CONSTRUCTION MANAGEMENT AGREEMENT BETWEEN THE NEW YORK TIMES BUILDING, LLC, OWNER, and AMEC CONSTRUCTION MANAGEMENT, INC., CONSTRUCTION MANAGER

Exhibit 10.9

CONSTRUCTION MANAGEMENT AGREEMENT

BETWEEN

THE NEW YORK TIMES BUILDING, LLC,

OWNER,

and

AMEC CONSTRUCTION MANAGEMENT, INC.,

CONSTRUCTION MANAGER

TABLE OF CONTENTS

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CONSTRUCTION MANAGEMENT AGREEMENT

AGREEMENT, made this 22nd day of January, 2004, by and between The New York Times Building, LLC, having its offices located at ▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (“Owner”); and AMEC Construction Management, Inc., having its offices located at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ (“Construction Manager”).

WITNESSETH

WHEREAS, The New York Times Building LLC, as Owner, intends to construct a Base Building of approximately 1,540,000 gross square feet on a site located on Eighth Avenue between 40th and 41st Streets in New York, New York (the “Project”), which shall consist of three primary condominium units: (1) retail space; (2) commercial office space; and (3) headquarters for The New York Times Company, including its newspaper division; and

WHEREAS, the Owner has retained ▇▇▇▇▇ ▇▇▇▇▇ Building Workshop, S.E.L.A.F.A., in association with Fox & ▇▇▇▇▇ Architects, P.C., as the Base Building Architect to prepare preliminary and final plans, specification, working drawings and other construction documents for the building core and shell design (the final versions of which are hereinafter collectively referred to as the “Construction Documents”); and

WHEREAS, NYT Real Estate Company, LLC, as Interiors Project Owner, intends to buildout an Interiors Project totaling approximately 845,000 gross square feet of space within the Base Building; and

WHEREAS, the Interiors Project Owner has retained Gensler & Partners as the Interiors Architect for The New York Times Headquarters portion of the Interiors Project; and

WHEREAS, the Interiors Project Owner has retained the Architect as the architect for The Times Center portion of the Interiors Project; and

WHEREAS, the Interiors Project Owner has retained ▇▇▇▇▇▇ Construction Company as Interiors Construction Manager for the Interiors Project; and

WHEREAS, the Architect and the Interiors Architect shall collaborate on the design of cafeteria and conference room portions of the Project; and

WHEREAS, FC Lion, LLC, as Commercial Office Project Owner, intends to buildout an Office Interior Project totaling approximately 600,000 gross square feet of space within the Base Building and, in connection therewith, anticipates that there may be an architect or architects and a construction manager or construction managers retained (referred to as Commercial Office Architect and Commercial Office Construction Manager, respectively); and

WHEREAS, FC Lion, LLC, as Retail Project Owner, intends to buildout an Retail Project totaling approximately 20,000 gross square feet of space within the Base Building and, in connection therewith, anticipates that there may be an architect or architects and a construction manager or construction managers retained (referred to as Retail Architect and Retail Construction Manager, respectively); and

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WHEREAS, Owner may separately retain the services of such other design professionals, consultants and construction managers as Owner may deem necessary and in the best interest of the Project; and

WHEREAS, Owner intends to retain the services of Construction Manager to: (1) perform Pre-construction Phase services; (2) construct the Project, including but not limited to, arranging for, monitoring, supervising and administering Trade Contracts for the construction of any and all portions of the Project; and (3) coordinate with the Interiors Architect, the Interiors Construction Manager, Interiors Trade Contractors, Office Architect, Office Construction Manager, Retail Architect, Retail Construction Manager and Separate Contractors working on the Base Building and the Project; and

WHEREAS, Construction Manager desires to be retained by Owner to perform, the Work pursuant to the terms and conditions of this Agreement; and

WHEREAS, in order to induce Owner to award this Agreement to Construction Manager, AMEC p.l.c. has executed the Guarantee attached hereto as Exhibit V;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, Owner and Construction Manager do hereby agree as follows:

ARTICLE 1

DEFINITIONS

The terms used in this Agreement, any amendment hereto and all Exhibits attached hereto, shall have the following meanings:

“Acceleration” shall mean the process by which Construction Manager increases the speed of the Work in order to regain lost time and maintain the Project Schedule.

“Affiliated Entity” shall mean, with respect to any entity, directly or indirectly controlling or controlled by, or under the direct or indirect common control with, such entity.  For the purposes of this Agreement, the term “control” as used with respect to any entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management of such entity, whether through ownership of voting securities or by contract or otherwise.

“Affirmative Action Requirements” shall mean those requirements set forth in Exhibit G hereto.

“Applicable Law” shall mean all applicable Federal, State and local laws, statutes, codes, rules, regulations and ordinances, which are in effect or pending at the time of execution of this Agreement.

“Application for Payment” shall mean Construction Manager’s monthly requisition which shall be submitted on AIA Document G-702, G-703 or such other form as may be agreed upon by Owner and Construction Manager.

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“Architect” shall mean ▇▇▇▇▇ ▇▇▇▇▇ Building Workshop, S.E.L.A.F.A., in association with Fox & ▇▇▇▇▇ Architects, P.C., or its successor designated in writing by Owner.  For the purposes of this Agreement, “Architect” includes the Architect’s Consultants identified in Exhibit I and any other Architect’s Consultants approved by Owner.

“Architect’s Consultants” shall mean engineers and specialty consultants retained directly by Architect including, but not limited to, the firms and individuals identified in Exhibit I.

“As-Built Drawings” shall mean red-lined Construction Documents showing the Work as constructed, prepared by Trade Contractors and indicating actual locations of utilities and all changes and alterations made to the Work during construction.

“Authorized Representative” shall mean an individual, designated in writing by each party, who shall be authorized to bind that party under the terms of this Agreement.

“Backcharge” shall mean a credit assessed against one Trade Contractor, by means of a deductive Change Order, for damage done to or extra Work performed by Construction Manager, another Trade Contractor or Owner.

“Base Building” shall mean the Core & Shell of the building to be constructed on Eighth Avenue between 40th and 41st Streets in New York, New York, of which the Project is a part.

“Bid Documents” shall mean the procedural documents and Bid Packages submitted to prospective Trade Contractors in connection with the competitive bidding process.

“Bidder’s List” shall mean a list of pre-qualified prospective Trade Contractors prepared by Construction Manager and approved by Owner.

“Bid Package” shall mean the collection of pertinent portions of the Construction Documents into a package suitable for bidding by prospective Trade Contractors working in a specific Trade.

“Buy Saves” shall mean the differential between the cost of any Trade Contract included in the GMP (Exhibit S) and the buyout of that Trade Contract at less than such GMP cost.

“Change” shall mean an agreed-upon modification to Construction Manager’s scope of Work which affects the price and/or the timing of the Work.

“Change Order” shall mean a written instrument prepared by Construction Manager, and signed by Owner and Construction Manager, describing a Change, and specifying any accompanying adjustment in the GMP or the Construction Contingency, and/or a Time Extension.

“Change Order Log” shall mean a list of all pending and approved Change Orders maintained by Construction Manager.

“Change Order Proposal” shall mean a written proposal by Construction Manager covering proposed Change Order Work submitted in response to a PCO issued by Owner.

“Change Order Work” shall mean Work undertaken by Construction Manager (through its Trade Contractors) under a signed Change Order.

“Claim” shall mean a formal request for additional compensation and/or a Time Extension by the Construction Manager.

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“Codes” shall mean building codes applicable to the Project.

“Commissioning Plan” shall mean a written plan agreed upon by Owner and Construction Manager covering the initial startup, testing and operation of all systems comprising any portion of the Work.

“Confidential Information” shall mean all information (whether or not specifically labeled or identified as confidential), in any form or medium, which is disclosed to or learned by Construction Manager in the performance of this Agreement, or acquired directly or indirectly such as in the course of discussions or investigations by Construction Manager, and which relates to the Owner’s business, products, services, research or development, suppliers, distributors, clients, or customers, or which relates to similar information of a third party who has entrusted such information to the Owner including, without limitation, any specialized know-how, technical or non-technical data, formula, pattern, compilation, program, device, method, technique, drawing, process, financial or business information, models, list of actual or potential customers or suppliers, novel analysis, work papers, studies or other documents that contain, reflect, or are based on such information.

“Construction Contingency” shall mean an amount available for use by Construction Manager, subject to Owner’s prior written approval, to cover certain unanticipated costs as more fully described in Section 10.4.

“Construction Documents” shall mean the final Drawings and Specifications from which the Work is actually constructed.

“Construction Documents Phase” shall mean that Phase during which the Construction Documents are prepared by the Architect.

“Construction Manager” shall mean AMEC Construction Management, Inc.

“Construction Manager-Caused Delay” shall mean any delay or interruption in the progress of the Work which is caused by the Construction Manager, any Trade Contractor or any party for whom either of them is responsible.

“Construction Phase” shall mean that Phase during which the Work is actually being constructed by Trade Contractors and the Construction Manager performs the tasks described in Article 4.

“Contract Documents” shall mean the documents identified in Section 2.2 of this Agreement.

“Contract Time” shall mean the period of time for performance of the Work as indicated in the approved Project Schedule, and any subsequent revisions thereto approved by Owner pursuant to this Agreement.

“Controlled Inspection” shall mean an inspection of the Work or some portion thereof by an independent third party.

“Coordination Drawings” shall mean drawings prepared by Trade Contractors detailing the Work and the coordination of Work items among the various Trade Contractors.

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“Core & Shell” shall mean those portions of the Project that are identified to be performed by Construction Manager pursuant to this Agreement.

“Costs of the Work” shall mean those costs actually expended by Construction Manager in performance of the Work that will be reimbursed by Owner as set forth in this Agreement including, but not limited to, Trade Contract Costs and General Conditions Costs, subject to the GMP.

“CPM” shall mean a critical path method format to be used for the Project Schedule.

“Critical Path” shall mean those Work activities identified on the Project Schedule which, if delayed, will cause a corresponding Delay in the Substantial Completion Date.

“Day” shall mean a calendar day.

“Daily Report” shall mean written reports provided on a daily basis by the Construction Manager that set forth the information described in Section 4.5.9.1.

“Delay” shall mean any delay or interruption in the progress of the Work as anticipated on the approved Project Schedule.

“Design Development Documents” shall mean the Design Documents prepared by Architect during the Design Development Phase.

“Design Development Phase” shall mean that Phase in the development of the Design Documents during which Architect prepares Documents that fix and describe the size and character of the Project as to architectural, structural, mechanical, electrical systems, materials and other elements as appropriate.

“Design Documents” shall mean preliminary Drawings and Specifications prepared by Architect prior to final approval by Owner of the Construction Documents.

“Design Team” shall mean Architect, Architect’s Consultants and Owner’s Consultants as identified in Exhibit I.

“Development Agreement” shall mean the agreement among The New York Times Building LLC, NYT Real Estate Company LLC and FC Lion LLC, dated December 12, 2001.  The requirements of the Development Agreement relating to early access and turnover protocol are attached hereto as Exhibit Q, and incorporated herein by reference as applicable to the terms of this Agreement.

“Drawings” shall mean graphic or pictorial portions of the Contract Documents, wherever located and whenever issued, which are proposed by Architect or any Vendor, and which show, among other things, the location and dimensions of the Work, generally including, but not limited to, plans, elevations, sections, details, schedules and diagrams.  A preliminary list of Drawings is attached hereto as Exhibit F.

“Emergency Change Order” shall mean a Change which is required in the case of an emergency imminently threatening the safety of persons or the Work and which, in the interest of such safety, Construction Manager determines must be made without obtaining the prior written approval of Owner.

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“Event of Default” shall mean actions and/or inactions on the part of Construction Manager as described in Section 16.1 that justify termination of Construction Manager by Owner for default.

“Excusable Delay” shall mean a delay, disruption, acceleration or hindrance that is: (1) reasonably unforeseeable; (2) beyond the control of Construction Manager; (3) not caused or contributed to by Construction Manager, any Trade Contractor or Lower Tier Contractor, and (4) caused by one of the causes described in Article 11 of this Agreement.

“Fee” shall mean the fixed fee that is Construction Manager’s compensation for management of the Pre-Construction Phase and of the Construction Phase of the Project as set forth as part of Exhibit S.

“Fees-and-Costs” shall mean, in the context of dispute resolution, all actual expenses of any legal proceeding borne by a party to this Agreement, including, but not limited to, fees and expenses of all attorneys (including both inside and outside counsel); architects; engineers; expert witnesses; contractors; consultants; third party witnesses (and their separate attorneys’ fees, where borne by a party to this Agreement); and other persons providing any services relating to any legal proceeding; court fees and charges; all costs of transcripts; printing of briefs and records on appeal; copying; trial graphics; jury consultants; trial presentation expenses; and all other reimbursable costs and expenses charged by any of the foregoing.

“FF&E” shall mean, collectively, furniture, furnishings, fixtures, accessories and similar items relating to the Project.

“Field Directive” shall mean a written directive to perform Work that is issued solely by Owner.

“Final Completion” shall mean that Construction Manager has satisfactorily completed all of the Work in strict conformity with the requirements of the Contract Documents, and the Work has been finally accepted by the Owner.

“Final Completion Date” shall mean the date determined by Owner when the Work has been completed and accepted by Owner.

“Final Payment” shall mean the last payment to Construction Manager, including Retainage, in connection with the Project.

“Force Majeure Event” shall mean acts of God and similar casualties beyond the reasonable control of Construction Manager, as described in Article 11.

“General Conditions Cap” shall mean a percentage or fixed amount which shall serve as a cap on the amount of General Conditions Costs that will be reimbursed by Owner in connection with the Work, as will be set forth in Exhibit D to the Agreement.

“General Conditions Costs” shall mean those costs identified in Section 7.3 of this Agreement which relate to Construction Manager’s management of the Project and operations at the Project Site.

“GMP” shall mean the guaranteed maximum price for the Work set forth in Exhibit S.

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“Governmental Authorities” shall mean all Federal, State, local and quasi-governmental agencies having jurisdiction over the Project, including but not limited to the New York City Building Department.

“Hazardous Materials” shall mean: (1) any “hazardous waste” as defined by the Resource, Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901, et seq.), as amended, and regulations promulgated thereunder, (2) any “hazardous, toxic or dangerous waste, substance or material” specifically defined as such in (or for the purposes of) the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601, et seq.), as amended, and regulations promulgated thereunder; (3) any “hazardous waste” or “hazardous substance” as defined by applicable New York State laws and regulations), as amended, and regulations promulgated thereunder; and (4) any hazardous, toxic or dangerous waste, substance, or material as defined in any so-called “superfund” or “superlien” law or any other federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards of conduct concerning such waste, substance or material.

“Indemnitees” shall mean Owner, Developer, INGREDUS Site 8 South LLC, Architect, Interiors Project Owner, Interiors Construction Manager, Lender and their respective members, partners, principals, shareholders, directors, agents, employees, successors and assigns.

“In-Scope Change Order” shall mean a Change Order that is funded within the GMP including, but not limited to, from the Construction Contingency.

“Interiors Project” shall mean the buildout within Base Building of The New York Times headquarters and The Times Center.

“Interiors Architect” shall mean, with reference to The New York Times Headquarters portion of the Interiors Project, Gensler and Partners, or its successor designated in writing by the Interiors Project Owner, and with reference to The Times Center, shall mean Architect, or its successor designated in writing by the Interiors Project Owner.

“Interiors Construction Manager” shall mean the construction manager retained by the Interiors Project Owner for the fitout of the Interiors.

“Interiors Project Owner” shall mean NYT Real Estate Company, LLC.

“Job Progress Report” shall mean the monthly report that Construction Manager is required to submit in accordance with Section 4.5.10.

“Key Employees” shall mean those employees of the Construction Manager identified in Exhibit M, who will have primary responsibility for implementing the Construction Manager’s obligations under this Agreement.

“Last Settlement Offer Before Trial” shall mean, in the context of dispute resolution, either: (1) the final amount in immediately available funds offered in complete resolution of the dispute delivered in writing by one party to the other party no later than twenty (20) days prior to the first witness being sworn to give testimony in any trial of the legal proceeding; or (2) where no offer was made in accordance with the preceding subclause (1), the amount of zero (0).

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“Lease Agreement” shall mean the Agreement of Lease between 42nd St. Development Project, Inc., as Landlord, and The New York Times Building LLC, as Tenant, dated December 12, 2001.

“Lender” shall mean any entity or institution that provides financing to Owner in connection with the Project.

“Long Lead-Time Item” shall mean a material and/or piece of equipment which must be ordered substantially in advance of the date on which it is scheduled to be incorporated into the Work because of its lengthy production, manufacturing, fabrication or delivery schedule.

“Lower Tier Contractor” shall mean a contractor having an agreement with a Trade Contractor to perform a portion of the Trade Contractor’s scope of Work, together with any other contractors to whom the Lower Tier Contractor may further delegate portions of the Work.  The term also includes lower-tier suppliers.

“Milestone” shall mean a specified event or completion of a specific portion of the Project required for Construction Manager to receive the Time Bonus indicated in Section 6.4.

“Milestone Dates” shall mean those dates which ▇▇▇▇ the completion of the Milestones required for Construction Manager to receive the Time Bonuses set forth in Section 6.4.  One or more of the Milestone Dates may be changed by an approved Change Order issued pursuant to Section 11.7.2.

“OCIP” shall mean the Owner’s Controlled Insurance Program as described in Section 14.2.

“Open Access Floors” shall mean the Core and Shell work described in Section 4.5.27.6.2.

“Out-of-Scope Change Order” shall mean a Change Order that is funded by an increase in the GMP.

“Owner” shall mean The New York Times Building LLC.

“Owner-Caused Delay” shall mean a Delay in the Project Schedule caused by an act or failure to act on the part of Owner or any party for whom Owner is legally responsible.

“Owner-Furnished Items” shall mean material, equipment and other items selected, purchased and provided to Construction Manager by Owner outside of the GMP.

“Owner-Furnished Information” shall mean data, documents, studies, analyses, reports and similar items to be furnished by the Owner to the Construction Manager.

“Owner’s Consultants” shall mean designers (other than Architect and Architect’s Consultants), other specialty consultants and advisors, who are retained directly by Owner including, but not limited to, the firms and individuals identified in Exhibit I hereto.

“Payment Bond” shall mean a surety bond provided by a Trade Contractor to assure payment to Lower Tier Contractors.

“PCO” shall mean a potential Change Order proposal submitted by Owner to Construction Manager.

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“Performance Bond” shall mean a surety bond provided by a Trade Contractor to assure completion of that Trade Contractor’s scope of Work.

“Permitted Assignee” shall mean any Affiliated Entity of Owner.

“Person” shall mean: (1) an individual, corporation, limited liability company, partnership, joint venture, estate, trust, unincorporated association or other entity; (2) any Federal, State, county or municipal government (or any bureau, department, agency or instrumentality thereof); and (3) any fiduciary acting in such capacity on behalf of any of the foregoing.

“Phases of Work” shall mean those portions of the Work as itemized in Section 6.1.

“Pre-Construction Phase” shall mean that preparatory phase of Construction Manager’s services prior to and in preparation for commencement of the Construction Phase of the Work.

“Preliminary Schedule” shall mean the schedule attached hereto as Exhibit C.

“Pre-Purchased Item” shall mean an item, material and/or equipment purchased by Owner, Construction Manager or a Trade Contractor in advance of the time that such Item will be installed in the Work, and stored on or off Site.  Pre-Purchased Items include, but are not limited to, Long Lead-Time Items.

“Prevailing Party at Trial” shall mean, in the context of dispute resolution, a party awarded an amount in any trial of the Legal Proceeding which, net of any offsets and counterclaims awarded to the other party, is greater than the Last Settlement Offer Before Trial made by the other party.

“Principal-in-Charge” shall mean the individual designated by Construction Manager and identified in Exhibit M to generally oversee successful and timely completion of the Project.

“Progress Payment” shall mean monthly payments to the Construction Manager based on the percentage of Work completed as measured against the approved Schedule of Values for the Project.

“Prohibited Person” shall mean: (1) any Person (1.1) that is in default after notice and beyond any applicable cure period, of such Person’s obligations under any material written agreement with New York City, the State of New York, or any of their instrumentalities, or (1.2) that directly controls, is controlled by, or is under common control with a Person that is in default after notice and beyond any applicable cure period, of such Person’s obligations under any material written agreement with New York City, the State of New York or any of their instrumentalities, unless, in each instance, such default or breach either (i) has been waived in writing by New York City, the State of New York or any of their instrumentalities as the case may be or (ii) is being disputed in a court of law, administrative proceeding, arbitration or other forum or (iii) is cured within thirty (30) days after a determination and notice from Owner that such Person is a Prohibited Person as a result of such default; (2) any Person that is an Organized Crime Figure; (3) any government, or any Person that is directly or indirectly controlled (rather than only regulated) by a government, that is finally determined to be in violation of (including, but not limited to, any participant in an international boycott in violation of) the Export Administration Act of 1979, as amended, or any successor statute, or the regulations issued pursuant thereto, or any government that is, or any Person that, directly or indirectly, is controlled (rather than only regulated) by a government, the effects or the activities of which are regulated or controlled pursuant to regulations of the United States Treasury Department or executive orders of the President of the United States of America issued pursuant to the Trading with the Enemy

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Act of 1917, as amended; (4) any Person that is in default in the payment to the City of New York of any real estate taxes, sewer rents or water charges totaling more than $10,000, unless such default is then being contested in good faith in accordance with applicable Legal Requirements or unless such default is cured within thirty (30) days after a determination and notice from Owner that such Person is a Prohibited Person as a result of such default; or (5) any Person (6.1) that has solely owned, at any time during the 3-year period immediately preceding a determination of whether such Person is a Prohibited Person, any property which, while in the ownership of such Person, was acquired by the City by in rem tax foreclosure, other than a property in which the City has released or is in the process of releasing its interest pursuant to the Administrative Code of the City of New York, or (6.2) that, directly or indirectly controls, is controlled by, or is under common control with a person that has owned, at any time in the 3-year period immediately preceding a determination of whether such Person is a Prohibited Person, any property which, while in the ownership of such Person, was acquired by the City of New York by in rem tax foreclosure, other than a property in which the City of New York has released or is in the process of releasing its interest to such person pursuant to the Administrative Code of the City of New York.

“Project” shall mean the construction of the Core & Shell of the Base Building of approximately 1,540,000 gross square feet on a site located on Eighth Avenue between 40th and 41st Streets in New York, New York, all as more fully described in Exhibit A hereto.

“Project Executive” shall mean the individual designated by Construction Manager and identified as such in Exhibit M hereto.

“Project Manual” shall mean a manual prepared by the Construction Manager and approved by the Owner that sets forth the information described in Section 3.1.18.

“Project Schedule” shall mean the schedule in CPM format, prepared by the Construction Manager and approved by the Owner, detailing the sequence and time durations for the Work and the Milestone Dates, including any approved revisions or updates thereto.

“Project Team” shall mean Owner, Owner’s Representative, Construction Manager, Architect and all Consultants, regardless of whether retained by Owner or Architect.

“Project Website” shall mean the website for the Project, to be established and maintained by the Owner for the duration of the Project in accordance with the Guidelines set forth in Exhibit K.

“Punchlist” shall mean a list, compiled by Construction Manager and Architect at Substantial Completion, and approved by Owner, which identifies items of Work that remain to be completed or corrected prior to Final Payment.

“Purchase Order” shall mean a written agreement between Construction Manager or a Trade Contractor and a Supplier in connection with the furnishing by the Supplier of materials and/or equipment in connection with the Work.

“Qualifications and Assumptions” shall mean any express qualifications and assumptions of the Construction Manager underlying the GMP, that are set forth in Exhibit O to the Agreement.

“Recovery Plan” shall mean a written plan prepared by Construction Manager, which describes how Construction Manager intends to reorganize and/or accelerate the Work to compensate for Delays and regain the Project Schedule.

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“RFI” shall mean a request for information and/or clarification submitted by Construction Manager or any Trade Contractor.

“RFP” shall mean Owner’s original Request for Proposals dated April 26, 2003 together with the addenda issued thereto.

“Retainage” means an amount withheld by Owner from Progress Payments to Construction Manager equal to: (1) ten percent (10%) of Trade Contract Costs through 50% completion of the Work, which shall be held by Owner until Final Payment; and (2) ten percent (10%) of Construction Manager’s Fee, which shall be held by Owner until Final Payment.  No Retainage shall be withheld on General Conditions Costs.

“Samples” shall mean physical examples that illustrate materials, equipment or workmanship, and which establish standards by which the Work will be judged.

“Schedule of Values” shall mean a line item breakdown of Trade Contractor Work, prepared by Construction Manager and approved by Owner, which shall be used as a basis for Progress Payments to the Construction Manager.

“Schematic Design Documents” shall mean the Design Documents prepared by Architect during the Schematic Design Phase.

“Schematic Design Phase” shall mean that Phase in the development of the Design Documents during which Architect determines the scale and relationship of the Project components.

“Separate Contractors” shall mean contractors or construction managers, other than the Construction Manager, that are retained directly by Owner to perform Work or services in connection with the Project.

“Shop Drawings” shall mean drawings, diagrams, illustrations, schedules, performance checks and other data prepared by Construction Manager, any Trade Contractor or Lower Tier Contractor to illustrate how a specified portion of the Work will be constructed.

“Shop Drawing Submittal Schedule” shall mean a schedule, prepared by Construction Manager and approved by Owner and Architect, outlining the sequence and timing of the submission of Shop Drawings for review by Architect.

“Site” shall mean the place where the Work will be performed (excluding manufacturing and storage/warehousing facilities).

“Site Safety Manager” shall mean the certified individual appointed by Construction Manager to be responsible for Site safety.

“Specifications” shall mean written requirements for the Work prepared by Architect.

“Submittal” shall mean a Shop Drawing, Sample, catalog cut or similar item submitted by a Trade Contractor.

“Submittal Log” shall mean a log maintained by Architect indicating the dates of submission of Shop Drawings and other Submittals by the Construction Manager and their return after review by Architect.

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“Substantial Completion” shall mean that stage in the progress of the Work when the Project (or any designated portion thereof) is sufficiently complete in accordance with the Contract Documents so that the Owner can occupy or utilize the Project (or that designated portion) for its intended use.

“Substantial Completion Certificate” shall mean the certificate issued by Architect and approved by Owner indicating the date upon which the Project (or a designated portion thereof) is Substantially Complete.

“Substantial Completion Date” shall mean the date identified in Architect’s Substantial Completion Certificate when the Work (or a designated portion thereof) is Substantially Complete.

“Substitution” shall mean a replacement or alternative to an item of material or equipment identified in the Construction Documents which is proposed by Construction Manager and approved in writing by Owner and Architect, as described in Section 4.5.37.

“Supplier” shall mean a person or entity that supplies materials and/or equipment to Construction Manager or to a Trade Contractor.

“Surplus Materials and Equipment” shall mean materials and equipment which are purchased by Construction Manager and paid for by Owner, but which are ultimately not incorporated into the Work or consumed in the course of performing the Work.

“Suspension” shall mean a delay, resequencing, stoppage and/or interruption of the Work (in whole or in part), in response to a written directive from the Owner, as more fully described in Section 16.3.

“Temporary Certificate of Occupancy” shall mean a certificate issued by Governmental Authorities when the Work is Substantially Complete.

“Temporary Systems” shall mean all barricades, provisions for utilities, offices and constructed facilities used in connection with the Work that will not remain as part of the Project when the Project is complete.

“Tenant” shall mean the occupants of any floor or floors of the Base Building.

“Termination for Convenience” shall mean the termination of this Agreement by Owner without cause, as described in Section 16.2.

“Termination for Default” shall mean the termination of this Agreement by Owner for cause, as described in Section 16.1.

“Testing” shall mean, with reference to equipment, performing those test required by the Contract Documents.

“The New York Times Headquarters” shall mean that portion of the Interiors Project that will be built out for The New York Times office headquarters, comprising approximately 825,000 gross square feet.

“The Times Center” shall mean that portion of the Interiors Project, comprising approximately 20,000 square feet, which includes a 400-seat auditorium, a companion space of similar size for exhibits and/or entertaining, a TV studio, retail store and ancillary space.

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“Time Bonus” shall mean the amount that Construction Manager will be eligible to receive upon achievement of each Milestone, as set forth in Section 6.4.

“Time Extension” shall mean the grant by Owner of additional time to complete the Work or discrete portions thereof, in connection with Change Orders and other causes of Delay.

“Trade Contract” shall mean a written agreement, generally in the form set forth in Exhibit B hereto, between Construction Manager and a Trade Contractor.  The term “Trade Contract” also includes Purchase Orders.

“Trade Contract Award Letter” shall mean a letter submitted by Construction Manager to Owner after completion of bidding process in a form approved by Owner.

“Trade Contract Costs” shall mean amounts billed by Trade Contractors for Work performed.

“Trade Contractor” shall mean a person or entity having a Trade Contract directly with Construction Manager to perform a portion of the Work or to supply materials and/or equipment.  The term “Trade Contractor” also includes Suppliers.

“Trademark” shall mean a trademark used by the Owner that is protected under U.S. Trademark Law.

“Trade Secret” any and all information that comes into Construction Manager’s possession, custody or control by, through, from, or on behalf of the Owner without regard to form, including, without limitation, any technical or non-technical data, formula, pattern, compilation, program, device, method, technique, drawing, process, financial data, financial plan, product plan, list of actual or potential customer or suppliers, that is not commonly known by or available to the public and with information: (1) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

“Trust Account” shall mean the bank account established by Construction Manager through which all payments to Trade Contractors will be processed.

“Unit Price” shall mean a Trade Contractor price for a specified unit of repetitive Work.

“Vendor” shall mean the manufacturer or seller of Owner-Furnished Items.

“Work” means all work and other services required to be performed by the Construction Manager under the Contract Documents, and includes all labor, materials, equipment and services to be provided by Construction Manager during the Pre-Construction and Construction Phases of the Project under the terms of this Agreement.

“Work Day” shall mean Monday, Tuesday, Wednesday, Thursday and Friday, excluding any nationally recognized union holidays, and excluding Saturday and Sunday.

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ARTICLE 2

GENERAL PROVISIONS

2.1  Relationship of the Parties

Construction Manager accepts the relationship of trust and confidence established between Construction Manager and Owner by this Agreement, and covenants to Owner to furnish its best professional skill and judgment, and to cooperate with Owner, Owner’s Representative, Architect and other members of the Project Team in furthering the interests of Owner as made known to Construction Manager.  Construction Manager agrees to use its best efforts to construct the Project at the lowest-reasonable cost and in an expeditious fashion consistent with budgetary, design, scheduling and other similar considerations.  Accordingly, Construction Manager will devote its best efforts toward: (1) maintaining the cost level of the Project at the lowest possible point consistent with good construction practices and the quality of materials and workmanship required and expected by Owner; (2) carrying out Owner’s intent and the direction of the Construction Documents; and (3) achieving the rapid and efficient construction and completion of the Work.  Construction Manager will bring to Owner’s attention any possibilities for cost savings that may present themselves over the course of the Project, and will confer with Owner periodically in order to determine whether there are any areas where, by design change or otherwise, costs may be reduced; provided however, that the Owner will make the final determination whether to pursue such cost savings.

2.2  Contract Documents

2.2.1        Contract Documents Identified

The Contract Documents shall consist of the following:

2.2.1.l      This Agreement, including all the Exhibits and amendments hereto.

2.2.1.2     Construction Documents and such other Documents as may be prepared by Architect and approved in writing by Owner.

2.2.1.3     Change Orders, Emergency Change Orders, and Field Directives.

2.2.1.4     The RFP.

2.2.1.5     The Project Schedule prepared by Construction Manager and approved by Owner, as the same may be updated, modified or extended in accordance with the applicable provisions of this Agreement.

2.2.1.6     The letter dated January 16, 2004 from Owner to the Construction Manager regarding the New York Times Ownership Structure and Project Financing.

2.2.2        This Agreement   The Contract Documents form the agreement between Owner and Construction Manager.  References in the Contract Documents to “the Contract” or “this Contract” shall be deemed to include all of the Contract Documents.  References to “this Agreement” or “the Agreement” shall refer to this instrument, which is one of the Contract Documents.

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2.2.3        Intent of Contract Documents

The intent of the Contract Documents is to include within Construction Manager’s scope of Work the obligation to perform and provide all labor, supervision, materials and supplies, insurance, tools, equipment, permits, licenses, taxes, approvals, transportation, testing and field surveying and other services and items as are necessary to satisfactorily complete the Work.  Matters not expressly included in the Contract Documents, but which are reasonably inferable therefrom as being necessary to produce the intended results shall be deemed included as part of the Work.  For purposes of this Section, the scope of Work shall be deemed to include: (1) items commonly associated with items of Work shown; (2) repetitive items; and (3) items commonly associated with the indicated purpose or quality.

2.2.4        Conflicts Among Contract Documents

The Contract Documents are complementary and cumulative, and what is called for by one shall be as binding as if called for by all.

2.2.5        Industry Terminology

Words and abbreviations that have well known technical or trade meanings are used in the Contract Documents in accordance with such recognized meanings.  In resolving any conflicts among the Contract Documents, the Contract Documents shall be given precedence based on the order in which they are set forth in Section 2.2.1.

2.2.6        Resolution of Conflicts and Ambiguities in the Contract Documents

2.2.6.1     Construction Manager shall carefully review the Contract Documents for conflicts or ambiguities.  If any conflicts or ambiguities are discovered by Construction Manager in or among the Contract Documents, Construction Manager shall immediately bring the same to the attention of Owner for resolution.  It is expressly understood and agreed that Owner, in consultation with Architect, shall be the interpreter of the Construction Documents and shall resolve any such conflicts and ambiguities.  The risk of performing any Work relating to any such conflict or ambiguity prior to the timely resolution of the same, shall be borne by Construction Manager without increase to the GMP.

2.2.6.2     The layout of mechanical and electrical systems, equipment, fixtures, piping, ductwork, conduits, specialty items and accessories indicated on the Construction Documents is diagrammatic.  The actual Work shall be carried out so as not to affect the architectural and structural integrity and limitations of the Base Building or the Project, and shall be performed in such sequence and manner as to avoid conflicts and provide clear access to all control points, including valves, strainers, control devices and specialty items of every nature related to such systems and equipment.  If Construction Manager, after a careful review of Shop Drawings, Coordination Drawings and the Construction Documents, discovers or has knowledge of: (1) conflicts between Shop Drawings, the Coordination Drawings and/or the Construction Documents; or (2) any conflicts between existing conditions at the Site and the Construction Documents which, in Construction Manager’s professional opinion, are of a nature that may affect the architectural or structural integrity or limitations of the Base Building or the Project, Construction Manager shall immediately shall bring the same to the attention of Owner for resolution.  The risk of any Work relating to such a conflict that is performed by Construction Manager or by any Trade Contractor prior to the resolution of the conflict shall be borne by Construction Manager without increase to the GMP.

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2.2.7        Drawings and Specifications

The Drawings and Specifications, which together comprise the Construction Documents are complementary.  Anything shown in any of the Drawings and not mentioned in the Specifications, or mentioned in any of the Specifications and not shown in the Drawings, shall have the same effect as if shown or mentioned in both.  In the event of a conflict between the Drawings and the Specifications, Construction Manager shall be required to perform the more complete installation, unless directed otherwise by Owner in Owner’s sole discretion.

2.2.8        Representative Details

A typical or representative detail indicated on the Construction Documents shall constitute the standard for workmanship and materials throughout corresponding parts of the Work, unless otherwise approved by Owner.

2.3  Construction Manager’s General Obligations

2.3.1        Participation in Development of Design Concept

The general scope of the Work, as initially reflected in the Original RFP and in the Construction Documents, shall be developed by Construction Manager into a detailed design and construction schedule, and further refined as the preparation of the Construction Documents progresses during the Pre-Construction Phase of the Project, so as to include and define the scope, parameters and anticipated timing for the Work, and the quality of materials and workmanship required and expected by Owner.  Construction Manager represents that Construction Manager: (1) has become acquainted with the design concept and scope of the Work, as reflected in the Drawings and Specifications identified in Exhibit F; (2) has visited and inspected the Project Site, including the location of adjacent structures and utilities and access to the Project Site; and (3) will actively participate with Owner and Architect in further development of the design concept into Construction Documents for the Project.

2.3.2        Project Management

2.3.2.1     Construction Manager agrees to furnish efficient business administration with emphasis on budget control, cost estimating, construction scheduling, coordination of the Work, supervision and construction management, and further agrees to perform the actual Work in an expeditious and economical manner consistent with the best interests of Owner.  Construction Manager shall utilize the Project Website as an active management tool and shall be responsible for posting (whether by posting itself or by causing appropriate Trade Contractors to post) Project documentation on a regular and timely basis as elsewhere described in this Agreement.

2.3.2.2     Construction Manager shall assist Owner in developing and maintaining a climate of understanding and good will with all Governmental Authorities, the local communities adjacent to the Project Site, unions, new tenants at the Project site and the public at large.

2.3.2.3     Construction Manager shall generally advise and assist Owner in all matters concerning construction of the Project and, upon request by Owner, provide advice and assistance with regard to matters concerning which the Construction Manager, being familiar with the construction industry, might be consulted.

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2.3.2.4     All recommendations to be provided by Construction Manager shall be rendered promptly and in writing; shall state the advantages and disadvantages of various courses of action and evaluate alternatives; and shall be in sufficient detail to enable Owner to analyze such recommendations and make informed decisions with respect thereto.

2.4  Ethical Obligations

2.4.1        Sales Commissions, Trade Discounts and Contributions

Construction Manager shall not accept, for its own account, any sales commissions, trade discounts or contributions of any type from third parties in connection with the Work.

2.4.2        Conflicts of Interest

Construction Manager shall not:

2.4.2.1     deal with (or recommend that the Owner deal with) any firm or entity in which Construction Manager has a financial or other interest;

2.4.2.2     undertake any activity or employment which would or could create a conflict of interest, compromise Construction Manager’s professional judgment or otherwise prevent Construction Manager from serving Owner’s best interests;

2.4.2.3     employ in connection with the Project, or recommend the acceptance of a bid from any Trade Contractor employing, with respect to the Project, any relative (including in-laws) of any officer or director of Construction Manager without fully disclosing such relationship in writing at the time that bids are solicited.

2.4.2.4     allow any officer, director, employee, agent or consultant, acting on behalf of Construction Manager, to negotiate, accept, approve or otherwise participate in any Trade Contractor or Trade Contract in connection with which that individual has, directly or indirectly, a financial or other personal interest.

If Construction Manager becomes aware of any of the foregoing situations or circumstances, Construction Manager shall immediately notify Owner in writing, and obtain Owner’s written approval before proceeding.  Failure to so notify Owner and obtain Owner’s written approval of an actual or potential conflict of interest shall constitute a material breach of this Agreement, entitling Owner to terminate Construction Manager for default.  Termination of this Agreement pursuant to this Section shall result in forfeiture by Construction Manager of its Fee earned to the date of termination.

2.4.3        Ethical Conduct

2.4.3.1     Construction Manager acknowledges that Owner is committed to having the Work performed in accordance with the highest ethical standards applicable to, or governing, the conduct of construction practices.  In furtherance thereof, Construction Manager hereby agrees to comply with and observe all Applicable Laws, trade standards and ethical guidelines governing performance of the Work.

2.4.3.2     In furtherance of the obligation set forth in Section 2.4.3.1, Construction Manager shall cause all of Key Employees identified in Exhibit M to sign the affidavit

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attached hereto as Exhibit L, once as a condition of their assignment to and participation in the Project, and a second time as a condition of Final Payment to Construction Manager.

2.5  Equal Opportunity

2.5.1        No Discrimination

Construction Manager shall not discriminate against any employee or applicant for employment because of race, creed, color, national origin, marital status, sex, disability, sexual preference or age.  Construction Manager shall take such actions as are reasonably necessary to ensure that employees and applicants for employment are treated without regard to their race, creed, color, national origin, marital status, sex, sexual preference or age.  As used herein, the term “treated” shall mean and include, without limitation, the following: recruited, whether by advertising or other means; compensated, whether in the form of rates of pay or other forms of compensation; selected for training, including apprenticeship; promoted; upgraded; demoted; downgraded; transferred; laid off; and terminated.  Construction Manager agrees to comply with all Affirmative Action requirements set forth in Exhibit G.

2.5.2        Reporting and Audit Requirements

Construction Manager shall furnish all information and reports required by Governmental Authorities to determine Construction Manager’s compliance with the provisions of this Section 2.5 and Applicable Laws, and shall permit access to its books and records by Owner and/or any such Governmental Authority during regular business hours for purposes of investigation to ascertain compliance with this Section 2.5.

2.6  Cooperation with Interior Construction Manager, Trade Contractors and Architect

The Construction Manager shall cooperate and coordinate the Work with the work of the Interiors Construction Manager, the Interiors Trade Contractors, the Interiors Architect, the Commercial Office Construction Manager, the Commercial Office Architect, the Retail Construction Manager, and the Retail Architect.

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ARTICLE 3

PRE-CONSTRUCTION PHASE

3.1  Pre-Construction Phase Services

During the Pre-Construction Phase of the Project, Construction Manager shall, at a minimum, perform the services described below and such other services as may be requested by Owner, which services are not intended to limit the services set forth in the RFP or otherwise in this Agreement:

3.1.1        consult with Owner (including various user groups, as designated by Owner), Architect, and other members of the Project Team to ascertain Owner’s needs and goals and the requirements of the Work.

3.1.2        attend weekly meetings of the Project Team.

3.1.3        thoroughly review all Design Documents, and all revisions and additions thereto, for the purpose of preparing and submitting to Owner a preliminary Construction Budget.  The Construction Budget shall be in such form and shall contain such detail as Owner may require and shall be revised monthly or more frequently if Owner so requires.

3.1.4        provide assistance to and cooperate with Owner, Architect and Owner’s code consultant in obtaining all necessary approvals of Governmental Authorities having jurisdiction over the Project.

3.1.5        review the Design Documents on an ongoing basis during their development by Architect to advise Owner regarding: (1) proposed Site use, logistics and improvements; (2) selection and availability of materials, building systems and equipment; (3) methods of Project delivery; (4) Long Lead-Time items; (5) potential areas of Trade conflict; (6) value engineering recommendations; (7) possible economies; (8) constructability; and (9) completeness of the Design Documents.

3.1.6        review all Design Documents and Construction Documents, and use best efforts to identify any failure of said Documents to comply with Applicable Laws, including, but not limited to, applicable building codes.  Construction Manager shall advise Owner and Architect of any failure of the Design Documents or Construction Documents to comply with Applicable Laws that Construction Manager identifies.  Construction Manager shall not, however, by virtue of this review, become liable for Architect’s failure to design the Project in accordance with all Applicable Laws.

3.1.7        advise Owner regarding the costing and procurement of Pre-Purchased Items, when early procurement is in Owner’s best interests including, but not limited to, the purchase of Long Lead-Time Items.  If Owner procures any Pre-Purchased Item itself, Owner shall have the right to assign the Purchase Order for that Pre-Purchased Item to Construction Manager or a Trade Contractor.

3.1.8        participate in value engineering reviews with Owner and Architect.

3.1.9        review the Design Documents on an ongoing basis as they are being prepared for the purpose of making recommendations to Owner and Architect regarding:

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3.1.9.1     availability of labor, materials, equipment and supplies.

3.1.9.2     elimination of possible conflicts and/or overlapping jurisdictions among the various trades or overlapping responsibilities among Trade Contractors.

3.1.9.3     conflicts and omissions and/or variations from customary construction practices and methods which may cause difficulties or delays in the performance of the Work.

3.1.9.4     discrepancies and deficiencies in the Design Documents, or between the Design Documents and existing conditions at the Project Site.

3.1.9.5     conduct of construction operations utilizing good construction practices.

3.1.9.6     costs of labor, materials, equipment and supplies to be used in the Work.

3.1.9.7     costs on comparable projects.

3.1.9.8     unit prices and alternates.

3.1.9.9     required Temporary Systems and Project support facilities.

3.1.9.10   construction detailing.

3.1.9.11   achievement of construction economies through alternative methods, materials, or concepts, consistent with Owner’s requirements and sound construction practice.

3.1.9.12   temporary Certificate of Occupancy process.

3.1.10      Comply with all Affirmative Action Requirements annexed hereto as Exhibit G.

3.1.11      Provide: (1) a code compliance analysis of the Site; and (2) a confirmation of Building infrastructure, Site analysis and related probe work.

3.1.12      Advise and make recommendations to Owner and Architect regarding the best order and sequence for the development of the Construction Documents.

3.1.13      Maintain written records of all communications with, and recommendations made to, Architect, and Architect’s responses thereto.  Construction Manager shall make such records available for inspection by Owner at all times, and promptly furnish Owner, upon request, with copies of all correspondence and notes relating to communications between Construction Manager and Architect relative to the Work and the Project.

3.1.14      Advise and consult with Owner and Architect with regard to division of the Construction Documents into appropriate Bid Packages.

3.1.15      Develop and refine the preliminary Site logistics plan in cooperation with the corresponding plan being developed by the Building Construction Manager;

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3.1.16      Prepare (and update regularly) a Project Manual which addresses Construction Manager’s policies, together with the policies of Owner and Architect on the following issues:

3.1.16.1        Coordination with Interiors Construction Manager’s operations.

3.1.16.2        Document control, including filing systems.

3.1.16.3        Submittals, including Submittal Schedules, number of copies required and control logs.

3.1.16.4        Clarifications, fully setting forth the process for requests for information.

3.1.16.5        Change Order control, including related time extensions.

3.1.16.6        Schedules, including CPM Requirements and occupancy schedules.

3.1.16.7        Cost Control procedures, including cost reports.

3.1.16.8        Quality Control procedures, including management, inspection and testing.

3.1.16.9        Safety Procedures.

3.1.16.10      Photography Requirements.

3.1.16.11      Coordination procedures, including Coordination Drawings and coordination meetings.

3.1.16.12      Monthly progress reports.

3.1.16.13      Application for Payment process.

3.1.16.14      Meetings including pre-construction, progress and others.

3.1.16.15      Trade Contractor/Supplier/Vendor dispute resolution procedures.

3.1.16.16      Closeout procedures, including procedures for Substantial and Final Completion inspections, preparation of Punchlists, and the preparation of As-Built Drawings.

The Project Manual shall be subject to Owner’s approval prior to implementation.

3.1.17      Construction Manager shall confirm that materials, equipment and labor are currently available to accomplish the Work.  Construction Manager shall continually thereafter undertake materials and labor surveys, including analyses of the following with respect to materials and equipment; all materials and equipment required for the Work; a forecast of the availability thereof; and any factors or potential occurrences identified by Construction Manager which might affect the future availability of such materials and equipment.  With respect to labor, Construction Manager shall prepare an analysis of costs, types and quality of labor required for the Work; a forecast of labor availability as and when needed; and a schedule of the dates of all union contracts coming up for renewal during the anticipated period of the Work.

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3.1.18                  Construction Manager shall perform other services similar in type to those described above including, but not limited to: preparation of such other schedules, reports, budgets and other technical data as may be reasonably requested by Owner; and attendance at such meetings during the Pre-Construction Phase as Owner may reasonably request in order to assist in the preparation of the Construction Documents, cost estimates, updated Project Schedules and any other documents and instruments relative to the Project, to the end that Final Completion of the Work may be achieved within the budgetary and time objectives set forth in this Agreement.

3.1.19                  Construction Manager acknowledges that portions of the Pre-Construction and Construction Phases may be on-going at the same time and that certain services performed by Construction Manager may overlap.

3.1.20                  As part of Pre-Construction Phase Services (and at no additional charge to Owner), Construction Manager shall coordinate and cooperate with parties working on the Interiors Project including, but not limited to, the Interiors Architect, Interiors Construction Manager, and Interiors Trade Contractors.

3.1.21                  Construction Manager shall provide information as required for a tax cost segregation study.

3.1.22                  Throughout the Pre-Construction Phase, Construction Manager shall post on the Project Website (or cause Trade Contractors to post), as appropriate, documentation generated or received by Construction Manager in the performance of Construction Manager’s services.

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ARTICLE 4

CONSTRUCTION PHASE

4.1  Performance of the Work

Construction Manager shall perform or furnish all labor, materials, plant, tools, supplies, equipment, services, transportation, scaffolding, permits, licenses, supervision, and inspection (temporary utilities to be provided by Owner), and all General Conditions items identified in Exhibit D attached hereto.  Construction Manager shall provide all services, business administration and supervision, necessary for, or incidental to, the successful prosecution of the Work in an expeditious and economical manner, consistent with industry accepted standards, and in strict and complete compliance with: (1) the Contract Documents; (2) Applicable Laws pertinent to the means and methods of performing the Work; (3) acceptable construction industry practices; (4) the Affirmative Action Requirements attached hereto as Exhibit G, (5) the hoisting and logistics plan attached hereto as Exhibit T, as such may be amended to meet the requirements of Applicable Laws, and (6) the best interests of the Owner.  The Work shall be free from defects and represent “first quality” workmanship and materials.

4.2  Coordination with Interiors Work

Construction Manager acknowledges that work on the Interiors Project will proceed concurrently with and overlap Construction Manager’s Work on the Project.  Accordingly, Construction Manager agrees to coordinate and cooperate with the Interiors Construction Manager and the Interiors Trade Contractors on all matters affecting the Work including, but not limited to: (1) access; (2) storage space; (3) staging areas; (4) utilization of elevators and hoists; and (5) the phased turnover of floors.  Construction Manager acknowledges that work on the Commercial Office and Retail Projects may proceed concurrently with and overlap Construction Manager’s Work on the Project.  Accordingly, Construction Manager agrees to coordinate and cooperate with the respective Construction Manager and trade contractors on all matters affecting the Work including, but not limited to: (1) access; (2) storage space; (3) staging areas; (4) utilization of elevators and hoists; and (5) the phased turnover of floors.  Owner acknowledges that Construction Manager intends to use some of the commercial retail space for staging its Work.

4.3  Bidding Process

4.3.1                        Management of Bidding Process

Construction Manager shall be responsible for managing and scheduling the competitive bidding process for Trade Contracts.  Notwithstanding the foregoing, Owner shall have the right, in its discretion, to participate in all aspects of the bidding process.  The exercise by Owner of the rights of participation, review and approval set forth in this Section 4.3 shall not diminish Construction Manager’s obligations relative to the bidding process as set forth herein.

4.3.2                        Pre-Qualification of Bidders

All bidders shall be pre-qualified based on criteria to be established jointly by Owner and Construction Manager.  The Bidders List, which shall contain a minimum of three pre-qualified bidders for each anticipated buyout in excess of $10,000 (unless otherwise approved by Owner in writing),

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shall be developed by Construction Manager.  The Bidders List shall be subject to Owner’s approval, which may be withheld in Owner’s discretion.

4.3.3                        Pre-Bid Conferences

Construction Manager shall conduct pre-bid conferences to familiarize bidders with the Bid Documents and administration of the bidding process.  Construction Manager shall respond to bidders’ questions by issuing addenda.  The bid form shall be subject to review and approval by Owner.

4.3.4                        Submission and Evaluation of Bids

Bids shall be submitted by bidders at a place and time established by Owner.  Owner shall establish a procedure for the receipt and opening of all bids.  Owner shall have the right to be present at all bid openings, and to review all bids including, but not limited to, riders or addenda submitted by bidders for clarification purposes to identify “exclusions” that could result in a distortion or skewing of the bids.  Construction Manager shall receive, level and analyze all bids.  Construction Manager shall prepare a written evaluation and comparison of the bids.  Construction Manager’s evaluation of bidders shall include qualitative criteria such as experience, bondability and financial resources, as well as quantitative criteria.

4.3.5                        Recommendations Regarding Award

Construction Manager shall make written recommendations to Owner regarding the award of Trade Contracts.  Subject to Owner’s approval, Construction Manager shall negotiate the most favorable price and terms to be included in such Trade Contracts.  Construction Manager shall not allow any “holds” or other forms of contingencies within a Trade Contract price.  Individual Trade Contract contingencies shall be included in the overall Construction Contingency.

4.3.6                        Trade Contract Award Letter

4.3.6.1                         After completion of the bidding process for each trade, Construction Manager shall, by Trade Contract Award Letter in a form to be approved by Owner in writing, advise Owner as to: (1) which Trade Contract bid it intends to accept; (2) the price of the proposed Trade Contract; and (3) any proposed material differences between the provisions of the Trade Contract form and the terms of the Trade Contract that Construction Manager proposes to enter into.  For purposes hereof; the term “material difference” shall be deemed to mean changes to the Trade Contract form that: (1) permit the Trade Contractor thereunder to observe a lesser standard of care in the performance of its obligations to Construction Manager under the Trade Contract than Construction Manager is obligated to observe under the terms of this Agreement; and/or (2) any other difference which may have a cost, liability or other consequence to Owner.

4.3.6.2                         Upon receipt by Owner of Construction Manager’s Trade Contract Award Letter, Owner shall countersign the Trade Contract Award Letter, setting forth no objection by Owner, or Owner’s rejection or other comment regarding any differences between the proposed Trade Contract and the Trade Contract form, and the Work to be performed by Construction Manager shall be deemed changed to the extent of the differences accepted therein.  Owner has the absolute right to reject any Trade Contract Award Letter.  If Owner rejects a Trade Contract Award Letter which has no “material differences” as defined in Section 4.3.6.1 for any reason, or if Owner rejects a Trade Contract Award Letter which has a material difference without a good faith reason, then Owner may indicate no objection to one of the other Trade Contractors and the GMP and/or Project Schedule (as identified in

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the Trade Contract Award Letter) shall be increased or decreased by Change Order based on the difference between the rejected and the approved Trade Contract amounts.  Construction Manager, upon receipt of the Trade Contract Award Letter countersigned by Owner, shall promptly make all required changes in the proposed Trade Contract and award the Trade Contract in question.

4.3.7                        Prior bids.

The GMP is based on some bids that Construction Manager has solicited, coordinated, and negotiated.  A removal or rejection by Owner of any bidder whose bid was used to determine the GMP may result in a change to the GMP.  The GMP will be adjusted only to the extent that the bidder is greater than the line item for that trade in the budget annexed to the Agreement as part of Exhibit S.

4.4  Trade Contracts

4.4.1                        Requirement for Written Trade Contracts

Unless otherwise agreed upon in writing by Owner, all Work to be performed and all materials, equipment and supplies to be furnished in connection with the Work shall be performed or provided by Trade Contractors pursuant to written Trade Contracts awarded by Construction Manager.  No portion of the Work shall be performed by a Trade Contractor and no materials, equipment or supplies shall be furnished by any Supplier unless and until: (1) a Trade Contract is entered into between Construction Manager and the Trade Contractor in question; and (2) the Trade Contract is approved by Owner prior to execution (unless Owner expressly waives the requirement).

4.4.2                        Each Trade Contract shall set forth that Trade Contractor’s express undertaking to comply with: (1) Owner’s OCIP (if applicable); (2) Owner’s Affirmative Action Program as set forth in Exhibit G.

4.4.3                        Enforcement of Trade Contract Terms

Construction Manager covenants and agrees that it shall diligently enforce all terms and conditions of the Trade Contracts.

4.4.4                        Assignment of Trade Contracts upon Termination of Construction Manager

Each Trade Contract to be entered into by Construction Manager in connection with the Work shall contain a provision providing that, if this Agreement is terminated by Owner pursuant to Article 16 hereof, that Trade Contract, at the option of Owner, shall be assigned by Construction Manager to Owner, or to such other entity as Owner may direct.  In such event, Owner or its designees shall assume all of Construction Manager’s obligations thereunder arising from and after the date of the assignment; provided, however, that nothing contained herein shall be deemed to release Construction Manager from liability to such Trade Contractor or to Owner or Owner’s designees with respect to claims arising from events occurring prior to the effective date of such assignment.

4.4.5                        Ownership and Use of Documents

Construction Manager agrees that the Contract Documents belong to Owner, and may not be used by Construction Manager or any Trade Contractor other than as may be necessary for the performance of the Work hereunder.  Without limitation of the foregoing, all Documents furnished to Construction Manager are to be used only with respect to this Project and are not to be used on or in

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connection with any other project.  Submission or distribution of documents to meet official regulatory requirements or for other proper and necessary purposes in connection with the performance of the Work at the Project shall not be construed as a violation of this Section.  Construction Manager shall include the requirements of this Section in all Trade Contracts.

4.5  Construction Phase Scope of Work

The Construction Phase of the Work shall commence on the date of commencement of construction of any portion of the Work and shall end on the date of Final Completion of the Work.  During the Construction Phase, Construction Manager shall, at a minimum, perform the following services:

4.5.1                        Establishment of Administrative Procedures

Construction Manager shall: (1) establish procedures for the orderly and expeditious performance of the Work in accordance with the terms of this Agreement and the Project Manual; (2) perform, or cause to be performed, all Work necessary in connection with the Project; (3) establish procedures for administration of Trade Contracts; (4) maintain coordination among Trade Contractors; and (5) coordinate the Work with the Work of the Base Building Construction Manager.

4.5.2                        Site Organization

Construction Manager shall prepare Project Site organization chart and establish lines of authority as necessary to carry out the Work on a coordinated basis.

4.5.3                        Site Staff and Office

Construction Manager shall organize staff and assign personnel to various functional areas as necessary so that the Work may be controlled, coordinated and expedited.  Construction Manager shall establish a Site office, with appropriate furnishings, equipment and support staff.  The Site office shall have accommodations for up to five (5) representatives of Owner and Architect.

4.5.4                        Cost Forecasts

In consultation with Owner and Architect, Construction Manager shall prepare an initial cost forecast setting forth in such manner and detail as Owner may require, all anticipated costs of the Work for: (1) all Trade Contractors performing Work or furnishing materials and/or equipment under Trade Contracts on a trade-by-trade basis; and (2) General Conditions Work.  Construction Manager shall update the cost forecast monthly, or more frequently if requested by Owner, in consultation with Owner and Architect.  Construction Manager shall submit the updates to Owner for its approval, and shall make such adjustments thereto, including adjustments by reason of approved Change Orders, Emergency Change Orders and Field Directives, as Owner may deem appropriate, to keep Owner currently informed as to the anticipated aggregate Costs of the Work and the ability of Construction Manager to complete the Work within the GMP.  In addition, Construction Manager acknowledges that Owner will rely on Construction Manager for monthly cash flow analysis for the purpose of Owner’s financial planning.  Construction Manager agrees that it will provide timely and accurate information, to the extent possible, given the state of the Design Documents at the time.

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4.5.5                        Project Schedule Updates

Construction Manager shall update the Project Schedule (including a two-week look-ahead schedule) on a regular basis, but not less than one (1) time per month to assure maximum utilization of all Trade Contractors.  All revisions and updates to the Project Schedule shall be approved by Owner.

4.5.6                        Incorporation of Trade Contractor Schedules

Construction Manager shall review the submission of Trade Contractor portions of the Project Schedule, which Construction Manager shall incorporate into the Project Schedule in a timely and coordinated manner.

4.5.7                        Owner Approval of Changes

Construction Manager shall obtain Owner’s written approval of any Changes in the Work and any approvals or other documents necessary in connection therewith (including both scope Changes determined by Construction Manager to be outside the GMP, and in-scope Changes within the GMP).

4.5.8                        Job Site Meetings

Construction Manager shall conduct regular job site and coordination meetings with Trade Contractors and members of the Project Team.  Job meetings shall be held not less often than weekly, and coordination meetings shall be held as required.  Construction Manager shall prepare detailed written agendas and minutes of each such meeting, which shall be circulated to interested parties as directed by the Owner.  Agendas must be provided at least two (2) days before each meeting, and minutes must be provided within three (3) days after each meeting.

4.5.9                        Site Record-Keeping

4.5.9.1                         Construction Manager shall prepare and maintain, on a current basis, an on-Site record-keeping system, including, but not limited to: (1) records of all Changes in the Work necessitated by Change Orders, Emergency Change Orders and Field Directives; (2) RFI’s, which shall be posted, in unedited form, on the Project Website; (3) Project Schedules; (4) daily manpower breakdowns; (5) daily/weekly manpower reports required by the Affirmative Action Requirements annexed as Exhibit G; (6) Submittal Logs; (7) material lists; (8) records of all pertinent communications with Architect and Architect’s responses thereto; and (9) Daily Reports which shall record manpower breakdowns on a trade-by-trade basis with a description of the Work being performed each day by each trade, equipment and material deliveries, visitors, special occurrences, accidents, weather conditions, and other Work related information.  Construction Manager shall make such on-Site records available for inspection to Owner.  In addition, copies of all correspondence pertaining to the Work shall be maintained by Construction Manager and shall be made available at all times to Owner.

4.5.9.2                         Construction Manager shall maintain at the Project Site, on a current basis and make available to Owner, Architect, and/or Owner’s Consultants upon request copies of all Trade Contracts, Shop Drawings, Samples, operating and maintenance manuals, Construction Documents and any related documents and any revisions thereto.

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4.5.9.3                         Construction Manager shall maintain and make available to Owner upon request progress photos taken on a monthly basis according to a plan approved by Owner; and at Owner’s request, upon Final Completion of the Work.

4.5.9.4                         Construction Manager shall also maintain a current set of As-Built Drawings for all Trades, showing the Work as actually completed, in such form, content and detail and, at Owner’s option, in such electronic medium, as Owner may specify.

4.5.10                  Job Progress Report

Construction Manager shall submit to Owner each month a Job Progress Report which shall provide the following information: (1) the financial condition of the Work, including Trade Contract awards, Project modifications, anticipated cost summary, Change Order summary and projected cash needs; (2) status of the Work, including updated Project Schedules with projected critical dates compared with original Milestone Dates, status of job progress to date, current Work activity, projected Work activity for the following month, job photos and status of materials required; and (3) status of Shop Drawings, the Shop Drawing Submittal Schedule, Coordination Drawings, a coordination drawing routing schedule, and coordination meeting minutes.

4.5.11                  Coordination and Maintenance of Project Documentation

4.5.11.1                   Construction Manager shall assemble and review all required brochures, guarantees, certificates of compliance and related agreements and instruments.

4.5.11.2                   Construction Manager shall assure that Trade Contractors, Suppliers and Vendors maintain required insurance through the maintenance of current certificates of insurance.

4.5.12                  Submittal Schedule

Construction Manager shall submit to Owner a Submittal Schedule, which shall be prepared in consultation with Architect, and which shall be updated on monthly basis.  The status of outstanding Submittals should be addressed by Construction Manager at the weekly progress meetings and included in the meeting minutes.

4.5.13                  Submittal Process

4.5.13.1                   Construction Manager shall obtain and review for constructability and conformity with the Construction Documents, all Shop Drawings, Samples, catalog cuts and other Submittals provided by Trade Contractors, and comment to Owner and Architect on their form and any significant inconsistencies between the Submittals and the Construction Documents.  Owner’s reasonable CADD Standards shall apply to Trade Contractor Shop Drawings to the extent reasonably possible based on the technical infrastructure of individual Trade Contractors.  After Construction Manager has conducted its review, Construction Manager shall promptly submit the Shop Drawings and other Submittals to Architect for review and approval.  Construction Manager shall coordinate and cooperate with Architect throughout the Submittal review process.  After return of the Shop Drawings and other Submittals from Architect, the Construction Manager shall review Architect’s comments thereon; evaluate and consult with Owner as to their impact on the Project; and distribute the Shop Drawings and other Submittals to the submitting Trade Contractors and all other affected parties.  Construction Manager shall diligently act to discover and resolve any conflicts between Shop Drawings and other Submittals submitted by Trade Contractors.

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4.5.13.2                   Construction Manager shall oversee the preparation and ongoing development of Coordination Drawings.  This process, in part, is intended to recognize and resolve design conflicts in advance of fabrication and installation of the various components of the Work.  Construction Manager agrees that it shall cause the Trade Contractors to expeditiously and thoroughly prepare and submit Coordination Drawings, so as to facilitate the identification and resolution of conflicts, including errors in the Construction Documents.

4.5.14                  Coordination of Purchase Orders

Construction Manager shall establish and coordinate with Owner a system for processing, expediting and administering Purchase Orders for the procurement of materials, supplies and equipment.  Construction Manager shall submit to Owner a schedule of Purchase Orders.  Construction Manager shall manage the procurement and delivery of critical materials to the Project Site and coordinate deliveries with the progress of the Work.

4.5.15                  Notification of Delays and Non-Conforming Work

Construction manager shall notify Owner and Architect of any delays, potential delays or non-conforming Work that may affect the Project Schedule, and provide Construction Manager’s recommendations regarding how to minimize the impact of such delays and/or non-conforming work.  Construction Manager shall recommend courses of action to Owner when the requirements of a Trade Contract are not being fulfilled, and the non-performing Trade Contractor fails or refuses to take satisfactory remedial action.

4.5.16                  Permits

Construction Manager shall obtain all necessary permits in conjunction with the Owner’s code consultant.

4.5.17                  Supervision and Coordination of Trade Contractors

Construction Manager shall inspect, manage and coordinate the work of all Trade Contractors; enforce the terms of the Trade Contracts; enforce strict discipline and good order among all Trade Contractors; cause Trade Contractors to leave the Work uncovered until such time as said Work has been inspected and approved by Construction Manager and/or Architect as required by the Contract Documents; and otherwise endeavor to guard Owner against any Delays, increased costs and defects and deficiencies in the Work.  In connection with the foregoing, Construction Manager shall: (1) inspect the Work daily to ensure that the Work as constructed complies with the Contract Documents and Applicable Laws; (2) require any Trade Contractor to stop Work which Construction Manager observes is not in compliance with the requirements of the applicable Trade Contract, the Contract Documents, recognized trade standards or the Applicable Laws; (3) reject and require to be corrected, those portions of the Work which Construction Manager discovers do not conform to the requirements of the applicable Trade Contract, the Contract Documents, recognized trade standards or the Applicable Laws; (4) inspect all materials, supplies and equipment delivered to the Site (or another storage location) or installed pursuant to any Trade Contract in an effort to determine that the same are in compliance with the requirements of the applicable Trade Contract, the Contract Documents, recognized trade standards and the Applicable Laws; (5) reject and require replacement of all non-conforming materials, equipment and supplies; and (6) not employ in connection with the Work any person or Trade Contractor unfit for, or unskilled in, the assigned task and, subject to Owner’s prior approval, remove such unfit or unskilled employee or Trade Contractor from the Project Site.

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4.5.18                  Cutting and Patching

Construction Manager shall arrange for all cutting, fitting or patching that may be required to complete the Work or to make its several parts fit together in a manner consistent with the Contract Documents.

4.5.19                  Informal Resolution of Trade Contractor Disputes

Construction Manager shall use its best efforts to resolve disputes between Trade Contractors relative to the performance of their Work or the furnishing of materials, or equipment or supplies in connection with the Work.

4.5.20                  Storage and Inspection of Materials and Equipment

Construction Manager shall arrange for the delivery, inspection, storage, protection and security of all materials, systems equipment and supplies provided in connection with the Work including, but not limited to, Pre-Purchased Items.

4.5.21                  Site Maintenance

Construction Manager shall maintain the Project Site in a safe and orderly fashion and provide clean-up of the Site on a daily basis.

4.5.22                  Site Security

Construction Manager shall provide security services in connection with the Work as approved by Owner.

4.5.23                  Site Safety

4.5.23.1                   Construction Manager shall enforce the implementation of necessary safety, health and environmental protection procedures (including, but not limited to, OSHA programs) during the performance of the Work, which shall include, but not limited to the erection and maintenance of Temporary Systems; the posting of danger signs and other warnings against hazards; the conduct of inspections; and enforcing the requirement that all Trade Contractors comply with Applicable Laws relating to safety, health, equal opportunity and environmental protection in connection with the Work.

4.5.23.2                   Construction Manager shall comply with, and shall require all Trade Contractors to comply with, the safety procedures and requirements of Owner’s OCIP.

4.5.23.3                   Construction Manager shall establish, implement and observe all safety, health and environmental protection measures during performance of the Work consistent with Applicable Laws; submit to Owner for approval, and periodically update, as necessary, safety plans for the Project showing the manner in which the aforesaid measures are to be implemented; and designate a responsible person or persons from Construction Manager’s organization or an independent person or persons from another firm or organization, subject to Owner’s approval, who shall be a Construction Manager’s certified Site Safety Manager and whose duties shall include the prevention of accidents.  The performance of such services by Construction Manager shall not relieve Construction Manager or

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any of the Trade Contractor firm of their respective responsibilities for the safety of persons and property in compliance with this Agreement and all Applicable Laws.

4.5.24                  Administration of Payment Process

4.5.24.1                   Construction Manager shall prepare a Schedule of Values for approval by Owner; prepare all Applications for Payment in a form reasonably similar to AIA Forms G702 and G703; determine, prior to the submission of each Application for Payment, whether and to what extent the sums requested therein are due and payable; and certify the same to Owner.

4.5.24.2                   Construction Manager shall receive and review Applications for Payment from Trade Contractors and Suppliers.  Construction Manager shall issue Applications for Payment incorporating same to Owner for review and approval.

4.5.24.3                   Construction Manager shall receive and review Partial Waivers of Lien and Release forms submitted by Trade Contractors and Suppliers in connection with Applications for Payments.

4.5.25                  Administration of Change Order Process

4.5.25.1                   Construction Manager shall establish procedures for processing Change Orders including, but not limited to, the maintenance of a Change Order Log.

4.5.25.2                   Construction Manager shall make recommendations with respect to any Changes that Construction Manager may consider necessary or desirable in connection with the Work.  No Changes shall be made in connection with the Work without the prior written approval of Owner.  Construction Manager shall negotiate Change Orders on behalf of Owner.

4.5.25.3                   Construction Manager shall issue to Trade Contractors: (1) Change Orders approved by Owner; (2) all Emergency Change Orders; and (3) Field Directives.

4.5.25.4                   Construction Manager shall with respect to portions of the Work to be performed pursuant to a Change Order, an Emergency Change Order, or a Field Directive, on a time and material, Unit-Cost or other similar basis, provide for record keeping in connection therewith; maintain accurate cost accounting records; and provide copies of all such accounting records to Owner.

4.5.26                  Installation of FF&E

Construction Manager shall coordinate with and afford the Separate Contractors and Vendors reasonable opportunity to install or cause the installation of FF&E in the Project.

4.5.27                  Substantial Completion

4.5.27.1                   Construction Manager shall work with Owner and Architect to develop a schedule for Substantial Completion staged occupancy and turnover for fitout of the Interiors Project in accordance with the provisions of Section 4.5.27.6 Early Access.

4.5.27.2                   Construction Manager shall assist Owner in determining when Substantial Completion of the Work (or any discrete portion thereof) has taken place; and prepare (in consultation with Architect and Owner’s Consultants) Punchlists that identify incomplete or unsatisfactory items of Work.  Punchlists shall be limited to minor details that do not affect Owner’s

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ability to use the Project or any discrete portion thereof.  Construction Manager shall supervise all Work necessary to complete the items set forth on the Punchlists.  The failure to include any element of the Work on the Punchlists shall not alter the responsibility of Construction Manager and/or the Trade Contractors to complete the Work in accordance with the Contract Documents.  Upon satisfactory completion of all Punchlist Items, Construction Manager shall provide written notice to Owner and Architect that the Work has reached the stage of Final Completion and is ready for final inspection.

4.5.27.3                   On or before the Substantial Completion Date, Construction Manager shall clear the Project Site of all debris, construction materials, rubbish, rubble, discarded equipment or spillage of solid or liquid waste; shall remove all tools, construction equipment, machinery and surplus materials; and shall maintain the Project free of such items until Final Completion.  In addition, on or before Final Completion, Construction Manager shall clean, the Project Site, as provided in the Construction Documents.  If the Work or the Project Site is damaged by Construction Manager or any Trade Contractor, Construction Manager, without increase to the GMP, shall promptly repair and restore the portion so damaged to its condition immediately prior to such damage in a manner satisfactory to Owner and Architect.  If Construction Manager fails to undertake said cleaning, removal and repairs, the Owner may, at Owner’s sole option, avail itself of any of the remedies provided in this Agreement and, subject to giving 72 hours’ prior written notice to Construction Manager, Owner may also perform, or cause to be performed, the said cleaning, removal and repairs.  All additional expenses incurred by Owner in connection therewith, at Owner’s option, shall be reimbursed to Owner either: (1) by Owner withholding a corresponding amount from monies then due or next becoming due from Owner to Construction Manager; or (2) by Construction Manager paying such amounts to Owner on demand, after rendition of a ▇▇▇▇ or statement therefor.

4.5.27.4                   Prior to Substantial Completion of the Work, Owner or Owner’s designees, including, but not limited to, Separate Contractors, shall have the right to use all or any portion of the Project for the installation of FF&E.  Construction Manager shall coordinate with Owner’s furniture consultant, Vendors and Trade Contractors regarding the delivery, installation and wiring necessary for FF&E.

4.5.27.5                   Construction Manager shall use good faith efforts in making the premises available hereunder to Owner or Owner’s designees.  Such use or occupancy by Owner or Owner’s designees shall not: (1) constitute acceptance by Owner of any element of the Work or of the space, systems, materials or equipment incorporated in the Project; (2) be construed as a waiver of any right or claim by Owner in connection with any portion of the Work; or (3) affect the obligations of Construction Manager or any Trade Contractor for any Work which is not in accordance with the Contract Documents.  Construction Manager shall continue performance of the Work in a manner which shall not unreasonably interfere with said use, occupancy and operation by Owner or Owner’s designees.  Construction Manager agrees that it shall not interfere with, such use or occupancy by Owner or Owner’s designees, and that it shall cooperate with Owner and any designated occupants to facilitate early occupancy of the Project or discrete portions thereof.

4.5.27.6.1          Tenants including, but not limited to, the Interiors Project Owner and the Commercial Office Owner, shall have the right of access to any floor (or group of floors) of the Base Building that will be occupied by such Tenant as part of such Tenant’s unit (or other space that may be leased by such Tenant, or any of its affiliates, in such unit) on a floor by floor (or group of floors) basis for the commencement of such Tenant’s interior improvement work as of the date that the construction milestone defined as “Open Access” with respect to any such floor (or group of floors) of the Building that will be so occupied by such Tenant.  The determination of the floor or floors which will constitute each block to be delivered to such Tenant (the “Open Access Floor(s)”) and the

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scheduling therefore shall be made by the Owner.  Construction Manager agrees that the Tenants shall have access to the Open Access Floors at the earliest feasible date.  The first Open Access Floors to be delivered are called the “Initial Open Access Floor(s).”

4.5.27.6.2          The term “Open Access” shall mean that the Core and Shell work with respect to a block of Open Access Floor(s) has been completed to the following extent (the date such work shall be completed as to any block of Open Access Floor(s) is herein called a “Open Access Completion Date”:

(1)  concrete has been poured and metal decking installed through the floor above such Open Access
Floor(s);

(2)  fireproofing has been completed to and through such Open Access Floor(s);

(3)  the main sprinkler riser has been installed;

(4)  the main HVAC trunk duct risers have been installed;

(5)  material and personnel hoists are serving the Improvements through such Open Access Floor(s) and are available for use by Tenant;

(6)  Base Building stairwells are erected to and through such Open Access Floor(s).

All of the work set forth in subsection 4.6.27.6.2(1) through (6) is herein referred to as the “Open Access Work.”

4.5.27.6.3          Delivery to the Tenants of their respective Initial Open Access Floors and each subsequent block of Open Access Floor(s) with the Open Access Work completed with respect thereto, in sequence from the bottom up, in accordance with the schedule set forth in Exhibit C.

4.5.27.6.4          On or before the Open Access Completion Date as to the Initial Open Access Floors and each subsequent block of Open Access Floor(s), all of the work necessary to provide the following to the Initial Open Access Floors and the Open Access Floors shall be completed, and Construction Manager shall cause such work to be completed expeditiously in accordance with the Open Access Schedule;

(1)  temporary power will be operational;

(2)  temporary water will be operational;

(3)  a separate temporary loading dock and laydown/staging area will be accessible.

4.5.28                  Initial Startup and Testing

Construction Manager shall assist Owner, Owner’s Consultants and Owner’s operating and maintenance personnel in the initial start up, testing and operation of the Work and all systems comprising any portion of the Work in accordance with a Commissioning Plan to be agreed upon by Owner and Construction Manager before the start of the Work.

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4.5.29                  Closeout

Prior to making Final Payment under any Trade Contract, Construction Manager shall: (1) prepare a Trade Contract status summary indicating the Trade Contract’s financial status, together with a summary of all approved Change Orders and payments made to date made under that Trade Contract; (2) secure and deliver to Owner all guarantees, warranties, affidavits, general releases, final waivers of lien and releases, certificates, consent of any surety to Final Payment, As-Built Drawings, maintenance manuals, operating instructions, keys and other documents and items required to be delivered under the Contract Documents, or requested by Owner, in connection with the Work; (3) provide, for itself and all Trade Contractors, all required Affirmative Action signoffs.  All such documentation and items shall be in a form acceptable to Owner.

4.5.30                  Labor Relations

4.5.30.1                   Construction Manager shall make recommendations regarding, and render assistance necessary for, the development and administration of an effective labor relations program for the avoidance of labor disputes during the performance of the Work.  The Construction Manager shall assist in negotiating any agreements with labor unions that will result in cost savings, and shall use its best efforts to secure better agreements.

4.5.30.2                   Construction Manager shall not, directly or indirectly, engage any Trade Contractor, mechanic or laborer in connection with the Work (even if such Trade Contractor, mechanic or laborer has been approved by Owner), or use any materials in connection with the Work in a manner that would disturb harmony with any Trade engaged in performing any other Work on the Project or in the Building (including, without limitation, the creation of any work slowdown, sabotage, strike, picket or jurisdictional dispute) or create any actual or anticipated interference with the operation of the Building or performance of the Work, Owner’s work force, construction in other space in the Building or construction being performed by or on behalf of other tenants in the Building.  Construction Manager shall immediately stop the performance of any Work, or the use of any materials in connection with such Work or use of any Trade Contractor, mechanic or laborer if Owner notifies Construction Manager that continuing such Work or employing such Trade Contractor, mechanic or laborer would so disturb harmony with any Trade engaged in performing any other work in the Building or create any actual interference with the operation of the Building, the performance of Work on the Project, construction in other space in the Building or construction being performed by or on behalf of other tenants in the Building.  Construction Manager shall cease the use of any such Trade Contractor, mechanic or laborer if Owner notifies Construction Manager that such employment is creating actual interference as described above.

4.5.31                  Trade Contractor Disputes

Construction Manager shall actively participate in the resolution of Trade Contractor disputes.

4.5.32                  Governmental Consents, and Approvals and Permits

4.5.32.1                   Construction Manager shall secure and deliver to Owner all governmental consents, approvals, licenses and certificates customarily obtained by a construction manager performing services similar to those being performed by Construction Manager hereunder, including, but not limited to, assisting Owner in obtaining Temporary and Final Certificates of Occupancy.  The making of Final Payment by Owner to Construction Manager hereunder shall be conditional upon the delivery by Construction Manager to Owner of the foregoing items, unless the

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failure to obtain any of the items is due to causes beyond the reasonable control of Construction Manager.

4.5.32.2                   Construction Manager acknowledges that Owner will obtain and pay for the building permit.

4.5.33                  Discounts, Rebates and Refunds

All cash discounts, rebates and refunds obtained by Construction Manager shall accrue to Owner.  Construction Manager promptly shall inform Owner of the availability of any cash discount available so as to afford Owner the opportunity to obtain the same, if Owner so elects.  All trade discounts, rebates and refunds, if any, and all returns from the sale of Surplus Materials and Equipment shall accrue to Owner, and Construction Manager shall take such steps as are necessary to ensure that Owner receives credit for all of the foregoing.

4.5.34                  Discharge of Liens

4.5.34.1                   If, at any time, a lien of any kind is filed against the Project by a Trade Contractor or anyone claiming through Construction Manager or a Trade Contractor for Work performed or for materials, equipment or supplies furnished in connection with the Work for which: (1) the Construction Manager has previously been paid by the Owner, or (2) Owner has not made payment because of a bona fide dispute between the parties, then Construction Manager shall, within seven (7) days after notice from Owner, commence to cause such lien to be cancelled and discharged of record by bonding or otherwise, and thereafter diligently pursue such cancellation or discharge, without any increase in the GMP.

4.5.34.2                   If any lien required to be removed pursuant to Section 4.3.32.1 hereof is not cancelled and discharged of record as set forth in that Section, Owner shall have the right to take such action as Owner shall deem appropriate (which shall include the right to cause discharge of such lien of record by bonding or otherwise.  In such event, all costs and expenses incurred by Owner in connection therewith (including but not limited to premiums for any bond furnished and reasonable attorneys’ fees and disbursements), shall be paid by Construction Manager to Owner on demand, or at the option of Owner, deducted from any payment then due or thereafter becoming due from Owner to Construction Manager in accordance with the terms of this Agreement.  In the event Owner elects to discharge such lien by placing security with the Court, Owner will so notify Construction Manager and Construction Manager will have 120 days to substitute its own security.  If Construction Manager fails to do so, Owner can satisfy the lien by payment and deduct all costs and expenses from sums due to Construction Manager.

4.5.35                  Inspection and Testing

4.5.35.1                   Notice of Inspection or Testing

If the Contract Documents, Applicable Laws or Governmental Authorities having jurisdiction over the Project require that any Work be inspected or tested, Construction Manager shall give Owner and Architect timely notice of the readiness of the Work for inspection or testing and the date fixed for such inspection or testing.  Construction Manager shall coordinate all Controlled Inspections, and shall give Owner and Architect timely notice thereof.

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4.5.35.2                                 Special Inspections or Testing

4.5.35.2.1                        Whenever, in the opinion of Owner, it is desirable to require special inspection or testing of the Work or any portion thereof, Owner shall have authority to do so, regardless of whether the Work is then fabricated, installed, covered or completed.  All costs incurred in connection with such special inspection or testing shall be a Cost of the Work authorized by the issuance of a Change Order, unless the test reveals a failure of the Work to conform to the Contract Documents.  If the test indicates that the Work fails to conform to the Contract Documents, Construction Manager shall bear, without increase to the GMP, all costs of such special inspection or testing, including, without limitation, Architect’s and additional services made necessary thereby.  No inspection performed or not performed by Owner shall be deemed a waiver of any of Construction Manager’s obligations hereunder or be construed as an approval or acceptance of the Work or any part thereof.

4.5.35.2.2                        In the event of a test failure of any portion of the Work, Owner may require inspection or testing of any or all similar items of the Work.  Construction Manager shall bear, without increase to the GMP, all costs of such additional inspection or testing, including, but not limited to, Architect’s additional services made necessary thereby.

4.5.35.3                                 Covered and Concealed Work

If any Work is covered or concealed contrary to the request of Owner or Architect, or requirements of the Contract Documents, such Work, if required by Owner, shall be uncovered for examination, inspection or testing without increase in the GMP.  If any such test results are below minimums specified in the Contract Documents, Owner may order additional examination, testing or inspection.  Such additional examination, inspection or testing shall likewise not increase the GMP.  Should Owner or Architect have reason to believe that defects exist in any Work which has already been covered or concealed, although a request not to cover or conceal such Work had not previously been made by Owner or Architect, such Work shall be promptly uncovered by Construction Manager and subjected to such tests, inspection or examination as may be deemed appropriate by Owner or Architect.  In such case, the provisions of Sections 4.5.35.2.2 shall control with respect to the costs associated with such uncovering.

4.5.35.4                                 Correction of Rejected Work

Work rejected by Owner or Architect for failure to conform to the Contract Documents shall immediately be reconstructed, made good, replaced or corrected by Construction Manager, (including adjacent portions of the Work destroyed or damaged by such removal or replacement) without increase in the GMP.  All rejected materials shall be removed from the Project Site within a reasonable period of time.  Acceptance of materials and workmanship by Owner shall not relieve Construction Manager from its liability for and obligation to replace all Work which is not in full compliance with the Contract Documents.

4.5.35.5                                 Owner’s Right to Accept Defective or Non-Conforming Work

At Owner’s option, subject to the concurrence of the Construction Manager, Owner may accept defective or nonconforming Work or materials, instead of requiring their removal, correction or replacement, and a Change Order shall be issued.  The amount of said Change Order shall reflect a

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reduction in the GMP in an amount equal to the aggregate cost of labor and materials which would have been incurred by Construction Manager if Owner had required Construction Manager to repair or replace such defective or nonconforming Work as required by the Contract Documents.  Such adjustment shall be effected whether or not Final Payment has been made.

4.5.36                Materials and Equipment

4.5.36.1                                 Transfer of Title and Responsibility

As the Work progresses, title to each item of material or equipment shall vest in Owner upon payment for such item by Owner.  Each such item shall then become the sole property of Owner, subject to the right of Architect to reject the same at any time prior to Final Completion for failure to conform to the Contract Documents.  Notwithstanding the foregoing, nothing contained herein shall be construed to transfer the risk of loss from Construction Manager or any Trade Contractor to Owner prior to incorporation of such materials or equipment into the Work, regardless of whether such loss is the result of damage, theft, vandalism or any other cause, or whether the same was caused by the negligent acts or omissions of Construction Manager or any Trade Contractor, or their failure to comply with their respective obligations under this Agreement or the Trade Contracts.  Accordingly, Construction Manager shall be responsible for arranging for insuring materials and equipment until the same are incorporated in the Work.  Owner shall be responsible for insuring materials and equipment from and after the date the same are incorporated into the Work as set forth in Article 14 hereof.  Notwithstanding the foregoing, Owner shall make arrangements to insure the foregoing applies to Pre-Purchased Items stored off-site, for which Owner has made payment.

4.5.36.2                                 Trade Contractor Warranties No Encumbrances

Construction Manager shall warrant, and shall require each Trade Contractor to warrant, that: (1) title to all materials and equipment incorporated in the Work or paid for by Owner, including, without limitation, title to Pre-Purchased Items, shall pass to Owner free and clear of all liens, claims, security interests and encumbrances of every kind; and (2) that no materials or equipment covered by any Application for Payment will have been acquired by any other person performing Work at the Project Site or furnishing materials and equipment in connection with the Work subject to an agreement under which an interest therein or an encumbrance thereon shall have been retained by the seller or otherwise imposed by seller or any other person.

4.5.36.3                                 Pre-Purchased Items

4.5.36.3.1                        Construction Manager shall be entitled to arrange for the procurement of certain Purchased Items of specified materials and equipment to be incorporated into the Work in advance of the time when such items are scheduled to be incorporated into the Work, provided that Owner shall have given its prior written consent thereto in each instance.  In such event, Construction Manager shall be entitled to requisition for 100% of the cost of such Pre-Purchased Items prior to installation.  Construction Manager, upon submission of its Application for Payment, shall deliver to Owner a ▇▇▇▇ of sale with respect to each Pre-Purchased Items evidencing unencumbered title to the same in Owner’s name, together with any warranties, certificates of insurance and other documents requested by Owner evidencing that such materials and equipment are covered by insurance as specified by Owner.

4.5.36.3.2                        All Pre-Purchased Items shall be stored at the Project Site or at such off-Project Site storage locations as shall have been approved in writing in each

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individual instance by Owner, and shall be subject to inspection at any time by Owner or Owner’s designee.  Any Pre-Purchased Items stored in off-Site storage locations shall be segregated from materials and equipment of others; shall be clearly labeled to evidence Owner’s ownership interest therein; and shall otherwise be stored in such manner as directed by Owner.  Insurance premiums, storage costs and other reasonable expenses incurred in connection with the off-Site storage of Pre-Purchased Items shall be included in the Costs of the Work.  The risk of loss or damage to such Pre-Purchased Items shall remain with Construction Manager until the incorporation of such Pre-Purchased Items into the Work.

4.5.36.3.3                        All Pre-Purchased Items obtained by Construction Manager shall be subject to the condition that, if, upon inspection of the same by Owner or if, upon incorporation of the same into the Work, Owner determines that such Pre-Purchased Items, or any portion thereof, are faulty or defective, then the Pre-Purchased Items shall be replaced, without increase in the GMP, Construction Manager’s Fee or General Conditions Costs, within thirty (30) days after receipt by Construction Manager of written notice to such effect from Owner or Architect.

4.5.36.4                                 Owner-Furnished Items

Owner may elect to provide certain Owner-Furnished Items that shall, at Owner’s option, be stored at the Site or at an off-site location identified and arranged by Owner.  Owner shall have the right to assign the Purchase Order for any Owner-Furnished Item to Construction Manager who may, in turn, assign said Purchase Order to the appropriate Trade Contractor.  Construction Manager shall cooperate with Owner in the installation of Owner-Furnished Items into the Work.

4.5.37                  Substitutions

4.5.37.1                                 Standards for Substitutions

4.5.37.1.1                        The materials and equipment of manufacturers identified in the Construction Documents are intended to establish the standard of quality and design required by Owner.  Notwithstanding anything to the contrary contained in the Construction Documents, materials and equipment of manufacturers other than those specified may be used only if accepted by Owner as provided in this Section 4.5.37.

4.5.37.1.2                        Owner, in consultation with Architect, shall be the judge of the equivalency of each proposed Substitution.  Architect shall make written recommendations with regard to the acceptance or rejection of proposed Substitutions to Owner.  Owner shall then issue to Construction Manager written approval or rejection of the proposed Substitution, and Construction Manager shall inform the appropriate Trade Contractor of said approval or rejection.  Owner, in its sole discretion, may authorize rejection of a proposed Substitution, notwithstanding the fact that Architect or may have judged it equivalent and recommended acceptance of the same.  In the event that a Substitution is necessary due to the unavailability of a specified item, any rejection by the Owner under this Section shall be accompanied by a recommendation by the Owner of a readily available Substitution.

4.5.37.2                                 “Or Equal” Specifications

4.5.37.2.1                        When two or more materials or pieces of equipment are specified in the Construction Documents for an item of Work, any one thereof shall be deemed acceptable, and Construction Manager shall have the choice as to which product to use.

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4.5.37.2.2                        When only one material or piece of equipment is specified in the Construction Documents for an item of Work and the term “or equal” is used in connection therewith, Construction Manager may offer a Substitution by submitting a written application to Architect, in sufficient time (taking into account the progress of the Work, the period of delivery of the items concerned and adequate time for Architect’s review), setting forth: (1) the proposed Substitution, together with substantiating data, samples, brochures and other documentation supporting the proposed Substitution, including, but not limited to, evidence that the proposed Substitution is equal in quality and serviceability to the specified item; will not entail changes in detail, schedule and construction of related Work; conforms with the design of the Project and its artistic intent; and will not result in an increase in the Costs of the Work; and (2) Changes in other parts of the Work required by reason of the proposed Substitution, and the cost consequences associated therewith.  A copy of any such application shall be delivered to Owner simultaneously with its delivery to Architect.

4.5.37.2.3                        When only one product is specified in the Construction Documents for an item of Work and the term “or equal” is not used in connection with such product, Owner, in its sole and absolute discretion, may authorize the rejection of any Substitution proposed by Construction Manager.  Notwithstanding the foregoing, if such specified product shall become unavailable for a material period of time, and Owner receives reasonably satisfactory proof from Construction Manager that the same shall be unavailable for reasons other than the failure of Construction Manager or a Trade Contractor to order such product in a timely manner, consistent with the Contract Documents and the Project Schedule, then, in such event, Owner shall consent to such Substitution, in which event any change in costs incurred in connection with the use of such Substitution shall be confirmed by a Change Order and included in the Costs of the Work hereunder.

4.5.37.3                                 Support Required for Substitutions

Construction Manager shall support any request for a Substitution with sufficient evidence to permit Architect to make a fair and equitable recommendation to Owner on the merits of the proposal.  Any item by a manufacturer other than those identified in the Construction Documents, or of brand name, or model number or size or generic species other than those cited in the Construction Documents, shall be considered a Substitution.

4.5.37.4                                 Acceptance of Proposed Substitutions

Acceptance by Owner of a proposed Substitution shall not relieve Construction Manager from responsibility for compliance with all of the requirements of the Contract Documents.  In addition, there shall be no increase in the Costs of the Work related to a Substitution, unless Construction Manager has notified Owner as required herein that the cost of the Substitution is an increase in the value of the substituted item, and Owner has approved such increase the issuance of a Change Order.  If Changes in other parts of the Work are required by reason of an approved Substitution, the costs of any such Changes shall likewise be confirmed by Change Order and included in the Costs of the Work.

4.5.37.5                                 No Time Extensions

Except in the instances where a specified product is not commercially available, the Project Schedule shall not be adjusted as a result of any circumstance relating to a proposed Substitution.

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4.5.38                  Cost Segregation

Construction Manager shall be required to report costs per a “Schedule of Assets” list (“List”) provided by the Owner or Owner’s consultants.  Costs must be accurately associated with each and every item of the List for assets that are included in the Construction Manager’s scope of work as defined by the drawings, specifications, and/or contract agreement(s).  All change proposals shall include necessary language to sufficiently describe the asset and the related work to be performed thereunder.  A preliminary List will be provided within a reasonable time period after execution of this Agreement.  Owner may modify or add to the List during the course of construction relative to the scope of work for Construction Manager.  Construction Manager shall update the List periodically through the course of construction.  A final and completed List will be provided to Construction Manager within thirty (30) days of completion of Construction Manager’s contract.  Construction Manager is required to complete the final List within fifteen (15) days following its receipt.

4.6                                 Warranties

4.6.1                        Materials and Equipment Warranties

Construction Manager warrants and represents that all materials and equipment incorporated in the Work shall be new and of good quality, free from improper workmanship and defective materials and in strict conformance with the Contract Documents and all Applicable Laws.  All Work not conforming to these requirements, including Substitutions not properly approved, may be considered defective, and must be corrected or replaced.  The Warranty on a piece of equipment installed in the Work shall: (1) commence to run on the date that the piece of equipment is first put into service under the Commissioning Plan; and (2) be the manufacturer’s standard warranty for that piece of equipment.  Owner’s option to purchase extended warranty coverage for materials and equipment shall be preserved in the applicable Bid Documents and/or Purchase Order.

4.6.2                        Return and Repair Warranty

Construction Manager shall guarantee (and shall require all Trade Contractors to guarantee) the Work for a period of one (1) year after Substantial Completion, during which time the appropriate Trade Contractor will return to the Site and replace or repair any defective or non-conforming item of Work identified by Owner.  In the event Construction Manager achieves Substantial Completion of a discrete building system, the warranties in connection with that building system will commence to run on the earlier of the date that Owner: (1) issues written approval and acceptance of such system; or (2) commences the use of the system for its intended purpose.  Owner shall give such written notice to Construction Manager promptly after discovery of an item of defective or non-conforming Work.  Notwithstanding the foregoing and in recognition that Construction Manager is required to include guarantees of the type contained in Trade Contracts, in the event that Owner shall agree in writing, in its sole discretion, to the inclusion in a specific Trade Contract of a period of guaranty which has a duration of less than one (1) year, then the obligation of Construction Manager under this Section with respect to the Work of such Trade Contractor shall be applicable only for the shorter period contained in the Trade Contract.

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4.6.3                        No Limitation on Statute of Limitations

Nothing contained in this Section 4.6 shall be construed to establish a period of limitation with respect to any other obligation that Construction Manager might have under the Contract Documents.  The establishment of the time periods noted in Section 4.6.2, or such longer period of time as may be prescribed by Applicable Laws or by the terms of any warranty required by the Contract Documents, relates only to the specific obligation of the Construction Manager and the appropriate Trade Contractor to correct the Work, and has no relationship to the time within which the breach of the obligation of the Construction Manager or any Trade Contractor to comply with the Contract Documents may be sought to be enforced.  Nor is the time within which proceedings may be commenced to establish Construction Manager’s liability with respect to Construction Manager’s obligations under this Agreement affected by the provisions of Section 4.6.2.

4.7                                 Compliance with Affirmative Action Requirements

Construction Manager agrees to comply with (and to cause all Trade Contractors to comply with) the Affirmative Action Requirements set forth in Exhibit G.  Construction Manager shall retain all Project records relating to the satisfaction of Affirmative Action Requirements for a period of not less than three (3) years after Final Completion of the Project.

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ARTICLE 5

MANAGEMENT OF THE WORK

5.1                                 Key Employees

5.1.1                        Key Employees Identified

Construction Manager has designated the individuals identified in Exhibit M as Key Employees, who shall have primary responsibility for management of the Project.

5.1.2                        No Reassignment or Removal of Key Employees

Key Employees may not be replaced or reassigned by Construction Manager during the term of this Agreement (including both Pre-Construction and Construction Phases) without the prior written consent of Owner.  In the event that a Key Employee dies, becomes disabled or otherwise leaves the employ of Construction Manager, Construction Manager shall promptly propose a substitute of comparable expertise and experience who shall likewise be subject to Owner’s approval.  Construction Manager shall immediately remove any Key Employee whom Owner, in its discretion, determines is not performing in accordance with the best interests of the Project.

5.1.3                        Time Commitments of Key Employees

Construction Manager agrees that the Principal in Charge shall devote at least ten (10) percent of his time to the Project, and shall be available to Owner on an as-needed basis.  The Project Executive shall be available to Owner on an as-needed basis.  The Senior Project Engineer and Senior Project Superintendent shall be assigned to the Work on a full-time basis.  The Senior Project Engineer shall be stationed at the Project Site until Final Completion of the Work in order to facilitate performance and completion of the Work in the most expeditious and economical manner consistent with the interests of Owner.

5.2                                 Support Staff

In addition to the Key Employees, Construction Manager shall staff the Project with appropriate support personnel, who shall be assigned to the Project as agreed by Owner and Construction Manager, and who may be stationed at the Project Site, in Construction Manager’s home office or a branch office, or such other location as may be approved by Owner.  Each support person whom Construction Manager intends to include as part of General Conditions Costs, and that individual’s salary or wage rate (and any increases thereto) shall be subject to Owner’s prior written approval.  Owner shall have the opportunity to interview all support personnel proposed by Construction Manager Construction Manager shall remove any individual support person whose continued participation is not, in the Owner’s determination, in the best interests of the Project.

5.3                                 Authorized Representatives

Construction Manager hereby designates ▇▇▇▇▇▇ ▇▇▇▇, as the Construction Manager’s Authorized Representative, together with any other person(s) who, with prior written notice to Construction Manager, Owner may designate or appoint, to act in conjunction with ▇▇▇▇▇▇ ▇▇▇▇▇▇ who

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shall act as Owner’s Authorized Representatives.  Whenever this Agreement requires or permits the approval or consent of a party, such approval or consent shall be deemed given only if furnished by the respective party’s Authorized Representative in writing.  Any such approval or consent given by an Authorized Representative shall be binding on the respective party unless and until the other party has received written notice of the designation or appointment of a successor to the foregoing.

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ARTICLE 6

PAYMENT

6.1                                 Phases

Each Application for Payment shall be submitted with a Summary Application together with separate Applications for each of the following Phases of Work:

(1)  New York Times;

(2)  FC Lion;

(3)  Retail; and

(4)  Auditorium.

Construction Manager shall comply with the Cost Allocation Guidelines attached as Exhibit R.

6.2                                 Payments

Owner shall make Progress Payments to Construction Manager at monthly intervals in accordance with the following procedures:

6.2.1                        On or before the twenty-fifth (25th) day of the calendar month following commencement of the Work and on or before the twenty-fifth (25th) day of each calendar month thereafter, Construction Manager shall submit to Owner for review and certification, a “pencil-copy” Application for Payment, based upon the Schedule of Values approved by Owner, setting forth in detail: (1) Trade Contract Costs incurred by Construction Manager in connection with the Work during the immediately preceding twenty-five (25) day period, pro-rated through the end of the month (less Retainage as described in Section 6.2.2); (2) the portion of Construction Manager’s Fee as set forth in Exhibit S earned that month based on the percentage of completion of the Work; (less Retainage as set forth in Section 6.2.2); and (3) General Conditions Costs as set forth in Exhibit D.  Change Order Work may be included in monthly Applications for Payment based on the percentage of completion of the Change Order Work.

6.2.2                        After review by Owner, Construction Manager shall finalize the Application for Payment and submit it to Owner on the first (1st) day of the following month.  Any materials which are stored either on Site or off-Site (included, but not limited to, Pre-Purchase Items), but which have not been incorporated into the Work, shall be listed separately on each Application for Payment, and payment therefor is subject to compliance with Article 4.  The Application should show: (1) a deduction for Retainage equal to ten percent (10%) of Trade Contract Costs, but only until the Work of each Trade Contractor is fifty percent (50%) completed as determined by Owner and Architect, which amount shall be held by Owner until Substantial Completion of the Work; and (2) a deduction for Retainage equal to ten percent (10%) of Construction Manager’s Fee, which amount shall be withheld until Final Completion.  No Retainage shall be withheld on General Conditions Costs.  All Applications for Payment must be accompanied by such documentation (including Partial Waivers and Releases of Lien in the form set forth in Exhibit H for all payments through the prior Application for Payment) from Construction Manager and Trade Contractors as may be reasonably required by Owner.  Owner may require additional evidence of Construction Manager’s right to the payment claimed, and that title to equipment or materials not yet incorporated into the Project is unencumbered including, but not limited to, bills of sale, bills of lading, title documents, warehouse receipts and similar documentation.

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6.2.3                        Each Application for Payment shall constitute an express representation by Construction Manager that:

6.2.3.1               the partial payment requested has been incurred by Construction Manager on account of the Work or is justly due to Trade Contractors;

6.2.3.2               the materials, equipment and supplies for which such Application for Payment is being submitted have been installed or incorporated in the Project or have been stored at the Project Site or at such off-Project Site storage locations as have been approved in writing by Owner;

6.2.3.3               the materials, equipment and supplies covered by prior payments are not subject to any security interests or similar encumbrances;

6.2.3.4               no mechanic’s, laborer’s, vendor’s, materialman’s or other liens have been filed, or have been threatened to be filed, in connection with the Work or in connection with any of the materials, equipment or supplies incorporated therein or purchased in connection therewith, and in the event that Construction Manager cannot make such a statement, state in full the reasons therefor;

6.2.3.5               no claims have been filed, or have been threatened to be filed, by any Trade Contractor or anyone claiming through any Trade Contractor in connection with the Project, or if such claim has been filed, or threatened state in full the reasons therefor;

6.2.3.6               the Work which is the subject of such Application for Payment has been performed in accordance with the Contract Documents.

6.2.4                        Construction Manager shall carefully examine all payment breakdowns and Applications for Payment submitted by Trade Contractors in an effort to eliminate “front-end loading.” Construction Manager shall under no circumstances request or allow payments to be made to any Trade Contractor which are “front-end loaded,” and which do not accurately reflect the true value of the Work performed or the materials, equipment or supplies actually furnished.

6.2.5                        On or before the forty fifth (45th) day after Owner’s receipt of the Application for Payment, Owner shall pay Construction Manager an amount equal to the sum of: (1) Trade Contract Costs approved by Owner (less Retainage as set forth in Section 6.2.2); (2) General Conditions Costs; and (3) Construction Manager’s Fee (less Retainage as set forth in Section 6.2.2).  There shall be no Retainage on General Conditions Costs.  Construction Manager shall process and make payment to all Trade Contractors whose Work is included in the Application for Payment as paid by Owner within ten (10) Work Days after Construction Manager’s receipt of payment from the Owner.  This provision is strictly for the benefit of Owner in order that satisfactory morale and relations with Trade Contractors be maintained, and shall not under any circumstances confer any right upon any third party.  This provision shall be waivable by Owner, in writing, in Owner’s absolute discretion.  Owner reserves the right to make payment directly to Trade Contractors in the event that such payments are not made by Construction Manager as provided for in this Agreement.

6.2.6                        Within thirty (30) days following Substantial Completion of the Work and submission of an Application for Payment, Construction Manager shall be entitled to an amount equal to the balance remaining unpaid to Construction Manager for Costs of the Work, together with that portion of the Construction Manager’s Fee and General Conditions Costs then due, less an amount equal to the sum two times the value of the Punchlist prepared in accordance with Section 4.5.27.2.

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Notwithstanding the foregoing, it is expressly understood and agreed that if, at any time after Retainage with respect to a particular Trade Contract is released, a lien is filed against the Project which relates to Work performed or materials, equipment or supplies furnished by said Trade Contractor, and Construction Manager has failed to cancel or discharge such lien in accordance with Article 4, Owner, at its option, shall be entitled to hold back from the sums then due to Construction Manager an amount equal to all costs and expenses to be incurred by Owner in causing such lien to be discharged of record, including, without limitation, attorneys’ fees and disbursements;

6.2.7                        Within sixty (60) days following Final Completion of the Work, Construction Manager shall submit a Final Application for Payment which shall be accompanied by: (1) final Waiver of Lien and Release forms for Construction Manager and all Trade Contractors; (2) consents of sureties; (3) As-Built Drawings; (4) operating and maintenance manuals; (5) keys; (6) requirement permits and certificates; (7) affidavits of Key Employees as described in Section 2.4.3.2; and (8) all other documents and/or items which Construction Manager is obligated by the Contract Documents to deliver at Final Completion.  Upon receipt of said documentation and items in a form acceptable to Owner, Owner shall pay to Construction Manager an amount equal to the aggregate of the balance remaining unpaid to Construction Manager on account of Costs of the Work, the Construction Manager’s Fee, and the balance of any Retainage withheld under Trade Contracts.  Acceptance by Construction Manager of Final Payment following Final Completion of the Work shall constitute a waiver of all Claims of which Construction Manager had knowledge at the time of Final Payment, unless the same are expressly reserved in writing and identified by Construction Manager as unsettled at the time of Final Completion.  Such reserved Claims shall remain valid only for a period of one (1) year.

6.2.8                        Notwithstanding anything in this Agreement to the contrary, Owner, in its reasonable judgment, may withhold from any payment due or to become due to Construction Manager any amount which Owner, in its good faith opinion, deems sufficient to reimburse Owner for its actual or potential expenditures for the account of Construction Manager, or to secure Owner’s remedies in consequence of any actual or potential default or breach by Construction Manager under this Agreement including, without limitation, Owner’s opinion that the balance payable to Construction Manager under this Agreement would be insufficient to complete the Work.  In connection with any of the foregoing, Owner may nullify, in whole or in part, any previously approved Application for Payment upon reasonable basis.  Owner may, in its sole discretion, issue joint checks to Trade Contractors and/or Suppliers, although nothing herein shall obligate Owner to do so.

6.3                                 Payment Does Not Constitute Acceptance

No payment by Owner of any Application for Payment shall constitute acceptance by Owner of Work completed or of materials stored that are not in conformity with the Contract Documents, and no such payment shall be construed as a waiver of any right or claim by Owner in connection with such Work or stored material.

6.4                                 Incentive Bonuses

Owner has included in the contract a bonus potential of an amount not to exceed two million five hundred thousand ($2,500,000) dollars.  The bonus shall be calculated at the time of Final Completion and is due and payable only to the extent there are funds remaining in the Contingency in excess of the amount of one million ($1,000,000) dollars to fund the bonus.  The first one million ($1,000,000) dollars remaining in the Contingency shall be deducted from the GMP, and the Construction Manager shall have no claim to such amount.  The bonus consists of two components: a

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maximum of one million ($1,000,000) dollars associated with achieving certain key milestones and a maximum of one million five hundred thousand ($1,500,000) dollars associated with savings in the GMP as follows:

6.4.1  Schedule Incentive: To the extent that Contingency in excess of one million ($1,000,000) dollars remains at Final Completion, Owner will pay Construction Manager an incentive bonus in the following amounts linked to achieving the following milestones.  When calculating savings and schedule incentives, schedule incentives will be calculated first.  These dates will be adjusted on a day-for-day basis to the extent that: (1) Owner directs construction to start after March 5, 2004 and (2) such dates are adjusted pursuant to Change Orders under this Agreement.  The requirements to achieve the milestones are set forth in Exhibit Q.

6.4.2 Savings Incentive: Savings will be calculated and paid at Final Completion based on savings below the GMP (as may be adjusted per the contract) and only to the extent that Contingency remains.  Savings will be split 50% to the Construction Manager and 50% to the Owner until the maximum bonus has been achieved.  Any savings above this amount will accrue to the Owner.

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ARTICLE 7

GUARANTEED MAXIMUM PRICE

7.1  GMP

7.1.1        A statement setting forth the price components of Construction Manager’s GMP is attached hereto as Exhibit S.  Construction Manager’s Qualifications and Assumptions are attached hereto as Exhibit O.

7.1.2        The GMP shall be comprised of:

7.1.2.1     Trade Contract Costs, as described in Section 7.2.

7.1.2.2     General Conditions Costs, as described in Section 7.3 and Exhibit D hereto.

7.1.2.3     Construction Contingency, as described in Section 7.4;

7.1.2.4     Allowances, as set forth in Exhibit U;

7.1.2.5     Construction Manager’s Fee included as part of Exhibit S.

7.2  Trade Contract Costs

Trade Contract Costs shall be based on the actual buyout of all Trades.  For those Trade Contracts that have not been bought out at the time that the GMP is given, the GMP shall include an estimate of Costs of the Work.  Construction Manager has specifically identified any allowances or contingencies relating to Trade Contract buyout.  Construction Manager shall advise Owner of any differential between an estimated Trade Contract price and the actual buyout of that Trade Contract.  The Construction Contingency may be adjusted to reflect such differential.

7.3  General Conditions Costs

General Conditions Costs set forth in Exhibit D.

7.4  Construction Contingency

7.4.1        The Construction Contingency is the maximum sum available, subject to Owner’s approval, to cover unanticipated costs which would otherwise increase the Construction Manager’s costs as follows:

7.4.1.1     Unforeseen conditions and events not evident to, or identified by, Owner or Construction Manager at the time of execution of this Agreement or circumstances arising after the execution of this Agreement such as:

7.4.1.1.1  refinement of details of Architect’s design within the scope of Work and standards of quality and quantities on which the GMP was based;

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7.4.1.1.2  abnormal field condition or difficulties resulting in additional costs, if such conditions or difficulties could not have been anticipated based on a reasonable review of the Contract Documents;

7.4.1.1.3  additional costs incurred as a result of a default by a Trade Contractor in excess of Bond coverage;

7.4.1.1.4  additional costs incurred as a result of items omitted by Construction Manager in the formulation of the GMP;

7.4.1.1.5  correction of non-conforming Work or defects not due to negligence of Construction Manager or any Trade Contractor (correction of non-conforming Work or defects resulting from Construction Manager’s or Trade Contractor’s negligence are to be corrected by the responsible party at its own cost);

7.4.1.1.6  costs associated with Time Extensions (to the extent permitted by Article 11);

7.4.1.1.7  casualty losses and related expenses, not compensated by insurance or otherwise, sustained by Construction Manager or any Trade Contractor in connection with the Work, except to the extent such losses or expenses are attributable to gross negligence or willful misconduct of Construction Manager or any Trade Contractor, or result from the willful violation by Construction Manager or any Trade Contractor of Applicable Laws.  Such losses shall include settlements made with the prior written consent and approval of Owner.  Reimbursement shall not be made for any losses or expenses for which Construction Manager has or will be indemnified by third parties or for which Construction Manager would have been compensated by insurance, except for the failure of Construction Manager to procure and maintain insurance in accordance with the requirements of this Agreement or the failure of Construction Manager to comply with the requirements of any insurance carriers providing coverage for the Project.

7.4.1.1.8  costs to repair Work damaged by Owner or any Separate Contractor.

7.4.1.1.9  unanticipated costs associated with the buyout of Trade Contracts.

7.4.2        Use of the Construction Contingency shall be reasonably approved in writing by Owner as provided herein.  No amounts may be charged to the Construction Contingency except with prior written approval of Owner, and then only to the extent that such amounts have been paid or are to be paid by Construction Manager.  Construction Contingency funds are further subject to the following restrictions:

7.4.2.1     No sums may be charged to Construction Contingency for Work for which Construction Manager is entitled to an Out-of-Scope Change Order hereunder.

7.4.2.2     No sums may be charged to the Construction Contingency for costs that arise out of Construction Manager’s willful misconduct, gross negligence or a material breach of sufficient magnitude to constitute an Event of Default under this Agreement.

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7.4.2.3     Construction Manager is not entitled to payment of amounts which would otherwise be properly chargeable to the Construction Contingency to the extent that: (1) such amounts are properly chargeable to a Trade Contractor or other responsible person or entity; (2) Construction Manager failed to notify Owner or its insurance carrier, if applicable, of the event which results in the claim to the Construction Contingency within ten (10) calendar days of such event; or (3) such amounts exceed the Construction Contingency set forth in the GMP.

7.4.2.4     The amount of the Construction Contingency shall be adjustable, and may be increased by Buy Saves, and/or decreased based on Owner-approved charges as described in this Section.  There shall not be any line item contingencies.

7.5  Construction Manager Acknowledgment of Incomplete Design Documents

Construction Manager acknowledges that the Design Documents to be reviewed by Construction Manager in connection with preparation of the GMP may be incomplete and subject to further development by Architect.  Notwithstanding the foregoing, Construction Manager understands and agrees that it will not be entitled to any increase in the GMP as a result of:

7.5.1       final completion of the Construction Documents consistent with the design intent as expressed in the Design Documents reviewed by Construction Manager;

7.5.2       any inconsistencies in or the lack of coordination of Construction Documents consistent with industry standard practices of coordination;

7.5.3       the fact that Costs of the Work may not be precisely defined prior to final completion of the Construction Documents;

7.5.4       an overrun in the buyout of any Trade Contract or a default in performance by any Trade Contractor;

7.5.5       the extension of Milestone Dates, Substantial Completion Date, or Final Completion Date or any Delay in the performance of the Work for any reason whatsoever, except as provided in Article 9;

7.5.6       Changes in the Work, except for those for which Construction Manager is entitled to a Change Order.

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ARTICLE 8

COSTS OF THE WORK

8.1  Limitation on Costs of the Work

In addition to the Construction Manager’s Fee, and subject to Owner’s receipt from Construction Manager of properly prepared monthly projections and of such other supporting documentation as Owner may reasonably require, Owner shall reimburse Construction Manager for the Costs of the Work set forth in this Article 8, to the extent such Costs of the Work are actually and necessarily incurred by Construction Manager in the performance of the Work.  Costs of the Work shall not include any costs that arise out of the grass negligence, willful misconduct, or breach of this Agreement by Construction Manager or by any Trade Contractor.

8.2  Trade Contract Costs

Trade Contract Costs include all costs paid by Construction Manager under Trade Contracts approved by Owner for Work performed (including the cost of Pre-Purchased Items procured by any Trade Contractor or by Construction Manager and assigned to a Trade Contractor) in accordance with the terms of this Agreement.

8.3  General Conditions Costs

General Conditions Costs as set forth in Exhibit D shall consist of the following items:

8.3.1        Wages paid for labor of personnel in the direct employ of Construction Manager in the performance of construction services at the Site incident to the Work under applicable collective bargaining agreements, or under a salary, wage or hourly rate schedule agreed upon by Owner.  Agreed-upon salary, wage and/or hourly rate schedules may not be changed by Construction Manager without the prior written consent of Owner (except for adjustments for union employees where the adjustment is contractually mandated by the applicable collective bargaining agreement).

8.3.2        When approved in advance by Owner, reasonable salaries paid by Construction Manager to its supervisory or administrative personnel when stationed at the Site or at Construction Manager’s home office or any branch office, based on salary schedules agreed to by Owner and Construction Manager, and attached hereto as Exhibit D.  No home office personnel, other than those identified in Exhibit D, may be charged to General Conditions Costs.  No change in the approved salary schedules shall be made by the Construction Manager without the Owner’s prior written approval.  Construction Manager’s supervisory or administrative personnel who are engaged at shops or on the road in expediting the production or transportation of materials or equipment in connection with the performance of the Work shall be considered to be stationed at the Site, and their salaries shall be paid for that documented portion of their time spent on performance of the Work.  Said employees of Construction Manager shall be paid on the basis of time cards and certified payrolls to which the Owner shall have ready access.  If a salaried employee who is fully chargeable to the Project spends any portion of his or her time working on another project, then Owner shall be entitled to a credit, on a reasonable hourly charge basis, for the time spent by said employee on such other project.  Owner shall be entitled to audit Construction Manager’s records relating to said employee in order to determine the amount of an appropriate credit.

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8.3.3        Actual payroll taxes and contributions and other assessments or taxes for unemployment compensation, old age benefits, Worker’s Compensation and Employee Liability insurance, social security and other standard employee benefits, based on a multiplier (to be agreed upon by the parties) times the wages and salaries described in Sections 8.3.1 and 8.3.2.  Vacation and training costs for a salaried employee shall be prorated based on the amount of time the employee actually spends working on the Project.  No reimbursement will be made on account of fidelity insurance premiums.

8.3.4        Actual costs and expenses incurred in connection with telephones installed at the Project Site, fax, messenger and overnight delivery service, blueprinting for Shop Drawings, reproduction, photographs and other similar ▇▇▇▇▇ cash items directly related to the Work.  Construction Manager shall limit such costs through use of the Project Websites as directed by Owner, and shall utilize outside contractors and Vendors designated by Owner for services including, but not limited to, messenger service, blue printing and reproduction.

8.3.5        Actual costs of hand tools not owned by the workmen, less the reasonable salvage value obtainable on such items used, but not totally consumed, in the performance of the Work, and costs of canvases and tarpaulins used in the performance of the Work.  Construction Manager shall provide an inventory of such items based on original Purchase Orders.  At Owner’s option and at its direction, Construction Manager shall: (1) deliver all or any portion of such hand tools, canvases and tarpaulins to Owner; (2) use reasonable efforts to sell the same for the account of Owner; or (3) discard the same in the manner set forth in Article 4 hereof;

8.3.6        Actual costs of all temporary structures and their maintenance, less the reasonable salvage value obtainable on such items which are used, but not totally consumed, in the performance of the Work; provided, however, that at Owner’s option and at its direction, Construction Manager shall: (1) deliver all such temporary structures to Owner; (2) use reasonable efforts to sell the same for the account of Owner; or (3) discard the same in the manner set forth in Article 4.

8.3.7        Net rental charges and maintenance expenses for any Temporary system or structure necessary in connection with the performance of the Work (such as, for example, hoists), including the installation, erection, removal, transportation and delivery costs thereof.

8.3.8        Net rental charges of all machinery and equipment (exclusive of hand tools) used at the Project Site in connection with the performance of the Work, together with costs incurred in the installation thereof, minor repairs and replacements thereto and the dismantling, removal, transportation and delivery of the same.  Any Trade Contract and/or Construction Manager Pre-Purchased Item in excess of $10,000 is subject to Owner’s prior written approval.

8.3.9        Travel, to the extent Construction Manager receives prior written approval from Owner, to: (1) meetings in connection with the Project; (2) Trade Contractor’s offices; (3) yards; or (4) fabrication plants.  All domestic and international travel shall be economy or coach class at the lowest available fare, whether refundable or not.  Travel to the Project Site and to the New York City offices of Owner, Construction Manager, Architect and/or Interior Architect shall not be reimbursable as a General Conditions Cost.

8.3.10      Royalties (if such royalties shall have been approved in writing by Owner); costs for the use of patented materials or processes (if the use of the same has been specified by Architect and/or approved in writing by Owner); and license fees necessary for the performance of the

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Work (excluding Work-related required licenses for the Construction Manager and its employees, agents and Trade Contractors).

8.3.11      Federal, State and local sales, use, excise, personal property and other similar taxes, if any, which may be required to be paid by Construction Manager in connection with the Work, except taxes applicable, directly or indirectly, to the Construction Manager’s Fee.  Construction Manager shall be responsible for obtaining necessary tax exemption certificates for qualified costs.  All sales and use taxes shall be submitted to Owner for reimbursement as incurred.  No back billing of sales and use taxes will be accepted by Owner.

8.3.12      Cost of premiums for any bond furnished in connection with, and for the discharge of, any lien.

8.3.13      Costs of insurance and Payment and Performance Bonds required pursuant to Article 14.

8.3.14      Costs of specialty consultants (approved in advance by Owner).

8.3.15      Costs included in Exhibit D.

8.4  Back-up Documentation

Construction Manager shall allow Owner to review and copy Project-related accounting records including, but not limited to, records relating to personnel salaries and wages, and personnel-related expenses.

8.5  Control of Costs of the Work

Construction Manager shall use its best efforts to minimize Costs of the Work incurred, consistent with the intent and purposes of this Agreement, sound business practice and the instructions from Owner.  Owner reserves the right to audit Costs of the Work in accordance with this Agreement, and any adjustments which are yielded by an audit shall be paid to Owner by Construction Manager or, at Owner’s option, deducted from payments due to Construction Manager.

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ARTICLE 9

NON-REIMBURSABLE COSTS

9.1  Non-Reimbursable Costs

Owner shall not reimburse Construction Manager for any of the following costs, all of which shall be borne by Construction Manager at its sole expense:

9.1.1        Salaries or other compensation of any principals and branch office heads of Construction Manager.

9.1.2        Salaries of non-line staff personnel including, but not limited to, legal, billing/collections (except any accounting personnel based at the Project Site, financial, and corporate insurance (except OCIP-related personnel)).

9.1.3        Operating Expenses of Construction Manager’s home and branch offices, including overhead and administrative expenses.

9.1.4        Any part of Construction Manager’s capital expenses, including interest on capital employed in connection with the Work.

9.1.5        Insurance-related costs.

9.1.5.1     costs not reimbursed by insurance, arising: (1) out of the acts or omissions of Construction Manager (including acts or omissions of any Trade Contractor), or the failure of Construction Manager to perform its obligations under this Agreement, or (2) from the violation by Construction Manager (or any Trade Contractor) of any Applicable Law;

9.1.5.2     casualty losses and related expenses sustained by Construction Manager (or by any Trade Contractor) in connection with tools, equipment, supplies and other personal effects owned or rented by Construction Manager (or by the Trade Contractor).

9.1.5.3     any other costs which would have been insured but for the failure of Construction Manager (or any Trade Contractor) to carry the insurance required to be carried hereunder, or the failure of Construction Manager (or any Trade Contractor) to comply with the requirements of any insurance carriers providing insurance coverage for the Project, as set forth in Article 14.

9.1.6        Losses, costs, and expenses (including attorneys’ fees and disbursements) incurred by Construction Manager in connection with, or a result of, the occurrence of any event expressly provided for under the terms of this Agreement wherein Construction Manager agrees to indemnify and hold harmless Owner against such losses, costs and expenses.

9.1.7        Costs of the Work that have been Backcharged against or deducted from the compensation of a Trade Contractor for any reason.

9.1.8        Costs resulting from the performance by Construction Manager or of any Trade Contractor of general conditions-type costs, other than or in addition to those types of costs expressly identified in Article 8 as being reimbursable by Owner.

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9.1.9        Costs incurred by reason of Construction Manager’s failure to comply with its obligations under this Agreement, including parking or any other fines assessed by New York City or the State of New York.

9.1.10      New York State and New York City sales and use taxes on any portion of the Work which is subject to exemption, as such exemption is identified to Construction Manager through means of a certificate of capital improvement or certificate of other exemption.  Construction Manager is responsible for obtaining applicable capital improvement and/or tax exemption certificates.

9.1.11      Cost of insurance on tools and equipment owned by workmen.

9.1.12      Costs of any item or expense which this Agreement expressly provides are to be paid or borne by Construction Manager at its sole cost and expense.

9.1.13      Overtime charges, unless approved in advance by Owner.

9.1.14      Vertical transportation costs (i.e., hoists, cranes, etc.) that are the responsibility of others.

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ARTICLE 10

CHANGES IN THE WORK

10.1         Change Orders

10.1.1      Owner, without invalidating this Agreement, may at any time direct Changes in the Work consisting of additions, deletions or other revisions.  All such required Changes in the Work shall be requested in a written PCO submitted to Construction Manager, and shall be authorized by Owner, and executed in the manner set forth in the following Sections:

10.1.2      Construction Manager agrees to exercise its best efforts so that, within fifteen (15) days after the issuance of the PCO, Construction Manager shall furnish to Owner a signed Change Order Proposal, in a form satisfactory to Owner, setting forth in detail, with suitable breakdowns by trades and work classifications, and using the Unit Price and/or other costing method specified by Owner, Construction Manager’s estimate of: (1) the cost or savings of the Change reflected in the PCO, which cost shall be at the best price obtainable for, and shall reflect the most economical manner of affecting, such Change; and (2) the Changes in the Project Schedule (including the Substantial Completion Date and/or the Final Completion Date) which would result from implementation of Construction Manager’s Change Order Proposal.  Construction Manager shall not be entitled to any increase in Construction Manager’s Fee or General Conditions Costs in connection with the first ten million ($10,000,000) dollars in aggregate value of Change Orders.  To the extent Change Orders have resulted in an increase in the GMP in excess of ten million ($10,000,000) dollars, then Construction Manager shall be entitled to an increase of eight (8%) percent of the Cost of the Work as total compensation for Construction Manager’s Fee and General Conditions Costs.

10.1.3      If Owner approves Construction Manager’s Change Order Proposal, Owner shall issue to Construction Manager a written Change Order signed by Owner, and the Substantial Completion Date and the Final Completion Date, the GMP and the Contract Documents, as the case may be, shall be adjusted, if required, in accordance with the terms of such Change Order.  All other terms and conditions of this Agreement shall remain in full force and effect.

10.1.4      A Change Order shall be effective only when signed by Owner and Construction Manager.

10.1.5      Construction Manager shall issue copies of all Change Orders to the appropriate Trade Contractors.

10.1.6      Construction Manager shall ▇▇▇▇ promptly for Change Orders based on a consolidation of the Trades involved in implementing the Change Order.

10.2         Field Directive

Owner, in its sole discretion, can direct Construction Manager to perform work upon issuance of a Field Directive.  If Construction Manager and Owner disagree on the value of Work to be performed under a Field Directive, or on whether such Work is part of Construction Manager’s Work under this Agreement, Construction Manager must so notify Owner in writing within fifteen (15) business days of receipt of the Field Directive and may seek legal recourse if the dispute is not resolved within 120 days thereafter, provided, however, that the Construction Manager shall continue

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performance of the Work in question pending resolution of the parties’ dispute.  Failure of Construction Manager to so notify Owner shall be deemed a waiver by Construction Manager of any increase in the GMP, Construction Manager’s Fee or General Conditions Costs and a waiver of any claim for a Time Extension.

10.3         Emergency Change Order

Notwithstanding anything to the contrary set forth herein, Construction Manager and Architect shall each have the authority to issue Emergency Change Orders without the prior written approval of Owner.  Construction Manager shall: (1) notify Owner that an Emergency Change Order has been issued within twenty-four (24) hours after the same has been issued, which notice shall set forth the reason giving rise to the issuance of the same; and (2) promptly furnish Owner with copies of all such Emergency Change Orders.  Valid Emergency Change orders shall be confirmed by Owner by a duly issued Change Order.

10.4         Full Payment for Change Orders

When paid by Owner to Construction Manager, the compensation specified in a Change Order shall constitute full payment for the additional Work covered thereby, including any delay/disruption cost or expense occasioned by reason of such Change.

10.5         Backcharges

Construction Manager shall develop a procedure for the prompt processing of Backcharges among the Trade Contractors, which process shall be implemented by means of deductive Change Orders.  Construction Manager shall track all Backcharges, and shall provide Owner with a monthly status report.

10.6         Change Order-Related Time Extensions

Each Change Order shall specify whether Construction Manager is entitled to a related Time Extension.  Construction Manager shall not be entitled to a Time Extension in connection with any Change Order unless the Time Extension is expressly stated therein.

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ARTICLE 11

SCHEDULE OF THE WORK AND OCCUPANCY

11.1         Project Schedule

Construction Manager shall promptly and diligently perform, or caused to be performed, the Work in strict accordance with the Project Schedule approved by Owner and the Milestones set forth in the Project Schedule.  The Work shall be: (1) Substantially Completed on or before the Substantial Completion Date as set forth on the Project Schedule; and (2) Finally Completed on or before the Final Completion Date as set forth in the Project Schedule.

11.2         CPM Schedule

Within ninety (90) days of the award of this Agreement, Construction Manager shall submit a detailed Project Schedule in CPM format, which includes the Milestones set forth in Section 6.4, and which will indicate a start date for the Work approved by Owner.  The Project Schedule shall be subject to review and approval by Owner.  Upon approval, the Project Schedule shall be attached hereto as Exhibit C, and shall serve as the baseline schedule for the remainder of the Project.

11.3         Updates to CPM Schedule

Construction Manager agrees to coordinate all revisions to the Project Schedule with Owner’s scheduling consultant and to participate in update meetings on a monthly basis, or more frequently as required.

11.4         Time of the Essence

Construction Manager further acknowledges that the timely performance of its obligations in accordance with the Project Schedule is of the essence of this Agreement.  This “time of the essence” requirement shall apply to all dates, time limits and time requirements set forth in this Agreement and in the Project Schedule.

11.5         Requirements for Substantial Completion

The Work (or a designated portion thereof) shall be deemed Substantially Completed on the date when all of the following events or conditions shall have occurred:

11.5.1      Owner may use and occupy the Project or, if requested by Owner, portions thereof without interference for all of its intended purposes under this Agreement;

11.5.2      only Punchlist items, if any, remain incomplete, provided said Punchlist items, in Owner’s judgment, do not interfere with Owner’s use and occupancy;

11.5.3      Architect shall have issued a Certificate of Substantial Completion; and

11.5.4      Issuance of a Temporary Certificate of Occupancy.

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11.6         Requirements for Final Completion

The Work shall be deemed Finally Completed on the date when Owner has received evidence satisfactory to Owner indicating that:

11.6.1      all Work (including all items set forth on the Punchlist), has been fully and satisfactorily completed in a good and workmanlike manner; in conformance with the Contract Documents; to Owner’s satisfaction; and in full compliance with all Applicable Laws and requirements of Governmental Authorities having jurisdiction over the Project, including required sign-offs for the Project.  If the Work does not comply with Applicable Laws because the Construction Documents do not so comply, and Construction Manager had no knowledge of such non-compliance, nothing herein shall be deemed to shift liability for such non-compliance from Architect to Construction Manager.

11.6.2      all final certificates of approval relating to the Work including, without limitation, all necessary certificates of the Board of Fire Underwriters or any successor thereto and the permanent certificate of occupancy, shall have been issued and delivered to the Owner.

11.6.3      all required receipts, general releases, final waivers and releases of lien (in the form set forth in Exhibit H), affidavits (including, but not limited to executed copies of the Key Employee Affidavits set forth in Exhibit L), guarantees, warranties, consents of sureties, As-Built Drawings and any other documents required under this Agreement or the Trade Contracts shall have been issued and delivered to Owner.

11.6.4      All required signoffs including, but not limited to, those relating to: (1) Affirmative Action Requirements; (2) sales taxes; and (3) OCIP requirements.

11.7         Time Extensions

11.7.1      Construction Manager hereby acknowledges that the Project will be tightly coordinated from a scheduling perspective, and agrees to manage the Work in a manner consistent with tight coordination and the requirements for timely performance set forth herein.

11.7.2      Subject to other provisions of the Contract Documents and to the extent permitted by this Section, Construction Manager shall be entitled to an extension of the Substantial Completion and Final Completion Dates established by the Project Schedule only for Excusable Delays and Owner-Caused Delays: (1) which directly impact activities on the Critical Path of the Schedule; (2) which result from one or more of the causes set forth below; and (3) (i) were beyond the control of Construction Manager; and (ii) to the extent not caused by or contributed to, in whole or in part, by the fault, error, omission, or negligence of Construction Manager, Trade Contractors, or anyone directly or indirectly employed by them for whom they are responsible:

11.7.2.1  Labor strikes (including strikes affecting transportation) unless precluded by any Project labor agreement, that do, in fact, directly affect the progress of the Work; provided, however, that Time Extension in connection with an individual labor strike shall not exceed the number of Days of said strike, together with a reasonable adjustment for demobilization and remobilization.  In any event, labor grievances, under existing agreements, representative matters, informational picketing and other labor matters shall not constitute a basis for a Time Extension (Excusable Delay).

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11.7.2.2  Acts of the public enemy, war, civil unrest, terrorism, sabotage, acts of the State, Federal or local governments in their sovereign capacity; provided, however, that in no event shall Construction Manager be entitled to a Time Extension with respect to any acts of the State, Federal or local governments in enforcing any Applicable Laws relating to Construction Manager’s performance of the Work.  Construction Manager may, however, be entitled to a Time Extension if the enforcement of any Applicable Laws causes a Delay as a result of errors or omissions in the Construction Documents and not a result of Construction Manager’s failure to comply with any of the terms of this Agreement (Excusable Delay).

11.7.23  Acts of the Interiors Construction Manager and/or Interiors Trade Contractors beyond those which might be reasonably anticipated based on the tight coordination described in Section 11.7.1 (Owner-Caused Delay).

11.7.2.4  Changes ordered in the Work, provided that Changes Orders are properly authorized and approved under the provisions of Article 7 (Owner-Caused Delay).

11.7.2.5  Any negligence or breach by Owner or Architect, or any act of the Owner specifically authorizing or approving the Delay in writing (Owner-Caused Delay).

11.7.2.6  Acts of God, such as tornado, fire, hurricane, blizzard, earthquake, typhoon, or flood, that damage completed Work or to stored materials and equipment (but only to the extent that such materials and/or equipment was properly stored by Construction Manager) (Excusable Delay).

11.7.2.7  Acts or failure to act of Owner, Architect and their respective agents, employees and Consultants which cause a Delay in the Work (Owner-Caused Delay).

11.7.2.8  Acts of Separate Contractors performing Work on the Project (beyond those that might be reasonably expected based on the tight coordination described in Section 11.7.1) (Owner-Caused Delay).

Any and all changes in the Substantial Completion and/or Final Completion Dates shall be effected by Change Order as provided in Article 10.

11.7.3      In the event that Construction Manager requests a Time Extension, Construction Manager shall furnish such justification and supporting evidence as Owner may deem reasonably necessary for a determination whether Construction Manager is entitled to a Time Extension under the provisions of this Agreement.  If Owner finds that Construction Manager is entitled to a Time Extension, Owner’s determination as to the total number of Days of the Time Extension shall be based upon the approved Project Schedule and on all relevant data.  The Construction Manager acknowledges and agrees that delays in activities which, do not affect the critical path of the Project Schedule or the Substantial Completion or Final Completion Dates will not be the basis for a Time Extension.  If the Owner determines that the Construction Manager is entitled to a Time Extension, an appropriate Change Order will be issued in accordance with Article 10.

11.7.4      All notices of claims for Time Extensions shall be made in writing to the Owner within seven (7) Days of discovery by Construction Manager of the Delay, and the circumstances and activities leading to such claim shall be indicated in Construction Manager’s Daily Report for the Day(s) affected.  In the absence of such notice, all such claims for a Time Extension shall be deemed to have been waived by Construction Manager.  In making a claim for a Time

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Extension as a result of a Delay, the Construction Manager shall provide an estimate of the probable effect of such Delay.  Within twenty-one (21) Days after the completion of the circumstances or activity that caused the Delay, the Construction Manager shall finalize its claim for a Time Extension related to such Delay, and shall submit such final claim in writing to the Owner.

11.7.5      In no case shall a Time Extension be granted because of any Construction Manager-Caused Delay.

11.8         Compensation for Delay

11.8.1      The Time Extension specifically provided for in Section 11.7 of this Agreement shall be Construction Manager’s sole and exclusive remedy for Excusable Delays.  Construction Manager shall not be entitled to any lost profits, consequential damages or other damages in connection with Excusable Delays.  Construction Manager hereby expressly agrees to waive its right to recover any damages for Excusable Delays.  Construction Manager may be entitled to access the Contingency in order to recover additional, documented General Conditions Costs up to a maximum amount reasonably demonstrated by Construction Manager and agreed to by Owner in writing for Excusable Delay to the extent such costs are not otherwise compensable under this Agreement.

11.8.2      In addition to the Time Extension provided for in Section 11.7, Construction Manager shall be entitled to recover additional, documented General Conditions Costs up to a maximum amount reasonably demonstrated by Construction Manager and agreed to by Owner in writing for Owner-Caused Delays which continue after a sixty (60) cumulative day “grace period.” Construction Manager shall not be entitled to any other damages in connection with Owner-Caused Delays.  Construction Manager shall submit a written Claim for such costs within twenty-one (21) Days after cessation of the Owner-Caused Delay, and such costs shall be processed by Change Order.  Construction Manager may be entitled to access the Contingency in order to recover additional, documented General Conditions Costs up to a maximum amount reasonably demonstrated by Construction Manager and agreed to by Owner in writing for costs arising during the “grace period” of the Owner-Caused Delay to the extent such costs are not otherwise compensable under this Agreement.

11.8.3      Construction Manager shall not be entitled to either a Time Extension or additional compensation in connection with Construction Manager-Caused Delays.

11.9         Acceleration of the Work

Construction Manager shall notify Owner promptly if the Work, or any portion thereof, will not be completed within the time provided in the Project Schedule for any reason including, but not limited to, an Excusable Delay or an Owner-Caused Delay as described in Section 11.7.  If Construction Manager so notifies Owner, or if, in the opinion of Owner reasonably exercised, Construction Manager falls behind in the Project Schedule for any cause within the reasonable control of Construction Manager, Construction Manager shall take appropriate action to regain the Project Schedule, and shall, if requested by Owner, submit a Recovery Plan to demonstrate the manner in which the lost time may be regained.  Such actions on the part of Construction Manager shall not result in an increase in the GMP.

11.10       Modifications to Project Schedule

Construction Manager shall make no modifications to the Project Schedule without first obtaining Owner’s prior approval thereof.  Revisions/updates to the approved Project Schedule shall

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address issues such as the following: (1) all major components of the Project and the Work, including Architect’s preparation of Design Documents; (2) critical design details; (3) matters relating to Trade Contractors and Trade Contract awards; (4) the Work of Separate Contractors; (5) Interiors Project coordination; and (6) Owner’s responsibilities.  All revisions/updates to the Project Schedule shall be subject to Owner’s written approval.

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ARTICLE 12

SEPARATE CONTRACTORS

12.1         Owner’s Right to Engage Separate Contractors

Owner reserves the right to directly engage Separate Contractors to perform work on the Project.  These Separate Contractors may perform additional work relating to the Project, but beyond the Work covered by this Agreement.  Alternatively, Separate Contractors may be engaged by Owner to perform work covered by this Agreement which is not, in the opinion of Owner, being performed by Construction Manager in a manner consistent with the Project’s cost, quality and scheduling objectives.  The Owner’s agreements with Separate Contractors may include terms, covenants, conditions and warranties different from those in any Trade Contract or the Contract Documents.

12.2         Cooperation and Coordination with Separate Contractors

Construction Manager shall, without additional compensation, cooperate and coordinate the Work with the work of such Separate Contractors.  Construction Manager shall integrate the schedules of individual Separate Contractors into the overall Project Schedule as reasonable and appropriate.  Construction Manager shall cooperate with the Separate Contractors in providing such access to the Project Site and to the Work including, but not limited to utilization of storage space, staging areas, hoists and elevators, as the Separate Contractors may reasonably request.  Construction Manager shall furnish to such Separate Contractors any services which Construction Manager furnishes to Trade Contractors including, but not limited to, use of hoists, storage and staging facilities.  Any additional costs incurred by Construction Manager in implementing its obligations under this Section shall be reimbursed by Change Order which the Owner agrees to issue.

12.3         Separate Contractor-Related Suspensions

Construction Manager understands that portions of the work of Separate Contractors may have to be performed either before, simultaneously with or after the Work, and that the Work may have to be suspended temporarily if, in Owner’s judgment, such suspension is necessary for the timely and efficient completion of the Project.  Accordingly, Construction Manager agrees that, upon request by Owner, Construction Manager shall temporarily suspend any affected Work activity during the period which, in Owner’s reasonable judgment, Construction Manager’s Work would unreasonably interfere with the Work of a Separate Contractor.  If Owner requests that Construction Manager temporarily suspend any Work, and if and to the extent that there are delays in the performance of the Work as a result thereof and Construction Manager demonstrates that the Work has actually been delayed thereby, then, the period of time during which the Work was suspended shall be recognized as an Excusable Delay, and the Construction Manager shall be granted an appropriate Time Extension.

12.4         Damage to Work

If Construction Manager causes damage to the property of Separate Contractors or to other work or property on the Project Site, Construction Manager shall promptly remedy such damage as provided in this Agreement.  If any Separate Contractor causes damage to the Work, and Construction Manager is required to remedy such damage, Owner will issue a Change Order for the cost thereof, and will further grant a Time Extension or, alternatively, Owner may direct and compensate Construction Manager for Acceleration, if the delayed activity is on the Critical Path of the Project Schedule.

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ARTICLE 13

ACCOUNTING RECORDS

13.1         Project Accounting Records

Construction Manager shall maintain full, detailed and separate accounting books and records to: (1) monitor delivery to the Project Site of all materials, equipment and supplies used in connection with the Work or incorporated in the Project; (2) check all labor performing Work; (3) provide a basis for proper financial management of the Work in accordance with a system to be approved by Owner.

13.2         Maintenance of Project Accounting Books and Records

Construction Manager shall maintain Project accounting books and records on a current basis, and shall institute such accounting procedures as may be reasonably requested by Owner including, but not limited to, procedures relating to any sales tax exemptions or other tax rebates, credits, exemptions or benefits available to Owner in connection with the Work.

13.3         Audits

13.3.1      Owner or Owner’s designated representative shall have the right to conduct interim audits of Construction Manager’s Project accounting books and records, in Owner’s discretion, to confirm the Costs of the Work being charged by Construction Manager.

13.3.2      Owner or Owner’s designated representative shall conduct a final audit of Construction Manager’s accounting books and records at Project completion.  Final audit results acceptable to Owner shall be a condition of Final Payment to Construction Manager.

13.4         Preservation of Project Records

Construction Manager shall preserve all Project accounting books and records for a period of one (1) year after Final Completion of the Work and, if requested by Owner, no later than thirty (30) days prior to the expiration of said one (1) year period, deliver to Owner, at Owner’s expense, copies of all or any portion of such Project accounting books and records.

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ARTICLE 14

BONDS AND INSURANCE

14.1         Bond Requirements

14.1.1      Bonds

Owner shall be entitled to require Construction Manager, on a selective basis, to cause individual Trade Contractors to furnish their bond ratings, and, in Owner’s discretion, to also furnish separate Payment and Performance Bonds naming Owner, any assignee of Owner, and Construction Manager as obligees.  Owner shall have the right to approve the form of Bonds provided by Trade Contractors provided by Construction Manager.

14.1.2      Reimbursement

The cost of Bonds shall be a Trade Contract Cost.

14.2         Insurance Requirements

14.2.1      It is Owner’s intent to provide insurance coverage for the Project under an OCIP.  If the OCIP is in place, the provisions set forth below, together with the requirements of the OCIP Manual attached as Exhibit J, shall apply:

14.2.2      Owner’s Controlled Insurance Program (OCIP)

14.2.2.1In accordance with the Owner Controlled Insurance Program (“OCIP”) being implemented by the Owner on this Project, the Owner has purchased and will provide to Construction Manager, its Trade Contractors, and Lower Tier Contractors insurance as set forth below, for claims which may arise out of, or result from, work performed by them under this Contract, for which they may be legally liable.  All bidders are required to submit their bid(s) with their insurance included for this Project The winning bidder(s) and all Lower Tier Contractors will be required to identify their costs to provide Workers’ Compensation, General Liability and Excess Liability for this Project.  The OCIP enrollment forms (outlined in this Construction Manager’s Manual) must be completed and returned within 10 business days by Construction Manager, all Trade Contractors and Lower Tier Contractors after they have been awarded a contract.  Please note that each Trade Contractor must also include a copy of its Workers’ Compensation Experience Modification Worksheet, along with a copy of the Policy Declarations Page(s) from their Workers’ Compensation, General Liability and Excess Liability policies.  The contract award will then be reduced by the costs identified by the winning bidder(s) and this total will be identified as a withhold amount.  At the conclusion of the contract, an audit will be performed and this amount will be adjusted based upon actual payrolls incurred on the project site and work performed including change orders.  Each enrolled Trade Contractor (any tier) will provide documentation as follows: Declarations or information page, Rating page(s), Verification of Experience Modification for Workers’ Compensation and a minimum of 3 years Loss History for each Trade Contractor (any tier) that participate in self-insured, large deductible or retrospective rated insurance programs.  If a Trade Contractor is participating in a retained loss program of this type(s), an insurance credit will be developed using the contractors actual loss history during the requested time period and program fixed costs (e.g. Excess Insurance premiums, Claims Administration charges and Claim Development factors, etc.).  Loss History calculations will

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be based upon Trade Contractor’s experience outside of this program provided by Owner.  The final adjustment will be addressed with a Change Order at the conclusion of the Project.  All insurance credits will be adjusted to reflect any change in Trade Contractor’s (any tier) insurance costs (higher or lower) that occur throughout their involvement in this project.  In the event that a Trade Contractor overstates its insurance estimate, the Trade Contractor will be credited accordingly.  The amount and type of coverage to be provided by the Owner under its OCIP program is as follows:

14.2.2.2  Statutory Workers’ Compensation and Employer’s Liability with limits of $1,000,000 Bodily Injury by Accident, $1,000,000 Bodily Injury by Disease and $1,000,000 policy limit by disease.  Workers’ Compensation insurance covers all Construction Manager, Trade Contractor and Lower Tier Contractor employees whose regular duties include performing work at the Project Site.

14.2.2.3  Commercial General Liability Insurance (excludes Automobile Liability).  This policy includes Completed Operations Coverage for a period of 10 years after acceptance of the work by Owner with a limit of liability of $2,000,000 each occurrence/$5,000,000 general aggregate for Bodily Injury/Property Damage.  No Automobile Liability insurance will be included.  This insurance applies to the operations of all insured parties at the Project site, including any work site set up by Owner for use by an insured party exclusively for the storage of material or equipment, or for fabrication of material to be used at the Project site.  The limits of liability apply collectively to all insured parties under the policy.

14.2.2.4  Excess Insurance. Excess liability insurance is provided, insuring the Owner, Construction Manager, Trade Contractors and Lower Tier Contractors working on the Project.  This insurance will cover only operations at the Project site and will provide excess coverage over the limits of coverage described in 1. and 2. above.  No Automobile Liability insurance will be included.  Coverage (excess of $2,000,000 per occurrence / $5,000,000 aggregate) will apply collectively to all insured parties on all covered projects with a single set of limits not less than $100,000,000 each Occurrence/Aggregate excess of the primary.

14.2.2.5  Property insurance, as described in Section 14.2.2.13.

14.2.2.6  The insurance provided for in Sections 14.2.2.2 through 14.2.2.5, written on an occurrence basis, shall be maintained without interruption from the date of commencement of the Work until date of final payment, and for a minimum period of ten (10) years after final payment for completed operations coverage.  In the event that insurance coverages as provided by Owner and as described herein are canceled, lapsed or otherwise become unavailable, the Owner has the option to procure and provide alternate insurance to the Contractors.  As an alternative, the Owner shall have the right to require the Contractor and all tiers of Subcontractors to provide insurance coverage, with reimbursement being made to the Contractor for the actual cost thereof by Change Order.

14.2.2.7  Each Trade Contractor participating in the OCIP will be issued an individual Worker’s Compensation policy.  Certificates of Insurance will be issued for the coverages of Commercial General Liability and Excess Liability that will evidence the coverages furnished by Owner.  These shall be filed with the Trade Contractor prior to commencement of the Work.  Both the Worker’s Compensation Policy and the Commercial General Liability and Excess Liability certificates shall contain a provision that coverage as afforded under the policies will not be canceled or allowed to expire until at least 30 days prior written notice has been given to Trade Contractor.

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14.2.2.8  Construction Manager’s Insurance

The Construction Manager, Trade Contractors and Lower Tier Contractors shall provide, at their own expense, the following insurance:

14.2.2.8.1     Comprehensive Business/Automobile liability insurance.  The Construction Manager, Trade Contractors and Lower Tier Contractors working on the Project (and any material dealers, suppliers, and vendors who enter the Project site) shall, at their own expense, carry automobile liability insurance covering all owned, non-owned, and hired vehicles used in connection with the Work.  The Construction Manager shall include this requirement in all of its subcontracts and purchase orders.  The limits of liability for this insurance shall be at least $5,000,000 per occurrence - bodily injury and property damage combined including uninsured and underinsured motorist coverage.

14.2.2.8.2     Workers’ Compensation and Commercial General Liability Insurance.  The Construction Manager shall carry and maintain at least the following insurance coverages in connection with operations away from the Project site:

14.2.2.8.3     Workers’ Compensation – Statutory Limits

14.2.2.8.4     Employer’s Liability - $2,000,000 (per bodily injury/disease and aggregate.)

14.2.2.8.5     Commercial General Liability Insurance with limits of at least $10,000,000 combined single limit bodily injury and property damage, and including protection for contractual liability, products, completed operations, work performed by independent contractors, and broad form property damage coverage.  Owner reserves the right to require alternative limits (higher or lower) to individual Trade Contractors (any tier) at their discretion.

14.2.2.8.6     Hazardous Material Liability Insurance covering bodily injury and/or property damage of limits not less than $2,000,000, if the work involves abatement, removal, replacement, repair, enclosure, encapsulation and/or disposal of any hazardous material or substance.  This coverage must remain in force for both on-site and off-site exposures.

14.2.2.8.7     The Construction Manager shall maintain Consultant’s Professional Liability (Errors and Omissions) and Contractor’s Pollution Legal Liability in the limit of $75,000,000.  Professional Liability provides coverage against claims resulting from any act, error or omission in the rendering of Professional Services by the Construction Manager.  Contractor’s Pollution Legal Liability provides coverage against claims for pollution conditions arising out of the performance of Professional Services and contracting operations rendered by the Construction Manager.

14.2.2.9  The Construction Manager shall maintain and require all Trade Contractors and Lower Tier Contractors (and Suppliers, Vendors and Project participants) not covered under the Owner’s OCIP to maintain appropriate levels of the insurance as identified herein.

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14.2.2.10  A Certificate of Insurance evidencing the Construction Manager-provided insurance under this Section shall, prior to commencement of any Work at the Project site, be furnished to Owner’s insurance agency at the following address:

▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.

c/o Construction Insurance Partners, LLC

▇▇▇ ▇▇▇▇▇ ▇▇^▇▇ ▇▇▇▇▇▇

▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇

(▇▇▇) ▇▇▇-▇▇▇▇

(▇▇▇) ▇▇▇-▇▇▇▇ fax

Contact: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,  Ext. 743

With copy to:

The New York Times Company

▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇

▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇

Attention: General Counsel

14.2.2.11  Certificates of Insurance provided under these provisions shall provide for a 30-day advance written notice of cancellation, lapse or policy change to Construction Insurance Partners at the address indicated above.  The Construction Manager shall also require the Trade Contractors and all Lower Tier Contractors to furnish similar Certificates of Insurance, copies of which shall be filed with the above Construction Insurance Partners representative.  Failure of Construction Manager or any Trade Contractor or other party to file such Certificates of Insurance shall not relieve such party of its responsibility to carry and maintain such insurance.

14.2.2.12  The Owner-Controlled Insurance Program as previously outlined is intended to afford broad coverage and relatively high limits of liability, but may not provide all the insurance needed by Trade Contractor.  Any insurance for higher limits or other coverages that a Trade Contractor may be required by law to carry or may need for its protection shall be at the Trade Contractor’s expense.  Any policy of insurance covering Construction Manager or any Trade Contractor or Lower Tier Contractor owned or leased machinery, watercraft, vehicles, tools, or equipment against physical loss or damage shall provide for a Waiver of Subrogation as to any claims against any insured parties under the Owner Controlled Insurance Program.

14.2.2.13  Property Insurance

14.2.2.13.1     Owner shall purchase and maintain property insurance in the amount of the initial contract sum, as well as subsequent modifications thereto for the entire Work at the site on a replacement cost basis.  Such property insurance shall be maintained unless otherwise provided in the Contract Documents, until final payment has been made or until no person or entity other than the Owner has an insurable interest in the property.  This insurance shall include Owner, Construction Manager, Trade Contractors and Lower Tier Contractors performing the Work as named Insureds.

14.2.2.13.2     The property insurance shall be on an All Risk policy form basis and insure against the perils of fire and extended coverage, and physical loss or damage including, without duplication of coverage, theft, vandalism, malicious mischief, collapse, temporary buildings and debris removal, including demolition occasioned by enforcement of any applicable legal

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requirements.  This property insurance shall also include transit coverages for materials to be incorporated into the project, as well as temporary offsite storage locations.  Sublimits may apply with respect to transit and offsite coverages.  Such insurance shall include loss of use coverage.  The property insurance will not provide coverage against loss by theft or disappearance of any materials (unless the materials are to be incorporated into the Project), tools, or equipment of Construction Manager, any Trade Contractor or Lower Tier Contractor, or any other person furnishing labor or materials for the Project.  Construction Manager shall pay the first $10,000 of each deductible.  The remaining portion of each deductible and any deductible in excess of the cumulative total shall be paid by the Owner.

14.2.2.13.3     Boiler & Machinery Insurance.  To the extent not previously provided for herein, Owner shall purchase and maintain boiler and machinery insurance which shall specifically cover such insured objects during installation until final acceptance by Owner.  This insurance shall include the interests of the Owner, Construction Manager, all Trade Contractors and any Lower Tier Contractor for the Work, and Owner and Construction Manager shall be listed as named insureds.

14.2.2.13.4     A loss insured under Owner’s property insurance shall be adjusted by Owner as fiduciary and made payable to Owner as fiduciary for the insureds subject to any applicable mortgagee clause.  Construction Manager shall pay Trade Contractors their just shares of insurance receipts received by Construction Manager, and by appropriate written agreements shall require Trade Contractors to make payments to Lower Tier Contractors in similar manner.

14.2.2.13.5     Partial occupancy or use shall not commence until the insurance company or companies providing property insurance have consented to such partial occupancy or use by endorsement or otherwise.  Owner and Construction Manager will take reasonable steps to obtain consent of the insurance company or companies and shall take no action with respect to partial occupancy or use that would cause cancellation, lapse or a reduction of insurance.

14.2.2.14  General Provisions

14.2.2.14.1     Other Insurance.  If Construction Manager requests in writing that insurance risks other than those described herein or insurance for special hazards be included, Owner shall, if possible, obtain such insurance and the cost to Owner shall be reimbursed by Construction Manager.

14.2.2.14.2     Waivers of Subrogation.  Owner and Construction Manager hereby waive all rights against each other and any of their Trade Contractors, Lower Tier Contractors, agents, consultants and employees, each of the other, as to claims and damages covered by insurance obtained by Owner under its OCIP program and property insurance, except the parties do not waive such rights as they have proceeds of such insurance held by Owner as a fiduciary.  The OCIP program and property insurance obtained by Owner shall provide such waivers of subrogation by endorsement or otherwise.  A waiver of subrogation shall be effective as to a person or entity even though that person or entity would otherwise have a duty of indemnification, contractual or otherwise, did not pay the insurance premium directly or indirectly, and whether or not the person or entity had an insurable interest in the property damage.

14.2.2.14.3     Insurance provided by Owner in favor of the Construction Manager and the Trade Contractors in its OCIP program shall not extend to Suppliers of Construction Manager or Trade Contractors not performing work at the project site.

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14.2.2.14.4      Construction Manager and its Trade Contractors and Lower Tier Contractors warrant that no cost for insurance is, or shall be, included in any cost or fee charged to Owner on the Project.

14.2.2.14.5      Construction Manager and its Trade Contractors and Lower Tier Contractors agree to comply with policy conditions of the insurance policies provided by Owner hereunder, and to comply with any claims handling procedures, payroll reporting procedures, loss prevention program, or other similar programs related to the Owner’s Controlled Insurance Program, including, without limitation, filing any claims in a timely fashion in accordance with the requirements set forth in such insurance policies.

14.2.2.14.6      Construction Manager and its Trade Contractors and Lower Tier Contractors expressly agree to procure and provide Workers’ Compensation, General Liability and Automobile Liability coverage at their own expense respecting operations not conducted at the project site.  These coverages shall include a waiver of subrogation in favor of the Owner and their employees, agents, consultants and contractors.

14.2.2.14.7      To the extent any Trade Contractor is, for whatever reason, not covered as an insured under the Owner Controlled Insurance Program, the Construction Manager shall require that Trade Contractor to provide applicable Workers’ Compensation, General Liability, and Automobile Liability insurance at their own expense in a form and amount acceptable to Owner.  Such coverages shall include the Owner as an additional insured and shall provide appropriate waivers of subrogation with the following limits:

1             Workers’ Compensation — Statutory Limits

2             Employer’s Liability - $3,000,000 (per bodily injury/disease and aggregate)

3             Commercial General Liability Insurance with limits of at least $10,000,000 combined single limit bodily injury and property damage, and including protection for contractual liability, products, completed operations, work performed by independent contractors, and broad form property damage coverage.

4             Auto Liability - $5,000,000 Combined Single Limit

5             Owner reserves the right to require alternative limits (higher or lower) to individual Trade Contractors (any tier) at their discretion.

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ARTICLE 15

HAZARDOUS MATERIALS

15.1         General Requirements

15.1.1      Construction Manager shall comply with, and shall ensure compliance by all Trade Contractors, with Applicable Laws relating to Hazardous Materials.

15.1.2      Construction Manager shall obtain and comply with, and ensure that all Trade Contractors obtain and comply with, any and all approvals, registrations or permits required by Applicable Laws relating to Hazardous Materials.

15.2         Hazardous Materials Brought to Site or Generated by Construction Manager and/or Trade Contractors.

15.2.1      Construction Manager shall keep the Project Site free of Hazardous Materials brought to the Site and/or generated in connection with the Work.  Without limiting the foregoing, Construction Manager shall not cause or permit the Project Site to be used to generate, manufacture, refine, transport, treat, store, handle, dispose, transfer, produce or process Hazardous Materials, except in compliance with Applicable Laws.  Similarly, Construction Manager shall not cause or permit, as a result of any intentional or unintentional act or omission on the part of Construction Manager or any Trade Contractor, a release of Hazardous Materials onto the Project Site or onto any other property.

15.2.2      Construction Manager shall indemnify, hold harmless and defend the Indemnitees from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs, or expenses (including reasonable attorneys fees) of whatever kind or nature, known or unknown, contingent or otherwise, arising out of, or in any way related to: (1) the presence, disposal, release, or threatened release of any Hazardous Materials which are on, from or affecting the soil, water, vegetation, buildings, personal property, persons, animals, or otherwise; (2) any bodily injury, personal injury (including wrongful death) or property damage (real or personal) arising out of or related to such Hazardous Materials; (3) any lawsuit brought or threatened, settlement reached, or government order relating to such Hazardous Materials; and/or (4) any violation of laws, orders, regulations, requirements, or demands of Governmental Authorities, or any policies or requirements of the Indemnitees, which are based upon or in any way related to such Hazardous Materials brought to the Site and/or generated by Construction Manager and/or any Trade Contractor, including, without limitation, attorney and consultant fees, investigation and laboratory fees, court costs, and litigation expenses.  The provisions of this Section 15.2.2 shall be in addition to any and all other obligations and liabilities that Construction Manager may have to the Owner under Applicable Laws, and shall survive Final Completion of the Work.

15.3         Hazardous Materials Identified in Contract Documents

15.3.1      With regard to Hazardous Materials existing at the Site, which are identified in the Contract Documents and for which Construction Manager is responsible as part of the Work, Construction Manager shall conduct and complete all investigations, studies, sampling, and testing, and all remediation, removal, and related actions necessary to clean up and remove all Hazardous Materials, on, from, or affecting the Project Site in accordance with all Applicable Laws to the

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satisfaction of the Owner, and in accordance with the orders and directives of all Governmental Authorities.

15.3.2      Construction Manager shall indemnify, hold harmless and defend the Indemnitees from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs, or expenses (including reasonable attorneys fees) of whatever kind or nature, known or unknown, contingent or otherwise, arising out of, or in any way relating to negligence or willful misconduct of Construction Manager, any Trade Contractor, and their respective agents and employees in the investigation, study, sampling, testing, remediation, removal and related actions in connection with Hazardous Materials identified in the Contract Documents and included within Construction Manager’s scope of Work.  The provisions of this Section 15.3.2 shall be in addition to any and all other obligations and liabilities that Construction Manager may have to Owner under Applicable Laws, and shall survive Final Completion of the Work.

15.4         Unidentified Hazardous Materials

15.4.1      If a Hazardous Material is encountered on the Site by Construction Manager that is not identified in the Contract Documents, Construction Manager shall, upon recognizing the condition, immediately stop Work in the affected area and report the condition to Owner in writing.

15.4.2      Owner shall obtain the services of a licensed laboratory to verify the presence or absence of Hazardous Materials reported by Construction Manager and, in the event such Hazardous Material is found to be present, to verify that it has been rendered harmless.  When the Hazardous Material has been rendered harmless, Work in the affected area shall resume upon written agreement between Owner and Construction Manager.  The Project Schedule shall be extended appropriately and the GMP shall be increased by Change Order in the amount of the Construction Manager’s reasonable additional costs of shut-down, delay and start-up.

15.4.3      To the fullest extent permitted by law, Owner shall indemnify, hold harmless and defend Construction Manager, Trade Contractors, and their respective agents and employees from and against claims, damages, losses and expenses (including reasonable attorneys fees) arising out of or resulting from Hazardous Materials at the Site that are not identified in the Contract Documents, if, in fact, the Hazardous Material presents the risk of bodily injury or death, and has not been rendered harmless; provided that such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death, or to injury to or destruction of tangible property, and except to the extent that such damage, loss or expense is not due to the gross negligence or willful misconduct of a party seeking indemnity under this Section.

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ARTICLE 16

TERMINATION AND SUSPENSION

16.1         Termination for Default

16.1.1      The following shall constitute Events of Default under the terms of this Agreement:

16.1.1.1   Construction Manager shall fail to diligently prosecute the Work, or default performing any material obligation under this Agreement, and after receipt of written notice of such default from Owner, Construction Manager shall fail, within three (3) days, to cure such default or commence a cure for such default satisfactory to Owner, and diligently prosecute such cure; or

16.1.1.2   Any Key Employee identified in Exhibit M, or his successor designated in writing, shall cease to be in Construction Manager’s employ, and Construction Manager shall fail within a reasonable time to provide a substitute acceptable to Owner, in Owner’s reasonable discretion, which shall include Owner’s subjective assessment as to Owner’s ability to develop a successful working relationship with such individual; or

16.1.1.3   Construction Manager becomes a party to any insolvency proceeding in a capacity as a debtor, and, in the case of any involuntary proceeding only, such proceeding is not stayed or discharged within thirty (30) days after the commencement of same.  The term “insolvency proceeding” as used herein shall include: (1) the filing of a petition for relief under Chapter 11 of Title 11 of the United States Code by Construction Manager of any petition or action looking to, or seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any other present or future Federal or State statute, law or regulation; (2) the appointment, with or without the consent of Construction Manager, of any trustee, custodian, receiver or liquidator of Construction Manager or of any of its property or assets; or (3) Construction Manager’s making an assignment for the benefit of creditors.  In such an event, to the extent permitted by Applicable Law, Owner may serve written notice upon Construction Manager terminating this Agreement on date specified by Owner in said notice.

16.1.1.4   Breach by Construction Manager of the ethical obligations set forth in Section 2.4.

16.1.2      Upon the occurrence of an Event of Default, Owner may, at Owner’s option, exercised upon three (3) days written notice to Construction Manager, terminate the engagement of Construction Manager.  In such an event, Construction Manager shall be entitled to payment of an amount equal to:

16.1.2.1   the aggregate of: (1) the actual unpaid Costs of the Work incurred by Construction Manager in its proper performance of the Work up to the date of termination, plus (2) the fair market value of such tools (less, if Owner elects to return the tools to Construction Manager, the salvage value thereof), less (3) an amount equal to the additional costs and expenses (including attorneys’ fees and disbursements) incurred by Owner over those which would have been incurred by Owner in connection with the Project had Construction Manager not defaulted hereunder, including, without limitation, the additional expense of engaging another construction manager/general

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contractor, as well as additional compensation for services of Architect and any Owner’s Consultant made necessary by the Event of Default.

16.1.2.2   Construction Manager shall be entitled to the payment described in Section 16.1.2.1 only after Final Completion of the Work by a replacement construction manager/general contractor.  Owner shall have the right to set-off against the aforesaid payment any amounts then due and payable by Construction Manager to Owner hereunder, or which may accrue as damages owing by Construction Manager to Owner under the terms of this Agreement.

16.1.3      Upon the happening of any of the Events of Default, Owner shall have the right, in addition to all other rights and remedies, to complete or cause the Work to be completed, by such means, and in such manner, by agreement or otherwise, as Owner deems advisable, subject, however, to the terms and conditions of the Payment and Performance Bonds required of Trade Contractors hereunder.

16.1.4      If it shall be determined that a termination under this Section 16.1 was wrongful or unjustified, such termination shall then be deemed to be a Termination for the Convenience of Owner under Section 16.2, and the sole right, remedy and recourse of Construction Manager against Owner shall be governed and determined by Section 16.2;

16.1.5      In the event of the happening of any of the Events of Default, subject to the orders and powers of any involved Bankruptcy Court, Construction Manager shall not interfere, directly or indirectly, with Owner’s right and efforts to complete the Work by others or with any of the Trade Contractors.

16.2         Termination for Convenience

16.2.1      Owner, at any time and for any reason whatsoever in Owner’s sole discretion, may terminate this Agreement for Owner’s convenience.  Construction Manager acknowledges that this Agreement must be approved by the Board of New York Times member of the Owner.  In the event that the Board fails to approve this Agreement, then the Agreement shall be considered terminated for Owner’s convenience.  Any Termination for Convenience shall be effected by delivering to Construction Manager a notice of Termination for Convenience specifying the date upon which the Termination for Convenience shall become effective and identifying any specific portion of the Work to be completed by Construction Manager prior to such effective date.  Upon receipt of a notice of Termination for Convenience by the Owner, Construction Manager shall:

16.2.1.1   stop all Work under this Agreement on the date, and to the extent, specified in the notice of Termination for Convenience.

16.2.1.2   enter into no further Trade Contracts except as may be necessary for completion of such portion of the Work specified in the notice.

16.2.1.3   unless directed otherwise by Owner, terminate all Trade Contracts entered into by Construction Manager to the extent that said Trade Contracts relate to portions of the Work to be performed subsequent to the effective date of the Termination for Convenience.

16.2.1.4   at Owner’s option, assign to Owner or such other entity or entities as Owner may direct, in the manner, at the times, and to the extent directed by Owner, all of the right, title and interest of Construction Manager in any or all Trade Contracts, in which case, Owner or such other

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entity or entities, shall accept all of Construction Manager’s obligations arising under such Trade Contracts after the date of such assignment.  Construction Manager shall have included in each Trade Contract a provision specifically contemplating and validating any such assignment, and the Trade Contractor shall continue to perform its services under the Trade Contract without interruption.

16.2.1.5   to the extent required by Owner and subject to the prior written approval of Owner, settle all outstanding liabilities and all claims arising out of any termination of Trade Contracts.  In the event of a Termination for Convenience, no Trade Contractor shall be entitled to recover anticipated profits on Work unperformed or materials or equipment not incorporated or installed in the Project, nor shall any Trade Contractor be reimbursed for losses arising out of matters covered by insurance.  Instead, Trade Contractor’s recovery shall be limited to the reasonable and actual out-of-pocket costs and expenses incurred by such Trade Contractor for Work satisfactorily performed or materials, supplies and equipment procured, fabricated, incorporated or installed in the Project prior to the effective date of the Termination for Convenience.

16.2.1.6   if applicable, transfer title to Owner, to the extent not already vested in Owner, and deliver in the manner, at the times, and to the extent, if any, directed by Owner: (1) fabricated or unfabricated parts, Work in progress, completed Work, supplies and other materials and equipment produced as a part of, or acquired in connection with the performance of, the Work terminated by such notice of Termination; and (2) copies of the Contract Documents and other Drawings, sketches, Specifications, Shop Drawings, information and other relevant documentation directly related to the performance of the Work.

16.2.1.7   use its best efforts to sell, in the manner, at the times, to the extent, and at the price or prices directed or authorized by Owner, any property of the types referred to in Section 16.2.1.6; provided, however, that Construction Manager: (1) shall not be required to extend credit to any purchaser; and (2) may acquire any such property under the conditions prescribed and at a price or prices approved by Owner.  The proceeds of any such transfer or disposition shall be applied to reduce any payments to be made by Owner to Construction Manager under this Agreement, or shall otherwise be credited against the Costs of the Work, or paid in such other manner as Owner may direct.

16.2.1.8   complete performance of such part of the Work as shall have been specified in the notice of Termination to be completed on or before the effective date of such Termination.

16.2.1.9   prior to the effective date of such Termination for Convenience, take such actions as may be necessary, or as Owner may reasonably direct, for the protection and preservation of the property related to the Work and the Project which is in the possession of Construction Manager and in which Owner has or may acquire an interest.

16.2.2      In the event of a Termination for Convenience pursuant to this Section 16.2, Construction Manager shall be paid by Owner for: (1) unpaid Costs of the Work incurred by Construction Manager in performance of the Work up to the effective date of the Termination for Convenience; (2) reasonable, documented demobilization costs; and (3) that portion of the Construction Manager’s Fee attributable thereto; less (4) any sums properly deductible by Owner under the terms of this Agreement.

16.2.3      Construction Manager agrees that the pendency or existence of any dispute between Construction Manager and Owner, Architect or any Owner’s Consultant shall in no manner whatsoever affect or interfere with the discharge of Construction Manager’s obligations hereunder.

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16.3         Suspension

Owner may, at any time and for any reason, direct Construction Manager to suspend the Work, or any portion thereof, for a period of time.  A notice of Suspension issued by Owner shall be in writing and shall specify the period during which the Work is to be suspended.  Construction Manager shall resume the Work upon the date specified in such notice, or upon such other date as Owner may thereafter specify in writing.

16.4         Termination of Owner by Construction Manager

16.4.1      If: (1) without good cause, Owner shall fail for a period of fifteen (15) days after the due date to make payment on the undisputed portion of any approved Application for Payment; or (2) if the Work shall have been suspended (i) by Owner for a period in excess of one hundred and twenty consecutive (120) days; or (ii) for a period in excess of one hundred and eighty (180) days under an order of any court or other public authority having jurisdiction over the Work or the Project or as a result of an act of government, such as a declaration of national emergency making materials unavailable through no act or fault of Construction Manager, then Construction Manager immediately shall serve Owner with written notice thereof.

16.4.2      If Owner shall fail: (1) to cause all such undisputed portions of such Application for Payment to be paid within fifteen (15) days after such notice; or (2) if the delay described in Section 16.4.1(2) shall continue more than fifteen (15) days after receipt of such notice, then this Agreement may be terminated by Construction Manager by written notice to Owner setting forth the date of termination, which date shall not be sooner than seven (7) days after the date of the second notice.  If, within said seven (7) day period, the matter giving rise to Construction Manager’s right to terminate this Agreement shall not have been cured or discontinued, this Agreement shall be deemed Terminated for Convenience and Construction Manager shall be compensated in the manner and to the extent set forth in Section 16.2 hereof.

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ARTICLE 17

DISPUTE RESOLUTION

17.1         Litigation

In the event that a Claim, dispute or controversy between the parties cannot be resolved through negotiation, the parties shall have recourse to litigation in a court of competent jurisdiction located in the State of New York, New York County.  No action or proceeding shall lie or be maintained by Construction Manager against Owner, Architect or consultants upon any claim arising out of or based upon this Agreement, the Contract Documents or by reason of any act or omission or any requirements relating to the giving of notices or information, unless such action or proceeding shall be commenced within one (1) year after Substantial Completion of the Work or, if this Agreement is earlier terminated, within one (1) year following the date of such earlier termination.  This Section 17.1 shall not be deemed or construed to modify any other provision hereof relating to waivers of claims by Construction Manager.  Construction Manager shall cause each Trade Contract to contain like provisions to this Section 17.1.

17.2         Continuation of Work

Notwithstanding any Claim between Owner and Construction Manager or any claim or controversy between Construction Manager and any Trade Contractor, or any claim or controversy between or among such Trade Contractors, it shall be the responsibility of Construction Manager to continue to prosecute all of the Work and perform all of its services diligently in a good and workmanlike manner in conformity with this Agreement.  Construction Manager and its Trade Contractors shall have no right to cease performance hereunder or to permit the prosecution of the Project to be delayed.  Owner shall, subject to its right to withhold amounts pursuant to this Agreement, continue to pay Construction Manager for Costs of the Work incurred in accordance with this Agreement.

17.3         Prevailing Party at Trial

In connection with any trial or other legal proceeding between the parties relating to or arising under this Agreement, whether sounding in tort or contract, the Fees-and-Costs of the Prevailing Party at Trial will be paid or reimbursed by the other party, regardless of and without awaiting the outcome of any appeal of any judgment rendered in such trial.  This Section shall not be admissible or introduced by any Person in any legal proceeding for any purpose whatsoever, except in a subsequent legal proceeding for purpose of enforcing this Section.

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ARTICLE 18

MISCELLANEOUS PROVISIONS

18.1         Practice of Architecture and/or Engineering

Construction Manager is not being engaged by Owner as a licensed architect and engineer.  Therefore, nothing contained in this Agreement, including, but not limited to, the obligation on the part of the Construction Manager to review the Design Documents for various purposes, shall be deemed to require or authorize Construction Manager to perform, or assume any liability for, any acts which would be deemed the practice of architecture or engineering in connection with the design of the Project.

18.2         Effectiveness of Agreement

This Agreement, when executed by the parties, shall be effective as of the date first stated above in this Agreement.  All understandings and agreements heretofore had among Construction Manager and Owner with respect to the Project are merged into, or superseded by, this Agreement.  This Agreement fully and completely expresses the agreement of the parties with respect to the Work and the Project, and it may not be modified or amended except by written agreement executed by each of the parties hereto.  Construction Manager understands and agrees that no representations of any kind whatsoever have been made to Construction Manager other than as appear in this Agreement, that it has not relied on any such representations and that no claim that it has so relied on may be made at any time and for any purpose.

18.3         Survival of Obligations

Except as specifically provided for herein, all obligations of Construction Manager survive the completion of the Work or termination of this Agreement.

18.4         Assignment

18.4.1      Assignment by Construction Manager

Construction Manager may not assign this Agreement or the performance of all or any of its obligations hereunder without the prior written consent of Owner, which consent may be given or withheld in Owner’s sole and exclusive discretion.  The provisions of this Section 18.4 may not be waived or otherwise modified except by a written instrument signed by Owner.

18.4.2      Assignment by Owner

18.4.2.1   This Agreement shall be freely assignable by Owner, without the consent of Construction Manager to any Lender, or to any Permitted Assignee, provided that such Lender or Permitted Assignee agrees to assume Owner’s obligations and liabilities hereunder.

18.4.2.2   In all other cases, Owner’s assignment of this Agreement is subject to the prior approval of Construction Manager, which approval shall not be unreasonably withheld or delayed.  If Owner shall assign this Agreement as set forth above, Construction Manager agrees that it shall deal with such Permitted Assignee or other approved assignee in the place and stead of Owner,

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and that it shall perform all of its obligations under this Agreement, and complete the Work in the manner required by this Agreement.  In such event, such Permitted Assignee or other approved assignee may, among other things, use the Contract Documents without payment of any additional fees or charges, and may enforce the obligations of Construction Manager hereunder with the same force and effect as if the Permitted Assignee or other approved assignee assumes the obligations and liabilities of Owner.  Upon such assignment and assumption by the Permitted Assignee or either approved assignee, Owner shall be released from all of its payment and other obligations and liabilities hereunder arising from Work to be performed subsequent to the assignment.  Construction Manager shall certify, in the form reasonably required by any such Permitted Assignee or other approved assignee, that the undertakings contained herein as to the obligations in favor of such Permitted Assignee or other approved assignee shall run in favor of such Permitted Assignee or other approved assignee.

18.5         Confidentiality

18.5.1      Confidential Information

18.5.1.1   As a result of Construction Manager’s participation in the Project, Construction Manager will have access and contribute to information and materials of a highly sensitive nature, including Confidential Information.  Construction Manager hereby warrants that Construction Manager and its employees and agents shall not (without in each instance obtaining the Owner’s prior written consent) disclose, make commercial or other use of, or give or sell to any person, firm, or corporation, any Confidential Information received directly or indirectly from Owner or acquired or developed in the course of the performance of this Agreement unless: (1) required to do so pursuant to Applicable Law (and then only after Construction Manager has given Owner prompt written notice of the legal compulsion and, at Owner’s expense, provided by Owner with cooperation in any attempt Owner may make to gain a protective order acceptable to Owner); or (2) it is rightfully in the possession of Construction Manager from a source other than Owner prior to the time of disclosure of the information to Construction Manager under this Agreement; or (3) it was in the public domain prior to the time of Construction Manager’s receipt; or (4) it became part of the public domain prior to the time of Construction Manager’s receipt by any means other than an authorized act or omission on the part of Construction Manager; or (5) it is supplied to Construction Manager after the time of Construction Manager’s receipt by a third party who is under no obligation to the Owner to maintain such information in confidence; or (6) it was independently developed by Construction Manager prior to the time of receipt.

18.5.1.2   Construction Manager’s confidentiality and non-disclosure obligations shall survive the expiration or earlier termination of this Agreement as follows: (1) in the case of information or material that constitute a Trade Secret under Applicable Laws, for so long as such information and materials remain a Trade Secret; and (2) in the case of other Confidential Information, for a period of ten (10) years following the expiration or earlier termination of this Agreement.  All Confidential Information, regardless of form, shall be the property of Owner and shall be returned to Owner upon its request, or in any event, at the expiration or earlier termination of this Agreement.

18.5.2      Trade Secrets, Trademarks and Trade Names

18.5.2.1   Construction Manager acknowledges that Owner will provide Construction Manager with access to certain information which may qualify as a Trade Secret under Applicable Law, and the Construction Manager agrees that for all such Trade Secrets that come into its

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possession, custody or control: (1) such Trade Secrets shall remain the sole property of Owner, and Construction Manager shall have no interest in said Trade Secrets; (2) Construction Manager shall maintain the secrecy of the Trade Secrets for so long as they remain Trade Secrets under Applicable Law; and (3) immediately upon the expiration or earlier termination of this Agreement, Construction Manager shall deliver to the Owner all Trade Secret documentation and any and all copies thereof, regardless of form or content.

18.5.2.2   Without Owner’s prior written approval, the Construction Manager shall have no right to use any Trademark or Trade Name of Owner or of Owner’s Affiliated Entities.  Further, Construction Manager shall not refer to this Agreement or the Work or services performed hereunder or to any Confidential Information, directly or indirectly, in connection with any production, promotion or publication, and the Owner reserves the right in its sole discretion to release such information, time its release, and approve its form and content.

18.5.2.3   Construction Manager may publish any information (other than Trade Secrets and Confidential Information, which shall not be published) resulting from or relating to its services or the Work, only after obtaining the Owner’s prior written approval, which Owner may grant or withhold in its sole discretion.  The Owner’s approval, if granted, may be conditioned upon changes in the text or reasonable delay in publication to protect Trade Secrets or Confidential Information and other interests of the Owner.

18.5.3      Press Releases and Other Project Promotion

18.5.3.1   The Owner shall control all promotion in connection with the Project including, but not limited to, the issuance of press releases and the preparation and distribution of promotional materials.  Construction Manager may not publish any information regarding the Project or Construction Manager’s participation in the Project including, but not limited to, Confidential Information as described in Section 18.5.2, without the prior written approval of Owner.

18.5.3.2   No signs advertising the Work to be performed by Construction Manager or any Trade Contractor or identifying any person, firm or entity concerned with the Work to be performed by Construction Manager or any Trade Contractor shall be allowed at the Project Site or elsewhere unless approved in writing by Owner in advance, which approval shall be within Owner’s sole and exclusive discretion.

18.6         Trust Account

18.6.1      Construction Manager agrees to open an interest-bearing demand deposit Trust Account with a commercial banking institution located in New York City, satisfactory to Owner, for the deposit of all advances, disbursements or other payments or refunds, in connection with any Application for Payment, required to be made by Owner to Construction Manager on account of Trade Contract Costs pursuant to the terms of this Agreement.  All interest on the Trust Account shall belong to Owner.  Construction Manager shall reconcile the Trust Account within three (3) weeks after receipt of each bank statement, and shall provide Owner with copies of each such bank statement and reconciliation upon request.  Construction Manager agrees that such demand deposit account shall be a trust fund; that such account shall remain a separate bank account; and that no monies deposited into said account will be commingled by Construction Manager with any other funds of Construction Manager or others.  Payments on account of: (1) Construction Manager’s Fee; (2) General Conditions Costs; and (3) other Costs of the Work set forth in this Agreement, to the extent such other Costs of the Work are incurred directly by Construction Manager, need not be maintained in the Trust Account.  All

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payments to Construction Manager or Trade Contractors shall be paid directly out of the Trust Account and may not be transferred to any other account.  Construction Manager further agrees that, upon reasonable notice from Owner at any time, it will authorize such commercial banking institution to permit Owner to review and inspect all records maintained with respect to the Trust Account.  Such requests may be repeated by Owner at any time in Owner’s absolute discretion.

18.7         Notices

Every notice, demand, request, consent, approval or other communication which either party hereto is required or desires to give or make to the other party hereto shall, notwithstanding any other provisions of this Agreement, be effective only if given in writing and delivered by hand and receipted for, or by registered or certified mail, postage-prepaid, return receipt requested, or by overnight mail as follows:

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or to such other address or addresses as Owner and Construction Manager shall from time to time designate by notice given and delivered as aforesaid.

18.8         Construction of Language

The language in this Agreement shall be construed according to its customary meaning within the building industry in the New York City metropolitan area, except where a specific definition is provided herein.  Whenever used, the singular number shall include the plural, and the plural the singular, and the use of any gender shall be applicable to all genders.

18.9         Captions and Titles

Captions and titles of the different Articles and Sections of this Agreement are solely for the purpose of aiding and assisting in the location of different material in this Agreement and are not to be considered under any circumstances as parts, provisions or interpretations of this Agreement.

18.10       No Waiver

18.10.1  The failure of either party to insist upon the strict performance of any provisions of this Agreement, the failure of either party to exercise any right, option or remedy hereby reserved, or the existence of any course of performance hereunder shall not be construed as a waiver of any provision hereof or of any such right, option or remedy available to either party or as a waiver for the future of any such provision, right, option or remedy or as a waiver of a subsequent breach thereof.

18.10.2  The consent or approval by Owner of any act by Construction Manager requiring Owner’s consent or approval shall not be construed to waive or render unnecessary the requirement for Owner’s consent or approval of any subsequent similar act by Construction Manager.  The payment by Owner of any amount due hereunder with knowledge of a breach of any provision of this Agreement shall not be deemed a waiver of such breach.  No provision of this Agreement affecting or relating to Owner shall be deemed to have been waived unless such waiver shall be in writing signed by Owner.

18.10.3  The consent or approval by Construction Manager of any act by Owner requiring Construction Manager’s consent or approval shall not be construed to waive or render unnecessary the requirement for Construction Manager’s consent or approval of any subsequent similar act by Owner.  No provision of this Agreement affecting or relating to Construction Manager shall be deemed to have been waived unless such waiver shall be in writing signed by Construction Manager.

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18.11       Indemnification

18.11.1  To the fullest extent permitted by law, Construction Manager shall indemnify, hold harmless and defend the Indemnitees from and against all losses, claims, costs, damages, and expenses (including, without limitation, attorneys’ fees and disbursements), arising out of or in connection with: (1) any personal injury, sickness, disease or death or damage or injury to, loss of or destruction of property (including tools, equipment, plant and the buildings at the Project Site, but excluding the Work itself, and excluding costs to the extent such costs are covered by Owner’s Property insurance) including the loss of use resulting therefrom, sustained or purported to have been sustained as a result of the performance of the Work; (2) any fines or penalties incurred by reason of Construction Manager’s violation of Applicable Laws; and (3) any infringement of patents covering products or processes provided such processes or products have not been specified or mandated by the Owner or Architect, to the extent such loss, claim, cost, damage or expense is caused in whole or in part by any act or omission of Construction Manager, the Trade Contractors, or anyone for whose acts Construction Manager or its Trade Contractors may be liable.  Such obligation shall arise regardless of any claimed liability on the part of an Indemnitee.  Such obligation shall not be construed to negate, abridge or otherwise reduce any other right or obligation that would otherwise exist as to any Indemnitee.

18.11.2  In any and all claims against any Indemnitee by any employee of Construction Manager, or of its Trade Contractors or anyone directly or indirectly employed by either Construction Manager or its Trade Contractors or anyone for whose acts either Construction Manager or its Trade Contractors may be liable, the indemnification obligation under Section 18.11.1 shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for Construction Manager under workers’ or workmen’s compensation acts, disability acts or other employee benefit acts.

18.11.3  Should a Trade Contractor bring suit against the Construction Manager and/or Owner, the Construction Manager, without prejudice to any other rights to receive reimbursement under its GMP, shall, to the extent the Owner neither caused nor contributed to the commencement of such suit by improper or inappropriate conduct, defend such suit on behalf of Owner, with the cost thereof also reimbursable as a Cost of the Work, or if the Construction Manager does not defend the Owner, the Owner may reduce the GMP by the reasonable cost of such defense and, if the balance of the GMP is insufficient, the Construction Manager shall reimburse Owner for such costs of defense.

18.11.4  To the fullest extent permitted by law, Owner shall indemnify, hold harmless and defend the Construction Manager, the Trade Contractors, Lower Tier Contractors and their respective agents and employees from and against all losses, claims, costs, damages, and expenses (including, without limitation, attorneys’ fees and disbursements), arising out of or in connection with: (1) any personal injury, sickness, disease or death or damage or injury to, loss of or destruction of property (including tools and equipment, but excluding the Work itself) to the extent caused, in whole or in part, by any act or omission of Owner, Separate Contractors or anyone for whose acts Owner or any Separate Contractor may be liable.  Such obligation shall arise regardless of any claimed liability on the part of Construction Manager or any Trade Contractor.  Such obligation shall not be construed to negate, abridge or otherwise reduce any other right or obligation which would otherwise exist as to Construction Manager or any Trade Contractor.

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18.12       Severability

If any provision of the Contract Documents is invalid or unenforceable as against any person, party or under certain circumstances, the remainder of the Contract Documents and the applicability of such provision to other persons, parties or circumstances shall not be affected thereby.  Each provision of the underlying Contract Documents shall, except as otherwise herein provided, be valid and enforced to the fullest extent permitted by law.

18.13       Architect and Owner Consultants

All references in this Agreement to Architect or Owner Consultants shall be deemed to mean any person or entity designated from time to time by Owner to serve in such capacity.

18.14       Rights and Remedies

The duties and obligations imposed by the Contract Documents and the rights and remedies available thereunder shall be in addition to, and not in limitation of, any of the duties, obligations, rights and remedies otherwise imposed or available at law or in equity.

18.15       Governing Law and Consent to Jurisdiction

18.15.1  This Agreement shall be governed by the laws of the State of New York, both as to interpretation and performance.  Owner and Construction Manager hereby irrevocably consent to the jurisdiction of the Courts of the State of New York, County of New York, for all purposes in connection with any action or proceeding which arises from or relates to this Agreement.

18.15.2  Nothing in the Contract Documents or any Trade Contract shall be construed to permit deviation from the governing law specified in this Section 18.15.

18.16       Interpretations in Writing

18.16.1 Any and all interpretations of Contract Documents must be in writing to be valid.

18.16.2 This provision is not intended to prohibit or deny normal discussion, recommendations, explanations, suggestions, approvals, rejections, and similar activity in pursuit of the Work at the Project on an oral basis, such as at job conferences at the Project Site.  In such instances, the written minutes, correspondence, Shop Drawing records, and other written data shall govern over personal claims regarding oral statements made contrary to the written data.

18.17       Independent Contractor

It is expressly understood and agreed by the parties hereto that Construction Manager, in performing its obligations under this Agreement, shall be deemed an independent contractor.  Nothing contained in this Agreement shall be construed to mean that Construction Manager and Owner are joint venturers or partners.

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18.18       Limited Recourse

The obligations of Owner do not constitute personal obligations of any natural persons who comprise the trustees, officers, shareholders, employees or agents of Owner.  All persons dealing with Owner shall look solely to the assets of Owner for satisfaction of any liability of Owner and will not seek recourse against any natural persons who comprise such trustees, officers, shareholders, employees or agents or any of them or any of their personal assets for such satisfaction.  However, this clause shall not protect such persons from willful misconduct or acts committed in violation of any duty of corporate loyalty.

18.19       Waiver of Delay Damages

The Owner and the Construction Manager agree to waive the following specific damages in connection with delay:

.1             damages incurred by the Owner for rental expenses, for losses of use, income, profit, business and reputation, and for loss of management or employee productivity or of the services of such persons, although Construction Manager acknowledges that the Owner is not waiving damages for financing or other interest costs; and

.2             damages incurred by the Construction Manager for principal office expenses including the compensation of personnel stationed there, for losses of financing, business and reputation, and for loss of profit.

18.20       Limitation of Damages

In connection with damages suffered by Owner as a result of delay, Construction Manager shall be liable to Owner for all damages arising hereunder subject to the limitation of the greater of: (i) the amount of proceeds recovered under any applicable insurance policy; or (ii) two times the amount of Construction Manager’s Fee under this Agreement.  Construction Manager acknowledges that the limitation in Section 18.20 (ii) is in no way intended to limit the amount recoverable under any insurance policies.  Construction Manager further acknowledges that there shall be no limitation on damages which are not the result of delay.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

In connection only with the following obligation:

Upon the effectiveness of the condominium declaration, the obligations of Owner under this Construction Management Agreement will be assumed by the following entities.  The obligations of these entities will be allocated pursuant to the terms of the condominium declaration.

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LIST OF EXHIBITS