EXHIBIT 10.6
AMENDED AND RESTATED AGREEMENT BETWEEN OWNER AND CONTRACTOR
where the basis of payment is the
COST OF WORK PLUS A FEE
NOT TO EXCEED A GUARANTEED MAXIMUM PRICE
THIS AMENDED AND RESTATED AGREEMENT
is made and entered into as of the 16th day of June, 2006,
BY AND BETWEEN the Owner: Premier Entertainment Biloxi LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(hereinafter referred to as the "OWNER")
And the Contractor: ▇▇▇ ▇▇▇▇▇▇▇▇ Corp
▇.▇. ▇▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(hereinafter referred to as the "CONTRACTOR")
(Owner and Contractor to be sometimes hereinafter individually and collectively
referred to as the "PARTY" and/or "PARTIES");
The Project is: Hard Rock Hotel and Casino
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(hereinafter referred to as the "PROJECT"
or "PROJECT SITE").
The Architect is: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Ltd.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(hereinafter referred to as the "ARCHITECT").
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 1
RECITALS
WHEREAS the Owner and the Contractor have entered into that certain
Agreement between Owner and Contractor (where the basis of payment is the cost
of work plus a fee not to exceed a guaranteed maximum price) dated December 24,
2003 (the "ORIGINAL AGREEMENT"); and
WHEREAS on January 16, 2004, St. ▇▇▇▇ Fire and Marine Insurance
Company issued Bond on Private Work Mississippi No.TC9414 ("the Bond"),
guaranteeing the obligations of Contractor under the Original Agreement; and
WHEREAS the Owner and Contractor, on or about September 20, 2005,
amended the Original Agreement to provide for debris removal and rehabilitation
of the Project following damage caused by Hurricane ▇▇▇▇▇▇▇; and
WHEREAS work under the Original Agreement has been completed and paid
for; and
WHEREAS work under the Original Agreement, as amended on September 20,
2005, has been completed and partially paid for; and
WHEREAS in furtherance of the Original Agreement and to provide for the
reconstruction of the Project following Hurricane ▇▇▇▇▇▇▇, the Owner and
Contractor desire to amend and restate the Original Agreement to provide for
reconstruction work not part of the scope of work under the Original Agreement;
and
WHEREAS Owner and Contractor agree that the obligations of St. ▇▇▇▇
Fire and Marine Insurance Company under the Bond extend solely to the Original
Agreement, which work was finally completed August 26, 2005, and do not extend
to work performed after August 26, 2005 pursuant to the September 20, 2005
amendment, this Amended and Restated Agreement or otherwise; and
WHEREAS the Owner and Contractor each are willing to enter into this
Agreement for the purpose of amending and restating the Original Agreement; and
WHEREAS the Owner and Contractor have agreed to renew and continue the
Original Agreement, as amended and restated hereby in its entirety, to cover the
specific additional scope of work on terms set forth herein.
AGREEMENT
NOW THEREFORE, in consideration of the promises and mutual agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency and adequacy of which are hereby acknowledged, the
Parties (intending to be legally bound) hereby agree that the above stated
Recitals are true, accurate and hereby incorporated in this Agreement as if
fully set forth herein and further agree as follows:
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 2
ARTICLE 1
---------
THE CONTRACT DOCUMENTS
1.1 The contract documents (hereinafter referred to as "CONTRACT
DOCUMENTS") consist of this Agreement; the following exhibits attached to and
made a part of this Agreement:
EXHIBIT "A" the General Conditions of the Contract of Construction,
AIA Document A201, 1997 edition
EXHIBIT "B" Specifications
EXHIBIT "C" Drawings
EXHIBIT "D" Not Used
EXHIBIT "E" Project Schedule
EXHIBIT "F" Not Used
EXHIBIT "G" Contractor's Assumptions, Qualifications and
Clarifications to Guaranteed Maximum Price, and
Schedule of Allowances
EXHIBIT "H" Schedule of Liquidated Damages for Late Completion
EXHIBIT "I" Schedule of Bonus for Early Completion
EXHIBIT "J" Not Used
EXHIBIT "K" Rental Rates for Equipment Rented from Contractor
EXHIBIT "L" Not Used
EXHIBIT "M" Mississippi Tax-Related Procedures (together with
attachments thereto)
EXHIBIT "N" the June 8, 2006 Estimate Survey Sheets for Casino
EXHIBIT "O" the June 8, 2006 Estimate Survey Sheets for the
Lowrise, Hotel, Parking Deck Repair and Sitework
and Addenda, if any, issued prior to execution of this Agreement; and
Modifications issued after execution of this Agreement, if any. These form the
contract (hereinafter referred to as the "CONTRACT"), and all are as fully a
part of the Contract as if attached to this Agreement or repeated herein. An
enumeration of the Contract Documents appears in ARTICLE 23. If anything in the
Contract Documents is inconsistent with this Agreement, this Agreement shall
govern, as set forth in ARTICLE 23. The Contract represents the entire and
integrated agreement between the Parties hereto and supersedes prior
negotiations, representations or agreements, either written or oral.
ARTICLE 2
---------
THE WORK OF THIS CONTRACT
2.1 Contractor shall execute the entire work of the Contract for the Hard Rock
Hotel & Casino development project (hereinafter referred to as the "WORK")
described in the Contract Documents, and reasonably inferable by the Contractor
as necessary to provide the result indicated by the Contract Documents, except
to the extent specifically indicated in the Contract Documents to be the
responsibility of others. The BASE SCOPE OF WORK shall include rebuilding the
entire Casino, renovate and repair the existing Hotel Tower, Low Rise building,
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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Parking Garage and Pool Area in accordance with the design plans included in
EXHIBIT "C" and detailed scope listed in Article 2.1.1.
2.1.1 BASE SCOPE OF WORK
The Hard Rock Hotel & Casino resort development includes a Hotel tower, a Casino
building, a Low-Rise entertainment and operations building, a Resort style pool
and sand beach area and a 7 level parking garage The scope of this contract
shall be limited to rebuilding the entire Casino, renovate and repair the Hotel,
Lowrise and Parking Garage and Pool Deck area.
HOTEL TOWER
-----------
The 318 key Hotel Tower is 12 stories tall with a total square footage of
234,500 sf. With the Guest Rooms starting at levels 3 thru 12 and total 282
typical guest rooms, 10 handicap accessible rooms and 26 suites. The first level
under the footprint of hotel structure is considered a part of the Lowrise.
▇▇▇▇▇ ▇▇ also includes a nightclub occupying the south half of the floor. The
hotel structure is constructed as a cast in place, post tensioned concrete
structure. The Facade is a combination of EIFS assembly and aluminum framed
curtain wall system with insulated glazing units. The structure sits on an
augercast pile foundation. Specifically, this scope of work for renovations to
the hotel includes the following:
o Selective demolition and removal of damaged partitions, ceilings,
millwork and floors on East Guestrooms
o Where needed, if any, de-humidify entire structure and treat with
microbial agent
o Repair 4th floor balcony structure
o Replace damaged aluminum handrails
o Replace damaged finishes @ suites
o Repair/Replace roofing (install new cap sheet over existing roof)
o Repair/Replace glass curtain wall system
o Repair/Replace glass and aluminum doors
o Repair exterior EIFS
o Repair/Rehab fire protection system
o Repair/Rehab Elevators (2 service and 3 passenger cars)
o Repair/Rehab HVAC/Plumbing system
o Repair/Rehab Electrical System
o Repair/Replace fire alarm system
CASINO AND LOWER LEVEL VALET PARKING:
-------------------------------------
The Casino will be rebuilt on piles supported structure at the existing location
with similar architectural design, finishes and system requirement. The new
structural system shall incorporate interior columns and shall include the
provision of future Ballroom expansion at roof level.
o Demo and remove existing barges and debris in the casino basin
(footprint) shall be the responsibility of the owner.
o Construct parking spaces for two hundred twenty (220) vehicles beneath
casino.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 4
LOW RISE BUILDING
-----------------
The Low-Rise structure is a 3 story steel framed structure with a total area of
163,000sf. which includes the first floor footprint under the Hotel structure.
The ground level of the low rise includes the entrance lobby, valet parking,
loading dock and warehouse storage. Level 1 of the low rise includes the 1,200
seat Hard Rock Live Performance Venue, three retail outlets, public restrooms
and BOH circulation and storage. Level 2 includes the Hard Rock Live VIP Lounge
and Mezzanine, Green Rooms for performers, and BOH spaces including security,
surveillance, employee uniform, employee toilets, employee dinning, and
miscellaneous office space. The third level of the low-rise includes a
Spa/Salon, administration offices, and the remaining back of house functions.
The Low Rise foundation is comprised of augercast piles and cast in place
concrete pile caps and grade beams. Specifically, this scope of work for
renovations to the low-rise includes the following:
o Selective demolition and the removal of damaged partitions, floors,
ceilings, millwork and equipment
o Where needed, if any, de-humidify and treat all areas with microbial
agent
o Demo and repair damaged steel members above loading dock and damaged
columns at grid line K.
o Remove and replace damaged composite slab areas at south east corner
of lowrise structure
o Replace damaged miscellaneous metal fabrications
o Replace aluminum & glass handrails at promenade
o Replace Metal Column Covers @ Porte Cochere
o Replace all millwork @ 1st Level
o Replace all stone tops @ 1st level
o Patch and repair roof
o Repair/Replace fireproofing
o Replace damaged hollow metal doors and frames
o Replace/Rehab broken glass and damaged aluminum curtain wall system
o Replace aluminum and glass doors and interior storefront @ vestibule
o Replace valet parking entry storefront.
o Replace interior glass and glazing
o Replace damaged / missing metal stud framing and drywall at levels G
and 1
o Replace all damaged drywall @ levels 2 and 3
o Replace damaged EIFS @ building exterior
o Replace damaged EIFS @ Porte Cochere
o Replace all damaged finishes (flooring, millwork, stone, tile, paint)
o Replace all toilet partitions and specialties on levels G and 1
o Replace all loading dock equipment and overhead doors
o Replace/Rehab fire protection system including replacement of fire
pump
o Replace/Rehab Elevators
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 5
o Replace Escalators
o Repair/Rehab HVAC/Plumbing system
o Repair/Rehab Electrical System
o Replace site / exterior lighting
o Repair/Replace fire alarm system
RESORT STYLE POOL AND BEACH AREA
--------------------------------
The pool and beach area located at the grade level on the west side of the Hotel
Tower includes a "zero entry" pool with sand beach, a swim up pool bar, pool
grille, covered pool club (below hotel footprint), public restrooms and towel
dispensing station. The pool area also includes 12 private cabanas.
Specifically, this scope of work for renovations to the pool area includes the
following:
o Replace pool equipment
o Repair pool and spa finishes (tile, coping and plaster)
o Repair/Replace pool decking (concrete and cool decking)
o Re-build pool bar (structure and finishes)
o Replace cabanas (frame only - fabric by Owner)
o Replace CMU screen wall around pool site
o Replace pool club and pool grille finishes
o Replace landscaping (by owner)
o Repair/Rehab site lighting
PARKING GARAGE
--------------
The parking garage includes a total of 1,608 spaces that includes 1,238
self-park spaces, 320 valet parking spaces, 50 dedicated spaces for the small
craft harbor and 3 bus arrival spaces. The total square foot of the parking
structure is 520,000 SF. Specifically, this scope of work for renovations to the
pool area includes the following:
o Demolish damaged slabs/ramps
o Form/Reinforce/Place new slabs/ramps
o Repair/Replace EIFS Light Walls
o Clean/Repaint Garage Stairs
o Replace/Rehab fire standpipe system
o Repair/Rehab garage drainage system
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 6
HARD ROCK CAFE SHELL TENANT SPACE
---------------------------------
The scope of work for renovations to the Hard Rock Cafe' Shell Space includes
the following:
o Remove and replace damaged sheetrock to 5 feet above finished floor on
exterior side of shell space demising wall, existing frame to remain.
o Repair existing demising wall framing and reinstall sheetrock on
Promenade side only.
o Repair / Replace broken glass and damaged aluminum curtain wall system
on building exterior.
o Replace exterior stairs.
o Replace aluminum handrail @ balcony and stairs. Handrail to match main
building handrail.
o Repair deck coating at balcony.
o Repair exterior wall framing and exterior sheathing
o Repair exterior EIFS
o Replace rooftop HVAC unit and associated ductwork to shell space
(distribution within shell space by others)
o All interior build-out of the Hard Rock Cafe space is not included in
this agreement
HARD ROCK RETAIL TENANT SPACE
-----------------------------
The scope of the work for renovations to the Hard Rock Retail Space includes the
following:
o Remove and replace damaged sheetrock to 5 feet above finished floor on
exterior side of shell space demising wall.
o Repair existing demising wall framing and reinstall sheetrock on
exterior side only.
o Replace HVAC unit and associated ductwork to shell space (distribution
within shell space by others)
o All interior build-out of the Hard Rock Retail space is not included
in this agreement
▇▇▇▇'▇ ▇▇▇▇▇ STEAKHOUSE
-----------------------
The scope of the work for renovations to the ▇▇▇▇'▇ ▇▇▇▇▇ Steakhouse Space
includes the following:
o Selective demolition / removal of all damaged sheetrock and wall
framing
o Selective demolition of all existing finishes
o Build out of tenant space as per RCSH drawings dated 01/21/05.
o All kitchen equipment and FF&E shall be by others
2.1.2 The Hard Rock hotel and casino development is located south of Highway 90
on the real property (hereinafter referred to as the "PROPERTY") bounded on the
east by Main Street, bounded on the west by the property formerly occupied by
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 7
the Windjammer Condominiums and bounded on the south by the Biloxi Small Craft
Harbor.
2.1.3 Contractor understands that Owner intends to fund the construction for
the Project from insurance proceeds received for damages caused by Hurricane
▇▇▇▇▇▇▇ ("INSURANCE PROCEEDS"), and in connection therewith, Owner will enter
into a Cash Collateral and Disbursement Agreement (the "DISBURSEMENT
AGREEMENT"), by and among U.S. Bank National Association, as disbursement agent,
securities intermediary and depositary bank (together with any successor
disbursement agent permitted thereunder, the "DISBURSEMENT AGENT"), U.S. Bank
National Association, as trustee under the Indenture (as defined therein)
(together with its successors and assigns from time to time under the Indenture,
the "TRUSTEE"), Professional Associates Construction Services, Inc., a
California corporation (referred to herein alternatively as "PACS" and the
"INDEPENDENT CONSTRUCTION CONSULTANT"), Premier Entertainment Biloxi LLC (d/b/a
Hard Rock Hotel & Casino Biloxi), a Delaware limited liability company, and
Premier Finance Biloxi Corp., a Delaware corporation ("PREMIER FINANCE CORP.").
Contractor has reviewed drafts of the Disbursement Agreement. Owner agrees to
provide Contractor with a true, accurate and complete copy of the Disbursement
Agreement, with all exhibits affixed thereto, after the Disbursement Agreement
is executed by all parties thereto. Contractor acknowledges that the
Disbursement Agreement provides for the execution and delivery by Contractor of
various certifications, schedules, relating to contract amendments, change
orders, amendments to the Project Schedule, amendments to the Project budget,
and in connection with construction disbursements. Subject to review of the
final version of the Disbursement Agreement, Contractor undertakes and agrees to
satisfy in good faith and within the time periods required under the terms of
the Disbursement Agreement, or upon the request of Owner, all requirements set
forth therein that are within the control of Contractor. As used in this
Agreement and in the Contract Documents, the phrase "within the control" of
Contractor shall mean and include (i) all certifications, schedules, information
and documentation required to be delivered by Contractor under the terms of the
Disbursement Agreement, and Contractor shall make all statements provided in
such certificates, unless such statements would be untrue or incorrect with
respect to the facts then known to Contractor at the time when such certificate
is made, and (ii) providing to Owner and/or the Independent Construction
Consultant in a timely manner any and all information and documentation within
the control of Contractor required to be delivered by Owner and/or the
Independent Construction Consultant under the terms of the Disbursement
Agreement and all exhibits and schedules provided for and/or contemplated
thereunder.
ARTICLE 3
---------
RELATIONSHIP OF THE PARTIES
3.1 Contractor accepts the relationship of trust and confidence established
by this Agreement and covenants with Owner to cooperate with Architect and
utilize Contractor's best skill, efforts, and judgment in furthering the
interests of Owner; to furnish efficient business administration and
supervision; to furnish at all times an adequate supply of skilled workers and
materials; and to perform the Work in the best way and most expeditious and
economical manner consistent with the interests of Owner. Owner agrees to
cooperate with Contractor by approving, in a timely manner, information
requested of Owner by Contractor, and by executing, in a timely manner, all
Direct Purchase Documents (as defined in EXHIBIT "M" attached hereto) and making
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 8
payments to Contractor and to vendors, suppliers and contractors on account of
Direct Purchase Items (as defined in EXHIBIT "M" attached hereto) (subject in
each case to the conditions set forth in this Agreement) and in accordance with
requirements of the Contract Documents. Owner and its Architect, as required,
shall cooperate with Contractor's reasonable suggestions as to construction
methods, phasing, and materials, in order to define the scope of the Work
(hereinafter referred to as the "SCOPE OF THE WORK") within the limits of the
Guaranteed Maximum Price (hereinafter referred to as the "GMP" as defined in
PARAGRAPH 5.2 below).
3.2 The services to be performed by Contractor under this Agreement shall
not constitute it an architect; and this Agreement shall not impose on
Contractor any obligation to assume, render to or perform on behalf of Owner the
professional responsibilities, duties, services and activities with respect to
design of the Project for which Owner has contracted with Architect. Contractor
assumes no responsibility or liability in connection with the design of the
Project or the failure of Architect to provide designs or otherwise perform its
obligations under any agreements between Owner and Architect, and the
performance by Contractor of its duties hereunder shall not relieve Architect
from any responsibilities or liabilities for services on the Project required
under any such agreements. Notwithstanding the foregoing, in the event
Contractor becomes aware of errors or omissions of any kind relating to design
of the Project or the failure of Architect to perform its obligations under any
agreements between Owner and Architect, Contractor shall promptly report the
same to Owner, which report shall be made in writing.
3.3 Representatives
Upon execution of this Agreement, Owner shall designate, in writing, to
Contractor the name of the Party who is to be "OWNER'S REPRESENTATIVE" with full
authority to execute any and all instruments requiring Owner's signature and to
act on behalf of Owner with respect to all matters arising out of this
Agreement. The Owner's Project representative is hereby designated to be ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, who has been authorized to make decisions on behalf of the Owner
regarding the Project. Owner reserves the right to designate a substitute
Owner's Project representative, upon written notice to Contractor, which written
notice shall define the scope of such Project representative's authority to make
decisions on behalf of Owner regarding the Project. In addition, Contractor
acknowledges that Owner has retained Professional Associates Construction
Services, Inc. as an Independent Construction Consultant. Contractor agrees to
cooperate with the Independent Construction Consultant in assisting the
Independent Construction Consultant to perform its duties and obligations under
the Disbursement Agreement (as hereinafter defined), and to take such further
steps as Owner and/or the Independent Construction Consultant may reasonably
request in order to facilitate the performance by the Independent Construction
Consultant of its duties and obligations under the Disbursement Agreement.
Upon execution of this Agreement, Contractor shall designate in writing to Owner
the name of the Party who is to be "CONTRACTOR'S REPRESENTATIVE" with full
authority to execute any and all instruments requiring Contractor's signature
and to act on behalf of Contractor with respect to all matters arising out of
this Agreement. The Contractor's Project Representative is hereby designated to
be ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and the Contractor's Superintendent is hereby designated to
be ▇▇▇▇▇▇▇ ▇▇▇▇▇▇. The Contractor shall not replace its Project Representative
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 9
or its Superintendent without the Owner's prior written approval, which approval
shall not be unreasonably withheld by Owner. The Contractor shall promptly
replace its Project Representative or its Superintendent upon the Owner's
reasonable request, which request shall be made in writing.
ARTICLE 4
DATE OF COMMENCEMENT AND SUBSTANTIAL
COMPLETION
4.1 The date of commencement (hereinafter referred to as "COMMENCEMENT
DATE") is the date from which the contract time of PARAGRAPH 4.2 is measured; it
shall be deemed to have occurred when: (1) the Owner has issued the Notice to
Proceed to the Contractor, and (2) the condition precedent for the Contractor
starting work set forth in Section 4.8 has been satisfied.
4.1.1 With respect to the Commencement Date under the Contract
Documents, the Contractor understands and agrees that in order for the Owner to
issue the Notice to Proceed for the Project, the Contractor must first perform
the following: (1) obtain all necessary governmental approvals required to
commence construction under PARAGRAPH 3.7.1 of the General Conditions; (2)
provide the Owner with valid insurance certificates evidencing the coverages
required hereunder; and Contractor agrees to use its best efforts to accomplish
the items described in clauses (1) and (2) above so that the Notice to Proceed
can occur on or before Friday, June 9, 2006. The Project Schedule has a
commencement date of Friday, June 9, 2006. The Project Schedule assumes that the
required permits and approvals will be obtained on a timely basis as shown by
the milestone dates on the Project Schedule. The Project Schedule assumes that
the Owner will issue the Notice to Proceed to Contractor on or before Friday,
June 9, 2006.
4.1.2 Contractor acknowledges that its has obtained from the
Architect sufficient architectural and civil engineering plans to enable
Contractor to obtain permits and related approvals for commencement of
construction of the initial phase of the Work (demolition, grading, site work,
underground site work, plumbing packages and foundations) in accordance with the
Project Schedule. Except for such permits and approvals, Owner and Contractor
acknowledge that not all final permits and related approvals will have been
obtained as of the Commencement Date, because the Architect will not have
provided complete Drawings and Specifications for the Project as of the
Commencement Date. Owner shall cause the Architect to cooperate with Contractor,
and Contractor shall cooperate with the Architect, in an effort to obtain all
final permits and approvals on a timely basis, and Contractor agrees to use all
diligent efforts to obtain same to maintain the dates in the Project Schedule.
Contractor shall not be liable for, and shall be entitled to appropriate time
extensions and other relief and/or additional direct costs (but not
consequential damages), proven to be the result of actual impacts to the Project
Schedule in the event the Architect does not provide Drawings and Specifications
which are sufficiently complete to allow Contractor to obtain all of the permits
and other approvals by the milestone dates set forth in the Project Schedule.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 10
4.1.3 Neither the Contractor nor any of its Subcontractors or
suppliers shall supply any labor or materials for the Work until Section 4.8 is
satisfied. The Contractor intends to commence the Work on or before Friday, June
9, 2006.
4.1.4 The Owner shall direct Contractor to commence the Work by
issuing to the Contractor a Notice to Proceed as soon as possible after Section
4.8 is satisfied. The Contractor shall be prepared to commence the Work
immediately upon, and the Contractor shall commence the Work immediately upon,
the issuance of the Notice to Proceed, subject to satisfaction of the condition
precedent set forth in SECTION 4.8 below.
4.2 The Contractor shall diligently prosecute the Work and achieve
Substantial Completion of the Work on or before the July 4, 2007 date
(hereinafter referred to as the "SUBSTANTIAL COMPLETION DATE") set forth on the
Project Schedule attached hereto and made a part hereof as EXHIBIT "E", for the
Base Scope of Work as described in PARAGRAPH 2.1. The Substantial Completion
Date may be extended only to the extent expressly provided under the terms of
the Contract Documents. The term "SUBSTANTIAL COMPLETION" or "SUBSTANTIALLY
COMPLETED", as used herein, shall have the meaning set forth in Section 9.8.1 of
the AIA 201 General Conditions attached hereto as EXHIBIT "A", including the
satisfaction of all conditions set forth therein. Except as otherwise provided
by the Contract Documents, Owner shall not be obligated to accept Substantial
Completion of the Work in phases.
4.3 FUTURE SPECIFICATIONS AND DRAWINGS
The Specifications and Drawings listed in EXHIBIT "B" and EXHIBIT "C",
respectively (referred to herein collectively as the "PRELIMINARY SPECIFICATIONS
AND DRAWINGS"), are incomplete at the time this Agreement is executed. Owner and
Contractor contemplate that the Architect will issue further Specifications and
will issue revised, supplemental and additional Drawings. Owner (who may be
represented by the Architect) and Contractor shall jointly approve any
modifications to the Specifications and shall jointly approve any revised,
supplementary, and additional Drawings, which approval shall not be unreasonably
withheld by Contractor. Contractor shall not have the right to increase the
Guaranteed Maximum Price as a result of any such revised, supplemental or
additional Drawings or Specifications, except to the extent any Work shown on
any such subsequently issued Specifications and Drawings is inconsistent with
the Preliminary Specifications and Drawings or the Contractor's assumptions,
clarifications and qualifications itemized on EXHIBIT "G" attached hereto, used
by Contractor in developing budgets, pricing and establishing the Guaranteed
Maximum Price, as set forth in PARAGRAPH 5.2 hereof.
4.3.1 Contractor agrees to timely execute and deliver all
certificates within its control required to be delivered by Contractor under the
terms of the Disbursement Agreement regarding final plans and drawings, and
Contractor shall make all statements provided in such certificates, unless such
statements would be untrue or incorrect with respect to the facts then known to
Contractor at the time when such certificate is made. Contractor agrees to (i)
cooperate with and provide to Owner all documentation, data and information
requested by Owner within the control of Contractor, to allow Owner to satisfy
the requirements and conditions for final plan approval set forth in the
Disbursement Agreement, and (ii) complete all schedules to be included with each
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 11
Progress Payment, where information required for or contained in such schedules
is within the control of Contractor.
4.4 The projected milestone completion dates in the Project Schedule assume
that Owner will cause Architect to furnish the required design information to
Contractor as needed for the orderly progress of Work. The Project Schedule
further assumes that Owner has secured or will secure adequate financing for the
entire Scope of Work with arrangements to ensure payments are made to Contractor
in accordance with this Agreement. The failure of Owner to cause Architect to
provide the required design information, to make decisions or perform
obligations, or to secure adequate financing by the prescribed dates or to
maintain adequate financing will entitle Contractor to commensurate time
extensions to applicable milestone dates and final completion dates set forth in
the Project Schedule. Contractor shall not be liable for, and shall be entitled
to appropriate time extensions and other relief and/or additional direct costs
(but not consequential damages), based upon proven impacts to the Project
Schedule in the event Owner fails to cause Architect to provide the required
design information, to make decisions or perform obligations, or to secure
adequate financing by the prescribed dates or to maintain adequate financing.
4.5 Except as set forth in PARAGRAPH 4.6 below, under no circumstances
shall Contractor be liable to Owner for any consequential damages, including
loss of use or rental, loss of profit or cost of any financing. Under no
circumstances shall Owner be liable to Contractor for any consequential damages,
including loss of profit or business opportunity.
4.6 Owner and Contractor acknowledge and agree that time is of the essence
with respect to the Contract Documents and all obligations hereunder and under
the Contract Documents. Contractor acknowledges and recognizes that (1) the
Owner is entitled to full and beneficial occupancy and use of the completed Work
following expiration of the Contract Time, and (2) the Owner has entered into,
or will enter into, binding agreements leasing all or part of the premises where
the Work is to be completed based upon the Contractor delivering certain
portions of the Project within the Contract Time, as and when required under the
terms of leases entered into by Owner, including, without limitation, the Hard
Rock Cafe lease and the Hard Rock retail store lease. The Contractor further
acknowledges and agrees that if the Contractor fails to achieve Substantial
Completion of the Work within the Contract Time and as otherwise required by the
Contract Documents, the Owner will sustain extensive damages and serious loss as
a result of such failure, and that the exact amount of such damages will be
extremely difficult to ascertain. Therefore, the Owner and the Contractor agree
as follows in this PARAGRAPH 4.6. If the Contractor fails to achieve Substantial
Completion of the Work within three (3) days of the Contract Time and as
otherwise required by the Contract Documents, the Contractor shall pay to Owner,
and Owner shall be entitled to retain or recover from the Contractor, as
liquidated damages and not as a penalty, a sum per day as shown in the sliding
scale set forth in EXHIBIT "H" attached hereto, for each calendar day that
Contractor fails to achieve Substantial Completion beyond the three-day grace
period following the Substantial Completion Date in PARAGRAPH 4.2. Contractor
shall not be obligated to pay to Owner, and Owner shall not be entitled to
retain or recover from Contractor, maximum total liquidated damages in excess of
Seven Hundred Fifty Thousand Dollars ($750,000) on account of delay by
Contractor in achieving Substantial Completion of the Work in accordance with
the Project Schedule. The parties acknowledge and agree that (i) such liquidated
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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damages are intended to compensate Owner for actual damages the Owner will
suffer and incur as result of delayed Substantial Completion of the Work and not
as a penalty for delayed Substantial Completion of the Work; (ii) the amount of
Owner's actual damages that will result from such delayed Substantial Completion
of the Work are not readily ascertainable; and (iii) such liquidated damages
constitute a reasonable and good faith pre-estimate of actual damages the owner
will incur as a result of delayed Substantial Completion of the Work. Liquidated
damages, if any, shall cease to accrue on the date when Contractor achieves
Substantial Completion of the Work. Notwithstanding the foregoing, Contractor
shall not be obligated to pay to Owner, and Owner shall not be entitled to
retain or recover from Contractor, liquidated damages in the event (i)
Contractor satisfies all conditions to achieving Substantial Completion of the
Work (as set forth in Section 9.8.1.2 of the AIA 201 General Conditions attached
hereto as EXHIBIT "A") within the three-day grace period following the
Substantial Completion Date, other than the condition that the value of all
Punchlist items are less than the threshold amount set forth in Section 9.8.1.2
of the A201 General Conditions attached hereto as EXHIBIT "A", and (ii) the
Project is open for business to the public and generating revenue for the Owner
and the use and enjoyment of the Project by employees, guests and patrons is not
materially and adversely affected or impeded by any item on the Punchlist.
4.6.1 The Owner may deduct liquidated damages described in PARAGRAPH
4.6 of this Agreement from any unpaid amounts then or thereafter due the
Contractor under this Agreement. Contractor shall pay to Owner any liquidated
damages not so deducted from any unpaid amounts due the Contractor upon demand
by the Owner, together with interest from the date of such demand until the date
paid in full, at a per annum rate equal to the Prime Rate, plus two percent
(2%).
4.7 If (i) Contractor achieves Substantial Completion more than three (3)
calendar days prior to the Substantial Completion Date in PARAGRAPH 4.2, (ii)
Contractor has provided to Owner sufficient advance notice of such early
completion of the Work to allow Owner to coordinate staging of all other
activities necessary for the Project to open for business to the public early,
and (iii) Owner has the right under existing contracts and agreement with other
parties (including, without limitation, Hard Rock) to accelerate performance by
such other parties necessary for the Project to open for business to the public
early, Owner agrees to pay to Contractor an early completion bonus. Such early
completion bonus shall be based upon the sum per day as shown by the sliding
scale set forth in EXHIBIT "I" attached hereto, for each calendar day that
Contractor achieves Substantial Completion of the Work more than three (3)
calendar days before the Substantial Completion Date in PARAGRAPH 4.2. Owner
shall not be obligated to pay to Contractor, and Contractor shall not be
entitled to recover from Owner, a maximum total bonus in excess of Seven Hundred
and Fifty Thousand Dollars ($750,000.00) on account of Contractor achieving
Substantial Completion of the Work more than three days earlier than the
Substantial Completion Date in PARAGRAPH 4.2. The obligation set forth herein of
Owner to pay Contractor a bonus for early completion of the Work is expressly
conditioned upon the matters described in clauses (i), (ii) and (iii) of the
first sentence of this PARAGRAPH 4.7.
Any bonus for early completion of the Project due the Contractor under PARAGRAPH
4.7 shall be payable by the Owner to Contractor from consolidated net income
generated from operation of the Project after it is open for business to the
public, if and to the extent any such consolidated net income is available for
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 13
disbursement under the restricted payments test contained in the Indenture among
the Owner and the Trustee (dated the same date as the Disbursement Agreement),
and provided that Contractor has satisfied the conditions to payment of such
bonus set forth in PARAGRAPH 4.7 above and the further condition that Contractor
is not in default under the terms of this Agreement or any of the Contract
Documents. Notwithstanding the foregoing, if Contractor is in default under the
terms of this Agreement and (i) such default can be cured by the payment of
money, Owner shall be entitled to deduct from any bonus due Contractor the full
amount of any cost, loss, damage or expense suffered or incurred by Owner as a
result of such default of Contractor, and Owner shall promptly remit to
Contractor the remaining balance, if any, of such bonus due Contactor, and (ii)
such default cannot be cured by the payment of money, Contractor shall have a
reasonable opportunity to cure such default, not to exceed a period of thirty
(30) days (and, provided that Contractor is diligently and continuously pursuing
such action to complete such cure promptly, Contractor shall be entitled to such
additional time as may be reasonable under the circumstances), provided,
however, that if in Owner's reasonable judgment, Contractor will be unable to
effectuate such cure or Contractor fails to utilize diligent and continuous
efforts to pursue such cure, Owner shall be entitled to deduct from any bonus
due Contractor the full amount of any cost, loss, damage or expense suffered or
incurred by Owner as a result of such default of Contractor, and Owner shall
promptly remit to Contractor the remaining balance, if any, of such bonus due
Contactor.
4.8 CONDITION PRECEDENT TO PERFORMANCE OF WORK; ABANDONMENT
Prior to requirement that Contractor commence Work hereunder, Owner agrees to
provide to Contractor evidence reasonably satisfactory to Contractor, prior to
such requirement that Contractor perform any Work hereunder, establishing that,
on or before the Commencement Date, Owner has available to it Insurance Proceeds
sufficient to completely pay the contract sum (hereinafter referred to as the
"CONTRACT SUM") under this Agreement, so that Contractor is reasonably assured
of the availability of monies to pay for the Work hereunder. The issuance by
Owner of a Notice to Proceed to Contractor shall be deemed a representation and
warranty by Owner that the Insurance Proceeds will be sufficient to pay for the
Work.
In the event Owner elects to abandon the Project prior to the time that
construction has commenced or obligations have been undertaken by the Contractor
hereunder, Owner may do so without owing any obligation to Contractor and
provided that no Work is commenced under any separate written order affecting
Property, in which event Owner's obligation (if any) shall be pursuant to such
separate Order and not hereunder. Otherwise, any termination of this Agreement
shall be pursuant to and subject to the termination for convenience provisions
in PARAGRAPH 20.2 below.
Acceptance by Contractor of the Notice to Proceed issued by Owner and
commencement by Contractor of the Work shall conclusively be deemed to mean that
all conditions precedent to commencement of the Work hereunder have been
satisfied or waived by Contractor.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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ARTICLE 5
---------
COST OF WORK AND GUARANTEED MAXIMUM PRICE
5.1 Owner agrees to reimburse Contractor for the Cost of Work as defined in
ARTICLE 8 (hereinafter referred to as "COST OF WORK"). Such reimbursement shall
be in addition to Contractor's fee stipulated in ARTICLE 6 (hereinafter referred
to as "CONTRACTOR'S FEE").
Contractor guarantees to Owner that the aggregate maximum of (i) the
Cost of Work to the Owner for completion of all of the Work (including, without
limitation, all Work reflected in the Estimate Survey Sheets for the casino,
lowrise, hotel, parking deck repair and site work, attached hereto and made a
part hereof as EXHIBITS "N" AND "O" and the cost of Direct Purchase Items (as
defined in EXHIBIT "M" attached hereto) to be purchased by Owner), (ii) the
Contractor's Fee for completion of all such Work; and (iii) design contingency
equal to the sum of the contingency line item amounts set forth in EXHIBITS "N"
AND "O" ("Design Contingency") to cover the costs of unknown conditions in the
estimate and other costs which are properly reimbursable as Cost of the Work but
are not the basis for a change order; shall not exceed the aggregate sum of
Seventy Eight Million, Three Hundred Thirteen Thousand and Seven Hundred Sixty
Six Dollars ($78,313,766) (the "GUARANTEED MAXIMUM Price" or "GMP"); provided,
however, that the Guaranteed Maximum Price may be increased or decreased for
changes in the Work, upon the terms and subject to the conditions set forth in
ARTICLE 7. Costs which would cause the GMP to be exceeded shall be paid by the
Contractor without payment, reimbursement or contribution by the Owner.
Contractor's assumptions, qualifications and clarifications used to develop
budgets, pricing and the GMP are itemized in EXHIBIT "G" attached hereto and
made a part hereof.
5.1.1 The Design Contingency shall be available to the Contractor
for the stated purpose upon the prior written approval by Owner, such approval
not to be unreasonably withheld. Following buyout of subcontractors and
completion of major purchase orders, to the extent the Design Contingency has
not been used as provided herein, such remaining amount of the Design
Contingency shall be reduced by one-half ((1)/2) and the GMP reduced
accordingly. A final accounting of the Design Contingency remaining, if any,
shall be performed following completion of the Project.
5.1.2 At the completion of the Project, to the extent the 1.25% (of
subcontracts and materials - see PARAGRAPH 8.1.10) within the GMP for bonding is
not fully used for the stated purpose, the GMP shall be reduced accordingly.
5.2 The GMP shall be decreased by the amount of any sales tax or
contractors' tax associated with Direct Purchase Items purchased by Owner or
with other elements of the Work that are exempt from sales tax or contractors'
tax. Direct Purchase Items shall be component and non-component materials of the
Work which, but for the direct purchase of such items by Owner, Contractor would
be obligated to purchase as part of the Work.
5.3 Owner has established a Project contingency fund in the amount of Three
Million, Five Hundred Thousand Dollars ($3,500,000) (the "PROJECT CONTINGENCY
FUND"). The Project Contingency Fund shall be controlled by Owner and shall not
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 15
be available to Contractor, except to the extent expressly permitted hereunder.
The Project Contingency Fund shall not be included within the GMP, nor shall the
Project Contingency Fund be available to Contractor to defray costs associated
with or resulting from unforeseen circumstances arising from or relating to the
performance of the Work. The Project Contingency Fund may be reduced by an
amount not to exceed One Million Five Hundred Thousand Dollars ($1,500,000) in
the event Owner incurs additional costs in connection with the scrapping and
removal of the two (2) barges that previously supported the casino. In the event
completion of the Specifications and Drawings shall result in additional work
not included in the Base Scope of Work or which is not consistent with the
Preliminary Specifications and Drawings or the Contractor's assumptions,
clarifications and qualifications itemized on EXHIBIT "G" attached hereto, used
by Contractor in developing budgets, pricing and establishing the GMP hereunder,
Contractor shall have the right to request a Change Order for approval by Owner,
which approval shall not be unreasonably withheld, and which Change Order shall
be funded by application of funds from the Project Contingency Fund, if and to
the extent funds are available in the Project Contingency Fund. Owner agrees to
segregate Two Million Dollars ($2,000,000) of the Project Contingency Fund.
Owner agrees that such segregated portion of the Project Contingency Fund shall
be reserved for application to fund any Change Order approved by Owner for
additional work not included in the Base Scope of Work resulting from or arising
out of completion of the Specification and Drawings. Upon the occurrence of the
earlier of forty-five (45) days after the Architect issues final Drawings
stamped for construction and the issuance of a Temporary Certificate of
Occupancy, Owner shall not be obligated to reserve any portion of the Project
Contingency Fund for such purposes, and the segregated portion of the Project
Contingency Fund shall be released to the Project for use and application by
Owner consistent with the terms, conditions and provisions of the Disbursement
Agreement. Contractor acknowledges and agrees that the entire amount of any
remaining unapplied Project Contingency Fund shall belong to Owner. The
Contractor will be required to furnish documentation evidencing expenditures
requested pursuant to any such Change Order request prior to the release of
funds from the Project Contingency Fund by the Owner.
5.4 In the event that the aggregate of (i) the Cost of Work, (ii) the
Contractor's Fee and (iii) the amount of the Direct Purchase Items is less than
the Guaranteed Maximum Price, after giving effect to any Change Orders and any
other adjustment(s) provided for herein (other than deductive change orders on
account of Direct Purchase Items and taxes associated therewith), then the
difference between (a) the Cost of Work, including the Contractor's Fee and the
cost of Direct Purchase Items and taxes associated therewith, and (b) the
Guaranteed Maximum Price, is defined herein as "PROJECT SAVINGS". Owner and
Contractor agree that Project Savings shall not include any tax savings
associated with any Direct Purchase Items, or any other taxes relating to items
that are exempt from sales tax or the contractors' tax, and that all tax savings
shall belong solely and exclusively to the Owner, without participation by the
Contractor. Owner and Contractor agree that any Project Savings, other than
Project Savings attributable to Design Contingency, shall be shared between
Owner and Contractor, in the proportion of seventy-five percent (75%) to Owner
and twenty-five percent (25%) to Contractor, provided, however, that the
Contractor shall not be entitled to receive more than $650,000 on account of
Project Savings. In the event Contractor is entitled to receive a proportionate
share of Project Savings, Owner shall pay such amount to Contractor, as an
additional fee, on or before thirty (30) days after Final Completion of the
Work, except in the event Contractor is in default under the terms of this
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 16
Agreement or any of the other Contract Documents, in which event the
Contractor's entitlement to receive a proportionate share of Project Savings
shall be subject to and conditioned upon the same terms and conditions set forth
in the second grammatical paragraph of PARAGRAPH 4.7 above applicable to payment
to Contractor of early completion bonus.
ARTICLE 6
---------
CONTRACTOR'S FEE
6.1 In consideration of the performance of the Contract, including
performance of all Work reflected in EXHIBITS "N" AND "O." Owner agrees to pay
Contractor in current funds as compensation for its services a Contractor's Fee
as follows:
6.1.1 A sum equal to five and one-half percent (5.5%) as applied to
the actual Cost of Work as defined herein and the cost of all Direct
Purchase Items (together with any taxes associated with Direct Purchase
Items), shall be paid to Contractor (the "CONTRACTOR'S FEE") Owner
shall pay to Contractor a proportional amount of the Contractor's Fee
with each progress payment, in the manner provided for in ARTICLE 13,
provided, however, that the Contractor's Fee shall be included within
the Guaranteed Maximum Price, and only shall be payable to Contractor
to the extent funds are available within the Guaranteed Maximum Price.
Contractor's Fee shall not be reduced on account of Direct Purchase
Items purchased by Owner.
6.1.2 In addition to the Contractor's Fee specified in PARAGRAPH
6.1.1, to the extent there are Project Savings, Contractor shall be
entitled to receive as an additional fee, its proportionate share of
Project Savings, subject to the conditions and limitations set forth in
PARAGRAPH 5.3 hereof.
6.2 For changes in the Work (hereinafter referred to as "CHANGES IN WORK")
pursuant to an approved Change Order, the Contractor's Fee shall be adjusted as
follows:
6.2.1 For all Changes in Work, if any, which result in additional
cost to Contractor, the value of the change shall be computed at
Contractor's actual cost, as defined in ARTICLE 8, plus ten percent
(10%) (comprised of four and one half percent (4.5%) of such actual
cost of Field General Conditions and five and one half percent (5.5%)
of such actual cost for Contractor's fee); provided, however, that for
any Changes in the Work based upon application of any of the Project
Contingency Fund or allowance in the GMP, the total fee for the Cost of
Work related to application of such Project Contingency Fund or
allowance shall be limited to 5.5%.
6.2.2 For Changes in the Work which result in a decrease in the GMP,
(including, without limitation, decreases in the Cost of Work on
account of Direct Purchase Items purchased by Owner), no reduction will
be made for the Contractor's Fee.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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ARTICLE 7
CHANGES IN WORK
7.1 Owner may make Changes in Work as provided in the Contract Documents.
Contractor shall be reimbursed for Changes in Work on the basis of Cost of Work,
as defined in ARTICLE 8, plus a ▇▇▇▇-up for Field General Conditions and the
Contractor's fee, as provided for in PARAGRAPH 6.2.1 above.
7.1.1 Change Orders. In the event Owner desires to effect any Change
Order during construction, whether the same would engender an increase
or decrease in the Contract Sum, Contractor shall not be required to do
and perform, or provide, any additional work, services, and materials
pursuant to any Change Order, or to delete any of the same from the
Work, until Owner has actually executed each Change Order and if
applicable, the same has become effective, as provided below.
Contractor shall include with all proposed Change Orders an explanation
of (a) the time period within which it requires a decision from Owner
on the Change Order, and (b) the anticipated impacts that will result
from a failure of the Owner and Architect to act on a timely basis with
respect to a Change Order requested by Contractor. Owner, Architect and
Contractor shall act promptly and diligently in their decision making
process with respect to all Change Order requests, provided, however,
that Contractor acknowledges that any Change Order which constitutes a
"Material Construction Contract Amendment" by reason of the criteria
set forth in Section 5.2 of the Disbursement Agreement being applicable
to such a Change Order will not be effective unless and until the
requirements set forth in Section 5.2 of the Disbursement Agreement are
satisfied. Contractor agrees to satisfy any and all requirements within
its control with respect to any Change Order which constitutes a
"Material Construction Contract Amendment" under the terms of the
Disbursement Agreement.
Whenever, from time to time, the net effect of all Change Orders engenders an
increase in the Contract Sum, Contractor shall have the right to require
evidence of funds for payment, or such other assurance as Contractor deems
satisfactory to it, in its reasonable discretion. Contractor agrees, however,
that it shall not unreasonably refuse to accept written advice from Owner
certifying that previously non-allocated loan proceeds or amounts from the
Project Contingency Fund will be made available to cover said Change Order.
Notwithstanding anything in this PARAGRAPH 7.1.1 to the contrary, Contractor
shall be required to do and perform, or provide, any additional work, services,
and materials pursuant to any Construction Change Directive issued by Owner,
without any further approvals, subject only to provisions above regarding
satisfactory proof as to funding for same. The term "CONSTRUCTION CHANGE
DIRECTIVE", as used herein, shall have the meaning set forth in SECTION 7.3.1 of
the General Conditions attached hereto as EXHIBIT "A". Contractor agrees to
satisfy any and all requirements within its control, and Owner agrees to satisfy
and cause the Architect and the Independent Construction Consultant to satisfy
any and all requirements within its and their respective control with respect to
any Construction Change Directive which constitutes a "Material Construction
Contract Amendment" under the terms of the Disbursement Agreement.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 18
7.2 Contractor agrees that Change Orders, in order to be effective
hereunder, shall be required to be (A) signed on behalf of Owner by Owner's
Project Representative, (B) signed on behalf of Contractor, either by
Contractor's Project Representative or Contractor's Vice President of
Operations, (C) if and to the extent required under the terms of the
Disbursement Agreement, signed on behalf of the Independent Construction
Consultant (Professional Associated Construction Services, Inc.), or any
successor Independent Construction Consultant appointed under the terms of the
Disbursement Agreement, indicating the Independent Construction Consultant's
approval thereof, and (D) signed on behalf of Architect, indicating the
Architect's approval thereof.
7.3 Contractor's Fee for Changes in the Work shall be set forth in
ARTICLE 6.
ARTICLE 8
---------
COSTS TO BE REIMBURSED
8.1 The term "COST OF WORK" shall mean costs necessarily incurred by
Contractor, in good faith and in the proper performance of the Work, and paid or
payable by Contractor. Such costs shall be at rates not higher than the standard
paid in the locality of the Work, except with prior consent of Owner, and shall
include the items set forth below in this ARTICLE 8. The cost of all Direct
Purchase Items (together with taxes associated with Direct Purchase Items) shall
be excluded from the Cost of Work. The cost for all of the items described in
this ARTICLE 8 shall be subject to and included within the GMP.
8.1.1 Wages paid for labor in the direct employ of Contractor in the
performance of the Work under applicable collective bargaining
agreements, or under a salary or wage schedule agreed upon by Owner and
Contractor, including such welfare or other benefits, as may be payable
with respect thereto.
8.1.2 Salaries of Contractor's personnel when stationed at the field
office, in whatever capacity employed; personnel engaged, at shops or
on the road, in expediting the production or transportation of
materials or equipment, but only for that portion of their time
required for the Work; and personnel in the main or branch offices of
Contractor who perform activities directly related to the Project,
including Contractor's project management staff, scheduling management,
estimators, pre-construction staff, and safety engineer at the home
office when engaged in performance of the Work under this Contract, and
usual vacation pay, incentive bonuses and profit sharing made by
Contractor to its superintendents, foremen and managers on the Project,
provided said incentive bonuses are pre-approved by the Owner and no
such bonus or profit sharing shall exceed 30% of the employee's base
wages with all such sums being included within the GMP.
8.1.3 Cost of contributions, assessments or taxes incurred during
the performance of the Work for such items as unemployment compensation
and social security, insofar as such cost is based on wages, salaries
or other remuneration paid to employees of Contractor and included in
the Cost of Work under PARAGRAPHS 8.1.1 and 8.1.2 at the fixed rate of
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 19
49.5% of said wages for work performed over land and the fixed rate of
58.5% of said wages for work performed over water.
8.1.4 The portion of reasonable lodging, travel, and subsistence
expenses of Contractor or its officers or employees incurred while
traveling outside the State of Mississippi in discharge of duties
connected with the Work with all such sums being included within the
GMP, provided, however, that lodging, travel and subsistence expenses
of Contractor shall not exceed the sum of $100,000.00 in the aggregate,
except with the written consent of the Owner, which consent shall not
be unreasonably withheld.
8.1.5 The normal cost of vehicles and fuel and repairs for vehicles
assigned to employees associated with the Project with all such sums
being included within the GMP.
8.1.6 Cost of all materials, supplies, and equipment incorporated in
the Work, including costs of transportation thereof.
8.1.7 Payments made by Contractor to subcontractors for Work
performed pursuant to subcontracts under this Agreement.
8.1.8 Costs, including transportation and maintenance, of all
materials, supplies, equipment, temporary facilities and hand tools not
owned by the workers, which are consumed in the performance of the
Work. Any such items used but not consumed, which are paid for by the
Owner, shall become the property of the Owner and shall be delivered to
the Owner upon completion of the Work in accordance with instructions
furnished by the Owner. If the Owner elects, however, the Contractor
shall purchase any such items from the Owner at a purchase price equal
to the original cost charged to the Owner, less the reduction in fair
market value resulting directly from use of any such item in connection
with the Work or such other price which is mutually acceptable to the
Owner and the Contractor. Upon demand by the Owner, the Contractor
shall furnish the Owner with any information and documentation
necessary to verify the period of time for which such items were used
in connection with the Work.
8.1.9 Rental charges including personal property taxes of all
necessary machinery and equipment, including office equipment,
exclusive of hand tools, used at the site of the Work, whether rented
from Contractor or others, including installation, minor repairs and
replacements, dismantling, removal, transportation, and delivery costs
thereof. Rates for equipment rented from Contractor shall be at rental
rates as listed on EXHIBIT "K" attached hereto and made a part hereof.
Rates for equipment rented from Contractor that are not listed on
EXHIBIT "K" shall be at rates subject to the Owner's prior written
approval.
8.1.10 Cost of premiums for all bonds and insurance will be a
reimbursable cost at a fixed rate of 1.09% of the final Contract amount
for the Contractor's insurance and associated costs pertaining to the
Project; and a blended rate of no more than 1.25% (to be verified
through the bid process) of the total subcontract and purchase order
amounts for payment and performance bonds or contractor default
insurance at the Contractor's election on all subcontractors and
suppliers and a fixed rate of 0.04% of the final contract amount for
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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Mississippi Gross Receipts Tax Bond. The phrase "final Contract amount"
as used herein shall mean the aggregate of (i) the Cost of Work to the
Owner for completion of all of the Work (including, without limitation,
all Work reflected in EXHIBITS "N" and "O", (ii) the Contractor's Fee
for completion of all such Work, and (iii) the cost of all Direct
Purchase Items (as defined in SECTION 3.6.1 of the General Conditions
and in EXHIBIT "M" attached hereto) purchased by Owner.
8.1.11 Sales, use, gross receipts, or similar taxes related to the
Work and for which Contractor is liable, imposed by any governmental
authority, excluding income and franchise taxes.
8.1.12 Permit fees, licenses and deposits lost for causes other than
Contractor's negligence.
8.1.13 Losses and expenses not compensated by insurance or otherwise,
sustained by Contractor in connection with the Work, provided, however,
that such losses and expenses resulting or arising from the negligence
or willful or wanton misconduct of Contractor, any subcontractor,
anyone directly or indirectly employed by any of them, or for whose
acts any of them may be responsible, shall not be included as a Cost of
Work, but shall be borne solely by Contractor without reimbursement by
Owner. Such losses shall include deductibles on any insurance loss
settlements made with the written consent and approval of Owner.
Reimbursable losses and expenses not compensated by insurance or
otherwise, as indicated above, shall be considered part of the Cost of
Work for the purpose of determining the guaranteed maximum cost to the
Owner pursuant to PARAGRAPH 5.2 of this Agreement. If, however, such
loss required reconstruction, and Contractor is placed in charge
thereof, it shall be paid for this service a fee proportionate to that
stated in PARAGRAPH 6.1.1.
8.1.14 The cost, in connection with the performance of the Work, of
long distance calls, telephone service at the site, expressage,
postage, photographs, blueprints, office supplies, first aid supplies,
ice, water, cups, furniture, fixtures, office equipment including
jobsite computers and software and similar miscellaneous cost items in
connection with the Work.
8.1.15 Cost of removal of all debris.
8.1.16 Costs incurred due to an emergency affecting the safety of
persons and property, to the extent not caused by the negligent acts or
omissions, or capable of prevention through the proper performance of
the Work, by Contractor, a subcontractor or anyone for who either is
responsible.
8.1.17 Cost of labor, material and equipment required for handling,
storing, and placing and affixing Owner-furnished material and
equipment.
8.1.18 Cost of small tools.
8.1.19 Costs for maintenance, adjustments and systems balancing
associated with the Work required during the warranty period which may
be the responsibility of Contractor, will be at a fixed rate of 0.22%
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 21
of the established GMP, with such sum being included within the GMP.
8.1.20 Demobilization, restocking, and cancellation costs associated
with early termination of the Work, unless such early termination is
due to a default by Contractor.
8.1.21 Any cost not specifically and expressly excluded by ARTICLE 9
which the Contractor reasonably and necessarily incurs in the
performance of the Work or in the furtherance of the Project, with such
sums being included within the GMP, provided, however, that any such
cost in excess of $10,000 per item shall not be included as a Cost of
Work, unless such cost is approved in writing in advance by the Owner,
which approval shall not be unreasonably withheld.
8.1.22 Cost to administer the Mississippi Tax Related Procedures set
forth in EXHIBIT "M" attached hereto on behalf of the Owner, including
portions of the salaries for personnel engaged in the administration of
the procedures in an amount which shall be established once the extent
of the Direct Purchase program is known.
8.2 Basis of Cost
8.2.1 Costs as defined herein shall be actual costs paid by the
Contractor, less all discounts, rebates and salvages which shall be
taken by the Contractor, subject to ARTICLE 10 of this Agreement. All
payments made by the Owner pursuant to this PARAGRAPH 8.2.1, whether
those payments are actually made before or after the execution of the
Contract, and all payments made by Owner on account of Direct Purchase
Items, are subject to and included within the GMP specified in
PARAGRAPH 5.2 above; provided, however, that in no event shall the
Owner be required to reimburse the Contractor for any portion of the
Cost of Work incurred prior to the date of commencement except for
those costs specified in PARAGRAPH 8.1.23, unless the Contractor has
received the Owner's written consent prior to incurring such cost.
8.2.2 Notwithstanding the breakdown or categorization of any costs
to be reimbursed in this ARTICLE 8 or elsewhere in the Contract
Documents, there shall be no duplication of payment in the event any
particular items for which payment is required can be characterized as
falling into more than one of the types of compensable or reimbursable
categories.
ARTICLE 9
---------
COSTS NOT TO BE REIMBURSED
9.1 The term "COST OF WORK" shall not include any of the items set forth
below in this ARTICLE 9.
9.1.1 Salaries or other compensation of Contractor's personnel at
Contractor's principal office and branch offices, other than the field
office, except as specifically provided in ARTICLE 8;
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9.1.2 Expenses of Contractor's principal and branch offices, other
than the field office, except as specifically provided in ARTICLE 8;
9.1.3 Any part of Contractor's capital expenses, including interest
on Contractor's capital, employed for the Work;
9.1.4 Home office overhead or general expenses of any kind, except
as may be expressly included in ARTICLE 6.2 and ARTICLE 8;
9.1.5 Costs due to the negligence or misconduct of, or failure to
comply with the requirements of the Contract Documents by, Contractor,
any subcontractor, anyone directly or indirectly employed by any of
them, or for whose acts any of them may be liable, including, but not
limited to, the correction of defective or nonconforming Work, disposal
of materials and equipment wrongly supplied, or making good any damage
to Property;
9.1.6 Any cost not specifically and expressly included in the items
described in ARTICLE 8;
9.1.7 Costs in excess of the GMP, if any, as set forth in ARTICLE 5
and adjusted pursuant to ARTICLE 8;
9.1.8 Legal fees and arbitration costs and fees incurred by the
Contractor in connection with the Project or any mediation, arbitration
or lawsuit relating to the Project.
9.1.9 Royalties, damages for infringement of patents and costs of
defending suits therefore.
9.1.10 Legal Fees and other consultative fees reasonably and properly
resulting under this Agreement or as a result of nonperformance and/or
default of subcontractors or venders.
9.1.11 Costs of arbitration, mediation and/or attorneys' fees
incurred in connection with the administration of the Contract
Documents.
9.1.12 Costs of repairing, maintaining, replacing or correcting
damaged or non-conforming Work.
ARTICLE 10
----------
DISCOUNTS, REBATES AND REFUNDS
10.1 All cash discounts shall accrue to Contractor, unless Owner deposits
funds with Contractor with which to make payments, in which case, the cash
discounts shall accrue to Owner. All trade discounts, rebates and refunds, and
all returns from sale of surplus materials and equipment shall accrue to Owner,
and Contractor shall make provisions so that they can be secured.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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ARTICLE 11
----------
SUBCONTRACTS
11.1 The Contractor shall keep Owner informed as to those with whom
Contractor plans to subcontract, including, but not limited to, all material
terms of any proposed Subcontract. Prior to award of the Subcontract, Contractor
shall furnish in writing to Owner the names of persons or entities (including
those who are to furnish materials or equipment fabricated to a special design)
proposed for each principal portion of the Work. Owner shall promptly reply to
Contractor, in writing, stating whether or not Owner, after due investigation,
has reasonable objection to any such proposed subcontractor or subcontract.
Failure of Owner to reply within seven (7) calendar days of submittal by
Contractor shall constitute "notice of no reasonable objection."
11.2 Contractor shall not contract with a proposed person or entity to whom
Owner has made reasonable and timely objection. Contractor shall not be required
to contract with anyone to whom Contractor has made reasonable objection. If
Owner has reasonable objection to a person or entity proposed by Contractor,
Contractor shall propose another to whom Owner has no reasonable objection. The
Contract Sum shall be increased or decreased by the difference in cost
occasioned by such change, and an appropriate Change Order shall be issued;
however, no increase in the Contract Sum shall be allowed for such change unless
Contractor has acted promptly and responsively in submitting names as required.
11.3 Contractor shall not award any subcontract with a contract price of
greater than or equal to Fifty Thousand Dollars ($50,000) ("MAJOR SUBCONTRACT")
without first obtaining the written approval of Owner, which approval shall not
be unreasonably withheld.
11.4 Subcontracts or other agreements shall conform to the applicable
payment provisions of this Agreement. Subcontracts and other agreements shall
not be awarded on the basis of cost plus a fee without the prior written consent
of the Owner.
11.5 All Subcontracts for the Project shall contain the same
indemnification, retainage, and release of liens provisions as required of the
Contractor hereunder, unless (i) otherwise stated in this Agreement or in the
General Conditions; (ii) specifically waived in writing by the Owner; or (iii)
the Subcontracts has a contract price less than $50,000, where it would be
unreasonable to require such provisions due to the scope of the Subcontract. All
Subcontracts under this Agreement shall provide insurance satisfactory to the
Contractor. All Subcontracts shall require insurance in at least the amounts as
set out in Contractor's standard form of Subcontract, unless Owner consents in
writing to different insurance coverages, which consent shall not be
unreasonably withheld.
11.6 Contractor represents and warrants to Owner that Contractor is
qualified to self-perform certain concrete work and installation of doors,
hardware and toilet accessories. In the event Contractor desires to perform with
its own forces a definable task or Scope of Work which is also appropriate for
performance by Subcontractors and for which it is reasonable to solicit bids,
then Contractor shall seek bids from Subcontractors, unless the task or Scope of
Work has an estimated cost under $50,000 or unless Owner otherwise consents to a
waiver of the bidding requirement on a case-by-case basis, which consent shall
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 24
not be unreasonably withheld. Notwithstanding anything to the contrary herein,
if (a) Contractor submits the low bid in competition with other Subcontractors
to perform a definable task or Scope of Work for which Contractor is qualified
to self-perform, or (b) Contractor's bid is not the lowest, but Owner, in its
sole discretion, decides to approve Contractor's self-performance of the task or
scope of Work, then Contractor shall be entitled to perform the task or Work
with Contractor's own forces on the same basis (e.g. lump sum) on which bids
were solicited. In all cases in which Contractor performs tasks or Work after
competition with Subcontractors, Contractor's Cost of Work for such tasks or
Work shall be the basis of compensation specified in the Subcontract. By way of
illustration, if the Subcontract is for a fixed price, Contractor's Cost of Work
for the Subcontract shall be the fixed price amount of the Subcontract.
11.7 Additional retainage beyond that held by the Owner from the
Contractor's Applications for Payment may be withheld by the Contractor, upon
Owner's consent, from payments owed by the Contractor to any Subcontractor or
supplier for no more than one Application for Payment unless the Contractor, at
the time the additional retainage is withheld, provides a written explanation to
the Owner. The Contractor shall not withhold without Owner's written consent
more in total in retainage for all of its Subcontractors and suppliers than the
Owner is holding in retainage for the Contractor, provided, however, for any
individual Subcontractor, the Contractor may hold up to a maximum of ten percent
(10%) in retainage.
11.8 Contractor acknowledges that the Disbursement Agent shall have the
right, but not the obligation, at reasonable times during customary business
hours and at reasonable intervals upon prior notice to review, all information
(including any direct contracts and purchase orders entered into by Owner)
supporting any Application for Payment. The Disbursement Agent shall be entitled
to examine, copy and make extracts of the books, records, accounting data and
other documents of the Contractor relating to construction of the Project,
including, without limitation, bills of sale, statements, receipts, contracts or
agreements, which relate to any materials, fixtures or articles incorporated
into the Project. The Contractor agrees to cooperate with the Disbursement Agent
in assisting the Disbursement Agent to perform its duties hereunder and to take
such further steps as the Disbursement reasonably may request in order to
facilitate the Disbursement Agent's performance of its obligations hereunder.
11.9 Contractor acknowledges that the Independent Construction Consultant
shall have the right to meet periodically at reasonable times during customary
business hours and at reasonable intervals, however no less frequently than
monthly, with representatives of the Owner, Contractor, the Architect and such
other employees, consultants or agents as the Independent Construction
Consultant shall reasonably request to be present for such meetings. The
Independent Construction Consultant may perform such inspections of the Project
Site and the Project as it deems reasonably necessary or appropriate in the
performance of its duties hereunder, however no less frequently than monthly. In
addition, the Independent Construction Consultant shall have the right at
reasonable times during customary business hours upon prior notice to review, to
the extent it deems reasonably necessary, all information (including any direct
contracts and purchase orders entered into by Owner) supporting the amendments
to the Project Budget, amendments this Agreement, any of the Contract Documents,
any Subcontracts and any direct contracts entered into by Owner, any
Applications for Payment and any certificates in support of any of the
foregoing, to inspect materials stored on the Project Site and the Project, at
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 25
off-site facilities where materials designated for use in the Project are
stored, to review the insurance required pursuant to the terms of the Indenture,
and to examine the Plans and all shop drawings relating to the Project. The
Independent Construction Consultant is authorized to contact any subcontractor
or payee for purposes of confirming receipt of progress payments. Contractor
acknowledges and agrees that the Independent Construction Consultant shall be
entitled to examine, copy and make extracts of the books, records, accounting
data and other documents of the Contractor relating to the construction of the
Project, including, without limitation, bills of sale, statements, receipts,
lien releases and affidavits, contracts or agreements, which relate to any
materials, fixtures or articles incorporated into the Project. From time to
time, at the request of the Independent Construction Consultant, the Contractor
shall make available to the Independent Construction Consultant a Project cost
schedule and/or the Project Schedule for the Project. The Contractor agrees to
cooperate with the Independent Construction Consultant in assisting the
Independent Construction Consultant to perform its duties hereunder and to take
such further steps as the Independent Construction Consultant reasonably may
request in order to facilitate the Independent Construction Consultant's
performance of its obligations hereunder.
11.10 Upon request by Owner and/or Independent Construction Consultant, the
Contractor shall provide to Owner and/or Independent Construction Consultant
copies of requests for bids, bid proposals, and/or bid documents submitted by
proposed subcontractors. In addition, Contractor shall provide to the
Independent Construction Consultant true, correct and complete copies of each
and every executed Major Subcontract and all direct contracts and purchase
orders entered into by Owner and invoices for Direct Purchase Items.
ARTICLE 12
----------
PRELIMINARY AND FINAL ACCOUNTING
12.1 Prior to final accounting, and as a condition thereto, Contractor shall
furnish Owner with a preliminary account for Cost of Work and Contractor's Fee,
which preliminary accounting shall be in a reasonably detailed form, as
determined by Owner. The final payment shall be made based upon the preliminary
accounting. If, at the time of final payment, based on the preliminary
accounting, there exists an identifiable dispute between Owner and Contractor
with respect to a particular item or items, then final payment shall still be
made by Owner, but the amounts in dispute will be paid to an escrow agent
satisfactory to Owner and Contractor and shall be held pending appropriate
resolution of such dispute, which the Parties will endeavor to resolve prior to
the review next provided. Thirty (30) days after final payment, or sooner when
the same is completed, Contractor shall represent its final accounting to Owner
in complete detailed form accounting for all Costs of Work and Contractor's Fee,
allowances, Project Savings, Change Orders, penalties and bonuses, if any. Owner
and its agents and attorneys may thereupon review and audit this final
accounting, and for such purpose, Owner, Disbursement Agent, Trustee and the
Independent Construction Consultant (and their respective agents and attorneys)
shall be given full access to the books and records of Contractor in any manner
relating to this Project, including all subcontracts, material purchase orders,
payrolls and the like, provided, however, that any audit of such books and
records of Contractor by such parties shall be conducted concurrently. This
review and audit shall be completed by Owner within a period of one hundred
eighty (180) days after it has received the final accounting from Contractor,
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 26
and Owner and Contractor shall, based upon the final accounting and Owner's
audit thereof, make such adjustments as may be necessary between them with
respect to all items, except any item which may then be in dispute between Owner
and Contractor, which said disputed items, if not resolved amicably, shall be
arbitrated or litigated between said Parties.
ARTICLE 13
----------
PROGRESS PAYMENTS
13.1 Based upon monthly Applications for Payment submitted to Owner and
Architect by Contractor, including all supporting documentation, and
Certificates for Payment properly issued by Architect, Owner shall make (i)
Progress Payments on account of the Contract Sum to Contractor, and (ii)
payments on account of the Direct Purchase Items to vendors, suppliers and
contractors, as provided below and elsewhere in the Contract Documents.
Contractor acknowledges having received the Disbursement Agreement and is
familiar with the terms and conditions set forth therein. Contractor
acknowledges that Owner shall not be obligated to make any Progress Payments on
Account of the Contract Sum (including Direct Purchase Items) unless and until
all conditions within the control of Contractor to disbursement of funds set
forth in the Disbursement Agreement for progress payments are satisfied.
Contractor agrees to timely execute and deliver all certificates within the
control of Contractor required to be delivered by Contractor under the terms of
the Disbursement Agreement, and Contractor shall make all statements provided in
such certificates, unless such statements would be untrue or incorrect with
respect to the facts then known to Contractor at the time when such certificate
is made. Contractor agrees to (i) cooperate with and provide to Owner all
documentation, data and information requested by Owner within the control of
Contractor, to allow Owner to satisfy the requirements and conditions for
Progress Payments set forth in the Disbursement Agreement (including all
documentation for Direct Purchase Items), and (ii) complete all schedules to be
included with each Progress Payment, where information required for or contained
in such schedules is within the control of Contractor.
13.2 The period covered by each Application for Payment shall be one
calendar month ending on the last day of the month.
13.3 Provided a proper and complete Application for Payment is received by
Architect and Owner not later than the last day of a month, and the Architect
and the Independent Construction Consultant has approved the same for payment,
Owner shall make payments to Contractor and, with respect to Direct Payment
Items, to vendors, suppliers and contractors, in each case not later than the
30th day of the following month, subject to satisfaction of the conditions to
payment set forth herein. If proper and complete Application for Payment is
received by Architect and Owner after the application date fixed above, and each
of the Architect and Independent Construction Consultant has approved the same
for payment, it is agreed that the time for payment shall be the next monthly
cycle, unless Owner is able to arrange for an interim payment to be made to
Contractor sooner than the next monthly cycle, at no additional cost, expense or
liability to Owner. Owner shall use diligent efforts to obtain approval of a
proper and complete Application for Payment by the Architect and the Independent
Construction Consultant. In the event Contractor timely submits to Owner and
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 27
Architect a proper and complete Application for Payment, the failure by Owner to
obtain the Architect's and the Independent Construction Consultant's approval
thereof shall not affect the right of Contractor to be paid or, with respect to
Direct Purchase Items, the right of vendors, suppliers and contractors to be
paid, pursuant to such timely, proper and complete Application for Payment,
unless the Owner's failure to obtain the Architect's and the Independent
Construction Consultant's approval thereof is attributable to matters within the
control of Contractor.
13.3.1 Each Application for Payment shall be based upon the most
recent approved schedule of values as reflected in EXHIBITS "N" and "O"
submitted by Contractor in accordance with the Contract Documents. The
schedule of values as reflected in EXHIBITS "N" and "O" shall allocate
the entire GMP among the various portions of the Work, except that the
Contractor's Fee shall be shown as a single separate line item, also
within the GMP. The schedule of values as reflected in EXHIBITS "N" and
"O" shall be prepared in such form and supported by such data to
substantiate its accuracy as Architect, Owner and the Independent
Construction Consultant may reasonably require. The schedule of values
as reflected in EXHIBITS "N" and "O", unless objected to by Architect,
shall be used as a basis for reviewing Contractor's Applications for
Payment.
13.3.2 The Contractor's entitlement to payment for each of its
Payment Applications is expressly conditioned upon the Contractor's
submission of a monthly update of the Project Schedule to the Owner,
the Architect and the Independent Construction Consultant with each of
the Contractor's monthly Applications for Payment.
13.3.3 Applications for Payment shall show the Cost of Work,
services, the cost of Direct Purchase Items, and the cost of materials
or equipment not incorporated in the Work, but delivered and suitably
stored at the Site or at some location agreed upon, actually incurred
by Contractor through the end of the period covered by the Application
for Payment and for which Contractor (or Owner, in the case of Direct
Purchase Items) has made or intends to make actual payment prior to the
next Application for Payment. Although Contractor shall invoice on a
percentage of completion basis according to an approved schedule of
values in EXHIBITS "N" and "O" for the current billing period,
Contractor shall also provide to Owner on a monthly basis payrolls,
▇▇▇▇▇ cash accounts, receipted invoices, and any other evidence
reasonably required by the Owner or Architect for the previous billing
period. The Contractor may with Architect's and Owner's approval submit
such documentation in electronic format. Title to all such equipment
and materials shall pass to Owner upon payment therefore or
incorporation in the Work, whichever shall first occur; and Contractor
shall prepare and execute all documents necessary to effect and perfect
such transfer of title. The Application for Payment shall also indicate
the sum of all prior payments, Contractor's proportionate amount of fee
in overall percentage of work completed compared to the GMP and amount
of retainage to be deducted from each Application in accordance with
PARAGRAPH 13.5 below. Except with the Owner's prior written approval,
the Contractor shall not make advance payments to suppliers for
materials or equipment which have not been delivered and stored at the
site.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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13.3.4 Contractor's Application for Payment shall include a written
inventory, substantially in the form required by the schedules to the
Disbursement Agreement, identify all materials, machinery, fixtures,
furniture, equipment or other items purchased or manufactured for
incorporation into the Work but which, at the time of the Application
for Payment, (i) are not located at the Project Site and for which the
Contractor has requested payment, or (ii) are located at the Project
Site but are not expected to be incorporated into the Project
improvements within ninety (90) days after such Application for Payment
(such materials, the "UNINCORPORATED MATERIALS") and including the
value thereof, together with evidence reasonably satisfactory to Owner,
the Independent Construction Consultant and the Disbursement Agent that
the following conditions have been satisfied with respect to such
Unincorporated Materials:
(a) all Unincorporated Materials for which full payment
has previously been made or is being made with the proceeds of the
Application for Payment are, or will be upon full payment, owned by the
Owner, as evidenced by the bills of sale, certificates of title or
other evidence reasonably satisfactory to Owner and the Independent
Construction Consultant, and all lien rights or claims of the supplier
has been or will be released simultaneously with such full payment and
all amounts, if any, required to be paid to the supplier thereof with
respect to the installation of such Unincorporated Materials (including
any Retainage Amounts) (provided, however, that lien releases,
affidavits and agreements need not be provided for Unincorporated
Materials from a single or affiliated suppliers (where the Owner or
Contractor has actual knowledge that such suppliers are affiliated)
with a contract price (or expected aggregate amount to be paid in the
case of "cost plus" contracts) of less than $100,000;
(b) the Contractor believes that the Unincorporated
Materials are consistent with the Final Plans;
(c) all Unincorporated Materials are properly
inventoried, securely stored, protected against theft and damage at the
Project Site or at such other location which has been specifically
identified by its complete address to Owner, the Independent
Construction Consultant and the Disbursement Agent (or if the
Contractor cannot provide the complete address of the current storage
location, the Contractor shall list the name and complete address of
the applicable contracting party supplying or manufacturing such
Unincorporated Materials);
(d) the amounts paid by the Owner in respect of
Unincorporated Materials not at the Project Site are not more than
$2,000,000 at any one time;
(e) the amounts paid by the Owner in respect of
Unincorporated Materials not at the Project Site are not more than
$9,000,000 at any one time;
(f) the Independent Construction Consultant shall have
confirmed the accuracy of the certification required in subparagraph
(c) above, and in connection therewith, the Independent Construction
Consultant shall have the right to visit the site of and inspect the
Unincorporated Materials; and
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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(g) the Independent Construction Consultant, at the
request of the Owner, may from time to time agree to increase the
thresholds set forth in subparagraph (d) and (e) above.
13.3.5 Applications for Payment shall show the approved percentage of
completion of each portion of the Work as of the end of the period
covered by the Application for Payment. The percentage of completion
shall be the lesser of (1) the percentage of that portion of the Work
which has actually been completed; or (2) the percentage obtained by
dividing (a) the expense that has actually been incurred by the
Contractor on account of that portion of the Work for which the
Contractor has made or intends to make actual payment prior to the next
Application for Payment by (b) the share of the Guaranteed Maximum
Price allocated to that portion of the Work in the schedule of values
as reflected in EXHIBITS "N" and "O."
13.4 The Owner will retain an amount on all Work as referenced in PARAGRAPH
13.3 equal to a percentage of the amount due the Contractor on account of
progress payments as follows: on the items for General Conditions the retainage
shall be equal to zero percent (0%) and for Contractor's Fee, the retainage
shall be equal to five percent (5%). For Work performed by Contractor the
retainage shall be equal to five percent (5%). For all other Work the retainage
shall initially be equal to ten percent (10%). Whenever the Work is
fifty-percent (50%) complete and performed in accordance with the Project
Schedule then in effect and satisfactory, in the opinion of the Architect with
concurrence of the Owner, fifty-percent (50%) of the retainage will be paid to
the Contractor, and five-percent (5%) on all subsequent progress payments shall
be retained thereafter. Upon mutual written agreement by Owner, and Contractor,
payment in full may be made to those subcontractors whose work is fully
completed during the early stages of the Project or reduced with respect to
other contractors at such times as Owner and Contractor may mutually agree,
provided, however, that Owner shall not be obligated to release any retainage to
Contractor or to any subcontractors sooner than provided in this PARAGRAPH 13.4.
Retainage under subcontracts shall be included in Contractor's Request for
Payment for the purpose of indicating the value of the Work performed; however,
Contractor shall not request payment thereof from Owner until such retainage is
actually payable.
13.5 In each Request for Payment, Contractor shall certify that such Request
for Payment represents the amount to which Contractor is entitled pursuant to
the terms of this Agreement and shall also certify as follows:
"There are no known mechanic's or materialmen's liens
outstanding at the date of this requisition, that all
due and payable bills with respect to the Work have
been paid to date or are included in the amount
requested in the current Application, and that,
except for such bills not paid but so included, there
is no known basis for the filing of any mechanic's or
materialmen's liens on the Work, except to the extent
as may be otherwise shown below."
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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To the extent that the Contractor cannot make such certification, Contractor
shall state with reasonable specificity the reasons why such certification
cannot be made and/or must be qualified or limited.
13.5.1 Contractor specifically agrees that it shall not include in
any Request for Payment sums attributable to Work which Owner or
Contractor have rejected (unless Contractor disputes in good faith such
rejection) or which otherwise constitute or relate to applications for
payments, ▇▇▇▇▇▇▇▇, or invoices or subcontractors or suppliers which
Contractor disputes, or for any other reason, does not intend to pay.
13.5.2 Owner shall review each such Request for Payment and may make
such exceptions as Owner reasonably deems necessary or appropriate
under the state of circumstances then obtaining.
13.6 The Contractor acknowledges and agrees that the Owner may reserve the
right, at the direction of Disbursement Agent or Trustee, to make payment on any
Application for Payment to the Contractor or directly to any Subcontractor.
Contractor acknowledges that Owner shall make payments directly to any vendor,
supplier or contractor with whom Owner has contracted for Direct Purchase Items.
13.7 Contractor acknowledges that all payments on account of Applications
for Payment submitted by Contractor shall be subject to satisfaction of the
following conditions and requirements, but only to the extent such conditions
and requirements are within the control of Contractor. Contractor shall take all
action within the control of Contract to satisfy the conditions and requirements
set forth in subparagraphs (a) through (d) below:
(a) a title bringdown is received by the Owner indicating
that no mechanics liens have been filed against the Project by (i) RAC;
or (ii) any parties claiming by, through or under RAC; or (iii) any
parties contracting directly with the Owner for Direct Purchase Items
(except to the extent any such mechanics liens have been filed by any
such parties on account of the Owner's failure to make payments that
are due and payable);
(b) all executed Releases of Mechanics' Liens from the
Contractor (substantially in the form required by the Disbursement
Agreement) and from any vendor, supplier, contractor or subcontractor
providing labor or materials and who is legally entitled to assert a
lien against all or any portion of the Project under the laws of the
State of Mississippi (except to the extent any such releases of
mechanics' liens are not delivered on account of the Owner's failure to
make payments that are due and payable);
(c) a written certification has been executed and
delivered by the Contractor to the Owner that:
(i) the construction of the Work to date has
been performed in a good and workmanlike manner and in
accordance with the Plans, and stating whether progress
thereof is such that the work will be completed by the
Substantial Completion Date;
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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(ii) the amount of direct costs for which such
payment is requested either has been paid by the Contractor or
is justly due to the Contractor for work, labor or material
furnished for the construction of the Work insofar as actually
reported therein (or stored on the Project site as approved by
the Owner and the Independent Construction Consultant) up to
the date of such Application for Payment (for the first
Application for Payment) or up to the date of such Application
for Payment from the date of previous Application for Payment;
(iii) no part of the Project Costs described in
such Application as being currently due for payment has been
made the basis for any previous payment;
(iv) a certification listing all of the
Subcontractors and Suppliers providing labor or materials for
Work described under the Application for Payment; and
(d) a written certificate from the Contractor has been
provided to Owner, Disbursement Agent and Trustee in the form specified
by, and meeting the requirements of the Disbursement Agreement.
13.8 Nothing in this Agreement or in any of the other Contract Documents is
intended to or may be construed to waive, abridge, or adversely affect
Contractor's right to make Contractor's actual receipt of payment from Owner a
condition precedent to Contractor's payment (whether progress, final, or any
other payment) to Subcontractors, suppliers, or other vendors. If Contractor or
its Subcontractors, supplies or other vendors are required to submit affidavits
of payment, waivers of rights, releases of claims, or the like, such affidavits
of payment, waivers of rights and releases of claims may be conditioned upon
receipt of payment.
13.9 Owner shall not be in default hereunder due to a delay in the
processing of an Application for Payment caused by the Disbursement Agent, the
Trustee and/or the Independent Construction Consultant and beyond the control of
the Owner; provided however, that, if Owner does not pay by the due date the
full amount of the Contractor's Application for Payment as certified (or failed
to be certified) by the Architect and the Independent Construction Consultant,
or if either Owner or Contractor disagrees with the amount certified (or failed
to be certified) by the Architect or the Independent Construction Consultant,
then Owner and Contractor shall endeavor in good faith to resolve their
differences over the amount due for the Application for Payment. In the event
there is a bona fide dispute as to the amount owed and Contractor is otherwise
paid the undisputed amount, then (i) Owner shall have the option of paying to
Contractor, under protest and with reservation of all rights, an amount equal to
one-half of the disputed amount and to place the other one-half of the disputed
amount in an escrow account administrated by a mutually acceptable escrow agent,
(ii) Contractor shall be obligated to continue or resume the Work, and (iii) the
Owner reserves the right to seek reimbursement of the disputed amount paid under
protest. In the event of a dispute over the amount owed by Owner to Contractor
for one or more Applications for Payment (whether placed in escrow or
otherwise), either party may initiate arbitration under the Construction
Industry Arbitration Rules of the American Arbitration Association. If the
Arbitrator determines that one party owes additional payment or reimbursement to
the other party, such additional payment or reimbursement will be paid within
thirty (30) days after notification of the Arbitrator's decision. Contractor
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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acknowledges that the procedure set forth in clause (i) above for payment under
protest and with reservation of Owner's rights is provided for under the Advance
Construction Disbursement process in the Disbursement Agreement and may be
limited to the extent of the "Available Advance Construction Disbursement
Amount" (as defined in the Disbursement Agreement).
13.10 In the event Contractor submits a timely, proper and complete
Application for Payment, and Owner fails to cause such Application for Payment
to be paid (including, without limitation, any payments by Owner to vendors,
suppliers or contractors on account of Direct Payment Items included in such
Application for Payment) within thirty (30) days of submittal (the thirtieth day
following submittal of such an Application for Payment shall hereafter be
referred to as a "DUE DATE"), there shall be deemed to be a "Payment Dispute",
unless on a Due Date the Architect, the Independent Construction Consultant
and/or the Owner have good cause for such failure to certify an otherwise
timely, proper and complete Application for Payment. The failure or inability of
any party to satisfy the conditions and requirements set forth in the
Disbursement Agreement for payment to Contractor of a timely, proper and
complete Application for Payment shall not be deemed to be "good cause", unless
such party's failure satisfy any such conditions and requirements of the
Disbursement Agreement is attributable to matters within the control of
Contractor. In the event of a Payment Dispute, the Contractor shall have the
right to give written notice to the Owner of the existence of a Payment Dispute.
If said Payment Dispute is not resolved within ten (10) days following such
Payment Dispute notice from Contractor, Contractor shall be entitled to give
Owner a second written notice stating Contractor's intent to stop work on
account of such Payment Dispute within five (5) days after delivery of
Contractor's second notice, unless the Payment Dispute is not promptly resolved.
If the Payment Dispute is not resolved on or before the expiration of the five
(5) day period established by the Contractor's second notice, then Contractor
shall have the right to immediately stop all Work, in which event, the date for
Substantial Completion set forth in SECTION 4.2 and the Guaranteed Maximum Price
set forth in SECTION 5.2 each shall be subject to adjustment for proven impacts
upon the Project Schedule and the Guaranteed Maximum Price, respectively, as a
consequence of cessation and recommencement of the Work. Notwithstanding the
foregoing, Contractor shall not have the right to stop the Work on account of a
Payment Dispute if Owner follows the procedures outlined in clauses (i), (ii)
and (iii) of SECTION 13.9 above with respect to payment of disputed amounts.
13.11 If a Payment Dispute relates to the failure by Owner to pay Direct
Purchase Items which are due and payable, the Contractor shall have the right to
give written notice to the Owner of the existence of a Payment Dispute. If Owner
fails to pay Direct Purchase Items which are the subject of said Payment Dispute
within ten (10) days following such Payment Dispute notice from Contractor,
Contractor shall be entitled to appropriate time extensions and other relief
and/or additional direct costs (but not consequential damages), proven to be the
result of actual impacts to the Project Schedule.
13.12 Upon Substantial Completion of the Project, or as soon thereafter as
possible, Contractor shall submit a Request for Payment which shall set forth
all amounts due and remaining unpaid to Contractor less an amount (hereinafter
referred to as the "PUNCH LIST RETAINAGE") equal to the sum of (i) one hundred
seventy five percent (175%) of the value of all items to be completed or
corrected (hereinafter referred to as the "PUNCH LIST"), and (ii) the greater of
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 33
$50,000 or one hundred seventy five percent (175%) of the value of all items to
be completed or corrected to obtain a permanent unconditional Certificate of
Occupancy for the entire Project. Upon approval of such Request for Payment by
Owner and Architect and satisfaction of all conditions set forth in the
Disbursement Agreement, and provided that Contractor has delivered all of the
items set forth in SECTION 14.1.1 below, Owner shall pay to Contractor the
amount due under such Request for Payment, less the amount of the Punch List
Retainage.
13.12.1 Owner shall pay the balance of the Punch List Retainage to
Contractor as and when all of the Punch List items are completed by
Contractor and accepted by Owner and a permanent unconditional
Certificate of Occupancy has been issued for the entire Project.
13.12.2 In no event shall any interest be due and payable by Owner to
Contractor, any subcontractor or any other party on any of the sums
rightfully retained by Owner pursuant to any of the terms or provisions
of any of the Contract Documents.
13.13 Any provision of this Agreement to the contrary notwithstanding, Owner
may retain such funds from any Progress Payment to reasonably protect Owner if
any one or more of the following conditions exist:
13.13.1 Contractor is in material default of any of its obligations
hereunder or otherwise is in material default under any of the Contract
Documents or this Agreement has been terminated as a result thereof; or
13.13.2 Any part of such payment is attributable to Work which is
defective or not performed in accordance with the Criteria and Scope
and the Drawings and Specifications, provided, however, such payment
shall be made as to the part thereof attributable to Work which is
performed in accordance with the Criteria and Scope and the Drawings
and Specifications and is not defective; or
13.13.3 Contractor has failed to make payments in accordance with its
contracts with Contractor's subcontractors or for material or labor
used in the Work for which Owner has made payment to Contractor; or
13.13.4 If Owner reasonably determines that the portion of the GMP,
including pending Change Orders, outstanding proposals and the like,
then remaining unpaid will not be sufficient to complete the Work in
accordance with the Drawings and Specifications, whereupon no
additional payments will be due Contractor hereunder unless and until
Contractor performs a sufficient portion of the Work so that such
portion of the Contract Sum then remaining unpaid is determined by
Owner to be sufficient to so complete the Work; or
13.13.5 If Owner reasonably determines that Contractor has not met, or
will not, with prompt acceleration of the Work, meet the Scheduled
Completion Date.
13.14 In the event Owner elects to withhold from payment to Contractor any
amounts to which Owner may be entitled to withhold as above provided, then Owner
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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shall only withhold the fair market value of such Work, claims or payments; and
in no case shall be withheld more than such total value. Failure to comply with
this provision is a material breach of this Agreement.
13.15 No partial payment made hereunder shall be, or shall be construed to
be, final acceptance or approval of that part of the Work to which such partial
payment relates or relieve Contractor of any of its obligations or a waiver of
any rights Owner may have hereunder with respect thereto.
13.16 Contractor shall, within fifteen (15) days following receipt of payment
from Owner, pay all bills for labor and material performed and furnished by
others in connection with the performance of the Work for which such payment is
made, and upon request by Owner, shall provide Owner with evidence of such
payment.
13.17 Payments due and unpaid under the Contract Documents shall bear
interest from the date payment is due at the per annum interest rate equal to
two percent (2%) in excess of the Prime Rate, as reported in the "Money Rates"
column of the most recent edition of The Wall Street Journal, provided such
interest rate does not exceed the highest legal rate allowed under the laws of
the state where such Project is located.
13.18 Contractor shall be entitled to receive payment in the amount of
Seventy-Five Thousand Dollars ($75,000.00) in the first requisition to cover the
cost of mobilization. This payment is included in the GMP.
13.19 All payments to be made hereunder shall be by wire transfer to the
following unless otherwise notified in writing by Contractor:
Account Name: ▇▇▇ ▇▇▇▇▇▇▇▇ Corp
Account Title: Depository Account
ABA #: ▇▇▇▇▇▇▇▇▇
Account #: ▇▇▇-▇▇▇-▇
Bank Location: The Peoples Bank
Biloxi, MS
(▇▇▇) ▇▇▇-▇▇▇▇
ARTICLE 14
----------
FINAL PAYMENT
14.1 Upon receipt of written notice that the Work is ready for final
inspection and acceptance and upon receipt of a final Application for Payment,
Owner, the Architect and the Independent Construction Consultant will promptly
make such inspection, and when Owner, the Architect and the Independent
Construction Consultant find the Work acceptable under the Contract Documents,
and the Contract fully performed, and all conditions precedent within the
control of Contractor to final payment pursuant to the Disbursement Agreement
have been fully satisfied, Owner will promptly issue final payment to
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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Contractor. Neither final payment nor any remaining retained percentage shall
become due, however, until Contractor submits to Owner (1) an affidavit that
payrolls, bills for materials and equipment, and other indebtedness connected
with the Work for which Owner or Owner's property might be responsible or
encumbered (less amounts withheld by Owner) have been paid or otherwise
satisfied; (2) consent of surety, if any, to final payment, if requested by
Owner; (3) a preliminary accounting for the Cost of Work and Contractor's Fee in
accordance with ARTICLE 12; and (4) if required by Owner, other data
establishing payment or satisfaction of obligations such as receipts, releases
and waivers of liens, claims, security interests or encumbrances arising out of
the Contract to the extent and in such form as may be designated by Owner. If a
subcontractor refuses to furnish a release or waiver required by Owner,
Contractor may furnish a bond satisfactory to Owner to protect Owner against
such lien. If such lien remains unsatisfied after payments are made, Contractor
shall refund to Owner all money that Owner may be compelled to pay in
discharging such lien, including all costs and reasonable attorneys' fees.
14.1.1 In addition, the Contractor's entitlement to final payment is
expressly conditioned upon the Contractor furnishing the Owner with all
of the following:
(i) All maintenance and operating manuals;
(ii) Marked sets of Drawings and Specifications
reflecting "as built" conditions;
(iii) The as built drawings and specifications
shall be turned over to the Architect as part of the closeout
requirement. The Architect and Engineers are responsible to
update the CADD drawing files to reflect the changes in the
work made during construction based on the marked-up drawings
at no additional cost to Contractor.
(iv) Any special guarantees or warranties
required by the Contract Documents;
(v) Any assignment and/or transfer of all
guarantees and warranties from Subcontractors, vendors,
suppliers and manufacturers;
(vi) A list of the names, addresses and phone
numbers of all Subcontractors and other persons who provided
guarantees and warranties;
(vii) The delivery from the Contractor to the
Architect and Owner of a permanent and unconditional
Certificate of Occupancy; and
(viii) The satisfaction by Contractor of all
conditions and requirements of the Disbursement Agreement to
final payment that are within the control of Contractor,
including, without limitation, the delivery by the Contractor
of all certifications, information and documentation required
to be delivered under the terms of the Disbursement Agreement
that are within the control of Contractor.
14.2 If, after Substantial Completion of the Work, final completion thereof
is materially delayed through no fault of Contractor or by issuance of Change
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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Orders affecting final completion, Owner shall, upon application by Contractor
and without terminating the Contract, make payment of the balance due for the
portion of the Work fully completed and accepted. If the remaining balance for
Work not fully completed or corrected is less than retainage stipulated in the
Contract Documents, and if bonds have been furnished, the written consent of
surety to payment of the balance due for that portion of the Work fully
completed and accepted may be submitted by Contractor to Owner prior to
certification of such payment. Such payment shall be made under terms and
conditions governing final payment, except that it shall not constitute a waiver
of claims.
14.3 Acceptance of final payment by Contractor, a subcontractor or material
supplier shall constitute a waiver of claims by that payee except those
previously made in writing and identified by that payee as unsettled at the time
of final Application for Payment.
14.4 Contractor agrees not to deliver to the Disbursement Agent under the
Disbursement Agreement any objection to a request by Owner for disbursement of
the remaining funds in the Construction Disbursement Account (as defined in the
Disbursement Agreement), absent good cause shown. In the event (a) Contractor
makes objection to any certificate of Owner requesting disbursement of remaining
funds in the Construction Disbursement Account, and such objection (i) requires
Owner to reserve additional funds in the Construction Disbursement Account, or
(ii) prevents Owner from obtaining the amount of Owner's requested disbursement,
and (b) if such objection shall prove to be unwarranted, incorrect or otherwise
resolved in favor of Owner, Contractor shall pay to Owner interest at the rate
of ten percent (10%) per annum on all amounts Owner would have received pursuant
to its request for disbursement of the remaining funds in the Construction
Disbursement Account had Contractor not made such objection. If such objection
by Contractor shall prove to be warranted, correct or otherwise resolved in
favor of Contractor, Owner shall pay to Contractor interest at the rate of ten
percent (10%) per annum on the amount of additional funds reserved in the
Construction Disbursement Account specified in Contractor's objection notice.
Interest at the specified rate shall accrue for the period commencing on the
date of Contractor's objection notice to the date such funds are disbursed from
the Construction Disbursement Account, and shall be paid to the prevailing party
not later than thirty (30) days after disbursement of such funds. The prevailing
party also shall be entitled to recover from the other party all of its
attorneys' fees, costs and expenses associated with the objection and any
contest relating thereto.
ARTICLE 15
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MEDIATION AND ARBITRATION
15.1.1 Mediation -- See Section 4.5 of AIA 201 General Conditions
attached hereto as EXHIBIT "A".
15.2 Arbitration -- See Section 4.6 of AIA 201 General Conditions attached
hereto as EXHIBIT "A".
15.3 Assignment
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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This Agreement shall not be assigned by either Party without the written consent
of both Parties, except that Owner shall have the right to assign this Agreement
to (a) any entity controlled by or under common control with Owner, (b) a
purchaser of substantially all of the assets of Owner or to the surviving entity
in a merger or consolidation, or (c) to the Trustee. However, no such assignment
by Owner shall release Owner of its obligations hereunder unless and then only
to extent agreed to by the Contractor in writing.
ARTICLE 16
----------
USES OF PREMISES BY OWNER PRIOR TO COMPLETION
16.1 If prior to Substantial Completion of the Work hereunder, any portion
of the Work is at such state of construction to permit the same, and Owner is
desirous of using portions of the Work or takes possession of portions thereof
to complete tenant work (or to allow tenants such as Hard Rock to complete their
tenant improvement work in the Hard Rock cafe and the Hard Rock retail store
premises) with other contractors, or is desirous of showing portions of the Work
to prospective tenants, then Owner may do so only upon the following conditions:
16.1.1 that use or inspection of such portion of the premises will
not in any manner interfere with, hinder or delay Contractor in the
performance of its Work hereunder;
16.1.2 that Owner, its agents, employees, invitees, and separate
contractors shall comply with all safety rules and regulations
established by applicable governmental authorities and Contractor;
16.1.3 that use of the premises by Owner, its employees, agents,
invitees, and separate contractors, is at sole risk of loss to Owner
both as to personal injuries, death of persons, and property damage
which may be incurred or sustained in or about the premises by Owner,
its employees, agents, invitees, and separate contractors;
16.1.4 the Owner shall assume responsibility for, and indemnify,
protect, defend and save Contractor harmless from, any such personal
injuries, death of persons and property damage resulting from the
aforesaid use of the premises or part thereof by Owner, its employees,
agents, invitees and separate contractors, subject to the limitations
set forth in ARTICLE 19 of this contract;
16.1.5 that the Owner maintain public liability and property damage
insurance, at its expense, protecting the interest of Owner and
Contractor with respect to the aforesaid uses and extending to the use
of the premises by Owner, its employees, agents, and invitees in a
company or companies satisfactory to Contractor, and in amounts of not
less than $1,000,000.00 single limit per occurrence or accident as to
personal injuries and death of persons, $500,000.00 as to property
damage per occurrence or accident, with additional excess umbrella
coverage of $30,000,000.00 and Owner has furnished Contractor with a
Certificate of Insurance verifying the subject coverage, with the
Contractor as an additional Insured with respect to the operations of
the Owner and primary to other available insurance, containing a
provision for the insurer to furnish Contractor with at least thirty
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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(30) days' written notice prior to cancellation. The existence of such
insurance coverage shall not limit Owner's liability under Owner's
indemnification herein. Owner shall pay its fair proportion of all
costs and expenses applicable to the portion of the premises used by it
for any of the aforesaid purposes (including water, power, etc.).
Contractor shall not be obligated to let Owner use any part of the Work
prior to substantial completion of the Work hereunder except in strict
compliance with the above provisions. The foregoing provisions shall
not be deemed as a waiver of any liability which Contractor may have to
Owner or to third parties for Contractor's negligence.
16.1.6 That the Owner shall cause their tenants to insure properties,
real or personal or both, at adjoining or adjacent to the site by
property insurance. The Owner shall cause the tenants to waive all
rights against the Contractor for damages caused by fire or other
perils to the extent covered by builder's risk insurance. The policies
shall provide such waivers of subrogation by endorsement or otherwise.
16.1.7 That the Owner shall cause their tenants or the other
contractors hired to complete tenant improvement work to purchase and
maintain, in a company or companies lawfully authorized to do business
in the jurisdiction in which the project is located, Builder's Risk
insurance in the amount of their tenant improvement work on a
replacement cost basis. Such insurance shall be on an all-risk policy
form and shall insure against the perils of fire and extended coverage
and physical loss or damages, including, without duplication of
coverage, flood (including wind-driven water and rain) theft,
vandalism, malicious mischief, collapse, false work, temporary
buildings and debris removal, including demolition occasioned by
enforcement of any applicable legal requirements, and shall cover
reasonable compensation for services and expenses required as a result
of such insured loss. The Owner shall cause the tenants or other
contractors to waive all rights against the Contractor for damages
caused by fire or other perils to the extent covered by Builder's Risk
Insurance. The policies shall provide such waivers of subrogation by
endorsement or otherwise.
16.2 Contractor shall coordinate the work of its forces and the work of any
separate contractors of Owner or tenants such as Hard Rock, to allow for the
timely completion by Owner or such tenants of their tenant improvement work.
Owner acknowledges and agrees that Contractor shall have no responsibility or
liability for the failure of any separate contractors of Owner or tenants to
perform their respective obligations to Owner, except that Contractor shall be
responsible and liable for the performance of work by any separate contractors
of Owner or tenants who are unable to perform their work because of Contractor's
failure to coordinate the work of its own forces with such separate contractors.
ARTICLE 17
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INSURANCE
17.1 Contractor's Liability Insurance.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 39
The Contractor shall purchase from and maintain in a company or companies
lawfully authorized to do business in the jurisdiction in which the project is
located such insurance as will protect the Contractor, Owner, Trustee,
Disbursement Agent and the Independent Construction Consultant from claims set
forth below which may arise out of or result from the Contractor's operations
under the Contract and for which the Contractor may be legally liable, whether
such operations be by the Contractor or by a Subcontractor or by anyone directly
or indirectly employed by any of them, or by anyone for whose acts any of them
may be liable.
17.1.1 Claims under workers' or workmen's compensation disability
benefit and other similar employee benefits acts, including United
States ▇▇▇▇▇▇▇▇▇ and Harbor Workers Act and ▇▇▇▇▇ Act, which are
applicable to the Work to be performed, at statutory limits;
17.1.2 Claims for damages because of bodily injury, occupational
sickness or disease, or death of the Contractor's employees;
17.1.3 Claims for damages because of bodily injury, sickness or
disease, or death of any person other than the Contractor's employees;
17.1.4 Claims for damages insured by usual personal injury liability
coverage which are sustained (a) by a person as a result of an offense
directly or indirectly related to employment of such person by the
Contractor, or (b) by another person;
17.1.5 Claims for damages, other than to the Work itself, because of
injury to or destruction of tangible property, including loss of use
resulting therefrom;
17.1.6 Claims for damages because of bodily injury, death of a person
or property damage arising out of ownership, maintenance or use of a
motor vehicle; and
17.1.7 Claims involving contractual liability applicable to the
Contractor's indemnity obligations under SECTION 3.18 of the AIA 201
General Conditions attached hereto as EXHIBIT "A".
17.1.8 Claims for damages resulting from errors, omissions and
wrongful acts in performing professional design services.
All such required insurance shall be evidenced by policies issued by an
insurance company rated "A-VII" or better by A.M. Best & Co. and licensed to do
business in the State of Mississippi. Each such policy is hereinafter referred
to in this Agreement as an "Insurance Policy". All insurance carried by
Contractor shall be primary and non-contributory.
Contractor shall furnish to Owner copies of all policies evidencing the
foregoing coverage for Owner's review. In the event Owner reasonably disapproves
of any coverage issues, policy limits, deductible amounts or other provisions of
such insurance, Owner shall notify Contractor in writing immediately so that
Contractor may take such steps as may be necessary to have such policy modified
to satisfy Owner's objections. Any additional cost to the Contractor to modify
said policy to reflect Owner's changes shall be an increase to the GMP. If Owner
fails to raise any objections in writing within 10 days following delivery of
such policy of insurance to Owner, such failure shall be deemed an acceptance of
such policy by Owner.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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Certificates of Insurance, in form and substance reasonably acceptable to Owner
and the Independent Construction Consultant, shall be filed with the Owner prior
to commencement of the Work. These Certificates and the insurance policies
required above shall contain a provision that coverage afforded under the
policies will not be canceled or allowed to expire until at least 30 days' prior
written notice has been given to the Owner and the Disbursement Agent. Each
insurance policy required hereunder shall name Owner, Architect, Architect's
consultants, Trustee, Disbursement Agent, the Independent Construction
Consultant and Rank PLC, as additional insureds thereunder.
17.2 Owner's Liability Insurance.
The Owner shall be responsible for purchasing and maintaining the Owner's usual
liability insurance. Optionally, the Owner may purchase and maintain other
insurance for self-protection against claims which may arise from operations
under the Contract. Whichever option Owner elects, Owner shall cause its general
liability carrier to furnish Contractor with a waiver of subrogation. The
Contractor shall not be responsible for purchasing and maintaining this optional
Owner's liability insurance unless specifically required by the Contract
Documents. Any and all policies of insurance coverage required to be carried by
Contractor shall be primary, and any optional Owner's liability insurance shall
not respond to any loss unless and until all insurance coverages required under
the Contract Documents to be carried by Contractor has been exhausted.
17.3 Property Insurance
17.3.1 The Owner shall purchase and maintain, in a company or
companies lawfully authorized to do business in the jurisdiction in
which the project is located, Builder's Risk insurance (or the
functional equivalent of Builder's Risk insurance) in the amount of the
initial GMP as well as subsequent modifications thereto for the entire
Work at the site on a replacement cost basis. Such insurance shall be
maintained until substantial completion of the Project is effected.
This insurance shall include interests of the Owner, Disbursement
Agent, Trustee, the Independent Construction Consultant, the
Contractor, Subcontractors and Sub-subcontractors in the Work. The
insurance shall be on an all-risk policy form and shall insure against
the perils of fire and extended coverage and physical loss or damages,
including, without duplication of coverage, flood (including
wind-driven water and rain) theft, vandalism, malicious mischief,
collapse, false work, temporary buildings and debris removal, including
demolition occasioned by enforcement of any applicable legal
requirements, and shall cover reasonable compensation for services and
expenses required as a result of such insured loss. Owner shall furnish
to Contractor a copy of such Builder's Risk policy for Contractor's
review. In the event Contractor reasonably disapproves of any coverage
issues, policy limits, deductible amounts or other provisions of such
insurance, Contractor shall notify Owner in writing immediately so that
Owner may take such steps as may be necessary to have such policy
modified to satisfy Contractor's objections. If Contractor fails to
raise any objections in writing within 10 days following delivery of
such policy of insurance to Contractor, such failure shall be deemed an
acceptance of such policy by Contractor. Notwithstanding anything to
the contrary appearing herein, Owner shall bear all risk of loss
including cost not covered by deductibles to the property which may
occur and agrees to look solely to the proceeds of insurance in the
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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event of a loss, the only exception being losses which may occur as a
result of Contractor's negligence or willful acts, and then, only to
the extent not covered by insurance. Contractor shall be paid by Owner
for such work in place at the time of such loss regardless of whether
or not such work was damaged in whole or in part by the peril. In the
event of a loss requiring reconstruction of any part of the project,
Contractor shall be compensated for the Contractor's actual cost, as
defined in ARTICLE 8, plus ten percent (10%) (comprised of four and
one-half percent (4.5%) of such actual cost of Field General Conditions
and five and one-half percent (5.5%) of such actual cost for
Contractor's fee). If the Owner does not purchase such property
insurance as provided for herein, the Owner shall so inform the
Contractor in writing prior to commencement of the Work. The Contractor
may then effect insurance which will protect the interests of the
Contractor, Subcontractors and Sub-subcontractors in the Work, and the
cost thereof shall be funded from the Contingency. If the Contractor is
damaged by the failure or neglect of the Owner to purchase or maintain
insurance as described above, without so notifying the Contractor, then
the Owner shall bear all reasonable costs properly attributable
thereto.
17.3.2 Loss of Use Insurance. The Owner, at the Owner's option, may
purchase and maintain such insurance as will insure the Owner against
loss of use of the Owner's property due to fire or other hazards,
however caused. The Owner waives all rights of action against the
Contractor for loss of use of the Owner's property, including
consequential losses due to fire or other hazards, however caused.
17.3.3 Waivers of Subrogation. The Owner and Contractor waive all
rights against (a) each other and any of the subcontractors,
sub-subcontractors, agents and employees, each of the other, and (b)
the design professional subcontractor and design professional
subcontractor's consultants, for damages caused by fire or other perils
to the extent covered by property insurance obtained pursuant to this
Section or other property insurance applicable to the site where the
Work is being performed, as well as the Work, except such rights as
they have to proceeds of such insurance held by the Contractor as
fiduciary. The Owner or Contractor, as appropriate, shall require of
the design professional subcontractor and design professional
subcontractor's consultants, subcontractors, sub-subcontractors, agents
and employees of any of them, by appropriate agreements, written where
legally required for validity, similar waivers each in favor of other
parties enumerated herein. The policies 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 damaged. This provision shall survive termination and/or
completion of the Project.
17.3.4 During the Project construction period, the Owner shall insure
properties, real or personal or both, adjoining or adjacent to the site
by property insurance. The Owner shall waive all rights in accordance
with the terms of PARAGRAPH 17.3.3 for damages caused by fire or other
perils covered by this separate property insurance. All separate
policies shall provide this waiver of subrogation by endorsement or
otherwise.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
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17.3.5 A loss insured under Builder's Risk insurance shall be
adjusted by the Owner and made payable to the Owner. The Owner shall
pay Contractor and Subcontractors their just shares of insurance
proceeds received by the Owner, and by appropriate agreements, written
where legally required for validity, shall require Subcontractors to
make payments to their Sub-subcontractors in similar manner.
17.3.6 Partial occupancy or use of the premises shall not commence
until the insurance company or companies providing insurance have
consented to such partial occupancy or use by endorsement or otherwise.
The Owner and the Contractor shall take reasonable steps to obtain
consent of the insurance company or companies and shall, without mutual
written consent, take no action with respect to partial occupancy or
use that would cause cancellation, lapse or reduction of insurance.
17.3.7 If, following any occurrence resulting in substantial damage
to the Project, Owner is unable to demonstrate to the reasonable
satisfaction of Contractor that Owner is financially capable of
completing the Project, Contractor shall be entitled to be paid in
accordance with the terms of the Agreement and as if the Contract were
terminated for convenience including, but not limited to, any retainage
held by owner. Additionally, prior to Contractor being obligated to
commence Work following such substantial damage to the Project, Owner
must demonstrate to the reasonable satisfaction of Contractor that
Owner is financially capable of completing the Project and additional
work resulting from such damage including, but not limited to
remobilization.
ARTICLE 18
----------
INDEMNIFICATION
18.1 Indemnification -- See Section 3.18 of the AIA 201 General Conditions
attached hereto as EXHIBIT "A".
ARTICLE 19
----------
WARRANTY - CONTRACTOR'S WARRANTY OR GUARANTY
19.1 Contractor confirms its Warranty or Guaranty as set forth in the other
Contract Documents, provided, however, that such Warranty or Guaranty is
qualified or limited by the following provisions which shall be controlling
wherever in conflict with the provisions of the Warranty or Guaranty set forth
in said other Contract Documents. The qualifications or limitations upon said
Warranty or Guaranty are the following:
19.1.1 Contractor warrants that it will furnish all of the materials
and work necessary to complete the improvements in a good and
workmanlike and first class manner and will furnish all of the
equipment which will be installed in a good and workmanlike and first
class manner, as all of the same are called for in the Contract
Documents; and Contractor shall obtain and deliver to Owner such
standard manufacturer's warranties as each equipment manufacturer may
furnish with any equipment. Contractor does not warrant or guarantee
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 43
the design or sufficiency of the design of the improvements or that the
materials and equipment furnished, pursuant to the Specifications of
Architect, will accomplish the purposes intended, provided, however,
that Contractor's warranty shall include the good, workmanlike and
proper construction of the improvements and installation of such
materials and equipment, free of defective workmanship.
19.1.2 As to all materials and equipment (including all Direct
Purchase Items) and as to Contractor's workmanship, Contractor warrants
the same against defects for a period of one (1) year as to all defects
appearing within said year and as to which Owner places Contractor on
written notice thereof within said year. Contractor covenants and
agrees to promptly repair or replace, at its sole cost and expense, any
and all defective Work, including, without limitation defective
materials and equipment. As to all defects (other than latent defects)
as to which Owner does not place Contractor on written notice thereof
within the one (1) year warranty period and all defects appearing after
one (1) year, Contractor makes no warranty for itself, without
limiting, however, warranties of any subcontractors or others which may
be for more than one (1) year, and after said one (1) year period,
Contractor will aid Owner, at Owner's expense, in enforcing any
warranties against others.
19.1.3 All warranties, if the same do not operate by any specific
written provision of any warranty or by operation of law to be in favor
of Owner, unless required to be enforced by the Contractor to back up
any obligation which it has hereunder, shall be deemed to be assigned
to Owner (if assignable), such assignment to take effect immediately
upon completion of the work of Contractor or after expiration of
Contractor's warranty. If and to the extent any such warranties by
their terms are not assignable, Contractor shall enforce such
warranties for the benefit of Owner, to provide Owner with the benefit
thereof for the entire period of such warranties.
As to all warranties called for under the Contract Documents, it is understood
and agreed that the limitation of Warranty or Guaranty in favor of Contractor in
this ARTICLE 19 shall not be construed as operating in favor of any
subcontractor or material supplier. Should any longer or other warranty or
guaranty be called for under the Contract Documents or imposed upon any
subcontractor and/or material supplier by operation of law, nothing set forth in
this Agreement shall be deemed to be a limitation thereof, nor a waiver of any
defense to the enforcement of such longer or other warranty as may be available
to any subcontractor or supplier under applicable law.
Contractor's Warranty is a one (1) year warranty, plus Contractor's duty to
obtain any longer or other warranties called for under the Contract Documents
from subcontractors and suppliers for benefit of Owner, which longer or other
warranties are not guaranteed by Contractor beyond the first year, subject to
the qualifications and limitations set forth above. During Contractor's one (1)
year Warranty, Contractor will enforce the subcontractors' and suppliers'
warranties for benefit of Owner or its assigns, except those warranties of
specific equipment stated above, as to which Owner will look solely to the
equipment manufacturer. After expiration of Contractor's one (1) year Warranty,
Contractor will continue to aid Owner in enforcing any continuing warranties,
but enforcement thereafter shall be at Owner's expense.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 44
The one (1) year Warranty shall run from the date of Substantial Completion. The
Contractor's Warranty shall survive beyond the one year after Substantial
Completion in which the Contractor agrees to correct defective Work pursuant
SECTION 19.1.1 above. The Contractor's duty to repair defective Work in no way
limits, diminishes or otherwise affects any warranty rights or other rights or
remedies that the Owner has or may have at law or in equity against the
Contractor for the Contractor's performance of the Work.
Notwithstanding anything to the contrary contained herein, for renovation,
restoration and reconstruction work, the Contractor's warranty or guarantee
excludes any damage or defect to new or existing work caused by any pre-existing
conditions.
ARTICLE 20
----------
TERMINATION OR SUSPENSION
20.1 Suspension of Work
If the Project is suspended by Owner, in whole or in part, for more than sixty
(60) consecutive days, Contractor shall be paid for all services performed,
prior to receipt of written notice from Owner of such suspension together with
reimbursable expenses then due and all termination expenses as defined in this
Article and a reasonable profit herein. If the Project is resumed after being
suspended for more than sixty (60) consecutive days, the Contract time and
amount shall be equitably adjusted.
20.2 Termination
If Contractor fails to commence the Work in accordance with the provisions of
this Agreement or fails to diligently prosecute the Work to completion thereof
in a diligent, efficient, and workmanlike manner, and in strict accordance with
the provisions of the Contract Documents; fails to use an adequate amount or
quality of skilled personnel or equipment to complete the Work in accordance
with the Project Schedule, fails to perform any of its obligations under the
Contract Documents, or fails to make payments to its subcontractors, materialmen
or laborers in a timely manner, then Owner shall have the right, if Contractor
shall not cure any such breach after five (5) days' written notice thereof, (or
if such breach is of such a nature as to be incapable of cure within such
period, shall not commence action to cure said breach within such period and
thereafter diligently and continuously pursue such action to complete such cure
promptly), to: (1) terminate this Agreement; (2) take possession of and use all
or any part of Contractor's materials, equipment, supplies, and other property
of every kind used by Contractor in the performance of the Work and to use such
property in the completion of the Work; or (3) complete the Work in any manner
it deems desirable, including engaging the services of other parties therefor.
Any such act by Owner shall not be deemed a waiver of any other right or remedy
of Owner. If, after exercising any such remedy, the cost to Owner of the
performance of the balance of the Work is in excess of that part of the Contract
Sum, which has not theretofore been paid to Contractor hereunder, Contractor
shall be liable for and shall reimburse Owner for such excess.
In addition to and not in limitation of the foregoing, the Owner shall have the
right, at any time, to terminate this Agreement for the Owner's convenience and
without cause. In case of such termination for the Owner's convenience, the
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 45
Contractor shall be entitled to receive payment for any Pre-Construction
services and Work executed, together with reasonable overhead and profit of the
Work executed as of the date of such termination, and the amount incurred by
Contractor as losses in connection with terminating any subcontracts and
purchase orders plus any proven loss sustained upon any services, materials,
equipments, tools, construction equipment, and machinery and demobilization
costs.
20.3 Contractor's Termination
If Owner fails to perform any of its obligations hereunder, Contractor shall
have the right to give Owner a written notice thereof, stating the nature of the
breach complained of. If Owner does not cure such breach within thirty (30) days
after receipt of such notice, Contractor shall have the right to terminate this
Agreement by giving Owner written notice thereof at any time thereafter while
such breach remains uncured, and payment shall be made to Contractor for all
Work executed and for any proven loss sustained upon any services, materials,
equipment, tools, construction equipment, and machinery, and reasonable
demobilization costs. Contractor shall similarly have the right to terminate
upon thirty (30) days' notice if the Work is suspended for a period of thirty
(30) consecutive days or more from causes not the fault of Contractor.
20.4 The amount, if any, to be paid to Contractor upon a termination of this
Agreement shall not cause the GMP to be exceeded, nor shall it exceed an
amount to be calculated as follows:
20.4.1 Take the Cost of Work incurred by the Contractor to the date
of termination;
20.4.2 Add the Contractor's Fee computed upon the Cost of Work to the
date of termination at the rate stated in PARAGRAPH 6.1.1 or, if the
Contractor's Fee is stated as a fixed sum in the Subparagraph, an
amount that bears the same ratio to that fixed-sum Fee as the Cost of
Work at the time of termination bears to a reasonable estimate of the
probable Cost of Work upon its completion; and
20.4.3 Subtract the aggregate of previous payments made by the Owner
and add the amount incurred as losses in connection with terminating
any subcontracts and purchase orders plus any proven loss sustained
upon any services, materials, equipments, tools, construction
equipment, and machinery and demobilization costs.
20.4.4 The Owner shall also pay the Contractor fair compensation,
either by purchase or rental at the election of the Owner, for any
equipment owned by the Contractor that the Owner elects to retain and
that is to otherwise included in the Cost of Work under ARTICLE 8. To
the extent that the Owner elects to take legal assignment of
subcontracts and purchase orders (including rental agreements), the
Contractor shall, as a condition of receiving the payments referred to
in this ARTICLE 20, execute and deliver all such papers and take all
such steps, including the legal assignment of such subcontracts and
other contractual rights of the Contractor, as the Owner may require
for the purpose of fully vesting in the Owner the rights and benefits
of the Contractor under such subcontracts or purchase orders.
20.5 Bankruptcy of Contractor.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 46
It is recognized that if Contractor is adjudged a bankrupt, or makes a general
assignment for the benefit of creditors, or if a receiver is appointed for the
benefit of its creditors, or if a receiver is appointed on account of its
insolvency, such could impair or frustrate Contractor's performance of this
Agreement. Accordingly, it is agreed that upon the occurrence of any such event,
Owner shall be entitled to request of Contractor, or its successor in interest,
adequate assurance of future performance in accordance with the terms and
conditions hereof. Failure to comply with such request within ten (10) days of
delivery of the request shall entitle Owner to terminate this Agreement and the
accompanying rights set forth herein. In all events pending receipt of adequate
assurance of performance and actual performance in accordance therewith, Owner
shall be entitled to proceed with the Work with its own forces or with other
contractors on a time and material or other appropriate basis, the cost of which
will be back charged against the Contract Sum hereof.
ARTICLE 21
MISCELLANEOUS PROVISIONS
21.1 Remedies Cumulative
The rights and remedies of Owner and Contractor under this Agreement shall be
non-exclusive, and shall be in addition to all the other remedies available to
such Parties at law or in equity.
21.2 Punchlist
Contractor shall be responsible for satisfying all items on any and all
reasonable Punch Lists generated by Owner or Owner's Representative.
21.3 Employment Restriction
Both Owner and Contractor agree that during the progress of the Work, and for a
period of one (1) year after Substantial Completion, neither shall employ any
person that has been or is currently employed by the other on this Project
without the written consent of the other Party.
21.4 Applicable Laws
This Agreement shall be construed and enforced in accordance with and under the
laws of the State of Mississippi, without regard to its conflict of laws
principles; and should any provision thereof be found to be invalid by a court
or courts of competent jurisdiction, the same shall not invalidate the remaining
provisions of this Agreement.
21.5 Notices
All notices to be given hereunder shall be in writing, and all payments to be
made hereunder shall be by check, and may be given, served, or made by
depositing the same in the United States Mail addressed to the authorized
representative of the Party to be notified, postage paid, and registered or
certified with return receipt requested or by delivering the same in person to
the said authorized representative of such Party. Notice deposited in the mail
in accordance with the provisions hereof shall be effective unless otherwise
stated in such notice or in this Agreement from and after the fourth (4th) day
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 47
next following the date postmarked on the envelope containing such notice, or
when actually received, whichever is earlier. Notice given in any other manner
shall be effective only if and when received by the Party to be notified. All
notices to be given to the Parties hereto shall be sent to or made at the
addresses heretofore set forth. By giving the other Party at least fifteen (15)
days' written notice thereof, the Parties hereto specify as its address for the
purposes hereof any other address in the United States of America.
21.6 Waiver
No consent or waiver, express or implied, by either Party to this Agreement to
or of any breach or default by the other in the performance of any obligations
hereunder shall be deemed or construed to be a consent or waiver to or of any
other breach or default by such Party hereunder. Failure on the part of any
Party hereto to complain of any act or failure to act of the other Party or to
declare the other Party in default hereunder, irrespective of how long such
failure continues, shall not constitute a waiver of the rights of such Party
hereunder. Inspection by, payment by, or tentative approval or acceptance by
Owner or the failure of Owner to perform any inspection hereunder, shall not
constitute a final acceptance of the Work or any part thereof and shall not
release Contractor of any of its obligations hereunder.
21.7 Conflicts
In case of conflicts between the provisions of this Agreement, any ancillary
documents executed contemporaneously herewith or prior hereto, or any other of
the Contract Documents, the provisions of this Agreement (including all
exhibits) shall prevail.
21.8 Notification of Liens
The Contractor shall notify the Owner immediately if the Contractor becomes
aware of the existence of any lien upon the Project site.
21.9 Removal of Liens
Should any lien attach to the site of the Project or the Project by the
Subcontractors, Suppliers, or anyone directly or indirectly employed by any of
them, the Contractor shall act diligently to obtain removal of that lien
(including posting of a bond, if permitted by the court).
21.10 Indemnification
The Contractor shall defend, indemnify, and hold the Owner harmless for any
loss, claim, damage, or expense, including reasonable attorneys' fees and
expense, arising from or related to liens which attach to the Project site filed
by any Subcontractor, Sub-subcontractor, or Supplier, or anyone directly or
indirectly employed by any of them and by anyone for whose acts any of them may
be liable.
21.11 Release and Waiver
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 48
When the Work is completed, the Contractor shall furnish the Owner a complete
release and waiver in form acceptable to the Owner and Owner's Lender of all
liens raising out of this Agreement.
21.12 Conformity of Other Contracts
The Contractor agrees to insert in all of its subcontracts and purchase orders
hereunder provisions which shall conform substantially to the language of
Sections 22.10, 22.11 and 22.12.
21.13 Attorneys Fees, Costs and Expenses
Each of Owner and Contractor shall be entitled to recovery of their attorneys'
fees, costs and expenses in enforcing their rights and remedies hereunder.
ARTICLE 22
----------
PROTECTION OF PERSONS AND PROPERTY
22.1 Safety Precautions and Programs
22.1.1 The Contractor shall be responsible for initiating,
maintaining and supervising all safety precautions and programs in
connection with the performance of the Contract.
22.1.2 In the event the Contractor encounters on the site material
reasonably believed to be asbestos or polychlorinated biphenyl (PCB)
which has not been rendered harmless, petroleum waste, biohazardous
substances, radioactive waste or any other substance falling within the
category of hazardous or toxic waste under the Comprehensive
Environmental Response, Compensation and Liability Act (CERCLA) or any
other state or federal environmental statute or regulation, hereinafter
collectively referred to as "HAZARDOUS MATERIALS," the Contractor shall
immediately stop Work in the area affected and report the condition to
the Owner in writing. Owner shall thereafter as soon as reasonably
possible conduct a thorough investigation to determine if the suspected
material in the affected area is in fact Hazardous Materials and shall
certify to Contractor that such material is not Hazardous Materials or
if such material is in fact Hazardous Materials that such Hazardous
Materials have been abated and that it is safe to return to the
affected area and resume work. Contractor may require Owner to furnish
copies of reports of tests conducted by a qualified testing laboratory
acceptable to Contractor verifying the absence of such Hazardous
Materials before Contractor will be required to resume work. The
Contract time and amount shall thereafter be equitably adjusted to
account for the time lost due to the encountering of the Hazardous
Materials and the reasonable cost associated therewith.
22.1.3 The Contractor shall not be required pursuant to the changes
clause herein to perform without consent any Work relating to Hazardous
Materials.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 49
22.1.4 To the fullest extent permitted by law, the Owner shall
indemnify, defend, protect and hold harmless the Contractor, the design
professional subcontractor and design professional subcontractor's
consultants and agents and employees of any of them from and against
claims, damages, losses and expenses, including but not limited to
attorneys' fees, arising out of or resulting from the encountering of
Hazardous Materials at the project site (excluding any Hazardous
Materials introduced to the Project Site by the Contractor, the design
professional subcontractor and design professional subcontractor's
consultants and agents and employees of any of them), including but not
limited to, any fines, assessments or other sanctions imposed under any
federal or state environmental statute or regulation as well as costs
or expenses associated with clean up or other abatement procedures,
regardless of whether or not such claim, damage, loss or expense is
caused in part by a party protected hereunder, subject to the
limitations set forth in ARTICLE 18 of this Contract. Such obligation
shall not be construed to negate, abridge or reduce other rights or
obligations which would otherwise exist as to a party or person
described in this PARAGRAPH 22.1.4.
22.1.5 To the fullest extent permitted by law, the Contractor shall
indemnify, defend, protect and hold harmless the Owner, the Owner's
consultants and agents and employees of any of them from and against
claims, damages, losses and expenses, including but not limited to
attorneys' fees, arising out of or resulting from any Hazardous
Materials introduced to the Project Site by the Contractor, the design
professional subcontractor and design professional subcontractor's
consultants and agents and employees of any of them, including but not
limited to, any fines, assessments or other sanctions imposed under any
federal or state environmental statute or regulation as well as costs
or expenses associated with clean up or other abatement procedures,
regardless of whether or not such claim, damage, loss or expense is
caused in part by a party protected hereunder, subject to the
limitations set forth in ARTICLE 18 of this Contract. Such obligation
shall not be construed to negate, abridge or reduce other rights or
obligations which would otherwise exist as to a party or person
described in this PARAGRAPH 22.1.4.
22.2 Safety of Persons and Property
22.2.1 The Contractor shall take reasonable precautions for safety
of, and shall provide reasonable protection to prevent damage, injury
or loss to:
22.2.1.1 employees on the Work and other persons who may be affected thereby.
22.2.1.2 the Work and materials and equipment to be incorporated therein,
whether in storage on or off the site, under care, custody or control
of the Contractor or the Contractor's Subcontractors or
Sub-subcontractors; and
22.2.1.3 other property at the site or adjacent thereto, such as trees, shrubs,
lawns, walks, pavements, roadways, structures and utilities not
designated for removal, relocation or replacement in the course of
construction.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 50
22.2.2 The Contractor shall give notices and comply with applicable
laws, ordinances, rules, regulations and lawful orders of public
authorities bearing on safety of persons or property or their
protection from damage, injury or loss.
22.2.3 The Contractor shall erect and maintain, as required by
existing conditions and performance of the Contract, reasonable
safeguards for safety and protection, including posting danger signs
and other warnings against hazards, promulgating safety regulations and
notifying owners and users of adjacent sites and utilities.
22.2.4 When use or storage of explosives or other Hazardous Materials
or equipment or unusual methods are necessary for execution of the
Work, the Contractor shall exercise utmost care and carry on such
activities under supervision of properly qualified personnel.
22.2.5 The Contractor shall cause all of its subcontractors to comply with the
foregoing safety requirements.
ARTICLE 23
----------
ENUMERATION OF CONTRACT DOCUMENTS
23.1 The Contract Documents, which constitute the entire Agreement between
Owner and Contractor, are listed in ARTICLE 1, as the same may be amended by any
modifications issued after execution of this Agreement, and are enumerated as
follows:
23.1.1 This Agreement is this executed Standard Form of Agreement
Between Owner and Contractor consisting of pages 1 through 51.
23.1.2 The General Conditions of the Contract of Construction, AIA
Document A201, 1997 edition, as enumerated in EXHIBIT "A" consisting of
pages 1 through 66.
23.1.3 The Specifications, as enumerated in EXHIBIT "B" consisting of
pages 1 through 3.
23.1.4 The Drawings, as enumerated in EXHIBIT "C" consisting of pages
1 through 4.
23.1.5 The Project Schedule, as enumerated in EXHIBIT "E" consisting
of pages 1 through 5.
23.1.6 Intentionally Deleted
23.1.7 The Contractor's Assumptions, Qualifications and
Clarifications to the Guaranteed Maximum Price, and Schedule of
Allowances, as enumerated in EXHIBIT "G" consisting of pages 1 through
11.
23.1.8 The Schedule of Liquidated Damages for Late Completion, as
enumerated in EXHIBIT "H" consisting of pages 1 and 2.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 51
23.1.9 The Schedule of Bonus for Early Completion, as enumerated in
EXHIBIT "I" consisting of 1 page.
23.1.10 The Rental Rates for Equipment Rented from Contractor, as
enumerated in EXHIBIT "K" consisting of 1 page.
23.1.11 Mississippi Tax-Related Procedures, as enumerated in EXHIBIT
"M", consisting of pages M-1 through M-11 and Attachment One thereto
consisting of Exhibits ▇-▇, ▇-▇ and B-2 and C-1 through C-7 and Exhibit
M-1 thereto.
23.1.12 The June 8, 2006 Estimate Survey Sheets for Casino as set
forth in EXHIBIT "N"
23.1.13 The June 8, 2006 Estimate Survey Sheets for the Lowrise,
Hotel, Parking Deck Repair and Site Work as set forth in EXHIBIT "O").
23.2 Whenever there shall appear any conflict between any provisions of the
Contract Documents, the controlling documents shall be the documents first
appearing in the order set forth above.
ARTICLE 24
----------
ALLOWANCES
24.1 Allowances
Included in the Contract Sum are all allowances stated in EXHIBIT "G" consisting
of pages 1 through 11. Items covered by allowances shall be supplied for such
amounts and by such persons or entities as Owner may direct, but Contractor
shall not be required to employ persons or entities against which Contractor
makes reasonable objection.
24.1.1 Unless otherwise provided on the Contract Documents:
24.1.1.1 materials and equipment under an allowance shall be selected promptly
by Owner to avoid delay in the Work;
24.1.1.2 allowances shall cover the cost to Contractor of materials and
equipment delivered at the site and all required taxes, less applicable
trade discounts;
24.1.1.3 Contractor's cost for unloading and handling at the site, labor,
installation costs, overhead, profit, and other expenses contemplated
for stated allowance amounts shall be included in the allowance; and
24.2 whenever costs are more than or less than allowances, the GMP shall be
adjusted accordingly by Change Order. The amount of the Change Order shall
reflect: (1) the difference between actual costs and the allowances; and (2)
changes in Contractor's costs.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 52
ARTICLE 25
----------
AUTHORITY
25.1 Authority. The individual executing this Agreement on behalf of
Contractor represents and warrants to Owner that Contractor's Board of Directors
or Bylaws has granted to such individual the express authority to execute and
deliver this Agreement on behalf of Contractor, and that this Agreement, once
executed and delivered by such individual, will be binding upon and enforceable
against Contractor, in accordance with its terms.
ARTICLE 26
----------
LIMITATION OF OWNER'S LIABILITY
26.1 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT,
NO PAST, PRESENT OR FUTURE PARTNER, MEMBER, SHAREHOLDER, MANAGER, DIRECTOR,
OFFICER, EMPLOYEE, AGENT OR ANY AFFILIATE OF OWNER, NOR ITS OR THEIR RESPECTIVE
HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS OR ASSIGNS, SHALL BE PERSONALLY
LIABLE FOR ANY JUDGMENT OR DEFICIENCY RELATING TO OR ARISING OUT OF THIS
AGREEMENT OR ANY DEFAULT BY OWNER HEREUNDER, except to the extent, if any, that
any of such parties or individuals become the Owner hereunder. No member or
manager of Owner shall have any personal liability under this Agreement or any
other instrument, document or agreement entered into or delivered in connection
with this Agreement and the transactions contemplated hereby (collectively, the
"Related Documents") and no recourse for the payment of any amount due under
this Agreement, or for any claim arising out of or relating to this Agreement or
any other Related Documents, whether for failure to pay, perform or discharge
any monetary or non-monetary obligation, breaches of representations, warranties
or covenants, the occurrence of defaults, or otherwise, shall be due or owing,
or had or recoverable against or from, any past, present or future partner,
member, shareholder, manager, director, officer, employee, agent, or affiliate
of Owner (or any successor or assign thereof), except to the extent, if any,
that any of such parties or individuals become the Owner hereunder.
The Remainder of this Page
is intentionally left blank
Signatures follow on next page
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 53
IN WITNESS WHEREOF, this Agreement is entered into as of the day and
year first written above and is executed in at least three (3) original copies,
one of which is to be delivered to Contractor, one to Architect for use in the
administration of the Contract, and the remainder to Owner.
Owner: Contractor:
----- ----------
Premier Entertainment Biloxi LLC ▇▇▇ ▇▇▇▇▇▇▇▇ Corp
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------- -------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Operating Title: Chief Financial Officer
Officer
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page 54
EXHIBIT "A"
General Conditions of the Contract of
Construction, AIA Document A201, 1997 edition
AIA Document A201 General Conditons to be attached
--------------------------------------------------------------------------------
AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "B"
Specifications
List of Specifications to be Attached
--------------------------------------------------------------------------------
AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "C"
Drawings
List of Drawings to be Attached
--------------------------------------------------------------------------------
AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "D"
Not Used
--------------------------------------------------------------------------------
AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "E"
Project Schedule
Project Schedule to be Attached
--------------------------------------------------------------------------------
AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "F"
Not Used
--------------------------------------------------------------------------------
AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "G"
Contractor's Assumptions, Qualifications and Clarifications
to Guaranteed Maximum Price, and Schedule of Allowances
Contractor's Assumptions, Clarifications and Qualifications
to Guaranteed Maximum Price, and Schedule of Allowances to be Attached
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "H"
Schedule of Liquidated Damages for Late Completion
Liquidated Damages for Late Completion
(Page 1 of 2)
o For each calendar day that Contractor fails to achieve Substantial
Completion beyond the Substantial Completion Date set forth in the Project
Schedule commencing upon the first (1st) calendar day following the
Substantial Completion Date through and including the third (3rd) calendar
day following the Substantial Completion Date, the Contractor shall not be
obligated to pay to the Owner any liquidated damages.
o For each calendar day that Contractor fails to achieve Substantial
Completion beyond the Substantial Completion Date set forth in the Project
Schedule commencing upon the fourth (4th) calendar day following the
Substantial Completion Date through and including the eleventh (11th) day
following the Substantial Completion Date, the Contractor shall be
obligated to pay to the Owner, immediately upon demand by Owner, the sum of
Five Thousand Dollars ($5,000.00) for each such calendar day, not as a
penalty, but as Liquidated Damages.
o For each calendar day that Contractor fails to achieve Substantial
Completion beyond the Substantial Completion Date set forth in the Project
Schedule commencing upon the twelfth (12th) calendar day following the
Substantial Completion Date through and including the nineteenth (19th) day
following the Substantial Completion Date, the Contractor shall be
obligated to pay to the Owner, immediately upon demand by Owner, the sum of
Twelve Thousand Five Hundred Dollars ($12,500.00) for each such calendar
day, not as a penalty, but as Liquidated Damages.
o For each calendar day that Contractor fails to achieve Substantial
Completion beyond the Substantial Completion Date set forth in the Project
Schedule commencing upon the twentieth (20th) calendar day following the
Substantial Completion Date and continuing for each day thereafter until
Contractor shall have achieved Substantial Completion of the Work, the
Contractor shall be obligated to pay to the Owner, immediately upon demand
by Owner, the sum of Twenty Five Thousand Dollars ($25,000.00) for each
such calendar day, not as a penalty, but as Liquidated Damages.
o Provided, however, that the Contractor shall not be obligated to pay Owner,
on account of the failure of Contractor to achieve Substantial Completion
within three calendar days of the Substantial Completion Date set forth in
the Project Schedule, more than the aggregate sum of Seven Hundred Fifty
Thousand Dollars ($750,,000.00).
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "H"
Schedule of Liquidated Damages for Late Completion
Liquidated Damages for Late Completion
(Continued, Page 2 of 2)
o Notwithstanding the foregoing, Contractor shall not be obligated to pay to
Owner, and Owner shall not be entitled to retain or recover from
Contractor, liquidated damages in the event (i) Contractor satisfies all
conditions to achieving Substantial Completion of the Work (as set forth in
Section 9.8.1 of the AIA 201 General Conditions) within the three-day grace
period following the Substantial Completion Date, other than the condition
that the value of all Punchlist items are less than the threshold amount
set forth in Section 9.8.1 of the A201 General Conditions, and (ii) the
Project is open for business to the public and generating revenue for the
Owner and the use and enjoyment of the Project by employees, guests and
patrons is not adversely affected or impeded by any item on the Punchlist.
o Contractor's obligation to pay to Owner, and Owner's right to retain or
recover from Contractor liquidated damages, is subject to the limitations
provided in Section 4.6.2 of the Owner-Contractor Agreement.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "I"
Schedule of Bonus for Early Completion
Bonus for Early Completion
o For each calendar day that Contractor achieves Substantial Completion prior
to the Substantial Completion Date as set forth in the Project Schedule
commencing upon the first (1st) calendar day prior to the Substantial
Completion Date through and including the third (3rd) calendar day prior to
the Substantial Completion Date, the Contractor shall not be entitled to
any bonus for early completion.
o For each calendar day that Contractor achieves Substantial Completion prior
to the Substantial Completion Date as set forth in the Project Schedule on
and/or between the fourth (4th) calendar day prior to the Substantial
Completion Date through and including the eleventh (11th) calendar day
prior to the Substantial Completion Date, Owner agrees to pay to Contractor
Five Thousand Dollars ($5,000) per calendar day as a bonus for early
completion.
o For each calendar day that Contractor achieves Substantial Completion prior
to the Substantial Completion Date set forth in the Project Schedule on
and/or between the twelfth (12th) calendar day prior to the Substantial
Completion Date through and including the nineteenth (19th) calendar day
prior to the Substantial Completion Date, Owner agrees to pay to Contractor
Twelve Thousand Five Hundred Dollars ($12,500) per calendar day as a bonus
for early completion.
o For each calendar day that Contractor achieves Substantial Completion which
is nineteen (19) calendar days or more prior to the Substantial Completion
Date set forth in the Project Schedule, Owner agrees to pay to Contractor
Twenty Five Thousand Dollars ($25,000) per calendar day as a bonus for
early completion.
o Provided, however, that Owner shall not be obligated to pay Contractor, on
account of achieving Substantial Completion prior to the Substantial
Completion Date set forth in the Project Schedule, more than the aggregate
sum of Seven Hundred Fifty Thousand Dollars ($750,000.00), and further
provided that Owner shall not be obligated to pay Contractor any bonus for
achieving Substantial Completion of the Work prior to the Substantial
Completion Date set forth in the Project Schedule unless all of the
conditions and requirements for early completion set forth in the Contact
Documents, including without limitation, all conditions and requirements
set forth in PARAGRAPH 4.7 and PARAGRAPH 4.8 of the Standard Form of
Agreement between Owner and Contractor, are satisfied in all respects.
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "J"
Not Used
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "K"
Rental Rates for Equipment Rented from Contractor
EQUIPMENT DESCRIPTION MONTHLY RENTAL RATE
35 Ton All Terrain Crane $7,520.00 per month
60 Ton All Terrain Crane $ 10,295.00 per month
Cat 416 2WD Backhoe $2,290.00 per month
Cat 416 4WD Bakchoe $2,850.00 per month
Cat D4 Bulldozer $3,645.00 per month
Cat D4 Wide Track Bulldozer $4,250.00 per month
Cat 320 Excavator $7,035.00 per month
8,000# / 42' Reach Forklift $3,795. per month
10,000# / 54' Reach Forklift $4,370.00 per month
Street Sweeper $1,500.00 per month
Compactor $750.00 per month
Pick-up Truck $775.00 per month
Tool Trailer $150.00 per month
Total Station $570.00 per month
Level & Transit $206.00 per month
Computer, Software, Printer Copy Machine, $600.00 per user per month
Fax Machine Phone System (not use charges)
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "L"
Not Used
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "M"
Mississippi Tax Related Procedures
To Be Attached
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "N"
The June 8, 2006 Estimate Survey Sheets for Casino
June 8, 2006 Estimate Survey Sheets for Casino to be attached
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AGREEMENT BETWEEN OWNER AND CONTRACTOR
EXHIBIT "O"
The June 8, 2006 Estimate Survey Sheets
for the Lowrise, Hotel, Parking Deck Repair and Sitework
June 8, 2006 Estimate Survey Sheets
for the Lowrise, Hotel, Parking Deck Repair and Sitework
to be attached
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AGREEMENT BETWEEN OWNER AND CONTRACTOR