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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
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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
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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
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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
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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 associated
with the Preconstruction Phase, including
but not limited to estimating
services, design assist services, contract
preparation, shall be included within
the Schedule of Values subject to the GMP.
An description of the types of costs
associated with the Preconstruction Phase
are set forth in EXHIBIT "L" attached
hereto.
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;
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;
AGREEMENT BETWEEN OWNER AND CONTRACTOR
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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 Cost of data processing services,
Information Technology support and
contract administration.
9.1.11 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.
9.1.12 Costs of arbitration, mediation
and/or attorneys' fees incurred in
connection with the administration of the
Contract Documents.
9.1.13 Costs of repairing, maintaining,
replacing or correcting damaged or
non-conforming Work.
9.1.14 Costs associated with archiving of
records.
9.1.15 Costs of all Direct Purchase Items
purchased by Owner.
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.
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 fourteen
(14) calendar days of submittal by
Contractor shall constitute "notice of no
reasonable objection."
AGREEMENT BETWEEN OWNER AND CONTRACTOR
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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 Except for the Barge
Construction Contract (as hereinafter defined),
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 Except for the Barge
Construction Contract, 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
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.
AGREEMENT BETWEEN OWNER AND CONTRACTOR
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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
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
AGREEMENT BETWEEN OWNER AND CONTRACTOR
Page
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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.
11.11 Owner approves of the form
of Subcontract attached hereto as EXHIBIT "N"
(the "BARGE CONSTRUCTION CONTRACT") to be
entered into between Contractor and
Corn Island Shipyard, Inc. (the "BARGE
CONTRACTOR") to fabricate the vessels
upon which the casino will be built.
Provided that the Barge Construction
Contract entered into between Contractor
and Barge Contractor is substantially
the same as the form of Barge Construction
Contract attached hereto as EXHIBIT
"N", Owner agrees (i) that the terms and
conditions set forth in the Barge
Construction Contract satisfy all
requirements of this Contract; (ii) that
payments for the work to be performed under
the terms of the Barge Construction
Contract shall be made in accordance with
the terms and subject to the
conditions set forth in the Barge
Construction Contract, notwithstanding
anything to the contrary contained in this
Contract; (iii) that the Barge
Contractor shall not be required to provide
a consent to assignment in favor of
the Trustee; and (iv) to waive any
requirements set
