EXHIBIT 10.1 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

 

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                                                                    Exhibit 10.1

 

                     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 AGREEMENT

 

made and entered into as of the 24th day of December, 2003,

 

BETWEEN the Owner:                 Premier Entertainment, L.L.C.

                                   11400 Reichold Road

                                   Gulfport, MS  39503

 

                                   (hereinafter referred to as the "OWNER")

 

 

And the Contractor:                Roy Anderson Corp

                                   P.O.  Box 2

                                   Gulfport, MS  39502

 

                                   (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

                                   777 Beach Blvd

                                   Biloxi, MS  39530

 

                                   (hereinafter referred to as the "PROJECt" or

                                   "PROJECT SITE").

 

 

The Architect is:                  Paul Steelman Ltd.

                                   3330 West Desert Inn Road

                                   Las Vegas, NV  89102

 

                                   (hereinafter referred to as the "ARCHITECT").

 

 

Owner and Contractor agree as set forth below:

 

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

                                     Page 1

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                                    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:

 

<Table>

        <S>                 <C>

        EXHIBIT "A"         the General Conditions of the Contract of Construction, AIA

                            Document A201, 1997 edition

        EXHIBIT "B"         Specifications

        EXHIBIT "C"         Drawings

        EXHIBIT "D-1"       Specifications for the Hard Rock Cafe Shell

        EXHIBIT "D-2"       Specifications for the Hard Rock Retail Store Shell

        EXHIBIT "E"         Project Schedule

        EXHIBIT "F"         Schedule of Values

        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"         Form of Payment and Performance Bond

        EXHIBIT "K"         Rental Rates for Equipment Rented from Contractor

        EXHIBIT "L"         Description of Preconstruction Phase Costs

        EXHIBIT "M"         Mississippi Tax-Related Procedures (together with attachments

                            thereto)

        EXHIBIT "N"         Form of Barge Subcontract between Contractor and Corn Island

                            Shipyard, Inc.

</Table>

 

and Addenda issued prior to execution of this Agreement; and Modifications

issued after execution of this Agreement. 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 a three-hundred

six (306) room, eleven (11) story hotel tower, a casino barge, a low-rise

transition building with adjoining resort style pool and beach area, a free

standing Parking Garage with six

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

                                     Page 2

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elevated floors and containing approximately 1,608 parking spaces, surface

parking, and the associated site development, infrastructure and utilities

system.

 

2.1.1   BASE SCOPE OF WORK

 

The Hotel shall have a footprint of approximately 20,000 sf., eleven (11)

stories with a total square footage of 234,500 sf. The first level of the hotel

shall include a Hard Rock Cafe (7,200 sf), hotel lobby (2,474 sf), a promenade

(3,900 sf), retail space (3,120 sf), and a restaurant (5,700 sf). Typical Hotel

Guest Rooms shall start from levels 2 thru 11 totaling two-hundred eighty-two

(282) typical guest rooms (420 sf each) and twenty-four (24) suites. Level two

(2) shall also accommodate a Health Club/spa facility (7,850 sf) and there will

be a separate Club at the top floor of the hotel. The hotel structure shall be

constructed of cast-in-place, post-tensioned, concrete. The Facade shall be a

combination of EIFS assembly and an aluminum frame curtain wall system with

insulated glazing units. The structure shall sit on a pile foundation with grade

beams.

 

The Casino shall be comprised of an 85,000 sf barge that will sit in tidal

waters, tethered to the bottom of the channel to remain at a constant level. The

exterior walls and roof of the barge shall be built independently from the barge

on pilings around the barge. The same superstructure shall also serve as

breakwater containment, as well as the extension boat slip marina. The roof

structure shall clearspan the 213' width of the barge with a barrel truss

design. The Barge shall house 48,400 sf of Gaming Area, a 13,000 sf Buffet and

Bakery with 6,450 sf of Kitchen and Servery space, the main Casino Cashier

(4,030 sf), a Steak House and Bar (5,190 sf), and a Center Bar (2,360 sf). The

Low-rise structure shall be 2 stories with a mezzanine and a total of 163,000 sf

of space, and shall have an adjoining resort style pool and beach area. The

first level of the low rise (52,640 sf) shall contain the Hard Rock Live

Performance Center (12,000 sf), an overhead connecting bridge between the casino

and parking garage structure, with "white box" spaces along the connecting

bridge for future tenants (6,000 sf), public restrooms, and an arcade. The

second level of the low-rise (40,000 sf) shall house administration office space

(6,200 sf), central plant area (5,510 sf) electrical room (4,140 sf), white box

spaces for future development (6,450 sf), security, surveillance, and the

circulation spaces. A Mezzanine level shall contain a balcony for the Hard Rock

Live, a VIP Lounge also for the Hard Rock Live area, toilets, green room, and

dressing rooms front office spaces (6,100 sf), housekeeping (3,030 sf), uniform

storage (504 sf), L&F supplies and sewing area (944 sf), linen storage (1515 sf)

electrical equipment room (2,560 sf), AHU room (5,070 sf.), employee toilets,

employee dining, and employee uniform area. The structure for the low-rise shall

be structural steel frame, with concrete and steel composite decks. The

foundation shall be comprised of piles and concrete grade beams.

 

The Parking Garage provides a total of 1,608 spaces that include 1,238 self-park

spaces for patrons and employees, 320 valet parking spaces, 50 dedicated spaces

for the small craft harbor and 3 bus arrival spaces. The total square footage of

the parking structure is approximately 520,000 sf. In addition to the parking

structure an additional 72 on-grade parking spaces are provide under the low

rise as VIP/Valet parking.

 

The Contractor also shall have the responsibility for causing the Barge

Contractor (as hereinafter defined) to construct the barges vessels upon which

the casino will be constructed

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

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Contractor shall construct the Hard Rock cafe shell and the Hard Rock retail

store shell in accordance with the requirements set forth in Exhibit C of the

Hard Rock Cafe lease and the Hard Rock retail store lease, respectively, copies

of which are attached hereto as EXHIBIT "D -1" and EXHIBIT "D-2", respectively.

Contractor acknowledges having received a copy of the construction exhibit to

each of the Hard Rock Cafe lease and the Hard Rock retail store lease, and

agrees that the Base Scope of Work will include the construction requirements of

each of the Hard Rock Cafe lease and the Hard Rock retail store lease, as set

forth on such exhibits.

 

2.1.2   DESIGN/BUILD SCOPE OF WORK

 

The Contractor will have Design/Build responsibilities for the Parking Garage.

The design documents prepared by the Contractor for the Parking Garage are

herein referred to as the "Contractor Prepared Documents". The design build

professional selected by Contractor for the Parking Garage shall be subject to

approval by Owner and Architect, which approval shall not be unreasonably

withheld.

 

2.1.3   For all professional design services or certifications by a design

professional related to systems, materials or equipment comprising the Parking

Garage, the Architect shall review the performance and design criteria prepared

by the Contractor to assure that the performance and design criteria specified

are consistent with the overall intent and design of the Project, and such

performance and design criteria shall be incorporated into the Specifications.

The Contractor shall cause such design services or certifications to be provided

by a properly licensed design professional, licensed in the State of

Mississippi, whose signature and seal shall appear on all drawings,

calculations, specifications, certifications, Shop Drawings and other submittals

prepared by such design professional. All design professionals furnishing the

delegated design shall obtain and maintain professional liability insurance as

required under Section 11.1.8 and all pertinent articles of A201 General

Conditions attached as EXHIBIT "A" to this Agreement. The Contractor shall

obtain from all such design professionals and provide to Owner, prior to their

work being performed, valid certificates of insurance providing evidence of such

insurance. The Contractor acknowledges that it is legally liable to the Owner

for professional liability relating to and arising from the design and

engineering performed by the design-build professional for the Parking Garage,

subject to the provisions of PARAGRAPH 17.4 below. Shop Drawings and other

submittals related to the Work designed or certified by such design-build

professional, if prepared by others, shall bear such professional's written

approval when submitted to the Architect. The Owner and the Architect shall be

entitled to rely upon the adequacy, accuracy and completeness of the services,

certifications or approvals performed by such design-build professionals.

 

The Architect and/or its subcontractors shall review the Contractor Prepared

Documents prepared by or on behalf of the Contractor for conformance to all

design and performance criteria set forth in the Specifications, provided,

however, that such review by Architect and/or its subcontractors shall not

relieve the Contractor or its design-build professional from responsibility and

liability for compliance with the design and performance criteria of the Parking

Garage. The Owner shall be entitled to rely upon (i) the adequacy, accuracy, and

completeness of the design and performance criteria reviewed by the Architect

describing the delegated services, and (ii) the Architect's review of the

Contractor Prepared Documents. The Architect will review, approve or take other

appropriate action or submittals (1) for the purpose

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

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of checking for conformance with information given and the design concept

expressed in the Contract Documents, and (2) to assure that the design conforms

with all design and performance criteria set forth in the Specifications.

 

2.2     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 Windjammer Condominiums and

bounded on the south by the Biloxi Small Craft Harbor.

 

2.3     Contractor understands that Owner intends to obtain construction

financing for the Project ("PROJECT FINANCING"), and in connection therewith,

Owner will enter into a Cash Collateral and Disbursement Agreement (the

"DISBURSEMENT AGREEMENT"), dated subsequent to the date of this Agreement, by

and among Standard Federal--Corporate and Institutional Trust, a division of

LaSalle Bank National Association, as disbursement agent, securities

intermediary and depositary bank (together with any successor disbursement agent

permitted thereunder, the "DISBURSEMENT AGENT"), Standard Federal--Corporate and

Institutional Trust, a division of LaSalle 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 (as successor in interest by merger with

Premier Entertainment, LLC, a Mississippi limited liability company), and

Premier Finance Biloxi Corp., a Delaware corporation ("PREMIER FINANCE CORP.").

Contractor has reviewed drafts of the Disbursement Agreement through and

including the Latham &Watkins draft dated ______, 200_. 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 and confirmation that the terms,

conditions and provisions set forth in the final version of the Disbursement

Agreement are not materially different than the terms, conditions and provisions

set forth in the drafts of the proposed Disbursement Agreement reviewed by

Contractor, 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.

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

                                     Page 5

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                                    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

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     With the exception of the Design/Build services to be provided by

Contractor, referenced in ARTICLE 2, SECTIONS 2.1.2 and 2.1.3, 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 Joseph

Billhimer, 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

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

                                     Page 6

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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 Meng Chai and the Contractor's Superintendent is hereby designated to be

Thomas Gonzalez. The Contractor shall not replace its Project Representative 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 close on the

Project Financing 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 (3) provide the Owner with a Payment Bond and a Performance Bond

(referred to herein collectively as the "BOND") in the form attached hereto as

EXHIBIT "J", which Bond shall name as co-obligees the Owner and the Trustee (as

defined in PARAGRAPH 2.3 above). The Contractor agrees to use its best efforts

to accomplish the items described in clauses (1), (2) and (3) above so that the

Project Financing can occur on or before January 21, 2004. The Project Schedule

has a commencement date of February 2, 2004. 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 Project Financing will be closed and Owner will issue the notice to

proceed to Contractor on or before February 2, 2004.

 

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

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

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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.

 

4.1.3   Neither the Contractor nor any of its Subcontractors or suppliers shall

supply any labor or materials for the Work until the Project Financing has

closed. The Contractor intends to commence the Work on or before February 2,

2004.

 

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 the closing of the

Project Financing. The Contractor shall be prepared to commence the Work

immediately upon the closing of the Project Financing, 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 23, 2005 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 "A" and EXHIBIT "B",

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

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

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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 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

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

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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 One Million Five Hundred Thousand Dollars ($1,500,000.00) 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 damages are intended to compensate Owner for actual damages

the Owner will suffer and incur as result of delayed Substantial Completion of

the Work (including, without limitation, construction interest related to the

Project Financing) 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%).

 

4.6.2   Notwithstanding anything to the contrary set forth in PARAGRAPH 4.6

hereof, if the failure of Contractor to achieve Substantial Completion of the

Work within three (3) days of the Contract Time and as otherwise required by the

Contract Documents is attributable solely to the failure of the Barge Contractor

(as hereinafter defined) to complete and launch the barge vessels in accordance

with the terms of the Barge Construction Contract (as hereinafter defined), and

such failure is not attributable to any act or omission of Contractor or its

employees, agents or representatives, Contractor's obligation to pay liquidated

damages to Owner on account of late delivery of the barge vessels shall be

limited to the amount of liquidated damages provided for in the Barge

Construction Contract. Contractor shall bear the risk of any delays occasioned

by failure of the barge vessels to be constructed in accordance with Plans and

Specifications, or for any defects in construction or workmanship of the barge

vessels.

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

                                     Page 10

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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 Eight Hundred

Thousand Dollars ($800,000.00) 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

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 any other thresholds, tests and restrictions provided for in the Project

Financing documentation, 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

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

                                     Page 11

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Date, Owner has available to it the Project Financing 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. Contractor acknowledges and agrees that

Owner's closing on the Project Financing shall be deemed to constitute such

evidence reasonably satisfactory to Contractor. The issuance by Owner of a

Notice to Proceed to Contractor shall be deemed a representation and warranty by

Owner that the closing on the Project Financing has occurred.

 

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 after closing of the Project Financing, 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.

 

                                    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").

 

5.2     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 Schedule of Values attached hereto and

made a part hereof as EXHIBIT "F", which includes the cost of Direct Purchase

Items (as defined in EXHIBIT "M" attached hereto) to be purchased by Owner), and

(ii) the Contractor's Fee for completion of all such Work, shall not exceed the

aggregate sum of Eighty-One Million Nine Hundred Fifty-Seven Thousand One

Hundred Eighty-Three Dollars ($81,957,183) (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. The Schedule of Values and the GMP shall be decreased by

the amount of any sales tax or contractors' tax reflected in the Schedule of

Values 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.

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

                                     Page 12

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Owner has established a Project contingency fund within the Project Financing in

the amount of $________ (the "PROJECT CONTINGENCY FUND"). The Project

Contingency Fund shall be controlled by Owner and shall not 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. 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, within the Project

Financing, an amount equal to Five Million Dollars ($5,000,000) 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.

Forty-five (45) days after the Architect issues final Drawings stamped for

construction, 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.

 

5.3     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 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

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

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

                                     Page 13

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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 the Schedule of Values attached hereto and

made a part hereof as EXHIBIT "F", Owner agrees to pay Contractor in current

funds as compensation for its services a Contractor's Fee as follows:

 

6.1.1   A lump sum amount of Three Million Two Hundred Seventy-Eight Thousand

Two Hundred Eighty-Seven Dollars ($3,278,287) (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 six percent

(6%) of such actual cost of Field General Conditions and four percent (4%) 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 4%.

 

6.2.2   For Changes in the Work which result in a decrease in the Cost of Work

(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.

 

                                    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 mark-up for Field General Conditions and the

Contractor's fee, as provided for in PARAGRAPH 6.2.1 above.

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

                                     Page 14

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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.

 

For all Change Orders, the Contractor shall obtain all necessary amendments in

the Bond, so as to extend the coverage of the Bonds to the Change Order Work,

unless the terms of the Bond provide that such Change Orders are automatically

covered by the Bond (up to the penal sum of the Bond), without further action of

the parties.

 

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.

 

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

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

                                     Page 15

<Page>

 

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 rate of 49.5% of said wages for work performed

over land and the 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 $60,000.00 in

the aggregate, except with the written consent of the Owner, which consent shall

not be unreasonably withheld.

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

                                     Page 16

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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; a fixed rate of 0.75%

of the final Contract amount for the Contractor's Bond; and a fixed rate of

1.25% of the total subcontract and purchase order amounts for payment and

performance bonds on all subcontractors and suppliers, which Contractor is

required by the Contract Documents to purchase and maintain and/or Contractor

requires, including cost of Performance & Payment Bonds for subcontractors

and/or suppliers. 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 the Schedule of

Values attached hereto and made a part hereof as EXHIBIT "F"), (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.

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

                                     Page 17

<Page>

 

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 whom 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 0.17% 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,

provided, however that the cost to administer such procedures on behalf of Owner

for the Project will not exceed the aggregate cost of $80,000.

 

                     AGREEMENT BETWEEN OWNER AND CONTRACTOR

                                     Page 18

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8.1.23  Cost associated with the Preconstruction Phase plus four percent (4%)

fee shall be paid to Contractor if the Project is abandoned by Owner prior to

commencement of the Work. After commencement of the Work, the cost as