EXECUTION COUNTERPART
DATED OCTOBER 10, 1997
FIRST AMENDMENT
made as of October 10, 1997
to
PROGRAM MANAGEMENT AGREEMENT
dated November 19, 1996
by and among
ATLANDIA DESIGN AND FURNISHINGS, INC.
Developer,
AND
XXXXXXX XXXXXXXXXXXX-FG, INC.,
Program Manager,
AND WITH
STATE OF NEW JERSEY
AND
SOUTH JERSEY TRANSPORTATION AUTHORITY,
ADDITIONAL PARTIES
EXHIBIT 10.11
FIRST AMENDMENT TO PROGRAM MANAGEMENT AGREEMENT
made as of this 10th day of October, 1997, by and among
ATLANDIA DESIGN AND FURNISHINGS, INC., a New Jersey
corporation having an office at 0000 Xxxxx Xxxxxxxxxx
Xxxx, Xxx Xxxxx, Xxxxxx 00000 ("Developer"); XXXXXXX
BRINCKERHOFF-FG, INC., a Delaware corporation having an
office at 000 Xxxxxxxx Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000 ("Program Manager"); the STATE OF NEW
JERSEY, acting through the Department of
Transportation, 0000 Xxxxxxx Xxxxxx, XX 000, Xxxxxxx,
Xxx Xxxxxx 00000-0000 (the "State"); and the SOUTH
JERSEY TRANSPORTATION AUTHORITY, a public body having
an office at Xxxxxx Xxxxxxx Xxxxx, X.X. Xxx 000,
Xxxxxxxxx, Xxx Xxxxxx 00000 ("SJTA").
With respect to the Atlantic City/Brigantine Connector
Project (the "Project"), Atlantic City, New Jersey.
The parties hereto agree as follows:
1. Reference is made to that certain Program
Management Agreement dated November 19, 1996 (the
"Program Management Agreement"), between Mirage
Resorts, Incorporated ("MRI" -- the predecessor to
Developer by virtue of an assignment/assumption
agreement dated as of November 19, 1996, between MRI,
as assignor, and Developer, as assignee), named therein
as Developer, and Program Manager. All terms utilized
in this Agreement which are defined in the Program
2
Management Agreement and/or, where the context so
indicates (and only where no definitional conflicts
exist between any terms, as defined and utilized in the
Road Development Agreement and/or in the related Escrow
Fund Agreement, and the same or similar terms, as
defined and utilized in the Program Management
Agreement), in the Road Development Agreement and the
Escrow Fund Agreement, shall have the same meanings as
are provided in the Program Management Agreement and/or
in the Road Development Agreement and/or in the Escrow
Fund Agreement, except where the context of utilization
in this Agreement, or in the Road Development Agreement
or the Escrow Fund Agreement, clearly requires a
modified or a secondary meaning. The term "this
Agreement", when utilized herein, shall mean this
amendatory agreement. The term "Program Management
Agreement" shall at all times be construed to encompass
both the Terms and Conditions and the Standard Terms
and Conditions comprising the Program Management
Agreement (hereinafter the "Terms and Conditions" and
the "Standard Terms and Conditions"), and all Exhibits
and Attachments thereto, as hereby modified and
amended. The term "Road Development Agreement" shall
have the meaning provided in Paragraph 2(a) of this
Agreement. The term "Escrow Fund Agreement" shall mean
3
the escrow agreement dated and executed concurrently
herewith (and concurrently as well with the Second
Amendment to the Road Development Agreement), between
Corestates Bank, N.A., SJTA, the State and Developer,
as same may hereafter be amended. The term
"Design/Build Contract", as utilized in this Agreement,
is used interchangeably with the term "Design/Build
Agreement", as defined in Article 1 of the Standard
Terms and Conditions. The term "Contract Documents"
shall have the meaning provided in Appendix 1 to the
Design/Build Contract. The term "Construction
Inspector" shall mean the independent third party
procured by SJTA to perform construction inspection
services, as contemplated under Section 3.1 of the
Second Amendment to the Road Development Agreement.
The term "State", wherever utilized in the Program
Management Agreement, shall also be deemed to refer to
and shall include the South Jersey Transportation
Authority ("SJTA"). The State and SJTA shall be deemed
and construed for all purposes as signatories to and
under the Program Management Agreement, with the same
force and effect as if the State and SJTA had been
initially named as parties in and to the Program
Management Agreement, and had initially joined in the
execution and delivery thereof. The State and SJTA
4
shall have the benefit of all of the same rights,
warranties, representation, indemnities and limitations
against liabilities as are available to Developer under
the Program Management Agreement without regard to
whether the State and/or SJTA are specifically named in
the applicable paragraphs or sections of the Program
Management Agreement, except where expressly provided
to the contrary; it being understood, however that the
generic use of the term "Developer" shall not be
construed as such an express provision to the contrary.
2. (a) The Memorandum of Understanding (the
"MOU") dated September 17, 1996, between Developer and
the State, has been superseded and replaced by the so-
called "Definitive Agreement" referred to in the MOU
and in Part II of the Program Management Agreement
(such "Definitive Agreement has been generally referred
to by the parties as, and, as same has been heretofore
and as may hereafter be amended, is hereinafter
referred to as the "Road Development Agreement"), dated
as of January 10, 1997, by and among Developer, the
State and SJTA, as amended by First Amendment thereto
and by Second Amendment thereto, dated, respectively,
as of July 31, 1997, and as of October 10, 1997, each
of which Program Manager has received and reviewed,
5
and, with respect to those provisions contained in the
Road Development Agreement relating to Program
Manager's obligations and/or requiring or contemplating
performance thereof by Program Manager, Program Manager
has approved such provisions and has agreed to comply
with and to perform such obligations, as is therein
provided.
(a) In order to promote efficient and consistent
administration of the Program Management Agreement and
the Design/Build Contract, Sections 3.3 and 6.2 of the
Road Development Agreement set forth certain procedures
and impose certain requirements to be followed and
observed by the parties in connection with the issuance
of directions and instructions to Program Manager
and/or to the Design/Build Contractor and as to the
initiation of direct communications between them.
Program Manager accepts, approves and shall implement
and observe such procedures and requirements; it being
understood that if Program Manager independently
determines during the course of the Construction
Administration Phase that the Design/Build Contractor's
Work materially violates the Contract Documents or
materially fails to comply with the Contract Documents,
6
or that continued Work by the Design/Build Contractor
will violate a Major Permit, Program Manager shall
report such determination to the State and to SJTA, as
well as to Developer.
3. (a) In conjunction with its services during
the Preliminary Design Phase, Program Manager has
issued to bidders the contemplated Design/Build
Contract and bids have been elicited and obtained.
Such Design/Build Contract has been dated September 8,
1997, has been executed and submitted for ultimate
delivery to Developer by the Design/Build Contractor,
and has been executed and delivered contemporaneously
herewith by Developer. Program Manager shall perform
each and all of the activities and services and each
and all of the other obligations, commitments and
undertakings contemplated and required to be performed
by Program Manager under the Program Management
Agreement, as hereby amended (including, without
limitation, those provided in the Scope of Services
exhibit thereto annexed as Exhibit A, as modified and
supplemented by the Description of Services --
Construction Administration Phase exhibit which is
annexed hereto as Exhibit A-1) and under the Road
Development Agreement, with respect to and under the
7
Design/Build Contract and with respect to the Project.
(a) The compensation arrangements for Program
Manager for the Construction Administration Phase,
inclusive of (x) all Inter-Phase Extra Services
Compensation for the period commencing April 23, 1997
and continuing until the date of execution and delivery
of this Agreement by Developer, the State and SJTA and
(y) compensation for all services and all additional
services as are provided and contemplated to be
performed for or with respect to the Construction
Administration Phase under Exhibit A to the Program
Management Agreement, and under the annexed Xxxxxxx X-
0, shall constitute compensation under an increased,
all-inclusive NTE-Fee of $8,699,908 (i.e., the
$4,297,152 NTE-Fee provided in such Part II of the
Program Management Agreement for the Construction
Administration Phase, plus $4,402,756 for all Inter-
Phase Extra Services and all additional services
provided and contemplated to be performed under the
annexed Exhibit A-1 and hereunder), payments of which
shall remain subject in all events to the limitations
and conditions contained and provided in such Part II
of the Program Management Agreement, and shall be paid
by application of and solely from Road Project Funding
8
Sources, as provided in the Road Development Agreement
and in this Paragraph 3. Subject to such limitations
and conditions, the State, SJTA, and Developer shall
arrange for compensation of Program Manager for the
services performed by it, inclusive of all direct,
indirect and all otherwise reimbursable costs and
expenses incurred by, at the request or for the aid and
benefit of Program Manager, the State, SJTA, Developer
and/or the Project, based solely upon the NTE Fees
enumerated on the Schedule of Fees and Values/NTE-Fee
for Construction Administration Phase appended as
Schedule A-2 to the Scope of Services exhibit (Exhibit
A) annexed to the Program Management Agreement, as
supplemented by the Schedule of Fees and Values/NTE-Fee
for Inter-Phase Extra Services and additional services
for the Construction Administration Phase appended as
Schedule A to the annexed Description of Services
exhibit (Exhibit A-1), in full, up to, but (except only
as and to the extent expressly provided to the contrary
in subparagraph (e) of this Paragraph 3) in no event
beyond the amount of such increased NTE-Fee, if and to
the extent to which the additional services covered
under such Exhibit A-1 are directed to be performed by
Developer and are in fact performed by Program Manager,
without any reallocation of the line item amounts set
9
forth on such Schedule A for Tasks 2.3b and 2.10b or
with respect to the project-specific insurance referred
to in Section 2.13 of the annexed Exhibit A-1 (Task
2.13 on such Schedule A).
(b) Subject in all events to the foregoing
payment limitations and conditions, when progress
payments become payable to and are invoiced by Program
Manager under Paragraph A of Part II of the Program
Management Agreement, Developer and SJTA shall submit
to the State, for the State's approval, an invoice from
Program Manager which they have each approved; and the
State shall then forward such invoice to the Escrow
Agent under the Escrow Fund Agreement, together with
(i) a Notice to Developer and SJTA setting forth the
allocation, among Developer, the State and SJTA, of the
amount set forth on the invoice as the amount due,
which allocation shall be in accordance with the Road
Development Agreement and, with respect to the
Developer's Account, in accordance with the provisions
of clause (ii) of this Paragraph 3(c), and (ii) a
Notice to such Escrow Agent in accordance with Section
2.1 of Schedule A to the Escrow Fund Agreement
directing such Escrow Agent to pay from the Developer's
Account (in the manner approved in writing by Developer
10
as set forth in the Notice from Developer to the State
which accompanied the invoice) and, if applicable, from
the SJTA Account, the amounts set forth in the Notice
sent under clause (i) of this Paragraph 3(c). Upon the
submission of such invoice to the Escrow Agent, (a) the
State and SJTA, collectively, will be deemed
incontestably and irrevocably committed to the deposit
in the Road Account of two-thirds (2/3) of the amount
so invoiced, such deposit to be made in accordance with
such Notice, and (b) upon the remitting by such Escrow
Agent of funds under Sections 2.1 and 2.2 of Schedule A
to the Escrow Fund Agreement and the making by the
State of the deposit into the Road Account of that
portion of the two-thirds (2/3) of the amount for which
the State and SJTA are collectively responsible
pursuant to the Road Development Agreement and which
was, pursuant to the Notice sent under clause (i),
allocated to the State, the State shall (i) be deemed
to have incontestably and irrevocably authorized the
release to Developer for payment to Program Manager of
such sums from the Road Account, and (ii) immediately
take all necessary steps to effectuate such release;
provided, however, that such funds shall not be
released from the Road Account for payment to Program
Manager in excess of any sums due to Program Manager
11
under the Program Management Agreement. In all other
respects, the provisions for progress payments
contained in such Paragraph A of Part II of the Program
Management Agreement shall be and remain applicable to
such progress payments.
(c) The compensation arrangements for additional
services for the Construction Administration Phase, as
provided in this Paragraph 3, are all-inclusive; such
additional services shall not be deemed Extra Services
under Paragraph B of such Part II; nor shall any delays
beyond May 7, 1997 in commencement of the Construction
Administration Phase be deemed a suspension of services
under such Paragraph B, or under Article 41 of the
Standard Terms and Conditions, entitling Program
Manager to any additional compensation other than as is
expressly provided with respect to the increased NTE-
Fee under this Paragraph 3.
(d) Concurrently with and conditioned upon
payment by and/or collection from the Design/Build
Contractor of any "Liquidated Damages" payable by the
Design/Build Contractor pursuant to Section 17.1 or
17.2 of the Design/Build Contract, by reason of delays
in achieving "Final Acceptance" (as such noted terms
are defined and utilized in the Design/Build Contract),
12
Program Manager shall be entitled to reimbursement for
any additional work required to be performed by Program
Manager on account of such delays at a rate not to
exceed 29.4% of the net amounts actually paid by or
collected from the Design/Build Contractor on account
of Liquidated Damages for such delays, less all costs
and expenses incurred in effecting such collections, up
to a maximum of whichever is the lesser of (x) the
reasonable value (on a per diem basis, averaged to
reflect the number of days of such delays) of Program
Manager's services in connection with the additionally-
required work, if any, on account of such delays, in
accordance with the Hourly-Rate Schedule annexed as
Exhibit E to the Program Management Agreement, plus all
direct expense costs and disbursements necessarily
incurred by Program Manager by reason of such
additionally-required work (on such averaged per diem
basis, based upon the number of days of such delays),
or (y) $2,500 per day for each day of such delay.
4. (a) The Commercial General Liability
Insurance and the Professional Liability Insurance
furnished by Program Manager under Article 13 of the
Standard Terms and Conditions shall provide limits of
coverage which are specific to and available
13
exclusively for this Project only; and such limits of
coverage shall not be subject to any reduction or
dilution by reason of any acts, actions or occurrences
relating to any other projects on which Program Manager
or any of its principals, officers or employees, any of
its independent contractors or any of its affiliated or
related firms or entities may have been or may
hereafter be involved, or to any claims, actions or
proceedings heretofore or hereafter asserted or
commenced against Program Manager, or any of such
principals, officers, employees or independent
contractors or any of its affiliated or related firms
or entities. The limits of the project-specific
coverage provided under the Professional Liability
Insurance to be furnished by Program Manager shall be
$20,000,000, commencing with commencement of the
Construction Administration Phase.
(a) Article 13 (captioned "Insurance") of the
Standard Terms and Conditions is hereby amended as
follows:
(i) The third sentence of such Article 13 is
hereby amended to read as follows: "Such policies
shall be primary to and non-contributory with any non-
project-specific coverage as may be separately and
14
independently maintained by Developer, by SJTA or by
the State."
(ii) The following sentence shall be inserted immediately
following the third sentence of such Article 13, as amended
by the immediately preceding subsection (i): "Such policies
shall be excess of and non-contributory with any project-
specific coverage as may be separately maintained or
provided by the Design/Build Contractor under the Design/
Build Agreement naming Program Manager as an insured or
including Program Manager as an additional insured."
5. Notwithstanding any other term, provision or
condition contained in, or as might otherwise be construed from,
the Program Management Agreement, as hereby amended, or any other
instrument or agreement between or among any of the parties hereto,
the indemnification provided and required under Article 12 of the
Standard Terms and Conditions shall continue to cover and include
all suits, claims, losses, demands, damages, costs and expenses, of
whatever kind or nature, including, without limitation, attorneys'
fees and disbursements, expert witness and consultant fees and
court costs, to the extent arising out of or claimed to arise out
of (x) any willful or negligent act, error or omission of Program
Manager, its agents, servants, employees, subcontractors or
subconsultants, or (y) any failure or default by any of them in
the performance of (or in the failure to perform) any of
15
the services and functions contemplated or required to
be performed under the Program Management Agreement, as
hereby amended, including, without limitation, any act,
error or omission of Program Manager, its agents,
servants, employees, subcontractors or subconsultants,
in or in connection with, or while acting as
Developer's agent, or otherwise, under, in connection
with or pursuant to the Design/Build Contract; or (z)
any failure or default by any of them in the
performance of (or in the failure to perform) any term,
provision or condition of the Program Management
Agreement, as hereby amended; such indemnification
shall continue and shall remain in full force and
effect; and neither such indemnification, nor any such
other term, provision or condition shall in any event
be construed to limit, negate, abridge or reduce
Developer's, the State's or SJTA's rights or Program
Manager's obligations or liabilities under the Program
Management Agreement, nor to relieve Program Manager
from any liability, or to preclude Developer, the State
or SJTA from taking any other actions or seeking and
obtaining any other relief or remedies available to
them, or to any thereof, whether under any other
provisions of the Program Management Agreement, or
otherwise at law or in equity.
16
6. The first sentence of Article 37 of the
Standard Terms and Conditions is hereby amended to read
as follows:
"Without in any way limiting,
abridging or reducing any of its obligations under this
Agreement, as same may be from time-to-time amended,
Program Manager shall be required to perform and shall
perform its obligations hereunder in accordance with
professionally and commercially-recognized standards of
care, good faith and due diligence and performance,
with the understanding that Developer shall have the
ongoing and unfettered right to detailed and
comprehensive review, and that Developer must be
satisfied with and find to be acceptable, in good
faith, the services performed hereunder, and all
Documents."
7. The words ". . . the State (except where and
to the extent expressly so provided) . . .", which
appear in the second and third lines of
Article 7 of the Standard Terms and Conditions, are
hereby deleted therefrom.
17
8. In addition to the termination rights
afforded to Developer under the Program Management
Agreement, as provided in Part V of the Terms and
Conditions, the Program Management Agreement shall
terminate upon termination of the Road Development
Agreement.
9. The sixth sentence of Article 12 (captioned
"Indemnification") of the Standard Terms and Conditions
is hereby amended to read as follows: "As soon as is
reasonably practicable after a claim has been made or a
suit commenced against Developer, for which Developer
believes it is entitled to indemnification under this
Article 12, Developer shall give written notice thereof
to Program Manager, along with full and complete
particulars of such claim or suit, unless the claim is
fully covered without enforcement or
collection risk by insurance maintained by Design/Build
Contractor under the Design/Build Agreement."
10. In the event of the Bankruptcy of SJTA or
Developer and the entry of an order rejecting the
Program Management Agreement and the Road Development
Agreement, and provided that (a) the Casino Project
Schedule set forth on Schedule 4.2B annexed to the
18
Second Amendment to the Road Development Agreement is,
in all material respects, being maintained as of the
time of the entry of such order, and (b) the Bankruptcy
of SJTA or Developer and the entry of such order will
not have the effect of preventing Affiliates of
Developer from proceeding with the Casino Project, the
State and such of SJTA or Developer which is not the
debtor in the Bankruptcy case shall (i) continue to
perform all of their respective obligations under the
Road Development Agreement, the Escrow Fund Agreement
and the Program Management Agreement and (ii) proceed
immediately to modify the Road Development Agreement,
the Escrow Fund Agreement, the Program Management
Agreement and all other documents which such debtor
theretofore executed and delivered in connection with
the Project in such manner as the State and such of
SJTA or Developer which is not such debtor, each
proceeding in good faith, may reasonably request, so
that the Bankruptcy of either SJTA or Developer and the
entry of the order of rejection will not delay or
prevent the timely completion of the Project.
Notwithstanding the above, the State may elect to
terminate the Agreement, the Escrow Fund Agreement and
the Program Management Agreement upon the entry of an
order rejecting the Agreement in the event the amounts
19
on deposit in the Escrow Fund are not available for the
payment of costs relating to the Road Project in
accordance with this Agreement, the Program Management
Agreement and the Escrow Fund Agreement. Each of
Developer and SJTA hereby irrevocably consents, to the
maximum extent permitted by Law, that in the event of
such Bankruptcy and the entry of such an order of
rejection, the Escrow Agent under the Escrow Fund
Agreement is irrevocably authorized and directed to
disburse such funds pursuant to the Escrow Fund
Agreement in the manner directed by the State and such
of SJTA or Developer which is not the debtor in such
Bankruptcy case and, upon the execution and delivery of
the modification of such Escrow Fund Agreement, in
accordance with such modification.
11. The Program Management Agreement, as hereby
amended, constitutes the entire and integrated
agreement between and among Developer, Program Manager,
the State and SJTA with respect to the subject matter
hereof, and supersedes all prior negotiations,
representations or agreements, whether written or oral.
The Program Management Agreement, as hereby amended, is
to be interpreted and construed solely on the basis of
those terms and provisions as are contained in the
20
final form and format of the Program Management
Agreement, as amended by this Agreement, as executed
and delivered by, between and among the parties hereto;
it being understood that the Program Management
Agreement, in such final form and format, and this
Agreement, in such final form and format, also
supersede all prior drafts or earlier versions of the
Program Management Agreement and of this Agreement, and
any notes or memoranda concerning or relating to the
Program Management Agreement and/or to this Agreement,
and that no assumptions, inferences or presumptions
shall be drawn or derived from or may be predicated
upon any changes, omissions, deletions or additions
from or to any prior drafts or pre-execution earlier
versions of the Program Management Agreement or this
Agreement in construing either the Program Management
Agreement, as hereby amended, or this Agreement, or any
instrument or document delivered pursuant to the
Program Management Agreement, as hereby amended. In
the event of any inconsistencies between the provisions
of the Program Management Agreement and this Agreement,
the provisions of this Agreement shall control. The
parties agree that any rule or premise of
interpretation or construction to the effect that
ambiguous provisions of any agreement shall be
21
interpreted or construed against the draftsman shall be
inapplicable. The Program Management Agreement, as
hereby amended, may be further amended only by written
instrument signed by each of the parties hereto, and
shall be binding on the parties hereto and their
respective successors and assigns, but shall not inure
to the benefit of any other person or entity.
12. All express representations, indemnifications
or limitations of liability made or given in the
Program Management Agreement, as hereby amended, shall
survive the completion of the Program Management
Agreement, as hereby amended, or of the services to be
performed thereunder (including completion of the
Project), or the termination of the Program Management
Agreement, as hereby amended, for any reason.
13. Program Manager has attached a certification
by its Secretary/Treasurer of corporate resolutions by
its Board of Directors, authorizing the President/Vice
President to execute this Agreement and thereby to bind
Program Manager; and Program Manager's Secretary shall
attest to the execution of this Agreement and shall
affix the corporate seal. This Agreement shall not
become binding on Developer, the State or SJTA unless
22
and until it is fully and duly executed by or on behalf
of Developer, the State, SJTA and Program Manager, and
unless and until a fully-executed counterpart thereof
has been delivered to Program Manager.
14. Except only as and to the extent hereby
modified or amended, the Program Management Agreement
shall continue and remain in full force and effect, and
is hereby ratified and confirmed.
This Agreement (including any handwritten and
mutually-initialed modifications) has been executed as
of the date first set forth above, each party having
caused it to be duly signed/attested/witnessed/sealed.
PROGRAM MANAGER:
XXXXXXX BRINCKERHOFF-FG, INC.
By: XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx
Vice President
DEVELOPER:
ATLANDIA DESIGN AND
FURNISHINGS, INC.
By: XXXXX X. XXXXX
Xxxxx X. Xxxxx
Secretary
23
STATE OF NEW JERSEY
BY: DEPARTMENT OF TRANSPORTATION
By: XXXX X. XXXXX, XX.
Xxxx X. Xxxxx, Xx.
Commissioner
SOUTH JERSEY TRANSPORTATION
AUTHORITY
By: XXXXX X. XXXXXXXX
Xxxxx X. Xxxxxxxx
Executive Director
THIS DOCUMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM ON
THIS 10th DAY OF OCTOBER, 1997
XXXXX XXXXXXXX
ATTORNEY GENERAL OF NEW JERSEY
By: XXXXX X. XXXX
Deputy Attorney General
24
