's Agent without any objection be construed as approval by Owner
of any work in progress.
ARTICLE 4: OWNER'S RIGHT TO OUTSIDE INSPECTION
4.1 RIGHT TO DESIGNATE
In addition to Owner's right to designate the Owner's Agent and the
rights of such Owner's Agent to have access to and inspect the Project from time
to time as provided in Article 3 above, Owner shall have the additional right,
but not the obligation, during the design and construction of the Work, to hire
outside architects, engineers, testing agencies and laboratories, and other like
parties to inspect the Work to determine whether it is being performed in
accordance with the Construction Documents, in a good and workmanlike manner, in
a manner which will cause the construction to be solid, sound structures fit for
their intended uses hereunder, and in total
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compliance with this Agreement, and to inspect all material and equipment stored
or warehoused off the Site.
4.2 LIMITATION OF OWNER'S LIABILITY
Contractor's duties, liabilities or obligations pursuant to this
Agreement shall not be relieved, diminished, reduced or otherwise limited by
virtue of the appointment by Owner of any such outside party or the performance
by such outside party or the Independent Consultant of any of its duties or
inspections, it also being the agreement and understanding of the parties hereto
that such outside parties and the Independent Consultant shall have no duty or
obligation whatsoever toward Contractor.
ARTICLE 5: OWNER'S RIGHT OF ENTRY AND OCCUPANCY FOLLOWING
SUBSTANTIAL COMPLETION
5.1 RIGHT TO ENTER
In addition to Owner's right of inspection throughout the period of
design and construction of the Work, Owner shall have the right to enter upon
and occupy the Casino and the Hotel after their respective dates of Substantial
Completion. Following Owner's entry, and in exercising its right of occupancy,
Owner shall have the right to take or cause to be taken any actions within the
occupied portion of the Project deemed necessary or desirable by Owner, in
Owner's total and absolute discretion, in carrying on, operating, using and
occupying such portion of the Project.
5.2 NO INTERFERENCE WITH CONTRACTOR'S REMAINING WORK
The entry and occupancy by Owner of the Casino or the Hotel shall not
be deemed an acceptance of the Work. Owner, in entering upon and occupying any
portion of the Project prior to Contractor's total and final completion of all
of its construction obligations with respect to the Work, shall not unreasonably
or materially interfere (it being recognized by Contractor that any entry or
occupancy by Owner prior to total and final completion of the Work will have
some affect on Contractor's operations on the Site) with the remaining
construction Work.
5.3 OWNER APPROVALS
The Contractor acknowledges and agrees that any review, approval,
comment or evaluation by the Owner of any plans, drawings, specifications or
other documents prepared by or on behalf of the Contractor shall be solely for
the Owner's determining for the Owner's own satisfaction the suitability of the
Project for the purposes intended therefor by the Owner, and may not be relied
upon by the Contractor, its subcontractors or any other third party as a
substantive review thereof. The Owner, in reviewing, approving, commenting on
or evaluating any plans, drawings, specifications or other documents, shall have
no responsibility or liability for the accuracy or completeness of such
documents, for any defects, deficiencies or inadequacies therein or for any
failure of such documents to comply with the requirements set
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forth in this Agreement; the responsibility for all of the foregoing matters
being the sole obligation of the Contractor. In no event shall any review,
approval, comment or evaluation by the Owner relieve the Contractor of any
liability or responsibility under this Agreement, it being understood that the
Owner is at all times ultimately relying upon the Contractor's skill, knowledge
and professional training and experience in preparing any plans, drawings,
specifications or other documents.
5.4 OWNER INFORMATION
Any information or documentation provided by the Owner to the
Contractor relating to the Project and/or existing conditions upon, about,
beneath or adjacent to the Site, including, without limitation, any information
pertaining to subsurface conditions, borings, test pits, tunnels and other
conditions affecting the Site, is provided only for the convenience of the
Contractor. The Owner makes no representation or warranty as to, and assumes no
responsibility whatsoever with respect to, the sufficiency, completeness or
accuracy of such information and makes no guarantee, either express or implied,
that the conditions indicated in such information or documentation are
representative of those existing at the Site or existing throughout the
performance of the Work, and there is no guarantee against unanticipated or
undisclosed conditions.
ARTICLE 6: PUNCH LISTS AND FINAL COMPLETION
6.1 PREPARATION OF PUNCH LIST
Contractor shall submit a list (a "Punch List") at the time it submits
application for certificate of Substantial Completion for the Casino and the
Hotel. Owner shall have the obligation to supplement and amend each such Punch
List and attach such amended and supplemental Punch Lists to the certificates of
Substantial Completion. Following the date any portion of the Project is
Substantially Completed, Owner shall have the right to amend and supplement the
Punch List, setting forth items which need completion in accordance with the
Construction Documents and good workmanship. All such Punch Lists shall be
submitted to Contractor as soon as practicable but in no event later than twenty
(20) days following the date of Substantial Completion of the portion of the
Project to which such Punch Lists have reference. Contractor agrees that as
soon as reasonably possible, but in any event within twenty (20) days after
receipt of any such Punch List, Contractor shall complete, or commence and
diligently pursue the completion of, all of the items set forth therein. If
Contractor shall fail to complete, or fail to commence and thereafter fail to
diligently pursue the completion of, as the case may be, such items within the
prescribed time period, Owner, after giving written notice and two (2) days to
cure, shall have the right, but not the obligation, to cause such items to be
completed and to deduct from any amount due Contractor the cost of completing
such items.
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6.2 FINAL COMPLETION
For purposes of this Agreement, the terms "Finally Completed",
"Finally Complete", and "Final Completion" shall be deemed to have occurred upon
the completion by Contractor of all of the Punch List items enumerated on the
Punch Lists and final acceptance of the Work by Owner.
ARTICLE 7: CONTRACTOR'S WARRANTY OF CONSTRUCTION
7.1 WARRANTY
Contractor hereby makes the following warranties and guarantees with
respect to the Work undertaken by Contractor pursuant to this Agreement:
7.1.1 Warranty with Respect to Professional Services. All design,
architectural, engineering and other professional services to be provided by
Contractor as part of the Work shall be performed (i) by duly licensed and
certified Colorado architects and engineers, (ii) with due diligence and to a
professional standard of competence, quality and technical accuracy, and (iii)
in strict conformity with all the requirements of this Agreement.
7.1.2 Warranty with Respect to Construction Work. All construction
work to be provided by Contractor as part of the Work shall be constructed,
supplied and installed by qualified, careful and efficient workers, performed in
a good and workmanlike manner, free from defects in design, workmanship and
material, and in strict conformity with the Construction Documents and with all
the requirements of this Agreement.
7.1.3 Warranty With Respect to Materials and Equipment. All
materials, supplies and equipment to be furnished by Contractor in connection
with the Work will be of good quality and new, free of faults, defects and
deficiencies, and will be safe for its intended purpose.
7.1.4 Period of Warranty. The warranties and guarantees set forth in
this Section 7.1 shall survive termination or expiration of this Agreement, and
shall remain in full force and effect for the following periods:
(i) One year after the Casino Substantial Completion Date for Work related
to the Casino (except for public water improvements for the benefit of the City
of Black Hawk, which shall be for a period of three years); and
(ii) One year after the Hotel Substantial Completion Date for Work related
to the Hotel.
7.2 EXTENT OF WARRANTY
If, at any time prior to the expiration of the warranty periods set
forth in Section 7.1.4, Owner shall discover any breach of the Contractor's
warranties, the Contractor shall, upon written notice from the Owner and at
Contractor's sole expense, immediately correct such failure
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or breach (which corrective action shall include, without limitation, the
correction of the defective or nonconforming work, the removal and replacement
of other portions of the Work that are necessary to be removed to gain access to
the portion of the Work to be corrected, the repair or replacement of any damage
caused by said defective or nonconforming work, and any necessary removal,
disassembly, reinstallation, reconstruction, retesting and reinspection of any
part of the Work). Contractor shall indemnify, hold harmless, reimburse and
make whole Owner for any and all other damages, costs or liabilities suffered by
Owner or others to whom Owner is liable by reason of or as a result of any
breach of Contractor's warranties or the failure of Contractor to promptly and
properly correct same (including without limitation bodily injury, death, and
property damage). All defective or nonconforming materials which Owner requires
to be replaced shall be removed promptly from the Site by Contractor. All costs
and expenses incurred by Contractor in correcting or replacing any defective or
nonconforming work or in undertaking any of its various obligations delineated
in this Section shall not constitute Cost of the Work but rather shall be
undertaken by Contractor from its own funds. If Contractor fails promptly to
commence correcting any nonconformity or defect as directed by Owner, Owner may
correct such defect or nonconformity and charge the cost to the Contractor.
7.3 NON-APPLICABILITY OF WARRANTY
The obligations of Contractor's warranty shall not extend to any Owner
Furnished FF&E.
7.4 SURVIVAL OF WARRANTY
The provisions of the warranties provided in this Article 7, together
with any applicable warranties and guarantees of Contractor's subcontractors and
suppliers which Contractor has agreed to assign or otherwise give to Owner
pursuant to Section 7.5, shall survive inspection, approval, test and acceptance
of and payment for the Work and shall run to and inure to the benefit of Owner,
its successors and assigns.
7.5 ASSIGNMENT OF WARRANTIES
Contractor agrees to assign to Owner, or otherwise give Owner the
benefit of, all warranties and guarantees which Contractor has, or to which
Contractor is entitled, from Contractor's subcontractors, suppliers, materialmen
and manufacturers. Owner shall have the absolute right to assign to any party,
in whole or in part, or to otherwise give any party the benefit of all
warranties or guarantees which Owner has or to which Owner is entitled under
this Agreement without the necessity of obtaining the consent of the warranting
party, and such assignment shall not in any way diminish or abrogate such
warranties.
7.6 MANUALS AND TRAINING
Contractor shall deliver to Owner, upon the date of Substantial
Completion of any portion of the Project, all operating and training manuals
applicable to systems, equipment and
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material located in such portion of the Project and copies of the results of all
tests done by Contractor or on Contractor's behalf in conjunction with the Work.
Contractor also agrees to conduct two training sessions of a duration
satisfactory to Owner for the Project designed to train Owner's staff in the
operation and maintenance of the Project's systems following the date on which
Owner enters and takes possession of the Project.
ARTICLE 8: CONTRACT SUM
8.1 TOTAL COMPENSATION
As full and total compensation for all Work required pursuant to this
Agreement, Owner will pay to Contractor the following amount (the "Contract
Sum"):
8.1.1 Cost of the Work. All the Cost of the Work, as such costs are
enumerated in this Agreement; and
8.1.2 Contractor's Fee. A fee (except as limited by the Guaranteed
Maximum Price) in the amount of three and one-quarter percent (3-1/4%) of the
Cost of the Work (the "Contractor's Fee") for Contractor's administration of
this Agreement and as total compensation for all of Contractor's home office
overhead, indirect costs and profit.
8.2 CONTRACTOR'S GUARANTEED MAXIMUM PRICE
8.2.1 Guaranteed Maximum Price. Contractor hereby guarantees that the
sum of (i) the Cost of the Work and (ii) the Contractor's Fee shall not exceed
the total dollar amount of Forty Seven Million Three Hundred Thirty Six Thousand
One Hundred Seventy Four And No/100 Dollars ($47,336,174.00) (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.
Except as specifically provided in Exhibit H attached hereto, the Contractor
represents there are no allowances or similar arrangements applicable to or
provided under this Agreement for any portion or phase of the Work and
Contractor agrees not to claim that any portion or phase of the Work is covered
by any allowances or similar arrangements which would permit Contractor to avoid
its obligations to fully and totally complete all of the Work required to be
completed by Contractor pursuant to this Agreement for an amount not in excess
of the Guaranteed Maximum Price.
8.2.2 Owner Furnished FF&E Excluded. Contractor and Owner acknowledge
and agree that Owner will provide certain furniture, fixtures and equipment
(hereafter referred to as "Owner Furnished FF&E") to be incorporated into the
Site which do not constitute a part of the Work, which shall not constitute Cost
of Work, and which shall not be chargeable against the Guaranteed Maximum Price.
Owner shall be solely responsible for furnishing and installing the Owner
Furnished FF&E and shall pay all costs and expenses in connection therewith. A
detailed enumeration of the Contractor supplied and installed FF&E (which is
part of the Work) and the
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Owner Furnished FF&E is set forth in the Equipment/Material Responsibility
Matrix attached hereto as Exhibit G.
8.3 EXCESS AND SAVINGS
8.3.1 Excess Cost Above Guaranteed Maximum Price. In the event that
the sum of the Cost of the Work exceeds the Guaranteed Maximum Price, such
excess shall be the sole responsibility of the Contractor and the Contractor
shall be obligated to totally complete the Work required to be performed by
Contractor pursuant to this Agreement, regardless of cost, and to bear the full
and entire burden of any costs and expenses which exceed the Guaranteed Maximum
Price from its own funds and not from the funds of Owner, and Owner shall not be
obligated to pay any portion of said excess above the Guaranteed Maximum Price.
8.3.2 Savings Below Guaranteed Maximum Price. In the event the sum of
the Cost of the Work and the Contractor's Fee is less than the Guaranteed
Maximum Price, the amount of the savings shall accrue and inure to the benefit
of the Owner and Contractor as follows:
. The first $500,000 of savings shall accrue entirely to the Owner;
. The next $500,000 of savings shall be split 80% to the Owner and 20%
to the Contractor;
. The next $1,000,000 of savings shall be split 70% to the Owner and
30% to the Contractor; and
. Any additional savings shall be split 60% to the Owner and 40% to
the Contractor.
8.4 COST OF THE WORK
The term "Cost of the Work" shall mean the costs enumerated below
which were necessarily incurred in the proper performance of the Work and
actually paid by the Contractor at rates not higher than the standard paid in
the locality of the Work except with prior consent of the Owner, excluding (i)
the items specifically denoted as not being Cost of the Work elsewhere in this
Agreement, (ii) the credits enumerated in Section 8.5, (iii) the costs
enumerated in Section 8.6, and (iv) any other costs which are not specifically
provided in this Section 8.4.
8.4.1 Salaries or Wages. Salaries or wages paid for all labor,
including part-time senior project manager, full-time project manager, part-time
accountant, project engineers, assistant superintendent, superintendent, field
engineer, foremen, timekeeper and clerk, expediter, teamsters, truck drivers,
mechanics, craft persons, laborers, and all others employed at the Site as
"general
35
conditions" personnel and approved by Owner as necessary for the proper conduct
of the Work and for the time employed on the Work (excluding safety personnel),
in the direct employ of the Contractor in the proper performance of the Work
under applicable collective bargaining Agreement, or under a salary or wage
schedule agreed upon in advance by the Owner and Contractor, and including such
welfare or other benefits, if any, as may be payable with respect thereto but
only if approved in writing by Owner prior to commencement of the Work. All such
salaries shall be reasonable in light of the type and the location of work to be
performed; provided, however, the parties recognize that the part-time senior
project manger and the part-time accountant will work from the Contractor's home
office.
8.4.2 Overtime Payments. Overtime premium payments to Contractor
employees where straight time salaries and wages are reimbursable as Cost of the
Work.
8.4.3 Contractor Self-Perform Trade Work. Payments toward
Contractor's lump sum bid(s) for trade work which Contractor is self-performing
pursuant to the terms of this Agreement; it being understood that all such self-
performed work shall be compensated through the Contractor's lump sum bid(s) and
no such work shall be charged as any other Cost of the Work.
8.4.4 Cost of Employee Benefits. Cost of all employee benefits and
actual taxes incurred during the performance of the Work for such items as
unemployment compensation, payroll taxes, workmen's compensation, general
liability insurance, social security, safety expense, 401(k)/pension, medical
insurance, training fund, vacation fund, employee bonus fund, and employee
recruitment fund, insofar as such cost is based on wages, salaries, or other
remuneration paid to employees of the Contractor and included in the Cost of the
Work under Sections 8.4.1 through 8.4.2.
8.4.5 Travel and Subsistence Expenses. The proportion of reasonable
local transportation, travel and subsistence expenses of the Contractor's full
time on site employees incurred while traveling in discharge of duties connected
with the Work, said travel, transportation and subsistence activities to be made
in accordance with Xxxxxxxx Construction, Inc.'s policies.
8.4.6 Cost of Material and Supplies. Cost of all structural
accessories, materials, supplies and equipment incorporated into the Work,
including costs of transportation, storage and installation thereof, less any
countercharges collected from the suppliers thereof. Storage costs may include
those expenses for storing pre-cast concrete or other materials fabricated
specifically for this Project.
8.4.7 Design Fees. All architectural, engineering and consulting
fees and expenses incurred in designing and constructing the Project and paid by
Contractor to the Contractor's Architect or such other consultants as had been
previously approved in writing by Owner.
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8.4.8 Subcontractor's Payments. Payments made by the Contractor to
subcontractors for Work performed pursuant to subcontractors under this
Agreement, less any countercharges collected from such subcontractors.
8.4.9 Cost of Tools, Equipment and Facilities. Cost, including
transportation, loading and unloading, demurrage, express, freight, cartage and
maintenance, of all materials, supplies, equipment, temporary facilities or
other structures utilized on the Site by Contractor, temporary fences, guard
rails, scaffolds, barricades, safety railings, field and office equipment.
8.4.10 Cost of Major Construction Equipment. Purchase or rental
charges of all necessary major construction tools and equipment, exclusive of
hand or small tools, used at the Site of the Work, whether purchased or rented
from the Contractor or others; expenditures for transportation and delivery
costs to and from the Site of the Work of said tools and construction equipment,
loading and unloading, assembling, erecting, installing, moving and
dismantling, and minor repairs and replacements during use on the work. Rental
charges for machinery and equipment rented from the Contractor or a subsidiary
shall not exceed eighty-five percent (85%) of the Association of Equipment
Dealers rate. Rental charges for machinery and equipment rented from a third
party unrelated to Contractor shall be reimbursed at the full rate charged by
the third party to Contractor.
8.4.11 Insurance Premiums. Cost of premiums for all insurance which
the Contractor may be required to purchase and maintain pursuant to the
provisions of this Agreement and any additional professional liability insurance
required by Owner pursuant to this Agreement; provided all general liability
insurance shall be billed at 0.7% of the Cost of the Work (excluding items in
this Section 8.4.11).
8.4.12 Taxes. Sales, use or similar taxes related to the Work and
for which the Contractor is liable.
8.4.13 Fees, Royalties and Deposits. Permit fees, licenses, tests,
royalties, and deposits lost for causes other than (i) the Contractor's
negligence, (ii) Contractor's failure to timely make any payments or (iii)
Contractor's noncompliance with its obligations pursuant to this Agreement.
8.4.14 Uninsurable Losses. Losses and expenses, not compensated by
insurance, sustained by the Contractor in connection with the Work, provided
they have resulted from causes other than the fault or neglect of the Contractor
and so long as Contractor has totally complied with the insurance obligations
imposed upon Contractor in this Agreement. Such losses shall include settlements
made with the written consent and approval of the Owner.
8.4.15 Communication Expenses. Minor expenses such as long distance
telephone calls and telephone service at the Site; express age; custom duties on
materials, drawings, or Contractor's equipment; cost of telegraph charges
incurred at the Site of the Work by Contractor in
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connection with the Work; cost of progress photographs and negatives; and
similar xxxxx cash items in connection with the Work.
8.4.16 General Conditions. Cost of fuel, power, light, temporary
heat, winter protection, temporary covers for openings, scheduling costs and
water used during construction.
8.4.17 Clean-up. Cost of removal of all debris.
8.4.18 Emergency. Cost incurred due to an emergency affecting the
safety of persons and property on the Site.
8.4.19 Other Agreement Cost. Any and all other items elsewhere in
this Agreement specifically and expressly provided to be included in this Cost
of Work.
8.4.20 Pre-Approved Cost. Other costs incurred in the performance of
the Work if and only to the extent approved in advance in writing by the Owner.
8.5 CREDITS TO COST OF THE WORK
Cost of the Work shall be credited with (reduced by) the following
amounts:
8.5.1 Proceeds of Sale. Proceeds of sales of all tools, surplus
materials, construction equipment, and temporary structures which have been
purchased for and charged to the Work otherwise than by way of rental and
remaining after final completion, whether such sales are made to Owner,
Contractor or some other party.
8.5.2 Discounts and Refunds. Trade and time discounts, rebates and
refunds or commissions allowed to or collected by Contractor from suppliers of
materials or from subcontractors, together with all other refunds, returns, or
credits received for return of materials or on bond or insurance premiums, or
otherwise. Contractor shall notify Owner in writing of any cash discounts
applicable to the Work if the amount of the discount exceeds $1,000. To the
extent Owner makes timely payments to Contractor with respect to the items
subject to discounts, rebates and refunds so that the funds are on deposit with
and available for use by Contractor, all such savings shall accrue to the
benefit of the Owner as a reduction in the Cost of the Work; provided however,
that any cash discounts of $1,000 or less or which are received as a result of
payment by Contractor out its own funds, shall inure to the benefit of
Contractor.
8.5.3 Material Retained by Contractor. Reasonable market value at
the time of removal of all material, tools and equipment actually used on the
Work, the purchase price for which was included in the Cost of the Work and
which upon completion of the Work were retained by Contractor.
8.5.4 Deposits. The full return amount of deposits made and charged
against the Work for which Contractor obtains credit or refund.
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8.5.5 Proceeds of Sale of Excess Equipment. Proceeds of sale of any
of Owner's excess equipment which are salvageable.
8.5.6 Proceeds of Existing Property and Furniture. Proceeds of sale
of any of Owner's existing property and furniture located on the Site.
8.5.7 COST NOT TO BE REIMBURSED
Cost of the Work shall not include any of the following items:
8.5.8 Office Personnel Expenses. Salaries, expenses or other
compensation of the Contractor's personnel at the Contractor's principal office
and branch offices, except as otherwise specifically permitted in Section 8.4.
8.5.9 Office Expenses. Expenses of the Contractor's principal and
branch offices, other than the field office.
8.5.10 Capital Expenses. Any part of the Contractor's capital
expenses, including interest on the Contractor's capital employed for the Work.
8.5.11 Unpermitted Rental Cost. Except as specifically provided for
in Section 8.4.10, rental costs of machinery and equipment.
8.5.12 Overhead and General Expenses. Overhead or general expenses
of any kind, except as may be expressly included in Section 8.4.
8.5.13 Warranty and Corrective Work. All costs and expenses
associated with warranty or corrective work by Contractor.
8.5.14 Preconstruction. All preconstruction costs and expenses.
8.5.15 Unincluded Items. The cost of any item not specifically and
expressly included in the items described in Section 8.4.
8.5.16 Excluded Items. The cost of any item specifically and
expressly excluded from Cost of the Work in various provisions of this
Agreement.
8.5.17 Guaranteed Maximum Price Excess. Costs in excess of the
Guaranteed Maximum Price, if any, as such Guaranteed Maximum Price may be
adjusted under this Agreement.
8.6 AUDIT
8.6.1 Right to Conduct Audit. Owner and the Independent Consultant
will have the right to conduct an audit of all payments made and costs incurred
by Contractor during the term
39
of this Agreement and for a period of three (3) years after the date of final
completion of all the Work. Contractor agrees to retain all pertinent records
applicable to the Work for said period of time. If the audit indicates that any
sums have been paid in error or upon erroneous applications, such sums shall be
adjusted by the audit and Contractor shall pay Owner all sums shown by said
audit to be due to Owner.
8.6.2 Imposition of Requirement on Subcontractors. With respect to
any subcontractors who entered into approved subcontracts with Contractor where
the basis of compensation to the subcontractor was "guaranteed maximum price,"
"cost of the work" or "cost plus", the Contractor shall include in all of its
subcontracts appropriate language requiring such subcontractors to comply with
the provisions of this Section 8.7 requiring them to submit to an audit within
three (3) years after the date of final completion of all the Work and to retain
all pertinent records as provided herein.
ARTICLE 9: PAYMENT OF COMPENSATION
9.1 APPLICATIONS FOR PROGRESS PAYMENTS
9.1.1 Time of Submission. Contractor shall prepare and present to
Owner and the Independent Consultant, for their approval and for payment, a
monthly application for payment (the "Application for Payment") for the Cost of
the Work incurred by Contractor for the previous thirty (30) days, which shall
be given under oath of the person executing the Application of Payment.
Applications for payment shall be submitted on the last day of each calendar
month and shall apply to the thirty (30) day period ending on the twenty-fifth
(25th) day of such calendar month.
9.1.2 Contents of Application for Payment and Attachments. Each such
Application for Payment shall contain or include the following:
9.1.2.1 A statement of the current Guaranteed Maximum Price,
including Change Orders approved and Construction Change Directives issued;
9.1.2.2 The dollar percentage of completion of the Contractor's Work
based on a schedule of values previously submitted to and approved by the Owner;
9.1.2.3 Acknowledgment of the total of all monies received on account
of this Agreement to and including the payment applied for in the presented
monthly Application for Payment;
9.1.2.4 The net amount of the Cost of the Work due for the current
period, after deducting the retainage provided for under Section 9.5, except no
deduction for retainage on the fees of the Contractor's Architect or its
consultants;
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9.1.2.5 A statement of any back charges and credits to which
Owner is entitled;
9.1.2.6 A statement of any claim for charges or extras due to
Contractor;
9.1.2.7 If required by Owner or Independent Consultant, the
names of all subcontractors, suppliers and materialmen who have supplied labor,
materials, equipment and services to the Site during said thirty (30) day
period, together with documentation (which may include properly certified and
correct invoices in duplicate) sufficient to establish the amount that is owed
to them by Contractor as of the end of said period. Owner and Independent
Consultant shall have the right to review at Contractor's office the addresses
and telephone numbers of all names so identified by Contractor and said
information, together with a repetition of the information contained in the
Application for Payment, upon Owner's request, shall be provided by Contractor
in a sworn statement separately from the Application for Payment within fifteen
business days from the date of Owner's request;
9.1.2.8 A lien waiver from Contractor with respect to all Work
covered by the Application for Payment; releases and lien waivers in a form and
content satisfactory to Owner and Independent Consultant from all architects,
consultants, laborers, materialmen and subcontractors performing Work or
providing materials, equipment or services and upon completion of the Work; and
a release from Contractor, and all architects, consultants, laborers,
materialmen and subcontractors, of all claims against the Owner arising under or
by virtue of this Agreement. All releases and lien waivers obtained by
Contractor from its architects, consultants, laborers, materialmen, and
subcontractors and submitted by Contractor to Owner, together with Contractor's
lien waiver submitted by Contractor to Owner, with respect to all Work covered
by the Application for Payment being processed by Owner may be contingent upon
receipt of payment pursuant to the application for Payment. All releases and
lien waivers which contain such payment contingency and which relate to Work for
which compensation has been paid by Owner to Contractor pursuant to the
Application for Payment with which they were submitted shall be resubmitted
without such contingency (i) with the immediately subsequent Application for
Payment submitted by Contractor or (ii) within thirty (30) days following the
date of payment of the Application for Payment with which they were submitted,
whichever is earlier;
9.1.2.9 With respect to Changes in the Work, Contractor's
monthly statement shall include such work only after the procedures set forth in
Section 1.7 for incorporating the change into the Work has been complied with
and shall set forth Owner's Change Order or Construction Change Directive
numbers;
9.1.2.10 With respect to materials not yet incorporated into the
Work, Contractor's monthly statement shall include such materials only to the
extent such materials are (i) needed within sixty (60) days from their delivery
for incorporation into the Work, purchased in order to obtain a price discount
at the direction of the Owner, or if otherwise approved by Owner in its sole
discretion, (ii) delivered and suitably stored at the Site or at some other
bonded location agreed to in writing by Owner, and (iii) readily and
specifically identified as belonging to the Work and not
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"commodity", "generic" or "stock" items not identified as belonging to the Work.
With respect to all materials incorporated into the Work, Contractor's monthly
statement shall include such materials only to the extent that the absolute
Ownership thereof shall have vested in Owner, and Contractor shall have
furnished to Owner, if required by Owner, the contracts, bills of sale or other
Agreement under which title thereto is claimed; and
9.1.2.11 All other information and documents, in the form required by
Owner or Independent Consultant, which Owner or Independent Consultant requires
in order to facilitate the final completion of the Work, which documents may be
according to AIA Forms G-702 and G-703.
9.1.3 Failure to Submit Proper or Timely Application for Payment. In
the event Contractor fails to prepare and present to Owner the monthly
Application for Payment in a timely manner, Owner shall only be required to make
progress payments for said payment in the event Owner's Independent Consultant
does not reject said tardy Application for Payment and makes disbursements from
the Construction Disbursement Account to Owner pursuant thereto. In the event
Contractor prepares and presents to Owner an incomplete or improper monthly
Application for Payment, Contractor shall have the right to supplement or
correct such monthly Application for Payment. In the event of such improper
Application for Payment, Owner shall not be responsible or required to make the
revised progress payment for said payment unless timely corrected by Contractor.
9.2 CONTRACTOR'S ARCHITECT CERTIFICATE
Contractor shall cause Contractor's Architect to issue a certificate
for payment (the "Certificate for Payment") certifying (i) that the portion of
the Work for which the Contractor seeks payment has been properly performed, and
(ii) that the matters set forth in Contractor's Application for Payment, and the
information and documentation submitted therewith, are valid, accurate and
complete; said Certificate for Payment to be forwarded to Owner together with
Contractor's Application for Payment. The Certificate for Payment shall cover an
inspection which was made by Contractor's Architect not more than four business
days prior to the date on which such Certificate for Payment is forwarded to
Owner.
9.3 DEDUCTIONS
Owner shall have the right to deduct from all the amounts payable to
Contractor hereunder any amounts due Owner by Contractor pursuant to any
provisions of this Agreement.
9.4 WITHHOLDING
9.4.1 Right to Withhold. Owner may withhold monthly progress
payments, in whole or in part, in order to protect Owner from loss because of
(but only to the extent of such actual or expected loss):
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9.4.1.1 Defective work not remedied, materials not furnished,
cleanup not performed or any other noncomplying aspects of the Work;
9.4.1.2 Claims, levies, attachments, liens, stop notices or
court orders filed, or which the Owner reasonably believes are likely to be
filed, including claims covered by insurance or bonds until such claims are
accepted by the insurance carrier or bond company (unless the same are caused by
the Owner's failure to make payments hereunder when properly due); provided,
however, as to mechanics' lien claims, if the Contractor furnishes a bond
satisfactory to the Owner, no funds shall be withheld as to such claim;
9.4.1.3 Failure of Contractor to make payments properly and
timely after receipt of Owner's payment to Contractor to its subcontractors or
for labor (including customary fringe benefits), materials or equipment,
transportation or shipping costs, taxes, fees or any other claims growing out of
the Work;
9.4.1.4 A determination by Owner or Independent Consultant that
the Work cannot be completed for the then remaining unpaid balance of the
Guaranteed Maximum Price and a refusal by Independent Consultant to authorize
disbursements from the Construction Disbursement Account until satisfactory
arrangements to cover the deficiency have been made;
9.4.1.5 Damage to any portion of the Work, another contractor or
to Owner;
9.4.1.6 Reasonable indication in Owner's opinion that the Work
will not be completed in compliance with the Schedule;
9.4.1.7 Unsatisfactory prosecution of the Work by Contractor;
9.4.1.8 Failure to deliver to Owner insurance certificates,
bonds, maintain on the Site the "as-built" drawings, provide final "as-built"
drawings, survey and manuals, failure to properly train Owner's employees,
failure to provide written guarantees or warranties or the failure to obtain
approvals of the Work required by any authority having jurisdiction thereof;
9.4.1.9 Filing by or against Contractor of a petition for
bankruptcy or reorganization; and
9.4.1.10 To the extent any liability, claims, judgements, or
demands which Owner has been indemnified and saved and held harmless by
Contractor under this Agreement, any money due or to become due to Contractor
sufficient to compensate Owner with respect thereto.
9.4.2 Conditions for Release of Withheld Amounts. The above right of
Owner to withhold monthly progress payments of Contractor, or for Independent
Consultant to refuse to release funds from the Construction Disbursement
Account, shall remain in effect even though the
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Contractor, if requested by Owner, has posted a full payment and performance
bond. When the above grounds are removed by Contractor, to the satisfaction of
Owner and Independent Consultant, payments for the amounts so withheld will be
made by Owner pursuant to the procedures set forth elsewhere in this Article 9.
However, as a condition to resuming such payments, Owner and Independent
Consultant may require that the Contractor furnish releases in a form
satisfactory to Owner and Independent Consultant for all claims made under
Section 9.4.1.2 and 9.4.1.3 and/or supporting invoices, receipts or other
records to substantiate the amounts owing or paid.
9.5 RETAINAGE
Owner and Independent Consultant shall have the right to retain from
the gross amount requested to be paid in each Application for Payment during the
term of this Agreement ten percent (10%) of both the Cost of the Work (excluding
fees of the Contractor's Architect and its consultants) and the Contractor's
Fee, which shall be held by Owner until such time as:
9.5.1 Achievement of Final Completion. The last portion of the Work
has been finally certified and accepted by Owner and the Independent Consultant;
and
9.5.2 Final Inspection. Final inspection of the Project has been
made and approved by Owner and Independent Consultant, which inspection shall
occur within ten business days of Contractor's filing the notice of completion;
and
9.5.3 Certificate of Occupancy. A permanent certificate of occupancy
has been issued to Owner by the appropriate Governmental Authority; and
9.5.4 Remaining Obligations. All other conditions to final payment
set forth in this Agreement have been satisfied.
9.5.5 No Further Retainage Withheld. Owner and Contractor
acknowledge that the retainage provisions of this Section 9.5 are ones which
Owner anticipates will be required by Owner's arrangements with the Noteholders'
Representatives. Owner hereby agrees to use its best efforts to negotiate with
and secure agreement from the Noteholders Representatives for (A) a retainage
provision which permits Owner, once fifty percent (50%) of the Cost of the Work,
as adjusted by Change Order or Construction Change Directive, has been paid by
Owner, and so long as (i) Owner and Independent Consultant are satisfied that
Contractor is performing the Work in accordance with this Agreement, and (ii)
Contractor passes on the reduced retainage requirements to its subcontractors,
to reduce retainage then held by the Owner to five percent (5%) of the then
expended Cost of the Work and Contractor's Fee (and to reduce retainage withheld
on future payments to the Contractor to five percent (5%)), and (B) a retainage
provision which allows release of that portion of the retainage which is held in
relation to the excavation and pre-cast concrete subcontractors upon the final
completion of each such subcontractor's work.
9.6 PAYMENT OF CONTRACTOR'S FEE
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Subject to the retainage provisions of Section 9.5, the Contractor
shall be paid its Contractor's Fee on the basis of the Cost of the Work for
which the Contractor is being paid. Such payments shall be made monthly and the
amount of the Contractors' Fee payable by Owner to Contractor shall be completed
by Contractor and included for payment in the monthly Applications for Payment,
after deducting therefrom the retainage.
9.7 PAYMENT OF PROGRESS PAYMENTS
Upon Contractor's compliance with the procedures set forth in this
Article 9 with respect to the submission of its Applications for Payment and the
Certificate for Payment by the Contractor's Architect, and only to the extent
that Owner has received disbursements from the Construction Disbursement Account
for such Work, Owner will make progress payments on account of the Cost of the
Work and Contractor's Fee to Contractor within fifteen (15) days after receipt
by Owner of the foregoing items, withholding therefrom pursuant to Section 9.5
the applicable retention amount and any other amount Owner is entitled to
withhold pursuant to this Agreement. Contractor agrees to pay to its
subcontractors, agents and consultants within a timely period following
Contractor's receipt of its progress payment from Owner, all amounts due and
payable to said subcontractors, agents and consultants which were included in
the Application for Payment for which Owner's progress payment related.
9.8 FINAL PAYMENT
Final payment, constituting the retention withheld by Owner and any
other sums and amounts owing to Contractor under the terms of this Agreement,
shall be made by Owner to Contractor within ten days after the expiration of the
conditions enumerated in Section 9.5. If a Punch List is submitted with respect
to any portion of the Project, then Contractor shall deliver, in writing, its
unconditional promise to complete said Punch List items within a reasonable time
thereafter, and Owner shall retain from said final payment in the event such
Punch List had not been totally completed as of such time a sum equal to two
hundred percent (200%) of the estimated cost of completing such Punch List items
(the "Holdback Amount"). Owner will list each Punch List item separately, and
Owner and Contractor shall agree on the estimated cost of completing each such
Punch List item, which cost shall also be listed separately. Thereafter, Owner
will pay to Contractor monthly, on the twentieth (20th) day of each month, the
amount retained for each said Punch List item completed during the previous
month.
9.9 PAYMENT NOT ACCEPTANCE
No payment made under this Agreement, nor any partial or entire use or
occupancy of the Project or any portion thereof by Owner, shall be evidence that
the Contractor has performed its obligations under this Agreement, either wholly
or in part, nor shall such payment, use or occupancy be construed as an
acceptance of Work not in accordance with this Agreement, or an approval of any
of the items in any requisition made or xxxx rendered.
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9.10 RELEASE OF CLAIMS
Acceptance of final payment by Contractor shall constitute a release
and waiver by Contractor of all claims that Contractor has or may have against
Owner.
9.11 CONTRACTOR'S LIABILITY FOR EXCESS OVER GUARANTEED MAXIMUM PRICE
No Application for Payment shall be submitted by Contractor to Owner
and no payments shall be required to be made by Owner to Contractor for
expenditures in excess of the Guaranteed Maximum Price, and Contractor shall be
obligated to and shall prosecute the Work to completion and shall pay from its
own funds all costs and expenses of such Work in excess of the Guaranteed
Maximum Price.
9.12 CONTINGENT ASSIGNMENT OF SUBCONTRACTS
9.12.1 Assignment of Contractor's Interest in Subcontracts and
Suppliers Contracts. Contractor hereby assigns to Owner its interest in all
subcontracts and material and supplier contracts in connection with construction
of the Project, such assignments to be effective only if Owner or its assignee
undertakes construction of the Project in case of termination of this Agreement
by reason of Contractor's nonperformance hereunder. Contractor shall cause each
subcontract and material and supplier contract to contain a clause specifically
recognizing such contingent assignment and obligating the Contractor's
Architect, subcontractors and materialmen to perform their obligations under
their respective agreements in the event this assignment become effective.
9.13 INTEREST RATE
Any amounts properly due to the Contractor or the Owner from the other
party, but which remain unpaid by such other party, shall bear interest at an
annual rate equal to ten percent (10%) from the date due until paid.
ARTICLE 10: INDEMNIFICATION
10.1 Indemnity. To the fullest extent permitted by law, the
Contractor shall indemnify, defend and hold harmless the Owner, the Independent
Consultant, the Noteholders and their respective officers, directors, employees,
agents, affiliates and representatives (the "Indemnitees"), from and against any
and all claims, demands, suits, liabilities, injuries (personal or bodily),
property damage, causes of action, losses, expenses, damages or penalties,
including, without limitation, court costs and reasonable attorneys' fees,
arising or resulting from, or occasioned by or in connection with (i) negligent
or wrongful acts or omissions of the Contractor, a subcontractor, a
subsubcontractor, anyone directly or indirectly employed by them or anyone for
whose acts they may be liable which results in bodily injury or property damage,
(ii) Contractor's failure to comply with applicable Laws, and/or (iii) any
breach, default, violation or nonperformance
46
by the Contractor of any term, covenant, condition, duty or obligation provided
in this Agreement. Notwithstanding the foregoing or anything to the contrary
contained in this Agreement, the Contractor's aggregate liability to the Owner
in relation to design errors or omissions which result from the performance of
professional services hereunder as an architect or engineer shall be limited to
$5,000,000. This indemnification, defense and hold harmless obligation shall
survive the termination or expiration of this Agreement.
10.2 No Limitation. In claims against any person or entity
indemnified under the preceding Section 10.1 by an employee of the Contractor, a
subcontractor, a subsubcontractor, anyone directly or indirectly employed by
them or anyone for whose acts they may be liable, the indemnification obligation
under such Section 10.1 shall not be limited by a limitation on the amount or
type of damages, compensation or benefits payable by or for the Contractor, a
subcontractor, a subsubcontractor or any other above-referenced party under
workers' or workmen's compensation acts, disability benefit acts, other employee
benefit acts, or by common law or case law.
10.3 Liens. Contractor further agrees to indemnify, save, protect
and hold harmless the Indemnitees from and against any claim of liens or liens,
or both, for labor performed or materials furnished, or both, or to be used on
the Site, and, in case suit on any such claims or liens is brought, Contractor
shall defend said suit at its own cost and expense and shall pay and satisfy any
such lien or judgment as may be established or determined by the decision of the
court in said suit. Contractor agrees within ten days after written demand to
cause the effect of any suit or lien to be removed from the Site, by bonding or
other means acceptable to Owner. In the event Contractor shall fail to do so,
Owner is authorized to cause said lien to be removed or dismissed and the cost
thereof, together with all attorneys' fees and litigation costs and expenses,
shall be deducted by Owner from any monies due to Contractor; provided, however,
that Contractor shall not be required to pay and release any lien placed on or
accruing against the Site solely by reason of Owner's work during Owner's period
of entry and occupancy of the Project or by reason of the Owner's failure to
make payment to Contractor when properly due under this Agreement.
10.4 Lost Profits. Notwithstanding anything to the contrary in this
Article 10, Contractor shall have no indemnification duties under this Article
10 with respect to lost profits or revenues sustained by Owner as a result a
delay in the completion of the Work other than the obligation to pay liquidated
damages as set forth in this Agreement.
ARTICLE 11: INSURANCE
11.1 CONTRACTOR'S INSURANCE
11.1.1 Contractor's Insurance Certificates. Before Contractor
mobilizes its forces at the Site or commences the Work at or prepares or
delivers materials to the Site, Contractor shall provide certificates of
insurance evidencing that Contractor has obtained and maintains with insurance
companies satisfactory to Owner the insurance coverages described in this
Article 11. Within a reasonable time after Owner's request, Contractor shall
provide Owner with a copy of such
47
policies. Owner, Independent Consultant and such persons or entities as may be
designated by the Noteholders' Representatives shall be named as an additional
insureds on all of Contractor's policies referred to herein (except on
Contractor's worker's compensation insurance and "errors and omissions"
insurance policies). The insurance coverage afforded under the policies
described herein shall be primary and non-contributing with respect to any
insurance carried independently by the additional insureds. All such insurance
policies shall indicate that as respects the insureds (whether named or
otherwise), cross-liability and severability of interests shall exist for all
coverages provided thereunder. All policies of insurance required under this
Article 11 shall be written on an "occurrence" basis, except the Professional
Liability Insurance, which shall be written on a "claims made" basis. The
insurance specified below shall be placed with insurance companies reasonably
acceptable to the Owner, and shall incorporate a provision requiring the giving
of notice to the additional insureds at least thirty (30) days prior to the
cancellation, non-renewal or material modification of any such policies.
11.1.2 Contractor's Liability Insurance. Contractor shall purchase
and maintain at its sole cost and expense and as a Cost of the Work, during the
term of this Agreement, insurance in the forms and minimum amounts described in
Section 11.2 to protect against claims relating to the liabilities which may
arise out of or result from Contractor's performance of its obligations under
this Agreement, whether such performance be by Contractor, its agents,
employees, Contractor's Architect and the consultants of Contractor's Architect
or any subcontractors, supplier, materialmen, or manufacturer employed by or
retained by Contractor, or any other person employed by or retained by
Contractor, or any other person employed or retained by them or any of them or
anyone for whose acts any of them may be liable. Such insurance shall be written
for not less than any limits of liability specified below or required by law,
whichever is the greater, and shall include contractual liability insurance
applicable to Contractor's obligations under this Agreement. Contractor shall,
at all times during the term of this Agreement, maintain insurance in the form
and minimum amounts with financially responsible companies having a minimum "A+"
rating by Best and qualified to transact business in the State of Colorado and,
further, which have been approved by Owner.
11.2 SCHEDULE OF INSURANCE COVERAGES
11.2.1 Worker's Compensation Insurance. A Workers' Compensation
Insurance Policy in form and substance reasonably acceptable to the Owner and in
an amount not less than the statutory limits (as may be amended from time to
time), including Employer's Liability Insurance with limits of liability of not
less than (i) U.S. $1,000,000 for bodily injury by accident, each accident, (ii)
U.S. $1,000,000 for bodily injury by disease, each employee, and (iii) U.S.
$1,000,000 aggregate liability for disease. The Workers' Compensation &
Employer's Liability Insurance Policies must each include a waiver of
subrogation endorsement in favor of the additional insureds.
11.2.2 Commercial General Liability Insurance. A Commercial General
Liability Insurance Policy written with a combined single limit of liability of
not less than $1,000,000.00 for each occurrence of bodily injury and/or property
damage and an annual aggregate of liability of not less than $2,000,000.00 for
bodily injury and/or property damage, and an annual aggregate of
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liability of not less than $2,000,000.00 for completed operations and products
liability, including the following coverages and endorsements:
11.2.2.1 Premises and Operations;
11.2.2.2 Broad Form Property Damage;
11.2.2.3 Property Damage Liability, including coverage for
explosion, collapse, and underground property damage hazards (and providing that
an unintentional failure to report hazards shall not invalidate such coverage);
11.2.2.4 Personal Injury Liability (with employee and
contractual exclusions deleted);
11.2.2.5 Independent Contractor's Protective Coverage;
11.2.2.6 Broad Form Contractual Liability;
11.2.2.7 Products/Completed Operations, for three years after
completion of the Work and its acceptance by Owner; and
11.2.2.8 A waiver of subrogation endorsement in favor of the
additional insureds.
11.2.3 Comprehensive Automobile Liability Insurance. A Comprehensive
Automobile Insurance Policy in form and substance reasonably acceptable to the
Owner and including, without limitation, a waiver of subrogation endorsement in
favor of the additional insureds. The Comprehensive Automobile Liability
Insurance Policy must provide coverage for all owned, hired, rented and non-
owned automobiles, and must be written with a combined single limit of liability
of not less than $1,000,000.00 for each occurrence of bodily injury and/or
property damage.
11.2.4 Umbrella Liability Insurance. An Umbrella Liability Insurance
Policy written in excess of the coverages provided by the insurance policies
described in Sections 11.2.2, 11.2.3 and the Employer's Liability in 11.2.1, in
form and substance reasonably acceptable to Company and including, without
limitation, a waiver of subrogation endorsement in favor of the additional
insureds. The Umbrella Liability Insurance Policy must be written with a
combined single limit not less than $10,000,000.00 for each occurrence of bodily
injury and/or property damage, and an annual aggregate of liability of not less
than $10,000,000.00 for bodily injury and/or property damage.
11.3 OWNER'S BUILDER'S RISK INSURANCE
11.3.1 Builder's Risk Policy. Before Contractor commences the Work
at or prepares or delivers material to the Site but under no circumstances
subsequent to the date of
49
commencement of construction specified in the Notice to Proceed, Owner will
provide certificates of insurance evidencing that Owner has obtained and
maintains "all risk" builder's risk insurance upon the Work, subject to a
deductible amount per occurrence not to exceed ONE HUNDRED THOUSAND AND NO/100
DOLLARS ($100,000.00). Within a reasonable time after Contractor's request,
Owner will provide Contractor with a copy of such policy. The policy will insure
Owner, the Contractor and subcontractors as their interests may appear.
11.3.2 Deductible. Upon each occurrence of property damage insured
by the coverage specified in Section 11.3.1, the Contractor's liability (in
relation to the insurance deductible only) shall be limited to $5,000; it being
understood that the Owner will be responsible for any deductible amount in
excess of $5,000.
11.3.3 Property of Others. Owner will not insure nor be responsible
for any loss or damage to property of any kind owned or leased by Contractor,
Contractor's Architect or any subcontractors, or their employees, servants, or
agents.
11.3.4 Builder's Risk Limits of Liability. The policy specified in
Section 11.3.1 shall be written in an amount equal to the "completed value" of
the Work and the Owner Furnished FF&E.
11.3.5 Builder's Risk Deductibles. The policy specified in Section
11.3.1 shall provide for up to the following deductible amounts:
$ 100,000.00 All perils
250,000.00 Earthquake
250,000.00 Flood
10,000.00 Transit
11.3.6 Owner's Use of Project. If the Owner finds it necessary to
occupy or use a portion or portions of the Project prior to substantial
completion thereof, such occupancy shall commence on the date Owner notifies
Contractor and the Owner shall obtain from the insurance company or companies
providing the property insurance their consent to such occupancy by endorsement
to the policy or policies, which insurance policies shall also provide that they
will not be canceled or lapse on account of such partial occupancy.
11.4 PROJECT ERRORS AND OMISSIONS INSURANCE
In addition to the above referenced insurance coverages and policies,
Contractor shall obtain a "project specific" professional liability insurance
policy written with a limit of liability of not less than $5,000,000.00 for each
claim, and not less than $5,000,000.00 in the aggregate, for errors, omissions
or negligent acts arising out of the performance of (or the failure to perform)
professional services hereunder as an architect or engineer. Such insurance
coverage shall cover work performed by Contractor's Architect and any other
architects, engineers or structural, mechanical, electrical or other applicable
consultants, and shall be retroactive to the earlier of the
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date of this Agreement or the commencement of the services in relation to this
Project (including, without limitation, those performed by the Contractor's
Architect). Such policy must be maintained for a period of not less than five
(5) years following the date of final payment to the Contractor for all services
provided under this Agreement.
11.5 NO COVERAGE CHANGES
Each of the above required insurance policies (and the certificates
evidencing the same) shall provide that the coverage therein afforded shall not
be canceled, terminated, reduced, or not renewed except upon the giving of
written notice to (i) Owner with respect to the insurance to be obtained by
Contractor and (ii) Contractor with respect to the insurance to be obtained by
Owner at least thirty (30) days prior to the effective date of such
cancellation, termination, reduction or nonrenewal. In the event Owner or
Contractor, whichever is applicable, receives such written notice that the
coverage evidenced by any such certificate is to be canceled, terminated,
reduced, or not renewed, it shall so inform the other and the other shall
procure and furnish new certificates conforming to the above requirements as
soon as reasonably practical but in any event at least five days before the
effective date of such cancellation, termination, reduction or nonrenewal. In
the event such new certificates within the time specified are not so provided,
the party not obligated to provide such insurance may nevertheless have the
right (but not the obligation) to procure such insurance and back charge the
cost thereof to the other party.
11.6 LIMITED WAIVERS OF SUBROGATION
11.6.1 Owner's Limited Waiver of Subrogation. Owner hereby releases
and waives any and all rights of subrogation against Contractor which, in the
absence of this Section 11.6.1, would arise in favor of any insurance company
insuring Owner against loss by fire, extended coverage, casualty and loss of any
other type resulting from damage to or destruction of property and the Work or
any portion thereof, or in damage to or destruction of property of Owner located
on the Site, and Owner hereby releases and waives its right of recovery against
Contractor for loss or damage resulting from damage to or destruction of
property and the Work or any part thereof, or in damage to or destruction of the
property of Owner located on the Site, caused by fire or other hazards insured
against by extended coverage or casualty insurance as provided in this
Agreement. This waiver of subrogation shall apply only to the extent that Owner
is compensated for such loss or damage by actual receipt of proceeds from
insurance policies covering such loss or damage; it being expressly understood
and agreed that this release and waiver shall not constitute a release and
waiver by Owner of any right of subrogation or recovery against Contractor for
loss or damage, whether arising in connection with the same claim or separate
claims, in excess of insurance proceeds actually received by Owner.
11.6.2 Contractor's Limited Waiver of Subrogation. Contractor hereby
releases and waives any and all rights of subrogation against Owner which, in
the absence of this Section 11.6.2, would arise in favor of any insurance
company insuring Contractor against loss by fire, extended coverage, casualty
and loss of any other type resulting from damage to or destruction of property
and the Work or any portion thereof, or in damage to or destruction of the
property of
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Contractor located on the Site, and Contractor hereby releases and waives its
right of recovery against Owner for loss or damage resulting from damage to or
destruction of property and the Work or any portion thereof, or in damage to or
destruction of the property of Contractor located on the Site, caused by fire or
other hazards insured against by extended coverage or casualty insurance. This
waiver of subrogation shall apply only to the extent that Contractor is
compensated for such loss or damage by actual receipt of proceeds from insurance
policies covering such loss or damage; it being expressly understood and agreed
that this release and waiver shall not constitute a release and waiver by
Contractor of any right of subrogation or recovery against Owner for loss or
damage, whether arising in connection with the same claim or separate claims, in
excess of insurance proceeds actually received by Contractor.
11.6.3 Conditions on Waivers of Subrogation. The foregoing releases
and waivers of subrogation rights and releases and waivers of the rights of
Owner and of Contractor respectively are expressly conditioned upon Owner and
Contractor each being able to obtain in present and future policies required
under this Agreement of fire, extended coverage, casualty and similar insurance,
clauses which permit the insured to release and waive the insurance company's
right of subrogation against third parties responsible for loss. In the event
either Owner or Contractor at any time is unable to obtain policies containing
such subrogation waiver clauses, then and in that event such party shall give to
the other party written notice thereof and from and after the giving of such
notice, the releases and waivers herein set forth and each and all of them shall
be considered withdrawn and shall not be effective as to loss or damage arising
from risks covered by such policies.
ARTICLE 12: DEFAULT
12.1 Termination by Owner for Cause. (a) The occurrence of any one of
more of the following matters constitutes a default by the Contractor under this
Agreement (a "Contractor Default"):
(i) Contractor becomes insolvent or generally fails to pay, or admits
in writing its inability or unwillingness to pay, its debts as they become
due;
(ii) Contractor makes a general assignment for the benefit of its
creditors;
(iii) Contractor shall commence or consent to any case, proceeding or
other action (a) seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of Contractor or of Contractor's
debts under any law relating to bankruptcy, insolvency, reorganization or
relief of debts, or (b) seeking appointment of a receiver, trustee or
similar official for Contractor or for all or any part of Contractor's
property;
(iv) any case, proceeding or other action against Contractor shall be
commenced (a) seeking to have an order for relief entered against
Contractor as debtor, (b) seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of Contractor or Contractor's debts
under any law relating to bankruptcy, insolvency,
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reorganization or relief of debtors, or (c) seeking appointment of a
receiver, trustee, or similar official for Contractor or for all or any
part of Contractor's property;
(v) the breach of any material representation or warranty made by
Contractor herein;
(vi) Contractor attempts to assign, convey or transfer this Agreement
or any interest herein without the Owner's prior written consent; or
(vii) Contractor fails to observe or perform any other covenant,
agreement, obligation, duty or provision of this Agreement, and such
failure continues for thirty (30) days after Contractor's receipt of
written notice thereof from Owner.
(b) Upon the occurrence of a Contractor Default, the Owner may, without
prejudice to any other right or remedy the Owner may have at law and/or in
equity or under this Agreement, terminate this Agreement. The Owner may, without
prejudice to any other right or remedy, take possession of the Site and of all
materials, equipment, tools and machinery thereon owned by the Contractor, and
may finish the Work by whatever method the Owner may deem expedient. If the cost
of finishing the Work exceeds the unpaid balance of the Guaranteed Maximum
Price, the Contractor shall immediately pay the difference to the Owner.
12.2 Termination by Contractor for Cause. (a) The occurrence of any one
of more of the following matters, and the continuation of the same for thirty
(30) days after the Owner's receipt of written notice thereof from the
Contractor, shall constitute a default by the Owner under this Agreement (an
"Owner Default"):
(i) Owner becomes insolvent or generally fails to pay, or admits in
writing its inability or unwillingness to pay, its debts as they become
due;
(ii) Owner makes a general assignment for the benefit of its
creditors;
(iii) Owner shall commence or consent to any case, proceeding or
other action (a) seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of Owner or of Owner's debts under
any law relating to bankruptcy, insolvency, reorganization or relief of
debts, or (b) seeking appointment of a receiver, trustee or similar
official for Owner or for all or any part of Owner's property;
(iv) any case, proceeding or other action against Owner shall be
commenced (a) seeking to have an order for relief entered against Owner as
debtor, (b) seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of Owner or Owner's debts under any law relating
to bankruptcy, insolvency, reorganization or relief of debtors, or (c)
seeking appointment of a receiver, trustee, or similar official for Owner
or for all or any part of Owner's property; or
53
(v) Owner fails to observe or perform any covenant, agreement,
obligation, duty or provision of this Agreement.
(b) Upon the occurrence of an Owner Default, the Contractor may terminate
this Agreement. If this Agreement is so terminated, the Contractor, as its sole
and exclusive remedy hereunder, shall be entitled to receive the following:
payment for Work properly performed to the date of termination (including all
retainage and the Contractor's Fee related thereto), reimbursement for all
cancellation charges incurred by the Contractor in relation to its
subcontractors, and reimbursement for proven loss with respect to materials,
equipment, tools, machinery and other out-of-pocket expenses.
ARTICLE 13: TERMINATION BY OWNER WITHOUT CAUSE
Owner shall have the absolute and total right to terminate this
Agreement at any time without cause if Owner decides in its sole and absolute
discretion to abandon or terminate construction of the Project for any reason
whatsoever, including, without limitation, the failure to obtain or revocation
of any license required by the Colorado Gaming Commission for operation of the
Casino, the issuance of any injunction, temporary restraining order or other
court order prohibiting, restricting or limiting Owner from proceeding with
construction of the Project, or the election by Owner not to continue the Work
because of any pending litigation relating to the construction and/or operation
of the Work, Hotel or Casino. If and only in the event Owner terminates the
Agreement pursuant to this Article 13, it will reimburse the Contractor for any
unpaid Cost of the Work which has been expended by Contractor and is due it
under Article 9, plus the unpaid balance of the Contractor's Fee computed based
on the Cost of the Work performed prior to termination of the Agreement, plus
cancellation charges incurred by Contractor in relation to its subcontractors,
and reimbursement for proven loss with respect to materials, equipment, tools,
machinery and other out-of-pocket expenses.
ARTICLE 14: INDEPENDENT CONTRACTOR
With respect to the Work, Contractor's relationship to Owner is that
of an independent contractor and nothing contained herein shall be deemed to
make Contractor the agent, employee or partner of Owner, the Independent
Consultant, or the Noteholders.
ARTICLE 15: PAYMENT AND PERFORMANCE BOND
15.1 Payment and Performance Bonds. The Contractor shall, on or before
the fifth (5th) day after issuance of the Notice to Proceed, furnish and deliver
to the Owner a payment bond and a performance bond issued by a surety authorized
to do business in the State of Colorado, covering the faithful performance and
completion of this Agreement, and covering the payment of all obligations
arising hereunder. Such bonds shall be issued in amounts equal to the Guaranteed
Maximum Price, shall be in form and substance (and issued by a surety)
satisfactory to the Owner, and shall name the Owner and the Noteholders as dual
obligees. Notwithstanding the foregoing,
54
such bonds shall not apply to design errors or omissions which result from the
performance of professional services under this Agreement as an architect or
engineer.
ARTICLE 16: DISPUTES
16.1 Dispute Resolution. (a) In the event Owner and Contractor are unable
to resolve any disputes, claims, controversies or other matters related to this
Agreement (a "Dispute"), the Dispute shall be promptly submitted for resolution
to a committee of three persons, including the President of the Owner, a neutral
third party jointly selected by Owner and Contractor who shall act as
chairperson, and the President of the Contractor (collectively the "Committee").
If either the President of the Owner or the President of the Contractor is
unable to act at the time a Dispute arises, then either the Owner or the
Contractor, as applicable, shall designate a substitute. Each substitute member
designated by a party shall be reasonably acceptable to the other party. The
decision of a majority shall decide any matter presented to it.
(b) Upon arriving at its decision (which decision shall be by majority
vote as provided above) with respect to any Dispute presented to it, the
Committee will promptly send its decision in writing to the Contractor and to
the Owner. Notwithstanding the foregoing, no decision of the Committee shall be
binding upon the parties; it being expressly agreed by the parties hereto that
they shall thereafter be entitled to refer such Dispute to any court of
competent jurisdiction within the State of Colorado.
(c) Pending final resolution of a Dispute, the Contractor shall proceed
diligently with the performance of its duties and obligations under this
Agreement, and the Company shall continue to make payments as to undisputed
amounts in accordance with the terms of this Agreement.
ARTICLE 17: HAZARDOUS SUBSTANCES
17.1 Hazardous Substances. (a) If, in the course of performance of the
Work, the Contractor encounters on the Site any matter which it reasonably
believes is a Hazardous Substance, the Contractor shall immediately suspend the
Work in the area affected and report the condition to the Owner in writing. In
any such event, the obligations and duties of the parties hereto shall be as
follows:
(i) If it is determined that such condition involves a Pre-Existing
Hazardous Substance, then any required remedial actions shall be performed
by the Owner at its sole cost and expense;
(ii) If it is determined that such condition involves a Hazardous
Substance introduced to the Site after the date of this Agreement by the
Contractor, its subcontractors or any party for whom either may be liable,
then any required, necessary or appropriate remedial actions shall be
performed by the Contractor at its sole cost and expense; or
(iii) If it is determined that the condition does not involve a
Hazardous Substance, the Contractor shall, promptly after receiving written
notice from the Owner authorizing the
55
Contractor to recommence site activities in the subject area, resume the
portion of the Work that had been suspended.
The parties acknowledge and agree that the Contractor shall not commence or
continue any construction activities on any portion of the Site on, in or under
which remedial actions are to be (or are being) performed until such remedial
actions are to the point where construction activities will not interfere with
such remedial actions, as evidenced by appropriate certifications from the
applicable environmental engineer and/or remediation contractor and any required
approvals of any applicable governmental agencies. The Contractor agrees to use
good faith diligent efforts to continue the unaffected portions of the Work and
to adjust and reschedule its activities at the Site so as to minimize, to the
extent reasonably practicable, any adverse effect on the progress of the Work
resulting from the performance of any remedial actions.
(b) The Contractor shall not bring or store (and shall prohibit
subcontractors from bringing or storing) Hazardous Substances to or on the Site,
and shall not utilize any construction materials containing asbestos,
polychlorinated biphenyls or urea formaldehyde. As previously indicated, the
Contractor shall be responsible for the removal and cleanup of Hazardous
Substances brought to or generated at the Site by the Contractor, any
subcontractor or any party for whose actions the Contractor is responsible
pursuant to this Agreement. In this regard, the Contractor shall comply, and
shall cause its subcontractors to comply, with all environmental laws, statutes,
ordinances, codes, rules, regulations, policies and guidance documents regarding
the generation, handling, storage, treatment and disposal of Hazardous
Substances.
ARTICLE 18: MISCELLANEOUS PROVISIONS
18.1 GOVERNING LAW
This Agreement shall be construed and governed in accordance with the
laws of the State of Colorado without giving effect to choice of law principles.
18.2 ASSIGNMENT AND SUCCESSORS
18.2.1 No Assignment by Contractor. Contractor shall not, without
the prior written consent thereto of Owner, which consent Owner shall have the
right, in its sole, total and arbitrary discretion to withhold for any reason
whatsoever, assign or transfer this Agreement or any portion or part of the
Work, or assign any payments to others. Any assignment or transfer made without
the written consent of Owner, either expressly, impliedly, or by operation of
law, shall be void and of no force or effect.
18.2.2 Assignment By Owner. Owner shall have the absolute right,
without obtaining Contractor's consent or approval, to assign this Agreement and
Owner's rights thereunder (including any warranty rights) to any person or
entity which has an ownership (including without limitation a leasehold
interest) or operating interest in the Project. The Contractor shall execute any
56
consent to the Owner's assignment of this Agreement to the Noteholders or to any
other party providing financing for this Project.
18.2.3 Agreement Binding on Successors and Assigns. Subject to the
foregoing, this Agreement and all of the provisions thereof shall extend to, be
binding upon, and inure to the benefit of (i) Owner and its successors and
assigns and (ii) Contractor and its successors and permitted assigns.
18.3 NOTICES
Unless otherwise herein expressly provided, all notices, orders and
other communications required or desired to be given under this Agreement shall
be in writing, signed by Owner or Contractor, or their respective duly
authorized agents or attorneys, as the case may be, and shall be deemed to have
been properly given if mailed by United States, registered or certified mail, if
hand delivered or if sent by a reputable overnight delivery service, with
postage prepaid, return receipt requested, addressed as follows:
If to Owner: Isle of Capri Black Hawk LLC
c/o Casino America, Inc.
000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
with a copy to: Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
if to Contractor: Xxxxxxxx Construction, Inc.
0000 X. Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
or to such other address as may, from time to time, be designated by the party
to be addressed, by notice to the other party in the manner hereinabove
provided. Any such notice, order or other communication mailed as provided in
this Section 18.3 shall be deemed to have been given and received on the second
business day next following the postmark date of such notice, order or other
communication if sent by U.S. Mail, or on the date of actual receipt if hand
delivered or sent by overnight delivery service.
18.4 CUMULATIVE RIGHTS AND REMEDIES
Except as expressly provided herein to the contrary, no right, power
or remedy herein or otherwise conferred upon or reserved to Owner or Contractor
shall be considered to exclude,
57
impair or suspend any other right, power or remedy, but the same shall be
cumulative and shall be in addition to any other right, power or remedy
available under this Agreement, at law or in equity.
18.5 WAIVER
No action, failure to act or delay in action by Owner or Contractor
shall constitute a waiver, or result in any impairment of any right, power, duty
or remedy afforded any of them under this Agreement, or result in any approval
of or acquiescence in any breach or violation by any of them of its covenants,
agreement and obligations under this Agreement, except as the affected parties
may specifically agree in writing. No waiver of any breach or violation of any
of the covenants, agreements and obligations of Owner or Contractor under this
Agreement shall be construed, taken or held to be a waiver of any other breach
or violation, or a waiver, acquiescence in or consent to any further or
succeeding breach or violation of the same covenant, agreement or obligation.
18.6 CAPTIONS OR HEADINGS
The index and the captions or headings of the Articles and Sections of
this Agreement are inserted and included solely for convenience and shall never
be considered or given any effect in construing the provisions hereof if any
question of intent should arise.
18.7 COMPLIANCE WITH NOTEHOLDERS' REQUIREMENTS
Contractor agrees to execute all documents reasonably required by
Noteholders, Noteholders' Representatives or Independent Consultant, including
without limitation an agreement by Contractor (which may be in the form of an
assignment), Contractor's Architect, and subcontractors to continue to perform
their obligations under this Agreement for the benefit of Noteholders in the
event Owner defaults in its obligations to Noteholders and Noteholders or
Noteholders' Representatives take possession of the Site during the pendency of
this Agreement; provided such assignees continue to perform the Owner's
obligations hereunder. Contractor shall use its best efforts to incorporate
into its subcontracts a provision obligating its subcontractors to continue to
perform under their subcontracts in the event Noteholders or Noteholders
Representatives take possession of the Site.
18.8 CALENDAR DAYS
As used herein, the terms "days" or "calendar days" shall mean
calendar days, the term "weekdays" or "business days" shall mean regular working
days, excluding Saturdays, Sundays and holidays.
18.9 PARTIES TO ACT REASONABLY
Owner and Contractor both acknowledge that the provisions of this
Agreement contemplate that the parties hereto will exchange information with
each other and keep each other
58
informed of the progress of the Work, and in each such instance (except the
specific instances where Owner is granted an arbitrary right which Owner may
exercise for whatever reason Owner desires), the parties agree to be both
reasonable and timely so as not to unreasonably delay either party in the
performance of their respective obligations hereunder.
18.10 SEVERABILITY OF PROVISIONS
The invalidity of one or more provisions of this Agreement shall not
be deemed to invalidate or affect the enforceability of the remainder.
18.11 ENTIRE AGREEMENT
This Agreement represents the entire agreement between Owner and
Contractor with respect to the subject matter hereof and supersedes all prior
negotiations, representations and agreements with respect thereto, whether
written or oral. This Agreement may be amended only by written instrument
signed by both Owner and Contractor.
18.12 NO THIRD PARTY BENEFICIARIES
Nothing contained in this Agreement shall be construed to confer any
rights, powers or remedies upon any parties other than Owner and Contractor,
including without limitation any rights as a third party beneficiary of this
Agreement.
18.13 AUTHORITY TO EXECUTE
Each party represents and warrants to the other that this Agreement
has been duly authorized, executed and delivered by and on behalf of each such
party, and constitutes the legal, valid and binding agreement of said parties.
18.14 INCORPORATION BY REFERENCE
The recitals set forth on the first few pages of this Agreement, as
well as all Exhibits attached hereto, are hereby incorporated into this
Agreement by this reference and expressly made a part of this Agreement.
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THIS AGREEMENT IS MADE AND ENTERED INTO as of the day and year first
above written.
CONTRACTOR: OWNER:
XXXXXXXX CONSTRUCTION INC. ISLE OF CAPRI BLACK HAWK L.L.C.
By: /s/ Xx Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxx
------------------------ ------------------------
Xx Xxxxxxxx Xxxx X. Xxxxxxxx
President Manager
EXHIBIT A
---------
Definitions
-----------
For purposes of this Agreement, the terms set forth in the following
clauses shall have the meanings ascribed to them:
"Actual cost" has the meaning set forth in Section 1.7.5.1.
"Agent" has the meaning set forth in Section 3.1.
"Application for Payment" has the meaning set forth in Section 9.1.1.
"Cash Collateral and Disbursement Agreement" has the meaning set forth in
Section 1.11.
"Casino" shall mean and refer to a first-class casino facility, which shall
include, without limitation, (i) a three level facility of approximately 98,000
gross square feet, which shall include, without limitation, a roughly 11,500
square foot entry level with a signature waterfall feature, a roughly 75,000
square foot gaming level with a casino area for over 1,000 slot machines and
table games, three food and beverage outlets, a 350 seat events center, a
customer service area and a back-of-house area, and a roughly 11,500 square foot
mezzanine for administrative offices, (ii) a four and one-half level parking
structure situated over the casino facility which is capable of operating on a
self-parking and valet basis for no less than 1000 passenger vehicles at any
single point in time, and (iii) all infrastructure, site improvements and
appurtenances related to the items in the preceding clauses (i) and (ii).
"Casino Substantial Completion Date" shall mean and refer to the date which
is four hundred seventy-six (476) days after the Contractor's receipt of the
Notice to Proceed, which date may be adjusted as provided in the Agreement.
"Certificate for Payment" has the meaning set forth in Section 9.2.
"Change in Law" shall mean and refer to the enactment, adoption,
promulgation, amendment, modification or change in interpretation by a
Governmental Authority after the date of this Agreement of any Law which is
applicable to the performance of the Work; it being expressly understood and
agreed by the parties hereto that a change in any income tax Law or any Law by
which a tax is levied or assessed on the basis of the Contractor's income,
profits, revenues or gross receipts shall not be a Change in Law.
"Change in the Work" has the meaning set forth in Section 1.7.
"Change Order" has the meaning set forth in Section 1.7.4.
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"Committee" has the meaning set forth in Section 16.1.
"Construction Change Directive" has the meaning set forth in Section 1.7.5.
"Construction Disbursement Account" has the meaning set forth in Section
1.11.
"Construction Documents" has the meaning set forth in Section 1.6.3.
"Contractor's Architect" has the meaning set forth in Section 1.5.2.
"Contractor Default" has the meaning set forth in Section 12.1.
"Contractor's Fee" has the meaning set forth in Section 8.1.2.
"Contract Sum" has the meaning set forth in Section 8.1.
"Cost of the Work" has the meaning set forth in Section 8.4.
"Design Development Documents" has the meaning set forth in Section 1.6.2.
"Dispute" has the meaning set forth in Section 16.1.
"Excusable Event" has the meaning set forth in Section 2.5.3.
"Extreme Weather Day" shall mean and refer to a day during which extremely
harsh weather conditions exist considering the geographical location of the
Site.
"Finally Completed", "Finally Complete" and "Finally Completion" has the
meaning set forth in Section 6.2.
"Force Majeure Event" has the meaning set forth in Section 2.5.3.2.
"Governmental Authority" shall mean and refer to any national, federal,
state, county, municipal or local government, agency, authority or court, or any
department, board, bureau or instrumentality thereof.
"Guaranteed Maximum Price" has the meaning set forth in Section 8.2.
"Hazardous Substance" shall mean and refer to any hazardous, toxic or
dangerous waste, substance or material defined as a "hazardous waste",
"hazardous material", "hazardous substance", "extremely hazardous waste" or
"restricted hazardous waste" in (i) any provision of Colorado law; (ii) the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
Sec. 6903 et seq.); (iii) the Clean Water Act (33 U.S.C. 1251 et seq.); (iv) any
so-called "Superfund" or
62
"Superlien" law; or (v) any other federal, state or local statute, law,
ordinance, code, rule or regulation.
"Holdback Amount" has the meaning set forth in Section 9.8.
"Hotel" shall mean and refer to a first-class, two-story hotel facility
over and upon the Casino, which shall include, without limitation, 119 guest
rooms.
"Hotel Substantial Completion Date" shall mean and refer to the date which
is one hundred twenty (120) days after the Casino Substantial Completion Date,
which date may be adjusted as provided in the Agreement.
"Indemnitees" has the meaning set forth in Section 10.1.
"Independent Consultant" has the meaning set forth in Section 1.11.
"Law" shall mean and refer to any constitution, charter, statute, act, law,
ordinance, regulation, code, rule, order, decree, judgment, directive, ruling,
decision, guideline, resolution or declaration of any Governmental Authority, or
any interpretation or application thereof by any such Governmental Authority.
"Modification" shall mean and refer to (i) a written amendment to this
Agreement signed by all parties hereto, or (ii) a Change Order.
"Noteholders' Representatives" has the meaning set forth in Section 1.11.
"Notes" has the meaning set forth in Section 1.10.
"Notice to Proceed" has the meaning set forth in Section 2.2.2.
"Owner Default" has the meaning set forth in Section 12.2.
"Owner Furnished FF&E" has the meaning set forth in Section 8.2.2.
"Pre-Existing Hazardous Substance" shall mean and refer to a Hazardous
Substance existing at the Site as of the date of this Agreement.
"Project" shall mean and refer to the design, engineering and construction
of the Casino and the Hotel.
"Project Concept Documents" shall mean and refer to those documents
identified or contained within Exhibit D to the Agreement, which documents
define generally the Project requirements and the concept design, scope and
intent for the Project.
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"Punch List" has the meaning set forth in Section 6.1.
"Satisfaction Notice" has the meaning set forth in 1.10.
"Schedule" shall mean and refer to the construction schedule identified and
contained within Exhibit E to the Agreement.
"Schematic Design Documents" has the meaning set forth in Section 1.6.1.
"Site" shall mean and refer to the property & structures identified or
contained within Exhibit B to the Agreement.
"Substantially Completed", "Substantially Complete" and "Substantial
Completion" has the meaning set forth in Section 2.3.1.
"Substantial Completion Dates" shall mean and refer to the Casino
Substantial Completion Date and the Hotel Substantial Completion Date.
"Unforeseeable Conditions" shall mean and refer to any one or more of the
following conditions:
(i) Crushed rock, highly fractured rock, clayey soil-like zones or
Weathered Rock which is 10 or more feet in length and 1 or more feet in
depth are encountered within the competent/hard rock strata;
(ii) Wedges into the face of the rock which extend 10 or more feet
into the rock mass from the cut line are consistently encountered;
(iii) Shafts, adits, tunnels, caverns or other mining excavations are
encountered;
(iv) The depth of the overburden soil consistently exceeds fifteen
(15) feet; or
(v) The depth of the Weathered Rock consistently exceeds fifteen
(15) feet below the bottom of the overburden soil.
"Weathered Rock" shall mean and refer to predominantly structureless
heterogeneous material showing none of the fabric of the parent rock and with
core boulders less than 50% of the mass (i.e., essentially rock which can be
excavated by hand or with a small backhoe (CAT 416) and is susceptible to
surface erosion).
"Work" has the meaning set forth in Section 1.1.
