Exhibit 10.1

 

LUMP SUM AGREEMENT

 

By and Between

 

WYNN LAS VEGAS, LLC,

a Nevada limited liability company

(“Owner”)

 

and

 

WADSWORTH GOLF CONSTRUCTION COMPANY

a Delaware corporation

 

(“Contractor”)

 

for

 

a Golf Course to be located at

3131 Las Vegas Boulevard South,

Las Vegas, Nevada

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1.

  

CONTRACT DOCUMENTS AND GOVERNMENTAL REQUIREMENTS

  

1

    

1.1

  

Agreement Governs

  

1

    

1.2

  

Contract Documents

  

2

    

1.3

  

Compliance with Contract Documents and Governmental Requirements

  

3

2.

  

CONTRACT SUM; METHOD OF PAYMENT

  

3

    

2.1

  

Contract Sum

  

3

    

2.2

  

Contractor Responsible for Expenditures in Excess of Contract Sum

  

4

    

2.3

  

Payment Application.

  

4

    

2.4

  

Progress Payments

  

6

    

2.5

  

Payments by Contractor

  

9

    

2.6

  

Materials Off-Site

  

9

    

2.7

  

Final Payment.

  

10

    

2.8

  

Withholding

  

12

    

2.9

  

Joint Checks

  

12

    

2.10

  

Waiver

  

13

    

2.11

  

Deposits and Payments

  

13

    

2.12

  

Title to Materials

  

13

    

2.13

  

Maintenance of Books and Records

  

14

3.

  

CHANGES IN THE WORK

  

14

    

3.1

  

Change Orders

  

14

    

3.2

  

Construction Change Directive

  

15

    

3.3

  

Surety Waiver

  

16

4.

  

STARTING AND COMPLETION DATE; DELAYS IN THE WORK

  

16

    

4.1

  

Commencement of Work

  

16

    

4.2

  

Completion of the Work

  

17

5.

  

OBLIGATIONS OF CONTRACTOR

  

19

    

5.1

  

Project Staffing

  

19

    

5.2

  

General Supervision of Construction

  

19

    

5.3

  

Site Meetings and Visits by Owner

  

21

    

5.4

  

Independence of Contractor; Taxes

  

22

    

5.5

  

Clean-up and Other Duties

  

22

    

5.6

  

Secure Project/Security/Safety of Personnel

  

23

    

5.7

  

Statement of Claims

  

23

    

5.8

  

Mechanic’s Liens; Stop Notices

  

23

    

5.9

  

Contractor’s Familiarity

  

24

    

5.10

  

Record Drawings

  

25

    

5.11

  

Shop Drawings

  

26

    

5.12

  

Subcontractors

  

26

    

5.13

  

Cooperation

  

27

6.

  

RIGHTS OF CONTRACTOR

  

28

    

6.1

  

General Authority and Powers

  

28

    

6.2

  

Selection of Materials; Variation from Plans

  

29

7.

  

RIGHTS OF OWNER

  

29

    

7.1

  

Generally

  

29

    

7.2

  

Partial Occupancy Or Use

  

29

    

7.3

  

Owner’s Right to Award Separate Contracts

  

30

8.

  

CONTRACTOR’S DEFAULTS AND OWNER’S REMEDIES

  

30

    

8.1

  

Contractor’s Defaults

  

30

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8.2

  

Owner’s Remedies

  

31

    

8.3

  

Termination for Convenience

  

33

    

8.4

  

Contractor’s Cooperation Following Termination

  

33

    

8.5

  

Suspensions By Owner

  

33

    

8.6

  

Payment to Contractor Upon Termination for Cause

  

34

    

8.7

  

Cumulative Remedies

  

35

9.

  

CONTRACTOR’S REMEDIES

  

35

    

9.1

  

Contractor’s Remedies

  

35

10.

  

INSURANCE

  

36

    

10.1

  

Owner Controlled Insurance Program

  

36

    

10.2

  

Evidence of Coverage

  

37

    

10.3

  

Deductibles

  

37

    

10.4

  

Cooperation by the Parties

  

37

    

10.5

  

Duration

  

37

11.

  

INDEMNIFICATION

  

38

    

11.1

  

Indemnity

  

38

    

11.2

  

Survival of Indemnification Provisions

  

39

12.

  

WARRANTY OBLIGATIONS

  

39

    

12.1

  

Contractor’s Warranty

  

39

    

12.2

  

Contractor’s Warranty Period

  

40

    

12.3

  

Compliance With Contract Documents

  

40

    

12.4

  

Warranty Costs

  

40

    

12.5

  

Timeliness of Corrective Services

  

41

    

12.6

  

Warranty Survival

  

41

    

12.7

  

Owner’s Right To Correct

  

41

    

12.8

  

Owner’s Right to Supplement Work of Contractor

  

41

    

12.9

  

Acceptance of Non-Conforming Work

  

42

    

12.10

  

Warranty Exclusions

  

42

    

12.11

  

Written Guaranty

  

42

13.

  

DEFINITIONS

  

42

    

13.1

  

“Change in the Work”

  

42

    

13.2

  

“Material Change in the Work”

  

42

    

13.3

  

“Change Order”

  

43

    

13.4

  

“Change Proposal”

  

43

    

13.5

  

“Construction Change Directive”

  

43

    

13.6

  

“Cost of the Work”

  

43

    

13.7

  

“Delays in the Work”

  

47

    

13.8

  

“Excusable Delays”

  

47

    

13.9

  

“Governmental Requirements”

  

47

    

13.10

  

“Substantial Completion of the Work”

  

47

    

13.11

  

“Subcontractor”

  

48

    

13.12

  

“Vendor”

  

48

    

13.13

  

“Work”

  

48

14.

  

OWNER’S LENDERS

  

48

    

14.1

  

Owner’s Lenders

  

48

    

14.2

  

Payments

  

48

    

14.3

  

Audit Rights

  

49

    

14.4

  

Access

  

49

    

14.5

  

Material Changes

  

49

    

14.6

  

General Cooperation

  

49

 

2

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15.

 

MISCELLANEOUS PROVISIONS

  

49

   

15.1

  

Subordination

  

49

   

15.2

  

Time is of the Essence

  

50

   

15.3

  

Entire Agreement; Modification; Waiver

  

50

   

15.4

  

Headings

  

50

   

15.5

  

Assignment; Successors to be Bound

  

50

   

15.6

  

Intent of Parties

  

51

   

15.7

  

Governing Law

  

51

   

15.8

  

Survival

  

51

   

15.9

  

Counterparts

  

51

   

15.10

  

Unenforceability of this Agreement

  

51

   

15.11

  

Dispute Resolution

  

52

   

15.12

  

Notices

  

52

   

15.13

  

Confidentiality

  

53

   

15.14

  

Legal Fees

  

54

   

15.15

  

Third-Party Beneficiaries

  

54

   

15.16

  

Statute Of Limitations

  

54

 

 

 

3

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LUMP SUM AGREEMENT

 

THIS LUMP SUM AGREEMENT (the “Agreement”) is made effective as of February 18,
2003 (the “Effective Date”), by and between WYNN LAS VEGAS, LLC, a Nevada
limited liability company (“Owner”), and WADSWORTH GOLF CONSTRUCTION COMPANY, a
Delaware corporation, holding Nevada State Contractor’s License No. 0021977
(“Contractor”), with respect to the following facts:

 

RECITALS

 

A. Owner owns the real property commonly known as 3131 Las Vegas Boulevard
South, Las Vegas, Nevada, as more particularly described on Exhibit A attached
hereto (the “Property”).

 

B. Owner plans to construct on the Property a first class luxury resort and
casino, including high-rise hotel space and low-rise space comprised of casino
and gaming areas, restaurants, retail, convention and meeting areas, a showroom,
parking structure, clubhouse and exterior features (the “Casino Improvements”).
Owner will be retaining separate architects, contractors and consultants (“Other
Builders”) to design and construct the Casino Improvements on the Property.

 

C. In addition to the Casino Improvements, Owner desires to have constructed on
a portion of the Property a championship golf course, consisting of 18 golf
holes, a driving range, practice putting green, lake and stream features
including a signature waterfall, turf grass conforming to USGA standards,
landscaping and irrigation (collectively, the “Project”), and desires to engage
Contractor to construct, and supervise the construction of, the Project, in full
accordance with the Contract Documents (as defined in Section 1.2 of this
Agreement), including the Plans and Specifications (as defined in Section 1.2.2
of this Agreement), and Contractor desires to accept such engagement, upon the
terms and conditions contained in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Owner and Contractor hereby adopt and incorporate the foregoing
Recitals and agree as follows:

 

  1.   CONTRACT DOCUMENTS AND GOVERNMENTAL

REQUIREMENTS.

 

1.1 Agreement Governs. The intent of the Contract Documents is to include all
items appropriate or necessary for the proper execution and Completion of the
Work (as defined in Section 2.7.2 of this Agreement) by Contractor to Owner’s
satisfaction. The Contract Documents are complementary, and what is required by
one shall be as binding as if required by all. Nothing contained in this Section
1.1 shall relieve Contractor of its obligations under this Agreement, including,
without limitation, under Section 5.9 of this Agreement, or shall create a
contractual or professional relationship between Owner and

 

1

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any person or entity other than Contractor. If any provision of the Contract
Documents conflicts with any other provision of the Contract Documents, the
provision requiring the highest degree of care or performance or the highest
quality of materials, as the case may be, shall prevail, unless Contractor is
otherwise instructed in writing by Owner. When only one product and manufacturer
is specified, this is the basis of the Contract (as defined in Section 1.2.9 of
this Agreement), unless substitution or exception is approved in writing by
Owner.

 

1.2 Contract Documents. The “Contract Documents” consist of the following
documents:

 

1.2.1 This Agreement, including any exhibits and appendices thereto.

 

1.2.2 The “Plans and Specifications” as approved by Owner and Owner’s Lenders
(as defined in Section 14.1 of this Agreement), including, without limitation,
all architectural, structural, civil, mechanical, plumbing, electrical, grading
utility security and low voltage drawings and specifications, and all
supplements, amendments and modifications thereto as approved by Owner and
Owner’s Lenders.

 

1.2.3 The Project Drawings and References as defined by Exhibit B attached
hereto.

 

1.2.4 The Project Construction Schedule (as defined in Section 4.2.1 of this
Agreement), and attached hereto as Exhibit C.

 

1.2.5 Any Submittals as defined in Section 5.11 of this Agreement.

 

1.2.6 The Schedule of Values (as defined in Section 2.3.3 of this Agreement).

 

1.2.7 The Technical Studies and Reports (as defined in Section 1.3.1 of this
Agreement).

 

1.2.8 The Permits and Entitlements as set forth on Exhibit D attached hereto.

 

1.2.9 All supplements, addenda, modifications and amendments to any of the
foregoing in this Section 1.2, from time to time approved by Owner in writing,
including, without limitation, any executed Change Orders (as defined in Section
13.3 of this Agreement) and Construction Change Directives (as defined in
Section 13.5 of this Agreement), and such other documents expressly referred to
in the foregoing documents as being a part of the Contract Documents. These
Contract Documents form the “Contract,” and are as fully a part of the Contract
as if attached to this Agreement or repeated in this Agreement.

 

2

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1.3 Compliance with Contract Documents and Governmental Requirements.

 

1.3.1 Contractor shall, and shall cause all Subcontractors (as defined in
Section 13.11 of this Agreement) to, construct and perform the Work in a good
and workmanlike manner in strict compliance with (a) the Contract Documents,
including, without limitation, the Plans and Specifications, and all things
indicated thereon or which should be inferred therefrom given Contractor’s
status as a Contractor experienced with construction projects similar in size
and complexity to the Work, and the Project Construction Schedule, (b) all
Governmental Requirements (as defined in Section 13.9 of this Agreement), and
(c) the “Technical Studies and Reports” set forth on Exhibit E attached to this
Agreement.

 

1.3.2 Contractor represents to Owner that Contractor is thoroughly familiar with
all Governmental Requirements. Governmental Requirements shall supersede the
Contract Documents if there is any conflict; provided, however, that if any
Governmental Requirement shall necessitate a change to or deviation from the
Contract Documents, Contractor shall obtain Owner’s written consent in the form
of a Change Order prior to implementing such change. Contractor shall be
responsible for failing to report to Owner any discrepancy between the Contract
Documents and Governmental Requirements. If Contractor performs any part of the
Work in violation of any such Governmental Requirements, Contractor shall bear
all costs of correction and adverse scheduling impacts; provided, however, that
should any governmental authority having jurisdiction over the Work mandate
compliance with any changes to applicable Governmental Requirements that have
been enacted or have become effective after the Effective Date, Contractor
shall, subject to consultation with and written approval by Owner, construct the
Work in accordance with such Governmental Requirements, the increased actual
cost of which (if any) will be added to the Contract Sum pursuant to a Change
Order under Article 3 of this Agreement, unless Contractor should have
reasonably anticipated or planned for such change.

 

1.3.3 Contractor shall furnish, perform and complete all Work required to
complete the Project in accordance with the Contract Documents. Contractor shall
be responsible for assembling all documentation necessary to obtain, and shall
itself obtain or through Project Architect obtain, all permits and other
approvals required to be obtained for the timely Completion of the Work from the
appropriate governmental authorities or other parties having approval rights
relating to the Project.

 

  2.   CONTRACT SUM; METHOD OF PAYMENT.

 

2.1 Contract Sum. Subject to the terms and conditions of this Agreement, Owner
shall pay to Contractor for Contractor’s complete performance under the
Contract, including, without limitation, the construction and completion of all
Work for the Project, a lump sum total amount of Sixteen Million Five Hundred
Eighty-Five Thousand Nine Hundred Thirteen Dollars and No Cents ($16,585,913)
(the “Contract Sum”). Contractor is not and shall not be entitled to any fee,
payment, compensation or reimbursement or other sum under this Agreement or the
other Contract Documents or arising out of or relating to the Work or the
Project, other than the Contract Sum. The

 

3

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Contract Sum may be adjusted only pursuant to Change Orders as provided for in
Article 3 of this Agreement. As stipulated in the OCIP Manual (as defined in
Section 10.1.2 of this Agreement), the Contract Sum shall be adjusted downward
to remove the cost of certain insurance, as determined pursuant to the OCIP
Audit (as defined in Section 10.1.3 of this Agreement).

 

2.2 Contractor Responsible for Expenditures in Excess of Contract Sum.

 

2.2.1 The Contract Sum is the maximum cost to Owner for the completion of the
Project, including, without limitation, the full performance of all Work and all
services by Contractor and its Subcontractors and Vendors (as defined in 13.12
of this Agreement). Contractor shall have sole responsibility to pay for any
expenditures, costs and/or expenses in excess of the Contract Sum. If, at any
point, Owner reasonably believes that, based on the progress of the Work, the
Work cannot be completed for the Contract Sum, Owner shall have the right to
require Contractor to provide Owner with satisfactory evidence of funds
available to Contractor to pay any anticipated overage, and cause Contractor to
provide Owner a perfected first priority lien on or security interest in such
funds and execute such security agreements as may be required. Contractor’s
failure to timely provide such evidence of available funds and/or a perfected
first lien, shall constitute a default pursuant to Section 8.1 of this
Agreement.

 

2.2.2 The Contractor acknowledges that the Golf Course Designer, as a part of
the normal Golf Course design process will make final adjustments in the field
to various aspects of the Golf Course which may affect actual quantities of the
Work relative to the estimated quantities. This being a normal process in the
design and construction of any Golf Course is anticipated and included as a part
of the Work to the extent that the “field adjustments” net out without any
material increase or decrease to the original aggregate value of the Work. The
unit cost established in Exhibit L shall be used for the purpose of calculating
the net value of these adjustments. It is incumbent upon the Contractor to
manage this process allowing maximum flexibility to the Designer without
affecting the value of the Work. The Contractor shall notify the Owner
immediately and prior to commencing upon said adjustments. Any adjustments which
increase or decrease the value of the Work shall be considered a change as
defined in Article 3 of this Agreement.

 

2.3 Payment Application.

 

2.3.1 Except for the retention or withholding specified below, or as otherwise
expressly provided in this Agreement, the Contract Sum shall be paid over the
course of the Project and in proportion to the Work completed during the
applicable pay period, based on the percentage that such completed Work bears to
the total Work provided for in the Schedule of Values (as defined in Section
2.3.3 of this Agreement) as reasonably determined by Owner. On or before the
last day of each month for which payment is being requested during the term of
this Agreement, Contractor shall deliver a statement to Owner and Owner’s
Lenders on AIA G701 and G702 forms or such other forms as are specified by and
acceptable to Owner and Owner’s Lenders (“Payment Application”), certified by
Contractor as correct, and representative of the Work completed during that
calendar month.

 

4

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Contractor shall not submit more than one Payment Application per month unless
otherwise requested by Owner. Each Payment Application shall specify:

 

2.3.1.1 the Work performed during such preceeding calendar month;

 

2.3.1.2 the portion of the Contract Sum to be paid by Owner pursuant to the
terms of this Agreement and the Schedule of Values;

 

2.3.1.3 for each category and portion of the Work: (1) the amount requested on
all previous Payment Applications, (2) the amount requested on the current
Payment Application, and (3) the amount allocated in the Schedule of Values to
the Work yet to be completed;

 

2.3.1.4 Retainage (as defined in Section 2.3.7 of this Agreement) in the amount
provided for pursuant to Section 2.3.7 of this Agreement;

 

2.3.1.5 the percentage completed of each portion of the Work as of the end of
the period covered by the Payment Application, shown as both (1) the percentage
obtained by dividing the completed portions of the Work by the total Work
referenced in the Schedule of Values, and (2) the percentage obtained by
dividing (a) the sum of the payments made to Contractor pursuant to prior
Payment Applications and the payment requested in the current Payment
Application by (b) the Contract Sum; and

 

2.3.1.6 such additional information and documentation regarding the progress of
the Work and the requested payment under the Payment Application as Owner and/or
Owner’s Lenders may reasonably require.

 

2.3.2 All blanks and columns in each Payment Application must be completed.

 

2.3.3 “Schedule of Values” means the budget (as prepared by Contractor and
submitted to and approved in writing by Owner) outlining the Work and allocating
values among all portions or categories of the Work. The initial Schedule of
Values shall be submitted by Contractor to Owner and Owner’s Lenders for their
prior written approval as a condition precedent to Contractor being paid under
Contractor’s first Payment Application. The Schedule of Values may be modified
only with the prior written approval of Owner. Following any Change Order or
Construction Change Directive, the Schedule of Values shall be adjusted by
Contractor as necessary, in each case subject to Owner’s prior written approval,
to reflect accurately the values of the various portions and categories of the
Work. The Schedule of Values as approved by Owner shall be used as the basis for
all Payment Applications.

 

2.3.4 Except with Owner’s prior written consent, Contractor shall not make
advance payments to Subcontractors or Vendors and, except as provided in Section
2.5 of this Agreement, shall not be entitled to payment for the cost of any
equipment or materials which have not been delivered and incorporated into the
Project or stored at the Property in a manner reasonably satisfactory to Owner
and/or Owner’s Lenders. Except as expressly provided in the Contractor’s
Certificate (defined in Section 2.3.6 of this

 

5

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Agreement), no Payment Application shall include requests for payment of amounts
Contractor does not intend to pay promptly to a Subcontractor or Vendor because
of a dispute or other reason.

 

2.3.5 Each Payment Application shall include signed and acknowledged (by a
notary) Conditional Waivers and Releases of Liens Upon Progress Payment in the
form attached hereto as Exhibit F from Contractor and each Subcontractor and
Vendor for all Work performed to date that is covered by such Payment
Application, and signed and acknowledged Unconditional Waivers and Releases of
Liens Upon Progress Payment in the form attached hereto as Exhibit G from
Contractor and each Subcontractor and Vendor for all Work that was covered by
the immediately preceding Payment Application. Execution and delivery of such
waivers shall be an absolute condition precedent to Owner’s duty to pay
Contractor pursuant to any Payment Application. Notwithstanding the foregoing,
and subject to all other terms of this Agreement, to the extent Contractor fails
to provide any of the foregoing waivers and releases of lien when required
(“Outstanding Releases”), Contractor shall provide to Owner’s and Owner’s
Lenders’ title insurers, from time to time upon Owner’s request and as a
condition to any progress or other payment to Contractor, such affidavits,
indemnities, certificates and other instruments as such title insurers require
to issue to Owner and Owner’s Lenders, as a condition to any progress or other
payment to Contractor, one or more endorsements to their respective title
insurance policies insuring the lien free status of the Work and Property
(Contractor’s failure to cause the title insurer to provide the required
endorsement(s) shall be a breach of this Agreement); provided, however, that at
no time shall the aggregate of all Outstanding Releases represent Work with an
aggregate value in excess of $200,000. In addition, Owner may at any time direct
Contractor to submit an affidavit that all payrolls, invoices for material and
equipment, and other indebtedness connected with the Work and associated with a
Payment Application have been paid.

 

2.3.6 Each Payment Application also shall include a “Contractor’s Certificate,”
in form and substance identical to Exhibit H attached to this Agreement, signed
by Contractor.

 

2.3.7 In addition to amounts, if any, withheld pursuant to Sections 2.7.6 and
2.8 of this Agreement, Owner hereby gives written notice to Contractor that
Owner shall withhold from each payment to Contractor an amount (the “Retainage”)
equal to ten percent (10%) of that payment. All such retainage shall be released
as part of final payment to Contractor. After fifty percent (50%) of the Scope
of Work has been satisfactorily completed in the Owner’s judgment, Owner may
elect to reduce the level of retainage withholding to be equal to 5% of the
adjusted contract value in the event that the Owner, in its sole discretion,
determines that Contractor, its Subcontractors and/or vendors are satisfactorily
performing the work in accordance with the contract documents.

 

2.4 Progress Payments.

 

2.4.1 Contingent upon the Owner and Owner’s lenders receipt of a complete
Payment Application and all required submittals under 2.3 of the Agreement,
Owner shall make payment of any properly due amounts to Contractor on or about
the 25th day of the month following the month for which payment was requested,
subject to the

 

6

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approvals required under this Section 2.4, and less any amount which may be
retained or withheld pursuant to this Agreement, including, without limitation,
Sections 2.3.7, 2.7.6 and/or 2.8 of this Agreement. This Section 2.4.1 shall
constitute a “schedule for payment” as described in Section 624.609(1)(a) of the
Nevada Revised Statutes.

 

2.4.2 Owner may approve or disapprove and/or withhold payment on, in whole or in
part, a Payment Application based on any reasonable grounds, including, but not
limited to:

 

2.4.2.1 a failure of Contractor to furnish any required lien releases, insurance
certificates, or bonds in a timely manner;

 

2.4.2.2 a failure of Contractor to make payments promptly to Subcontractors
and/or Vendors;

 

2.4.2.3 Owner’s good faith belief that the Work cannot be completed for the
unpaid balance of the Contract Sum;

 

2.4.2.4 regarding any particular portion of the Work as shown on the Schedule of
Values, a determination by Owner that an amount requested attributable to a
portion of the Work was not actually completed or the amount requested
represents a greater percentage of the Work than actually completed;

 

2.4.2.5 Owner’s good faith belief that the Work will not be completed by the
Scheduled Completion Date as defined in Section 4.2.1;

 

2.4.2.6 damage to property or Work or injury to persons attributable to the acts
or omissions of Contractor, Project Architect, or any Subcontractor or Vendor;

 

2.4.2.7 unsatisfactory prosecution of the Work;

 

2.4.2.8 lack of required documentation;

 

2.4.2.9 deviations from the Contract Documents without an applicable Change
Order or Construction Change Directive;

 

2.4.2.10 the filing or existence of liens or claims against Owner, the Property,
the Project or the Work arising out of or relating to Contractor’s performance
of the Work or other acts or omissions of Contractor, any Subcontractor or
Vendor;

 

2.4.2.11 a determination by Owner to nullify in whole or in part a prior
approval of a Payment Application and/or prior payment made, because of
subsequently discovered evidence or subsequent observations which otherwise
would allow Owner to withhold payment pursuant to this Section 2.4 or elsewhere
in the Contract Documents;

 

7

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2.4.2.12 Owner’s Lenders’ inability (if not the fault of Owner) to obtain (1)
one or more title insurance endorsements to Owner’s Lenders’ title policy,
showing no intervening or other liens, lien rights or encumbrances upon the
Property or any improvements relating to the whole or any portion of the Work
prior to any Lender Liens (as defined in Section 15.1 of this Agreement), other
than those approved in writing by Owner’s Lenders, and insuring the full amount
of the disbursement and its priority satisfactory to Owner and Owner’s Lenders,
and showing no encroachments by any portion of the Work and proper location of
foundations, or (2) a satisfactory report under the Nevada Uniform Commercial
Code showing no liens or interests (other than those of Owner’s Lenders)
relating to the whole or any portion of the Work, including, without limitation,
any improvements; or any failure of Contractor or any Subcontractor to comply
with Section 15.1 of this Agreement;

 

2.4.2.13 Contractor’s failure to obtain, comply with and keep valid and in full
force, and deliver copies to Owner of, all approvals, permits, certifications,
consents and licenses of governmental authorities or other parties having
jurisdiction over the Property, the Project or the Work or contractual rights to
approve or inspect any of the foregoing which are necessary at the stage of
construction and/or otherwise existing and required to be complied with or
satisfied when such disbursement to Contractor is to be made to enable
Completion of the Work on or before the Scheduled Completion Date;

 

2.4.2.14 an order or statement shall have been made by or received from any
governmental, administrative or regulatory authority or agency stating that the
whole or any part of the Work, and/or any proposed change thereto, for which
Contractor or any Subcontractor is responsible or which relates to Contractor’s
or any Subcontractor’s activities is in violation of any Governmental
Requirements, unless such order or statement has been timely corrected to the
satisfaction of both the applicable governmental agency and Owner and evidence
of such timely correction shall have been provided to Owner in form and
substance satisfactory to Owner;

 

2.4.2.15 defective Work not remedied; and/or

 

2.4.2.16 any other material breach or default or failure to perform by
Contractor under the Contract Documents.

 

2.4.3 If Owner and/or Owner’s Lenders do not approve the full amount of the
Payment Application, Owner shall provide written notice to Contractor and shall
make payment of the lesser of the amount (if any) that Owner and Owner’s Lenders
have approved pursuant to Section 2.4.1 of this Agreement (less any amount which
may be retained or withheld pursuant to Sections 2.3.7, 2.7.6 and/or 2.8 of this
Agreement). When the reason(s) for withholding approval are removed to Owner’s
and Owner’s Lenders satisfaction, approval will be made for amounts previously
withheld, and Owner will pay such amounts (less amounts properly withheld or
retained) with the next regularly scheduled payment.

 

2.4.4 Within 15 days of Substantial Completion of the work, Contractor shall
submit to Owner the Contractors Completion Certificate as defined in Section
4.2.1.1.

 

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2.5 Payments by Contractor. Contractor shall promptly pay each Subcontractor and
Vendor, within five (5) business days after receipt of payment from Owner, the
amount to which said Subcontractor or Vendor is entitled on account of such
Subcontractor’s or Vendor’s portion of the Work, as reflected in the Payment
Application and reflecting Retainage in accordance with Section 2.3.7 of this
Agreement or amounts withheld under this Agreement. Contractor shall, by
appropriate agreement with each Subcontractor and Vendor, require each
Subcontractor and Vendor to make payments to their respective Subcontractors and
Vendors in a similar manner.

 

2.6 Materials Off-Site. All materials which are the subject of a Payment
Application shall be stored at all times at the Project, in a bonded warehouse
or such other secured facility satisfactory to Owner and Owner’s Lenders, or, at
the premises of the manufacturer or fabricator (in which event the materials
shall be appropriately marked and identified with the applicable purchase
contract and physically segregated in an area with access to a public street),
until the materials are incorporated into the Project; provided that if the
materials are stored with the manufacturer or fabricator, Owner must receive
evidence satisfactory to Owner of the creditworthiness of the manufacturer or
fabricator and/or Contractor shall procure and deliver or cause to be procured
and delivered to Owner such dual obligee performance and labor and material
payment bond or bonds, in form, substance and amount satisfactory to Owner and
Owner’s Lenders, as Owner and Owner’s Lenders may require. Furthermore,
Contractor shall:

 

2.6.1 use the materials only for construction of the Project, and not make any
transfer thereof or permit any lien to attach thereto which could materially
impair the ability of Owner to use the materials for such purpose;

 

2.6.2 take or cause to be taken all actions necessary to maintain, preserve and
protect the materials and keep them in good condition and repair, and to comply
with all laws, regulations and ordinances relating to the ownership, storage or
use of the materials;

 

2.6.3 cause to be delivered to Owner the original warehouse receipt (and any
bailee waivers where bailee rights exist) covering any stored materials, and
ensure that such stored materials have been stored in such a way as to eliminate
the possibility that they will be commingled with other materials or projects;
and

 

2.6.4 ensure that Owner and Owner’s Lenders may enter upon any property on which
the materials may be stored to inspect them at any reasonable time.

 

2.6.5 If Contractor shall fail to perform any of its obligations under this
Section 2.6 after Owner has made payment to Contractor for the materials, Owner
or Owner’s Lenders may, but shall not be obligated to, after written notice to
Contractor, take such actions and expend such sums as may be necessary in their
respective judgments to protect and preserve Owner’s title and Owner’s Lenders’
security interest in such materials, and all such expenditures so incurred
(including, without limitation, attorneys’ fees and disbursements) shall be
repayable by Contractor promptly on demand with interest thereon per annum at
the prime rate (as then published by Bank of America) plus two percent (2%) from
the date of demand until paid.

 

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2.7 Final Payment.

 

2.7.1 Final payment (“Final Payment”), consisting of the entire unpaid balance
of the Contract Sum, including Retainage held pursuant to Section 2.3.7 of this
Agreement, shall be made to Contractor within sixty (60) calendar days after
Completion of the Work.

 

2.7.2 “Completion of the Work” shall be deemed to have occurred after
Substantial Completion of the Work when (i) the Contract has been completely
performed by Contractor in accordance with the Contract Documents as determined
by Owner and Owner’s Lenders, including, without limitation, completion of all
“punch-list” work (unless Owner has with written notice to Contractor elected to
retain sufficient funds to protect it against the nonperformance of such
“punch-list” work), (ii) Contractor has delivered each and all of the items
described in Sections 2.7.5.1 through 2.7.5.12 of this Agreement, (iii) Owner
has accepted the Work in writing, and (iv) the OCIP Audit (as defined in Section
10.1.3 of this Agreement) as it relates to the Project has been completed and
any required downward adjustments in the Contract Sum have been made as
described in Sections 2.1 and 10.1.3 of this Agreement.

 

2.7.3 Contractor shall submit, with its final Payment Application, a Full and
Unconditional Release of All Claims and Waiver of Liens in the form attached
hereto as Exhibit I executed by Contractor, and by any additional parties Owner
designates including, without limitation, all Subcontractors and Vendors.

 

2.7.4 Upon receipt of written notice from Contractor that the Work is ready for
final inspection and acceptance and upon receipt of an acceptable final Payment
Application with all required submittals, Owner and/or Owner’s Lenders will
promptly make such inspection and, when Owner and Owner’s Lenders find the Work
acceptable under the Contract Documents and the Contract fully performed, Owner
shall approve the Final Payment.

 

2.7.5 Notwithstanding anything to the contrary in the Contract Documents, Final
Payment shall not become due until Contractor submits to Owner and Owner’s
Lenders:

 

2.7.5.1 an affidavit that all payrolls, bills for materials and equipment, and
other indebtedness and obligations connected with the Work for which Owner or
Owner’s Property might be responsible or encumbered (less amounts withheld by
Owner) have been paid or otherwise satisfied;

 

2.7.5.2 a certificate of the insurer(s) evidencing that insurance required by
the Contract Documents to remain in force after Final Payment is currently in
effect and will not be cancelled or allowed to expire until at least 30 calendar
days’ prior written notice has been given to Owner;

 

2.7.5.3 a written statement that Contractor knows of no reason that such
insurance will not be renewable to cover the period required by the Contract
Documents;

 

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2.7.5.4 if required by Owner or Owner’s Lenders, other data establishing payment
or satisfaction of obligations, such as receipts, releases and waivers of liens,
claims, security interests or encumbrances arising out of the Contract or the
Work which may then or in the future affect Owner, the Project or Property, and
to the extent and in such form as may reasonably be designated by Owner or
Owner’s Lenders (if a Subcontractor or Vendor refuses to furnish a release or
waiver required by Owner, Contractor shall within such time as set forth in
Section 5.8 of this Agreement and in accordance with the procedure set forth in
Section 5.8 furnish a bond satisfactory to Owner, in Owner’s and Owner’s
Lenders’ sole and absolute discretion, to indemnify Owner against such lien and
cause it to be paid and released; if such lien remains unsatisfied after
payments are made, Contractor shall immediately refund to Owner and indemnify
Owner against all monies that Owner is compelled to pay in discharging such
lien, including all costs and attorneys’ fees);

 

2.7.5.5 an affidavit certifying that Contractor has paid all taxes and all labor
costs, including, without limitation, any union dues, health, welfare, pension
plan, and other labor associated contributions;

 

2.7.5.6 all written guarantees and warranties under the Contract for Contractor,
Subcontractors and Vendors; all instructions and warranties furnished by
manufacturers, suppliers, or Vendors relating to any materials and equipment
incorporated in the Work; all required operation and maintenance manuals for
major equipment required under the Contract; as-built drawings required under
Section 5.10 of this Agreement;

 

2.7.5.7 all certificates of occupancy (or their equivalents) relating to or
required for the full use and occupancy of all aspects of the Project (and Owner
can fully occupy and utilize the Work for its intended use;

 

2.7.5.8 any documents, instruments, releases, affidavits, certificates and
indemnities reasonably required in order to permit Owner and Owner’s Lenders to
secure endorsements in form and content satisfactory to them to their respective
policies of title insurance for the Property, including, without limitation,
that no mechanics’ or materialmen’s liens appear of record, that all Lender
Liens are of first priority (including prior to any unrecorded liens or other
lien rights), and that there are no encroachments or violations of any recorded
covenants, conditions or restrictions affecting the Property;

 

2.7.5.9 such documents and other items so that Owner will receive and Owner does
receive a release and complete refund of all security, bonds and/or cash amounts
provided by or on behalf of Owner and held by or for the benefit of any
administrative or governmental agency;

 

2.7.5.10 an accurate list of all Subcontractors and Vendors with their addresses
and telephone numbers;

 

2.7.5.11 a statement of all unresolved claims (and for which payment has been
and/or shall be withheld by Owner). Contractor shall separately list by

 

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claim number the specific dollar amounts which have previously been submitted as
claims by Contractor in good faith and in full compliance with this Agreement;
and

 

2.7.5.12 such other certificates, instruments and affidavits relating to the
Work as Owner or Owner’s Lenders may reasonably require.

 

2.7.6 Any unsatisfied conditions to Final Payment as set forth in this Section
2.7 shall, unless expressly waived in writing by Owner in Owner’s sole and
absolute discretion, be deemed to be and considered items in dispute allowing
Owner to withhold from Final Payment such amounts as permitted by this
Agreement. Owner shall give Contractor prior written notice of any such
withholding. Contractor shall not be entitled to receive payment on any Payment
Application that is inaccurate or incomplete or that contains any material
misrepresentation. The rights and remedies of Owner under this Section 2.7 shall
be non-exclusive and shall be in addition to all other remedies available to
Owner under this Agreement or at law, in equity or otherwise.

 

2.7.7 Except for such unresolved claims stated in specific dollar amounts which
have been previously filed by Contractor in good faith and in full compliance
with this Agreement, the submittal by Contractor of its final Payment
Application shall constitute a final and irrevocable release and waiver by
Contractor of any and all other claims and causes of action for additional costs
allowable under the Contract Documents. This shall include, but not be limited
to, any and all claims for additional amounts relating to the unresolved claims
so identified by Contractor and claims or potential claims of Subcontractors and
Vendors arising out of this Contract, whether or not any such claims or
potential claims arise in contract or in tort or were known or unknown at the
time of submittal of the final Payment Application.

 

2.8 Withholding. In addition to any amounts withheld from a Payment Application
by Owner pursuant to Sections 2.3.7 and/or 2.7.6 of this Agreement, in the event
of and during any breach or default or failure to perform by Contractor of its
obligations pursuant to the Contract Documents, or any third-party claim against
Owner arising out of or connected with the Work, Owner shall have the right (and
Contractor hereby expressly authorizes Owner) to withhold such amounts and
payments to Contractor as Owner in good faith deems necessary to protect Owner
against or compensate Owner for any damage, cost, expense and loss attributable
to the foregoing, to cure any breach, default or failure to perform, or to
assure the payment of claims of third persons, and at Owner’s option to apply
such sums in such manner as Owner may in good faith deem necessary or proper to
secure protection from or to satisfy such claims. Owner shall give Contractor
prior written notice of any such withholding. Owner shall not be deemed in
default by reason of withholding payment under this Agreement in good faith.

 

2.9 Joint Checks. Owner shall have the right (but not the obligation) to issue
in its discretion, at any time and from time to time, payment checks for
portions of a progress payment or the Final Payment payable jointly to
Contractor and the person or persons owed (including, without limitation, any
Subcontractor or Vendor). Without limiting the generality of the foregoing, if
Contractor fails, neglects, or refuses to pay for labor or services performed or
materials or equipment supplied in connection with the Work as payments become
due, Owner shall have the right (but not the obligation) upon written

 

12

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notice to Contractor to make payments directly for any and all such labor,
materials, or equipment and to deduct the amount of such payment from the
Contract Sum. Owner also shall have the right upon five (5) calendar days’ prior
written notice to Contractor to stop the performance of the Work by Contractor
until payment of all amounts due and owing by Contractor has been made and such
failure by Contractor to make such payments shall be a material breach under the
Contract; provided, however, Owner shall not have any duty to stop the Work.

 

2.10 Waiver. Owner’s payment of any item pursuant to any Payment Application or
otherwise shall not constitute approval of the Work or the Payment Application,
or result in Owner’s waiver of any claims, all of Owner’s rights being
specifically reserved. A progress payment or partial or entire use or occupancy
of the Project by Owner shall not constitute acceptance of Work not in
accordance with the Contract Documents. The acceptance of Final Payment by
Contractor, a Subcontractor, and/or a Vendor shall constitute a waiver of all
claims by that payee, except those previously made in writing and identified by
that payee as unsettled at the time of the Payment Application for the Final
Payment.

 

2.11 Deposits and Payments. If any deposits are required for the purchase of any
materials, such deposits will be specifically identified by category and
credited against amounts as billed in that category. Contractor agrees to
receive and hold all payments to it by Owner as trust funds to be applied only
to the payment of the Contract Sum. Contractor will, promptly upon written
request from Owner, account for any and all funds theretofore received by
Contractor from Owner. Contractor agrees to arrange to purchase such materials
or equipment in advance of the time for installation in the Project as may be
deemed advisable by Owner or Contractor, provided such purchases in excess of
Fifty Thousand Dollars ($50,000.00) are approved by Owner and Owner’s Lenders.
Upon payment to Contractor of approved deposit amounts, Contractor shall provide
Owner with an assignment of Contractor’s rights relating to such deposit made
and agreement for purchase of such item.

 

2.12 Title to Materials. Contractor represents and warrants to Owner that (i)
title to all of the Work and materials and equipment incorporated into the Work
or covered by any Payment Application will pass to Owner upon the earlier of
incorporation in the Work or receipt of payment by Contractor, and such title
shall be free and clear of all liens, claims, security interests or
encumbrances; (ii) the vesting of such title shall not impose any obligations on
Owner or relieve Contractor of any of its obligations under the Contract
Documents; (iii) Contractor shall remain responsible for damage to or loss of
the Work, whether completed or under construction, until responsibility for the
Work has been accepted by Owner in the manner set forth in this Agreement; and
(iv) no Work covered by a Payment Application and no material or equipment
incorporated in the Work will have been acquired or incorporated into the Work
by Contractor, or by any other person performing Work or furnishing materials
and equipment for the Project, subject to an agreement under which an interest
in the Work or an encumbrance on the Work or the Property is retained by the
seller or otherwise imposed by Contractor or such other person. Subject to the
terms of this Agreement, including any modifications or waivers of rights
provided herein (including, without limitation, Section 15.1 hereof), the
provisions of this Section shall not be a bar to Contractor’s lien rights as to
the Property under Nevada state

 

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law as to Work for which Contractor has not yet received payment (and to the
extent Contractor is entitled to payment).

 

2.13 Maintenance of Books and Records. Contractor shall keep full and detailed
accounts and exercise such controls as may be necessary for proper financial
management under the Contract and as are otherwise reasonably satisfactory to
Owner. Contractor’s books, records, correspondence, instructions, drawings,
receipts, subcontracts, purchase orders, vouchers, cancelled checks, pay
requests, invoices, bills and statements and all other data relating to or
arising out of the design and construction of the Work, shall at all times be
made available to Owner and Owner’s Lenders for inspection, audit, and copying
during normal working hours in Buckeye, Arizona. Contractor shall preserve in
Buckeye, Arizona, all such records for a period of at least three (3) years
after the Completion of the Work or for such longer period as may be required by
law.

 

  3.   CHANGES IN THE WORK.

 

3.1 Change Orders.

 

3.1.1 Changes in the Work (as defined in Section 13.1 of this Agreement),
regardless of impact, shall be made only in accordance with a Change Order or
Construction Change Directive. No Change in the Work will increase the Contract
Sum, or extend the Scheduled Completion Date, without an accompanying Change
Order. Accordingly, no course of conduct or dealings between the parties, nor
express or implied acceptance of alterations or additions to the Work, and no
claim that Owner has been unjustly enriched by any alteration or addition to the
Work, whether or not there is in fact any such unjust enrichment, shall be the
basis for any claim to an increase in the Contract Sum or an extension of the
Scheduled Completion Date. Notwithstanding anything to the contrary, any and all
approvals, consents, Change Orders, and other documents under this Agreement
affecting Owner’s rights and/or the Work shall be effective only if signed by
Owner.

 

3.1.2 Once the actual cost of such Change in the Work and corresponding
extension, if any, in the Scheduled Completion Date have been determined
pursuant to this Article 3, prior to using such actual cost to make any increase
in the Contract Sum, and prior to extending the Scheduled Completion Date, such
actual cost and/or extension, as the case may be, shall be reduced and offset by
any and all reductions or Changes in the Work which result in a reduced Contract
Sum and/or an advancement of the Scheduled Completion Date, as the case may be
(i.e., Changes in the Work shall be netted out). Additions and deletions to the
Work shall be priced in accordance with the unit cost as established herein. The
unit pricing represents the total cost per unit of the Work including
Subcontractor markup. Except for Material Changes in the Work, the Contractor’s
fee shall not be adjusted. Any increase or decrease in the Contract Sum as a
result of net Material Changes in the Work shall not exceed the sum of: (i) the
aggregate additional amounts (if any) actually paid by Contractor to its
Subcontractors and Vendors for the applicable Change in the Work, plus a mark-up
on such amounts of not more than five percent (5%) to Contractor, and (ii) the
increase (if any) in the actual Cost of the Work (as defined in Section 13.6 of
this Agreement) incurred by Contractor with respect to the applicable Change in
the Work to the extent (if any) performed by Contractor directly, plus a mark-up

 

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on any such increase incurred by Contractor of not more than ten percent (10%)
to Contractor.

 

3.1.3 At any time and from time to time prior to Completion of the Work, Owner
may request Contractor to make Changes in the Work. If Owner desires a Change in
the Work, Owner may, in its sole and absolute discretion and in writing, request
a Change Proposal from Contractor (a “Change Proposal Request”). A Change
Proposal Request shall set out, in reasonable detail, the Changes in the Work
requested by Owner. Within ten (10) calendar days following its receipt of a
Change Proposal Request, Contractor shall issue a Change Proposal (as defined in
Section 13.4 of this Agreement). Contractor also shall issue a Change Proposal:
(i) when Contractor reasonably believes that a Change in the Work is necessary
or desirable (pursuant to a right set forth in this Agreement); or (ii) when a
Change in the Work is made necessary by Governmental Requirements. Any material
Changes in the Work shall require Owner’s Lenders’ prior approval.

 

3.1.4 If Contractor refuses or fails to timely provide a Change Proposal
requested by Owner, or modifies or alters a Change Proposal Request, or if Owner
and Contractor are unable to agree in writing upon the terms of the Change
Proposal requested by Owner, including, but not limited to: (i) the amount of
increase or decrease in the Contract Sum, or (ii) the length of extension or
advancement, if any, of the Scheduled Completion Date, Owner: may (1) issue a
Construction Change Directive pursuant to Section 3.2 of this Agreement; (2)
require Contractor to obtain at least three bids from qualified Subcontractors
to perform such Change in the Work, and Owner may designate the Subcontractor
from said bidders to perform such Change in the Work, and/or (3) engage other
contractors, subcontractors and/or laborers to perform such Change in the Work,
and Contractor shall cooperate fully with any of such persons, and any such
hiring by Owner or issuance of a Construction Change Directive shall not affect
this Agreement in any manner (other to provide for a reduction in the Contract
Sum, equal to the amount of any Work reflected in the Schedule of Values not
being performed by Contractor) and shall not be deemed to be a constructive
termination.

 

3.1.5 No dispute between Owner and Contractor relating to: (i) a change in the
Contract Sum or the Scheduled Completion Date due to any Change in the Work, or
(ii) any Change in the Work (either additive or reductive) shall entitle
Contractor to walk off the Project or to slow down the Work.

 

3.2 Construction Change Directive.

 

3.2.1 Owner may, by Construction Change Directive, without invalidating or
breaching the Contract, order a Change in the Work. Upon receipt of a
Construction Change Directive from Owner, Contractor shall promptly proceed with
the Change in the Work involved (including implementing any reductions in the
Work) and advise Owner of the Contractor’s agreement (in which case Contractor
shall sign and return the Construction Change Directive) or disagreement with
the method, if any, provided in the Construction Change Directive for
determining the proper adjustment, if any, in the Contract Sum and/or the
Scheduled Completion Date.

 

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3.2.2 A Construction Change Directive signed and unmodified by Contractor
indicates the agreement of Contractor therewith, including the method, if any,
provided in the Construction Change Directive for determining the adjustment, if
any, in the Contract Sum and/or the Scheduled Completion Date. Upon Contractor’s
written acceptance and delivery thereof to Owner of the unmodified Construction
Change Directive, that Construction Change Directive shall become a Change
Order. If Contractor fails to advise Owner of its agreement or disagreement with
the proposed adjustment in the Contract Sum and/or the Scheduled Completion Date
within ten (10) calendar days after the delivery of the Construction Change
Directive to Contractor, then the Construction Change Directive shall be deemed
approved by Contractor and shall become a Change Order, and Contractor shall
have no right to any adjustment to the Contract Sum and/or the Scheduled
Completion Date in excess of the adjustments, if any, provided in the
Construction Change Directive.

 

3.2.3 If Contractor disagrees with the method or adjustment in the Contract Sum
and/or the Scheduled Completion Date within the ten (10)-calendar day time
period provided for in Section 3.2.2 above, the method and the adjustment shall
be submitted to an appropriate consultant for a recommendation or binding
resolution as Owner may elect. If the parties are unable within a reasonable
period of time (as determined by Owner) to reach an agreement or binding
resolution by the consultant (if Owner elects) under the prior sentence or
otherwise, the matter shall be resolved after Completion of the Work, in
accordance with Section 15.11 of this Agreement.

 

3.2.4 After Owner has issued a Construction Change Directive and pending final
determination of the adjustment, if any, in the Contract Sum, any amount not in
dispute may be included in Payment Applications to be paid by Owner.

 

3.3 Surety Waiver. Change Orders or Construction Change Directives as described
in this Agreement shall not be subject to inspection or approval by any sureties
issuing any performance or labor and material payment bonds in connection with
the Project, whether or not the Change Orders (or Construction Change
Directives) encompass “substantial” changes in the scope of Work undertaken by
Contractor. Contractor shall cause any sureties, in issuing any performance or
payment bonds in connection with the Project, to expressly waive any of their
respective rights to approve any Change Orders or Construction Change Directives
executed by Owner and Contractor.

 

  4.   STARTING AND COMPLETION DATE; DELAYS IN THE WORK.

 

4.1 Commencement of Work. Contractor shall commence the Work in accordance with
the Project Construction Schedule no later than February 18, 2003 (“Date of
Commencement”); provided that commencement of the construction phase of the Work
shall commence upon Owner’s issuance to Contractor of a written notice to
proceed with the construction phase of the Work. If Owner fails to issue such a
written notice to proceed in accordance with the Project Construction Schedule,
and if no default has occurred under Section 8.1 of this Agreement, the
Scheduled Completion Date shall be extended pursuant to Change Order in
accordance with Article 3 of this Agreement by one day for each full day that
Owner fails to issue such notice to proceed.

 

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4.2 Completion of the Work.

 

4.2.1 Contractor shall proceed expeditiously with adequate forces, and shall
achieve Substantial Completion of the Work (as defined in Section 13.10 of this
Agreement) not later than January 27, 2005 (the “Scheduled Completion Date”),
subject to any Excusable Delays (as defined in Section 13.8 of this Agreement).
Subject to Section 4.2.2 below, if any Excusable Delays occur and subject to the
procedures set forth in Section 4.2.5 of this Agreement, the Scheduled
Completion Date shall be extended by one day for each full day of Excusable
Delay delaying “critical path” items. The Scheduled Completion Date also shall
be extended or accelerated as the parties may agree pursuant to any Change
Order(s) approved by Owner (if any). If minor items remain to be completed after
Substantial Completion of the Work (the “Punchlist Items”), Contractor shall
complete the Punchlist Items and achieve Completion of the Work, within a
reasonable time, but in any case not later than sixty (60) calendar days
following Substantial Completion of the Work. Contractor has prepared and
delivered to Owner a “Project Construction Schedule” indicating the time
required to complete each portion of the Work. The Owner approved Project
Construction Schedule is attached hereto as Exhibit C and incorporated in this
Agreement by this reference. The Project Construction Schedule may not be
changed without the prior written approval of Owner (and Owner’s Lenders as to
material changes) and shall identify and label the “critical path” items.

 

4.2.1.1 Within 15 days of Substantial Completion of the Work (as defined in
Section 13.10), Contractor shall submit to Owner the Contractors Completion
Certificate (Exhibit M).

 

4.2.2 If any Excusable Delay occurs and as a condition precedent to the granting
of an extension of time, Contractor shall within five (5) calendar days of the
beginning of such Excusable Delay, give Owner written notice of the Excusable
Delay, which notice shall include an explanation of the Excusable Delay and its
impact on the critical path items of construction (including a description, as
fully as practicable, at that time, of the nature, cause and expected duration
of the delay), and shall set forth Contractor’s proposed new Scheduled
Completion Date. If Owner and Contractor agree on the Excusable Delay and its
effect, all in accordance with Section 4.2.5 of this Agreement, any extension of
the Scheduled Completion Date shall be reflected in a Change Order which must be
approved by Owner (and Owner’s Lenders as to material changes) in writing in
order to give effect to any extension of the Scheduled Completion Date. If Owner
and Contractor are unable to agree, any issue of Excusable Delays shall be
resolved after Completion of the Work, in accordance with Section 15.11 of this
Agreement.

 

4.2.3 Contractor shall keep the Project Construction Schedule up-to-date and
revised on a monthly basis. The up-to-date Project Construction Schedule as
revised shall be provided by Contractor to Owner on a monthly basis. Contractor
also shall forward to Owner and Owner’s Lenders each month a monthly summary
report of the progress of various parts of the Work under the Contract,
describing the existing status of the Work, rate of progress, estimated time of
completion, cause of any Delays in the Work (as defined in Section 13.7 of this
Agreement), and a comparison of actual progress with the most recent Project
Construction Schedule. If Owner reasonably determines at any time that the
progress of the Work, or any portion of the Work, is behind the periods set
forth in the

 

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Project Construction Schedule or reasonably believes that the Work will not be
complete by the Scheduled Completion Date, then immediately following written
notice from Owner, Contractor shall submit to Owner for its review and approval
a narrative description of the means and methods which Contractor intends to
employ to expedite the progress of the Work to ensure timely completion of the
various phases of the Work as well as the totality of the Work, and Owner shall
have the right to require Contractor to work its construction crews and
Subcontractors and other personnel overtime, and to direct Contractor to take
all other necessary action, including, without limitation, increasing the number
of personnel and implementing double shifts. Such overtime work and other
actions shall continue until such time as the Work has progressed so that it
complies with the stage of completion required by the Project Construction
Schedule. Additional costs incurred due to such overtime work and other actions
shall be at Contractor’s sole cost and expense and shall not result in any
adjustment in the Contract Sum. Owner’s exercise of any of its rights under the
Contract Documents including, but not limited to, rights regarding a Change in
the Work, or Owner’s exercise of any of its remedies, including, but not limited
to, Owner’s rights under Section 8.2 of this Agreement, or Owner’s rights to
require correction or re-execution of any Work, shall not under any
circumstances be construed as interference with Contractor’s performance of the
Work.

 

4.2.4 Other than as expressly allowed and solely to the extent provided for
under Section 8.5 of this Agreement, Contractor agrees for itself and its agents
and for its Subcontractors and Vendors, and will cause each Subcontractor to
agree by its subcontract with Contractor for performance of the Work and each
Vendor to agree by its agreement or purchase order with Contractor for
materials, supplies, equipment, and/or related services for the Work, that it
will make no claim or claims against the Property, Project, Owner (or any party
affiliated or associated with Owner or any assets of Owner), or Owner’s Lenders
for damages or losses incurred as a result of or arising out of Delays in the
Work, including, but not limited to, any Excusable Delays (as defined in Section
13.8 of this Agreement). Lost time from any Excusable Delays in the Work, if
claimed by the Contractor and approved by Owner in accordance with this
Agreement, solely and completely will be compensated and balanced by an
extension of the Scheduled Completion Date. The Contractor and each
Subcontractor and Vendor shall accept any such extensions at no additional cost
to Owner, and waive and relinquish any right to payments of any kind for any
Delays in the Work, including, without limitation, for any Excusable Delays.

 

4.2.5 To the extent Contractor or any Subcontractor is delayed at any time in
the progress of the Work by an Excusable Delay, then the Scheduled Completion
Date shall be reasonably extended by Change Order in accordance with the
procedures described this Section 4.2.5 and in Article 3.

 

4.2.5.1 Notwithstanding any other provision of the Contract Documents, any item
that cannot be demonstrated as being on or affecting the critical path of the
Work shall not result in an extension of time to perform the Work in the event
such item is delayed. Further, to the extent any Delay in the Work could have
been prevented or reduced if Contractor had, with diligence and due care and its
best skill and attention consistent with the terms of the Contract Documents,
performed its duties and responsibilities under the Contract Documents, such
delay will not entitle Contractor to an extension of the Scheduled Completion
Date (except for that portion, if any, of such Delay

 

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in the Work which could not have been reduced consistent with the foregoing, and
subject to the other requirements of the Contract Documents, including this
Section 4.2.5).

 

4.2.5.2 Extensions of the Scheduled Completion Date for the Work will be
authorized by Owner only if (a) Contractor has been necessarily delayed in
meeting such Scheduled Completion Date by a cause which constitutes an Excusable
Delay; (b) the completion of the Work by the Scheduled Completion Date is
actually and necessarily delayed by such cause; (c) the effect of such cause
cannot be avoided or mitigated by the exercise of all reasonable precautions,
efforts and measures, including planning, scheduling and rescheduling, whether
before or after the occurrence of the cause of delay, and (d) Contractor has met
any notice requirements set forth in this Agreement and the other Contract
Documents for it to be entitled to any extension of time. All extensions of time
to which Contractor is entitled hereunder will be acknowledged by Change Order.

 

4.2.5.3 The period of any extension of time for delay shall be only that which
is necessary to make up the time actually lost for a Work item or items
specifically identifiable on the Project Construction Schedule as being on or
affecting the critical path of the Work at the time in which the delay occurs.

 

4.2.5.4 Contractor shall not be entitled to receive a separate extension of time
for each of several causes of delay operating concurrently but only for the
actual period of delay in completion of the Work irrespective of the number of
causes contributing to produce such delay. If one of several causes of delay
operating concurrently results from any act, fault or omission of Contractor or
Subcontractor or for which Contractor or Subcontractor is responsible, and would
of itself, irrespective of the concurrent causes, have delayed the Work, no
extension of time will be allowed for the period of delay resulting from such
act, fault or omission. Further all such extensions shall be netted out with any
reductions in the Scheduled Completion Date, before implementing any such
extension or increase pursuant to a Change Order.

 

4.2.5.5 It shall in all cases be presumed that no extension, or further
extension, of time is due unless Contractor shall affirmatively demonstrate the
extent thereof to the reasonable satisfaction of Owner and a Change Order is
entered into pursuant to Article 3 of this Agreement. Contractor shall maintain
adequate records supporting any claim for an extension of the Scheduled
Completion Date.

 

  5.   OBLIGATIONS OF CONTRACTOR.

 

5.1 Project Staffing. Contractor shall provide at all times a sufficient and
competent organization (duly licensed, registered, trained and/or qualified to
the extent required under applicable laws), which shall include, but not be
limited to, Project Manager, General Superintendent, Irrigation Superintendent,
Lake and Stream Superintendent, foremen, engineers, inspectors, flagmen, skilled
and common laborers, and such other personnel as may be necessary or desirable
to prosecute and achieve Completion of the Work properly and expeditiously
within the time periods required under this Agreement.

 

5.2 General Supervision of Construction. The individuals who shall be
responsible on behalf of Contractor for supervising the Project are Scott Boyer
(“Project

 

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Manager”), Ted Thornburg (“General Superintendent”), Dwayne Kraagerud (“Project
Superintendent”), Scott Boyer (“Assistant Superintendent”), Ruben Martinez
(“Layout Man”), Wade Turner, Seve Reyes, Cruz Rodriguez (“Shaping Crew”),
Honario Herandez (“Irrigation Foreman”). Except for reasons beyond its control,
Contractor shall not change the individuals serving as the Project Manager,
General Superintendent, Project Superintendent, Assistant Superintendent, Layout
Man, Shaping Crew or Irrigation Foreman during the term of this Agreement
without the prior written approval or direction of Owner. The Superintendent
shall be at the Property on a full-time basis and at all times while any Work is
being performed. The Project Manager shall spend such time at the Property as is
necessary or desirable to so supervise and direct the Work along with the
Superintendent. Subject to Article 7 of this Agreement, Contractor shall be
solely responsible for all construction performed pursuant to the Contract
Documents, including, without limitation, the coordination and implementation of
all techniques, procedures and sequences with respect to the Work.

 

5.2.1 Unless otherwise provided in the Contract Documents, Contractor shall
provide, furnish, supply and pay for all labor, materials, tools, supplies,
equipment, machinery, water, utilities, transportation, and all other facilities
and services (whether temporary or permanent and whether or not incorporated
into the Work) necessary or desirable for proper execution and timely completion
of the Work.

 

5.2.2 Contractor shall: (i) obtain all permits, including, without limitation,
all trade permits, and all governmental approvals, licenses, and inspections
necessary for the proper and timely execution and completion of the Work and
shall pay all costs and/or fees for obtaining the same, (ii) procure, maintain,
and provide to Owner copies (or originals if requested by Owner) of all
certificates of inspection, authorizations, bonds, permits and licenses, and pay
all charges and fees and give all notices necessary and incidental to the due
and lawful prosecution of the Work and as required by any Governmental
Requirements and/or any governmental authority or other party having
jurisdiction over the whole or any part of the Work, and (iii) fully comply with
all Contract Documents in the performance of the Work or any part of or event
relating to the Work.

 

5.2.3 Contractor shall inspect and keep reasonable records of all materials and
labor entering into the Work or on the Property.

 

5.2.4 Contractor shall supervise and direct all such construction work in
accordance with the highest standard for construction in Las Vegas, Nevada.

 

5.2.5 Contractor shall be responsible to Owner for all acts and/or omissions of
Contractor’s employees and agents, Subcontractors and Vendors, and Contractor
shall defend, hold harmless and indemnify any Indemnitee (as defined in Section
11.1 of this Agreement) from and against any and all loss, liability, costs,
damages, claims or causes of action, including, without limitation, attorneys’
fees, costs and expenses, which may arise or be incurred by any Indemnitee by
reason of any acts and/or omissions of Contractor’s employees and agents,
Subcontractors and/or Vendors or of any person for which any of the foregoing
may be responsible or liable.

 

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5.2.6 Contractor shall not be relieved of its obligation to perform the Work in
accordance with the Contract Documents either by activities or duties of Owner
or Owner’s Lenders, by any request, approval or consent of Owner, or by tests,
inspections or approvals required or performed by persons other than Contractor.

 

5.2.7 Contractor shall require and ensure that each Subcontractor and Vendor
comply with all applicable requirements set forth in the Contract Documents for
Contractor.

 

5.2.8 At all times during performance of the Work on the Project, including,
without limitation, during any partial use or occupancy of the Project by Owner
or others, Contractor shall not use (and shall ensure that its Subcontractors,
Vendors and any other persons performing Work on the Project do not use) Owner’s
toilet facilities and the Project’s permanent toilet facilities. Contractor also
shall perform (and shall cause its Subcontractors and Vendors to perform) all
Work on the Project so as to cause the least inconvenience and disruption to
Owner’s business which may require performance of Work at hours when Owner’s
business is least active.

 

5.2.9 Except to the extent the Contract Documents expressly provide otherwise,
if any dispute arises between Owner and Contractor, Contractor shall proceed
with the performance of its obligations under the Contract with reservation of
all rights and remedies it may have under the Contract unless the Contract is
terminated by Owner. Notwithstanding any provision of this Contract or the other
Contract Documents to the contrary, during the pendency of any dispute, action
or proceeding (including in respect of any Change Order) between Contractor and
Owner, so long as Owner continues to pay all undisputed amounts hereunder,
Contractor shall continue to perform the Work diligently and in accordance with
the Contract so as to complete the Work on or before the Scheduled Completion
Date. Notwithstanding any provision to the contrary herein or in the other
Contract Documents, Contractor shall not be relieved of any of its obligations
hereunder unless and to the extent of a final judgment resolving any such
dispute, action or proceeding. Contractor recognizes and acknowledges that the
provisions of this Section and the Completion of the Work on a timely basis
notwithstanding any dispute, action or proceeding are fundamental to the
contractual relationship established pursuant to this Contract, shall be
specifically enforceable, and that Owner would not have entered into this
Contract but for Contractor’s agreement set forth herein. Contractor
acknowledges that it understands and has duly considered and consulted with
counsel concerning the significance of this provision.

 

5.3 Site Meetings and Visits by Owner. Contractor shall hold weekly meetings (or
more frequently if necessary or desirable) at the Property for the Project with
some or all of the following: Owner, Other Builders, and Subcontractors and
Vendors, as required, to resolve any outstanding issues, to clarify requests for
additional information and to discuss the progress of the Work. Contractor shall
be responsible for securing attendance of its Subcontractors, Vendors and other
personnel at such meetings. Unless otherwise directed by Owner, Contractor shall
be responsible for the meeting minutes. Meeting minutes shall be in writing and
distributed in a timely fashion so that they can be received and reviewed by all
recipients prior to the next meeting. Owner, Owner’s Lenders, Other Builders and
any other party designated in writing by Owner shall have complete and

 

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unfettered access to the Property, the Project and the Work at all times.
Contractor shall, at all times, provide Owner, Owner’s Lenders, Other Builders
and Owner’s other representatives and contractors access to the Work in
preparation and progress wherever located. Visits to the Property or
observations of the Work by Owner, Owner’s Lenders, Other Builders, or any party
designated by Owner or Owner’s other representatives, shall in no way relieve
Contractor from its obligations to carry out the Work in accordance with the
Contract Documents.

 

5.4 Independence of Contractor; Taxes. Contractor is an independent contractor
and shall pay all federal and state taxes and contributions for Social Security,
unemployment insurance and income withholding tax and other taxes that are
measured by wages paid to Contractor’s employees, as well as all sales,
consumer, employment, use and similar taxes for the Work or portions of the Work
provided by or through Contractor or any Subcontractor or Vendor or relating to
their operations or property. Nothing contained in the Contract Documents or
otherwise shall be deemed or construed to (i) make Contractor the agent,
representative, servant or employee of Owner, or (ii) create any partnership,
joint venture, or other association or relationship between Owner and
Contractor. Any approval, review, inspection, direction or instruction by Owner
or any party on behalf of Owner in respect to the Work or services of Contractor
shall relate to the results Owner desires to obtain from the Work, and shall in
no way affect Contractor’s independent contractor status or obligation to
perform the Work in accordance with the Contract Documents.

 

5.5 Clean-up and Other Duties.

 

5.5.1 Contractor shall maintain sufficient labor, and appropriate tools and
materials, including, but not limited to, dumpsters, at the Property for the
Project, and shall at all times keep the Work, the Project and the Property free
from accumulation of waste materials, rubbish, dirt, debris and dust. Contractor
shall maintain streets leading to the Project and used as a means of ingress or
egress in a clean condition, and shall remove from these areas spillage and
tracking arising from the performance of the Work, and shall promptly repair any
damage to same. Contractor shall minimize the impact and effect of the Work on
properties adjoining and nearby the Property, and shall take all necessary or
desirable precautions to prevent any debris including, but not limited to,
fugitive dust, from entering or interfering with any adjacent or nearby
property.

 

5.5.2 Upon Substantial Completion of the Work, Contractor shall in accordance
with Governmental Requirements: (i) remove all debris, rubbish, unused
materials, tools, construction equipment and machinery from the Property, and
(ii) leave the Property and improvements in a neat, clean and broom-clean
condition.

 

5.5.3 If Contractor fails to clean up as provided in the Contract Documents,
Owner may do so and upon written notice to Contractor charge the cost to
Contractor.

 

5.5.4 Contractor shall not directly contact or communicate with any neighbor or
resident in the vicinity of the Project, but shall promptly forward to Owner all
communications from or relating to any such person.

 

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5.6 Secure Project/Security/Safety of Personnel.

 

5.6.1 Contractor shall secure, protect, and be responsible for the safety of the
Work, materials, supplies, tools and equipment and all other improvements and
personal property for the Project, whether or not incorporated into the Work or
located at the Property. Contractor shall bear the cost of, and be liable for,
and promptly shall remedy, all loss and damage to any of them from any cause
whatsoever (even if not covered by Contractor’s insurance), except loss or
damage caused solely by Owner’s gross negligence or willful misconduct. Owner
will not in any manner be responsible for any such loss or damage (or for the
cost of insurance against such loss or damage), except loss or damage caused
solely by Owner’s gross negligence or willful misconduct.

 

5.6.2 Contractor shall provide all necessary or desirable measures for security
at and on the portion of the Property where the Work is being performed in
connection with the Project, including, but not limited to, fences, gates,
cameras, and patrols. Without limiting any of Contractor’s obligations herein or
under the Contract, Owner may elect to provide and/or maintain security of its
own choosing for the whole or portions of the Work and/or the Property and/or
adjacent property, but Owner shall not have any obligation to do so and shall
not have any responsibility or liability of any kind to any party or person
relating to Owner’s obtaining or failing to obtain any security for the
Property.

 

5.6.3 Contractor shall be responsible for initiating, maintaining and
supervising all safety precautions and programs in connection with the Work, and
without limiting the foregoing, shall take all reasonable precautions for the
safety of, and shall provide for all reasonable protections to prevent injury
to, any of its employees, Project Architect, Subcontractors, Vendors, and all
other persons (including, without limitation, Owner, Owner’s Lenders, and Other
Builders) on the portion of the Property where the Work is being performed in
connection with the Project or adjacent to or nearby the same. In connection
with the Work, Contractor shall give any required notices and otherwise comply
with Governmental Requirements bearing on the safety of persons or property or
their protection from damage, injury or loss. Contractor shall also, and shall
cause all Subcontractors and Vendors to, comply with Owner’s “Project
Construction Safety and Health Guidelines” in the form attached hereto as
Exhibit J.

 

5.7 Statement of Claims. Whenever requested by Owner, Contractor shall certify
to Owner in writing (in a form satisfactory to Owner) the amounts then claimed
by and/or due and owing from Contractor to any person(s) for labor and services
performed and materials and supplies furnished relating to the Work, setting
forth the names and addresses of the persons whose charges or claims for
materials, supplies, labor, or services have been paid and whose charges or
claims are unpaid or in dispute, and the amount due to or claimed by each
respectively.

 

5.8 Mechanic’s Liens; Stop Notices. If any mechanics’, materialmen’s or other
liens or stop notice claims (other than a lien or stop notice which is the
result solely of Owner’s failure to issue payment to Contractor in breach of
this Agreement) are filed by anyone in relation to the labor, services,
materials or supplies rendered or supplied to the Work, Contractor, at its sole
cost and expense, shall obtain a bond in an amount and with a

 

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bonding company satisfactory to Owner in Owner’s and Owner’s Lenders’ sole and
absolute discretion, and file with the appropriate court a petition to
substitute the bond for such lien or claim within five (5) working days after
receipt of notice thereof (or such lesser period in any loan documents relating
to Owner’s Lenders), and obtain a court order within thirty (30) calendar days
after filing such petition, allowing substitution of the bond for such lien or
claim. Owner shall have the right to withhold an amount equal to twice the sum
of all such liens and claims from amounts otherwise payable by Owner to
Contractor under the Contract, regardless of whether the 30-calendar day period
has expired. Owner shall give Contractor prior written notice of any such
withholding. If Contractor fails to have such lien or claim discharged as
described above, Owner may (but shall have no obligation to) cause such liens
and claims to be discharged and the expense of discharging, including, without
limitation, any payment by Owner, the amount of any obligation assumed by Owner
by bond, indemnity, or otherwise, as well as Owner’s attorneys’ fees and costs
in connection therewith, shall promptly be repaid to Owner by Contractor with
interest thereon per annum at the prime rate (as then published by Bank of
America) plus two percent (2%) from the date such expenses, fees or costs were
incurred by Owner until the date repaid by Contractor.

 

5.9 Contractor’s Familiarity.

 

5.9.1 Execution of this Agreement by Contractor is Contractor’s representation
and warranty to Owner that the Contract Documents that exist as of the Effective
Date (including, without limitation, the Project Design Criteria and Drawings)
are, full and complete, and that the same are now sufficient to enable
Contractor to determine the Contract Sum, to construct the Work in accordance
with the Contract, and otherwise timely to fulfill all of its obligations under
the Contract, including, but not limited to, Contractor’s obligation to complete
the Work for an amount not in excess of the Contract Sum on or before the
Scheduled Completion Date. Contractor further represents and warrants to Owner
that Contractor: (i) is highly experienced with construction projects
substantially similar to the Work, (ii) has had ample time to familiarize itself
with, and has fully reviewed and familiarized itself with (and will continue to
review and familiarize itself with) (a) the Contract Documents, including,
without limitation, the Project Design Criteria and Drawings, (b) the
Governmental Requirements, and (c) the Technical Studies and Reports, and (iii)
has visited and examined the Property (and will continue to do so), has
investigated all physical, legal, and other conditions affecting the Work, and
fully is familiar with all of the conditions on, under, about and affecting the
portion of the Property on which the Work will be performed in connection with
the Project.

 

5.9.2 Contractor has taken (and will continue to take) field measurements and
verified (and will continue to verify) field conditions, and carefully compared
such field measurements and conditions and other information known to Contractor
with the Contract Documents and has not found any omissions, errors or
discrepancies. Contractor’s duty to carefully study and compare Contract
Documents with each other and with field measurements and report to Owner, in
writing, any errors, inconsistencies, discrepancies, ambiguities, conflicts or
omissions is ongoing and extends for the full term of the Work, and Contractor
shall not proceed on that portion of the Work where any such errors, omissions,
inconsistencies, ambiguities, discrepancies, or conflicts are found without
prior written instruction from Owner.

 

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5.9.3 Without limiting the generality of the foregoing, Contractor specifically
represents and warrants to Owner that it has satisfied itself as to: (1) the
nature, location, and character of the Work and the portion of the Property on
which the Work will be performed in connection with the Project, including,
without limitation, all improvements and obstructions on and under such portion
of the Property, both natural and man-made; (2) the nature, location, and
character of the general area in which the Project is located, including,
without limitation, its climatic conditions, available labor supply and labor
costs, and available equipment supply and equipment costs; and (3) the quality
and quantity of all materials, supplies, tools, equipment, labor, and
professional services necessary to achieve Completion of the Work pursuant to
and in accordance with the Contract and for no greater than the Contract Sum and
by the Scheduled Completion Date.

 

5.9.4 In connection with the foregoing, Contractor represents and warrants to
Owner that it (i) has determined the Contract Sum with respect to all of the
foregoing, and (ii) has no knowledge of any errors, inconsistencies,
discrepancies, omissions, ambiguities, or conflicts in any or all of, or between
or among any of the Contract Documents, and that if it becomes aware of any such
errors, inconsistencies, discrepancies, omissions, ambiguities, or conflicts, it
promptly will notify Owner in writing and take appropriate steps (with the prior
written approval of Owner) to address the same.

 

5.9.5 Further articulation of the Contract Documents shall not be the basis for
any change to the Contract Sum or Scheduled Completion Date. If Contractor
encounters any unforeseen conditions during the course of the Work, it shall
promptly notify Owner in writing and Changes in the Work, if any, shall be made
by Change Order. Any conditions that Contractor reasonably should have foreseen
given Contractor’s status as a Contractor experienced with Construction projects
of similar size and complexity as the Work and Contractor’s review of the
Property, the Contract Documents, the Technical Studies and Reports, shall not
be a basis for an increase in the Contract Sum or extension of the Scheduled
Completion Date. The failure of the Contractor fully to acquaint itself with any
provision of the Contract Documents or other matter shall not in any way relieve
it from responsibility for performing the Work in accordance with the Contract
Documents, and for the Contract Sum and by the Scheduled Completion Date.

 

5.9.6 Neither Owner nor any person on behalf of Owner has made representations
or warranties, oral or written, to Contractor or any of its agents with respect
to the conditions of the Property or improvements thereon, or regarding the
completeness, correctness, or adequacy of any Technical Studies and Reports or
Contract Documents.

 

5.10 Record Drawings. At Substantial Completion of the Work and as a condition
precedent to Final Payment, Contractor shall furnish to Owner record (i.e., “as
built”) drawings showing the effect of Change Orders and Construction Change
Directives, any Change in the Work not authorized by Change Order or
Construction Change Directive, general construction, mechanical, electrical, and
all other Work, and indicating the Work as actually completed and installed.
These as-built drawings shall consist of carefully drawn markings on a set of
reproducible mylar of the Plans and Specifications (and electronically when
available). Contractor shall maintain at the Property one current record copy of
the Plans and Specifications, Change Orders, Construction Change Directives,
approved

 

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Submittals and other modifications, in good order and marked to record changes
and selections made during construction.

 

5.11 Shop Drawings. Contractor shall prepare or cause to be prepared and review,
approve and submit to Owner shop drawings, product data, samples and similar
submittals (“Submittals”) required by the Contract Documents with reasonable
promptness and in such sequence as to cause no delay in the Work or in the
activities of Owner or Other Builders at the Property. Submittals made by
Contractor which are not required by the Contract Documents and/or are not
submitted in compliance with the Contract Documents may be returned without
action. Contractor shall perform no portion of the Work requiring a Submittal
unless such Submittal has been approved in writing by Owner. Such Work shall be
in accordance with the Submittals as approved by Owner. In submitting shop
drawings, product data, samples and similar Submittals, Contractor represents
and warrants that it has determined and verified materials, field measurements
and field construction criteria related to them, and has checked and coordinated
the information contained within such Submittals with the requirements of the
Work and of the Contract Documents. Contractor shall not be relieved of
responsibility for deviations from requirements of the Contract Documents by any
approval by Owner of any Submittal unless Contractor has specifically informed
Owner in writing of such deviation at the time of the Submittal, and Owner has
given prior written approval to the specific deviation. Contractor shall not be
relieved of responsibility for errors or omissions in shop drawings, product
data, samples or similar Submittals by reason of any approval by Owner.

 

5.12 Subcontractors.

 

5.12.1 Contractor hereby represents and warrants that it is (and will at all
times while performing Work be) licensed and qualified to act in the capacity of
a general contractor under the laws of the State of Nevada in connection with
the Project and that it will contract with all Subcontractors as are necessary
for Completion of the Work and that all Subcontractors will be properly licensed
and qualified to act in the capacity of subcontractors under the laws of the
State of Nevada at all times while performing Work in connection with the
Project. Contractor shall furnish to Owner in writing, for prior written
acceptance by Owner prior to the date on which Contractor awards or executes any
subcontracts, the names of qualified, responsible, and reputable Subcontractors
proposed for the principal portions of the Work. Contractor shall not contract
with any Subcontractor if such Subcontractor is or has been rejected by Owner.
Contractor shall not be required to contract with any Subcontractor against whom
it has a reasonable objection. Contractor shall not make any substitution for
any Subcontractor that has been accepted by Owner in writing, unless such
substitution is first accepted by Owner in writing. At the request of Owner,
Contractor shall provide copies of the licenses for Contractor and any
Subcontractor to Owner. Contractor shall not permit any Subcontractor to perform
Work on the Project without first obtaining a copy of such Subcontractor’s valid
license to perform such Work.

 

5.12.2 All Work performed for or on behalf of Contractor by a Subcontractor
shall be pursuant to an appropriate written agreement between Contractor and
such Subcontractor (and where appropriate, between Subcontractors and their
Subcontractors and/or Vendors) which shall contain provisions that: (i) preserve
and protect the rights of Owner under the Contract with respect to the Work to
be performed under the

 

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subcontract, so that the subcontracting of the Work shall not prejudice such
rights and shall require that such Work be performed in accordance with the
requirements of the Plans and Specifications and other Contract Documents and
for the provision of information for Contractor to comply with its obligations
under the Contract; and (ii) require that the subcontract and any purchase
orders may not be assigned by Subcontractor or any Vendor but permit the
assignment of the subcontract and any purchase orders by Contractor to Owner or
a third party designated by Owner, including Owner’s Lenders, and such assignees
shall have the right to enforce such subcontracts and purchase orders.

 

5.12.3 All subcontract agreements shall conform to the requirements of the
Contract Documents. Contractor shall not waive or fail to exercise any material
or significant right or remedy under any subcontract or waive any material or
significant default under any subcontract without Owner’s prior written
approval. Contractor shall direct and supervise each Subcontractor fully and
shall have full and complete authority with respect to such direction and
supervision subject to the terms of the Contract Documents. Notwithstanding the
exercise of any of Owner’s rights of approval or disapproval in the
subcontracting process or the process of managing subcontracts, Contractor shall
be responsible and liable to Owner for all acts and/or omissions of
Subcontractors and/or Vendors.

 

5.12.4 Contractor hereby assigns to Owner all its interest in all subcontract
agreements and purchase orders now existing or hereafter entered into by
Contractor for performance of any part of the Work, which assignment will be
effective only upon acceptance by Owner in writing and only as to those
subcontract agreements and purchase orders that Owner designates in said
writing. Such assignment may not be withdrawn by Contractor prior to the end of
the Warranty Period (as defined in Section 12.2 of this Agreement), and Owner
may accept said assignment at any time prior to the end of the Warranty Period.
Upon such acceptance by Owner: (i) Contractor shall promptly furnish to Owner
the originals of the designated subcontract agreements and purchase orders, and
(ii) Owner shall be required to compensate the designated Subcontractor(s) or
Vendor(s) only for compensation accruing to same for Work done or materials
delivered from and after the date as of which Owner accepts in writing
assignment of such subcontract agreement(s) or purchase order(s). All sums due
and owing by Contractor to the designated Subcontractor(s) or Vendor(s) for work
performed or material supplied prior to the date as of which Owner accepts in
writing assignment of the subcontract agreement(s) or purchase order(s), and all
other obligations of Contractor accruing prior to Owner’s written acceptance of
such assignment, shall constitute a debt and an obligation solely between such
Subcontractor(s) or Vendor(s) and Contractor, and Owner shall have no liability
with respect to such sums or any other obligations of Contractor.

 

5.13 Cooperation.

 

5.13.1 Contractor acknowledges that a portion of the Project will attach to
and/or be joined into the Casino Improvements.Accordingly, in connection with
the Work on the Project, Contractor shall cooperate fully with Owner and Other
Builders of the Casino Improvements and shall schedule, coordinate and sequence
its Work with that of Owner and the Other Builders in order to minimize the (i)
cost of the work for Owner and such Other Builders and (ii) the time needed to
achieve Substantial Completion of the Work.

 

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Upon Owner’s request, Contractor shall at all times provide the Other Builders
with access to the Work in preparation and progress wherever located and with
any and all information concerning the Project and its progress, including,
without limitation, the Project Construction Schedule and the Plans and
Specifications (as the same may be amended from time to time), especially as
they relate to the portions of the Work that will be attached to and/or joined
into the Casino Improvements. Contractor further shall afford the Other Builders
a reasonable opportunity for the introduction and storage of their materials and
equipment on the portion of the Property relating to the Project and shall
permit the execution of their work on the portion of the Property relating to
the Project, and Contractor shall connect its Work with theirs as and when
required under the Contract Documents. If any part of Contractor’s Work depends
in part for proper execution or results upon the work of the Other Builders (or
vice versa), Contractor shall, prior to proceeding with such Work, promptly
report in writing to Owner any apparent discrepancies or defects in such other
work or activities that would render it unsuitable for proper execution or
results or incompatible with Contractor’s Work. Failure of Contractor to do so
shall constitute an acknowledgement and agreement by Contractor that the Other
Builders’ completed or partially completed work is fit and proper to receive
Contractor’s Work and such construction and/or activity is fully compatible with
Contractor’s Work. Should Contractor or its Subcontractors, Vendors or any other
person performing Work for or on behalf of Contractor on the Project cause any
damage or loss to the work of the Other Builders, Contractor shall promptly
remedy such damage or loss. Owner also shall require the Other Builders promptly
to remedy any damage or loss to the Work of the Contractor caused by such Other
Builders or their subcontractors or any other person performing work on the
Casino Improvements for or on behalf of such Other Builders. Notwithstanding the
foregoing, any costs caused by defective work shall be borne by the party
responsible therefor.

 

5.13.2 Contractor and its Subcontractors and Vendors shall use all best efforts
to work without causing labor disharmony, coordination difficulties, delays,
disruptions, impairment of guarantees or interferences of any other obligations
of any of Owner’s other contractors, engineers, inspectors and consultants,
including, without limitation, Other Builders.

 

5.13.3 Contractor will not engage in, nor commit its personnel to engage in, any
other projects while performing Work on the Project to any extent that such
other projects may materially and adversely affect the quality or efficiency of
the Work required to be performed by Contractor in connection with this Project
or which will otherwise be detrimental to the carrying on and completion of this
Project.

 

  6.   RIGHTS OF CONTRACTOR.

 

6.1 General Authority and Powers. Subject to the provisions of this Agreement
and the other Contract Documents, Contractor shall have full power and authority
to:

 

6.1.1 Specify all techniques and sequences of construction, furnish and select
all labor, construction equipment, tools, machinery, and all other facilities
and services appropriate, necessary or desirable for the proper completion of
the Work, and to

 

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execute and deliver contracts and agreements with Subcontractors and Vendors
(subject to Owner’s prior written approval to the extent required by this
Agreement) for the performance or provision of every service or supply deemed by
Contractor to be necessary or appropriate for the construction of the Work in
accordance with the Contract Documents.

 

6.1.2 Dismiss Subcontractors, Vendors and employees of Contractor who, in
Contractor’s reasonable opinion, are not properly performing the tasks which
shall have been assigned to them.

 

6.1.3 Perform, supervise, or direct any and all other tasks which Contractor
shall reasonably deem to be necessary or appropriate to facilitate the
construction of the Work in accordance with the Contract Documents.

 

Notwithstanding any other provision of the Contract, including, but not limited
to, this Article 6, Contractor and its Subcontractors and Vendors shall access
the Project and confine all activities and Work on the Project to the areas as
directed by Owner.

 

6.2 Selection of Materials; Variation from Plans. Unless otherwise specified or
provided for in the Contract Documents or in any written notice from Owner
(which shall thereafter become part of the Contract Documents to the extent
expressly so provided in such written notice), Contractor shall select all
materials, appliances, mechanical devices, supplies and equipment to be
incorporated into the Work. Contractor shall promptly notify Owner in writing if
any items in the Contract Documents shall not be readily available, and Owner
shall have the right (but not the obligation) to designate an available
substitute item pursuant to Change Order. Nothing in this Section 6.2 or
elsewhere in this Agreement shall derogate from Contractor’s responsibility to
select, order, and timely purchase such items. If Contractor does not timely
order or arrange for delivery of items or materials required for the Work, Owner
may (but is not obligated to) arrange for delivery or order such items and
materials and in such event the Contract Sum shall be reduced by the cost of
such items and materials arranged for or ordered by Owner.

 

  7.   RIGHTS OF OWNER.

 

7.1 Generally. Solely Todd Nisbet and Darrell Richards shall have the authority
to act on behalf of Owner under this Agreement, subject to Owner’s right to
withdraw, substitute or replace Todd Nisbet and/or Darrell Richards, with notice
to Contractor. Contractor shall take direction and instruction from Todd Nisbet
or Darrell Richards on behalf of Owner, with regard to the Property, Work and
Project. Notwithstanding any provision in this Agreement to the contrary, Owner
shall have the right to require Contractor to remove any employee of Contractor
(including, without limitation, the Project Manager, General Superintendent,
Project Superintendent, Assistant Superintendent, Layout Man, Shaping Crew,
Irrigation Foreman) from the Project and to terminate any Subcontractor and/or
Vendor whose work is not deemed satisfactory by Owner, who is abusive of Owner’s
property, who employs vile language, who is disorderly, or as to whom Owner has
any other reasonable objection.

 

7.2 Partial Occupancy Or Use. Owner may occupy or use any completed or partially
completed portion of the Work at any stage, including opening

 

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portions of the Project to the public. Notwithstanding any other provision of
the Contract, any such partial occupancy or use shall not: (i) constitute final
acceptance of any Work, (ii) relieve Contractor of responsibility for loss or
damage because of or arising out of defects in, or malfunctioning of, any Work,
material, or equipment, or from any other unfulfilled obligations or
responsibilities under the Contract Documents, (iii) commence any warranty
period under the Contract Documents (provided Contractor shall not be liable for
ordinary wear and tear resulting from such partial occupancy), or (iv) entitle
Contractor to any Retainage. Contractor and Owner shall cooperate in all aspects
of Owner’s partial use and occupancy of the Work and Project, including, without
limitation, scheduling, allocation of costs of utilities, access and storage,
any cost impacts as may mutually be agreed upon between Owner and Contractor,
and all other arrangements. Unless and until Owner issues a Certificate of
Substantial Completion pursuant to Section 13.10 of this Agreement for such
portion of the Work partially occupied or used by Owner, Owner shall not be
obligated to pay Retainage relating to such portion of the Work at that time
partially used or occupied by Owner, and it is the express intent of Contractor
and Owner that Contractor waive the benefits of Section 624.620 of the Nevada
Revised Statutes.

 

7.3 Owner’s Right to Award Separate Contracts. Owner reserves the right to award
separate contracts to persons other than Contractor (including, but not limited
to, Other Builders) or to use its own forces to perform work or other activities
on the Project (including, without limitation, pursuant to Article 3 and
Sections 8.3 and 8.5 of this Agreement or otherwise) or on the Property.

 

  8.   CONTRACTOR’S DEFAULTS AND OWNER’S REMEDIES.

 

8.1 Contractor’s Defaults. Each of the following occurrences is a default of
Contractor under the Contract:

 

8.1.1 The failure of Contractor to perform the Work in a diligent, expeditious,
workmanlike and careful manner strictly in accordance with the Contract,
including, but not limited to, in compliance with all Governmental Requirements,
or any other failure of Contractor to comply with the Contract or to perform any
material obligations under the Contract (including, without limitation, the
failure of Contractor to pay timely Subcontractors and Vendors for Work
performed or material supplied for the Project or the failure of Contractor to
achieve Substantial Completion of the Work or Completion of the Work within the
time periods prescribed by Section 4.2.1 of this Agreement), unless Contractor
takes and completes corrective action satisfactory to Owner, in Owner’s sole and
absolute discretion, with respect to any such failure within five (5) calendar
days following written notice from Owner specifying the failure or other default
(unless a different, specific time period for Contractor’s performance is set
forth in this Agreement, in which case Contractor shall have such specified
period in lieu of such five (5)-calendar day period within which to take and
complete corrective action); provided, however, that if the nature of
Contractor’s failure or default (excluding any failure to pay Subcontractors or
Vendors, any failure to achieve Substantial Completion of the Work or Completion
of the Work within the time periods prescribed by Section 4.2.1 of this
Agreement, and any failure or default of the type referred to in Sections 8.1.2,
8.1.3, 8.1.4, 8.1.5 or 8.1.6 of this Agreement) is such that corrective action
cannot be reasonably completed within the aforesaid five (5)-calendar day
period, then Contractor shall (unless such default or failure is

 

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a second occurrence in which event Contractor shall not have any right to cure
except within said five (5)-calendar day period) not be in default under this
Agreement if it commences corrective action within such five (5)-calendar day
period and thereafter diligently completes such corrective action within the
shortest feasible time (but in no event longer than sixty (60) calendar days)
and in a manner satisfactory to Owner, in Owner’s sole and absolute discretion;
and provided, further, that no cure period shall apply in the case of any
failure or default which, by its nature, cannot be cured.

 

8.1.2 The making by Contractor of any general assignment for the benefit of
creditors; the filing by or against Contractor of a petition to have Contractor
adjudged a bankrupt or be discharged of its debts or of a petition for
reorganization or arrangement under any law relating to bankruptcy unless, in
the case of a petition filed against Contractor, the same is dismissed within
ten (10) business days of the filing; or the appointment of a trustee or
receiver to take possession of all or a significant portion of Contractor’s
assets.

 

8.1.3 The recordation of a mechanics’ or materialmen’s lien on the Property or
the Work by a Subcontractor or Vendor or any other person performing Work
relating to the Project, provided that Contractor, at its sole cost and expense,
does not obtain a bond in an amount and with a bonding company satisfactory to
Owner in Owner’s and Owner’s Lenders’ sole and absolute discretion, and file
with the appropriate court a petition to substitute the bond for such lien
within five (5) working days after receipt of notice of such lien (or such
lesser period in any loan documents relating to Owner’s Lenders), and obtain a
court order within thirty (30) calendar days after filing such petition,
allowing substitution of the bond for such lien.

 

8.1.4 Failure of Contractor for three (3) successive calendar days or an
aggregate of five (5) calendar days in any thirty (30) calendar day period
(other than Sundays or national holidays), to have an adequate number of
Subcontractors at the Property who are actively and productively working on the
Project, unless Excusable Delays exist for such absence.

 

8.1.5 Failure of Contractor for five (5) calendar days following a request from
Owner to provide Owner with evidence of satisfactory funds (and a perfected
first priority lien therein) available to make up any overage with regard to the
Contract Sum as required under Section 2.2 of this Agreement.

 

8.1.6 Owner’s good faith belief that Contractor will not complete the Work
within the time periods required under the Contract Documents or within the
Contract Sum.

 

8.2 Owner’s Remedies. In the event of any default of Contractor specified under
Section 8.1 above (which is not an all-inclusive list of defaults), or any other
default of or failure to perform by Contractor under the Contract, which is not
cured within the express applicable time period (if any), set forth in Sections
8.1.1 through 8.1.6 above, Owner may, without prejudice to any other rights or
remedies of Owner:

 

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8.2.1 terminate the Contract, reduce the scope of Contractor’s services, or
suspend, delay or interrupt the Work in whole or in part for such period of time
as Owner may determine by written notice specifying the effective date of such
termination, reduction, suspension, delay or interruption; provided, however,
the right of Owner to terminate the Contract or reduce, suspend, delay, or
interrupt the Work shall not give rise to a duty on the part of Owner to
exercise this right for the benefit of Contractor or any other person or entity.
If Owner elects to delay, suspend or interrupt the Work or reduce the scope of
Contractor’s services due to a default by Contractor, Contractor shall not be
entitled to any further payments under the Contract unless and until such
default is cured or Owner and Contractor reach mutual agreement in writing on a
resolution of such default, nor shall Contractor be entitled to the benefits
under Sections 8.3 or 8.5 of this Agreement with regard to any such termination,
reduction, suspension, delay or interruption. No increase or upward adjustment
shall be made in the Contract Sum for any such termination, reduction,
suspension, delay or interruption, and in no event shall Owner be liable for, or
shall Contractor or any Subcontractor, Vendor or any other party performing any
Work on the Property be entitled to, any lost opportunity, lost profit or
consequential damages claimed or alleged by Contractor, any Subcontractor,
Vendor or any other party performing any Work on the Property and relating to
any such termination, reduction, suspension, delay or interruption. If Owner
first elects to suspend, delay or interrupt the Work, Owner also may at any time
thereafter elect to terminate the Contract. Upon termination of the Contract,
Owner may: (a) enter upon the Property and take possession of all materials of
any kind that have been paid for, that are to be incorporated into the Work, or
to which Owner has any ownership rights or interest, and finish the Work and
provide the materials therefor or contract with others to do so by whatever
method Owner deems expedient; (b) accept assignment of such subcontracts or
purchase orders, if any, as Owner may specify in writing; and/or (c) pursue any
other rights or remedies provided for under the Contract Documents or available
at law, in equity or otherwise. In case of such termination, Contractor shall
not be entitled to receive any further payment unless and until the Work is
finished, at which time Contractor shall be entitled, subject to the terms of
the Contract Documents, to receive only such additional payments under the
Contract, if any, as are provided in Section 8.6 of this Agreement. If a court
determines that reduction, suspension, delay or interruption of the Work or
termination of Contractor pursuant to this Section 8.2 was wrongful, such
reduction, suspension, delay or interruption of the Work or termination will be
deemed converted to a suspension, delay, interruption or termination for
convenience pursuant to Section 8.3 or 8.5, as the case may be, of this
Agreement, and Contractor’s exclusive remedy for wrongful reduction, suspension,
delay or interruption of the Work or termination shall be limited to the
recovery of the payments required upon a termination for convenience as set
forth in Section 8.3 of this Agreement or the adjustment, if any, in the
Contract Sum and/or Scheduled Completion Date required under Section 8.5 of this
Agreement, as the case may be; or

 

8.2.2 cure such default, and the cost of curing defaults, including, but not
limited to, compensation for any additional services and any other expenses
arising from or related to such default (including, but not limited to, those
listed in Section 8.6 of this Agreement) shall upon written notice to Contractor
be deducted from any payments then or thereafter due to Contractor under the
Contract Sum. If payments then or thereafter due to Contractor are not
sufficient to cover such amounts, Contractor shall pay the difference to Owner
upon Owner’s demand and such amounts shall bear interest per annum at the prime

 

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rate (as then published by Bank of America) plus two percent (2%) from the date
of demand until paid.

 

8.3 Termination for Convenience. Owner, for convenience or otherwise, may
terminate Contractor’s services at any time upon five (5) calendar days prior
written notice to Contractor. If Owner terminates Contractor’s services under
this Section 8.3 (and without limitation of any of Owner’s rights with respect
to a default or a breach by Contractor), Owner’s sole obligation and liability
to Contractor shall be to reimburse Contractor (and Contractor’s exclusive
remedy shall be to receive reimbursement) for (i) the Cost of the Work incurred
(and not cancelable or refundable) by Contractor for Work properly performed by
Contractor up to the date of termination and approved by Owner in accordance
with the Contract, but not in excess of the portion of the Contract Sum
equitably allocable to such Work (and less the portion of the Contractor’s fee
to be paid pursuant to clause (ii) below) based on the value the percentage of
such properly performed and completed Work by Contractor bears to the total
value of the Work included within the Contract Sum, plus (ii) a pro rata portion
of the Contractor’s fee (as set forth on the Owner-approved Schedule of Values)
based on the percentage obtained by dividing the Work properly performed and
completed through the effective date of such termination for convenience by the
total Work required to be performed by Contractor under this Agreement, less all
payments previously made to Contractor under the Contract and any amounts owed
by Contractor to Owner under the Contract. Any sum due to Contractor pursuant to
the preceding sentence shall be promptly paid by Owner, and any overpayment
shall be promptly refunded by Contractor to Owner.

 

8.4 Contractor’s Cooperation Following Termination. If Owner terminates this
Agreement pursuant to a right set forth in the Contract Documents, Contractor,
upon receipt of Owner’s termination notice, shall: (i) place no further orders
or subcontracts for materials, equipment, services, or facilities, (ii)
discontinue the Work on that date specified in the notice and thereupon vacate
the Property and remove all equipment and materials owned by Contractor
therefrom, (iii) promptly execute or cause the execution of any and all required
documents and assignments of right to Owner in connection with the termination
of Contractor’s Work and (iv) deliver to Owner all such documents and all
materials, equipment, or other items or things for whose cost the Contractor
requests or has requested reimbursement under this Agreement. Owner, however,
shall not be obligated to pay or reimburse Contractor for any costs for which
Contractor may be liable to Subcontractors or Vendors on account of
cancellation, termination, or restocking charges of any kind that are due to
Contractor’s failure to bind such Subcontractors and Vendors to the terms and
conditions of this Contract relating to termination. Any of Contractor’s
equipment, machinery and supplies not removed from the Property within seven (7)
calendar days from the date of Owner’s request may be removed and stored by
Owner at Contractor’s sole risk and expense.

 

8.5 Suspensions By Owner.

 

8.5.1 Owner’s Right To Suspend For Convenience. Owner may at any time, with or
without cause, suspend, delay, reduce or interrupt performance of all or any
portion of the Work for such period or periods as Owner elects (and without
limitation of any of Owner’s rights with respect to a breach or default by
Contractor) by

 

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giving Contractor five (5) calendar days’ written notice specifying which
portion of the Work is to be suspended, delayed, reduced or interrupted and the
effective date of same. Such suspension, delay, reduction or interruption shall
continue until Owner terminates the same by written notice to Contractor. No
such suspension, delay, reduction or interruption by Owner shall constitute a
breach or default by Owner under the Contract Documents. Contractor shall
continue to diligently perform any remaining Work that is not suspended,
delayed, reduced or interrupted and shall take all actions necessary to maintain
and safeguard all materials, equipment, supplies and Work in progress affected
by the suspension, delay, reduction or interruption.

 

8.5.1.1 Payment Upon Suspension For Convenience. In the event of a suspension,
delay, or interruption for convenience by Owner, any necessary equitable
adjustment shall be made by Change Order pursuant to Sections 3.1.2 and 4.2.5 of
this Agreement (i) for an unavoidable increase, if any, in the Contract Sum,
and/or an extension, if necessary, in the Scheduled Completion Date, caused
solely by such suspension, delay or interruption ordered by Owner for
convenience, but only if and to the extent such delay, suspension or
interruption exceeds a period of twenty (20) consecutive calendar days following
commencement of the construction phase of the Work, and (ii) for any reduction
in the Contract Sum, and acceleration of the Scheduled Completion Date, relating
to any such suspension, delay, interruption or reduction by Owner under this
Section 8.5. No increase or upward adjustment shall be made in the Contract Sum
for any such suspension, delay, interruption or reduction, and in no event shall
Owner be liable for, or shall Contractor or any Subcontractor or Vendor or any
other person performing any Work be entitled to, any lost opportunity, lost
profit or consequential damages as a result of any suspension, delay,
interruption or reduction by Owner under this Section 8.5.

 

8.5.1.2 Provided, however, that no adjustment shall be made to the extent that
performance was otherwise subject to suspension, delay, or interruption by
another cause for which Contractor or a Subcontractor or Vendor is responsible.

 

8.6 Payment to Contractor Upon Termination for Cause.

 

8.6.1 If Owner terminates the Contract for Contractor’s breach or default (and
subject to the satisfaction by Contractor of the conditions set forth in Section
8.6.3 below), Contractor shall thereafter be entitled, as and when provided in
Section 8.2 of this Agreement, to reimbursement only of such amount (if any), by
which:

 

8.6.1.1 the Cost of the Work for Work actually and properly completed by
Contractor (and not cancelable or refundable) in accordance with this Agreement
and the other Contract Documents up to the date of such termination (but not to
exceed the portion of the Contract Sum fairly allocable to the Work so
completed), exceeds:

 

8.6.1.2 the total of (i) all payments theretofore made to Contractor under the
Contract Documents, and (ii) all damages and other costs and expenses incurred
by Owner, directly or indirectly, arising out of or as a result of Contractor’s
breach or default, including, without limitation: (1) the cost of any additional
consultants’ services, or managerial and administrative services required
thereby, (2) any additional costs incurred

 

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in retaining another Contractor or other Subcontractors, (3) any additional
financing, interest or fees and other costs that Owner must pay, including by
reason of a delay in completion of the Work, Owner’s termination of Contractor
and the finishing of the Work by another method after such termination, (4)
attorneys’ fees and expenses, and (5) any other damages, costs, and expenses
Owner may incur as a result of Contractor’s breach or default, including if
Owner elects to complete the Project after such termination, the amount by which
the actual cost of completing the Project (including the actual cost of
components of the Project that are not part of the Work) is greater than what
such actual cost (including the actual cost of the components of the Project
that are not part of the Work) would have been if Contractor had fulfilled its
obligations under the Contract Documents, and if Owner elects to not complete
the Project after such termination, all damages suffered by Owner arising out of
Contractor’s breach of this Agreement.

 

8.6.2 If the amount referred to in Section 8.6.1.2 of this Agreement exceeds the
amount referred to in Section 8.6.1.1 of this Agreement, Contractor shall pay
the difference to Owner immediately upon Owner’s demand and such amount shall
bear interest per annum at the prime rate (as then published by Bank of America)
plus two percent (2%) from the date of demand until paid.

 

8.6.3 Any reimbursements or payments to be made to Contractor under this Section
8.6 are expressly conditioned on (i) Contractor previously having delivered to
Owner possession and unfettered access to the Work and Property and all
materials, equipment, tools and the like (undamaged and in good condition) which
Owner has paid for and/or been billed for; (ii) Contractor previously having
delivered to Owner all the items listed in, and having performed all the
obligations described in, Sections 2.7.5.1 through 2.7.5.12 of this Agreement;
and (iii) Contractor previously having complied with such other obligations
under the Contract Documents as Owner and/or Owner’s Lenders reasonably require.

 

8.7 Cumulative Remedies. The rights and remedies of Owner under this Article 8
shall be non-exclusive, and shall be in addition to all other rights and
remedies available to Owner under the Contract or at law, in equity or
otherwise.

 

  9.   CONTRACTOR’S REMEDIES.

 

9.1 Contractor’s Remedies.

 

9.1.1 If payment from Owner for a Payment Application (exclusive of amounts
properly retained or withheld or in dispute under the Contract), approved by
Owner and Owner’s Lenders in accordance with this Agreement, has not been
received by Contractor within thirty (30) calendar days of the date payment is
due pursuant to this Agreement, Contractor may cease work until such payment has
been received, in which case the Scheduled Completion Date will be extended by
the number of days of the cessation of Work. If payment of undisputed amounts to
which Contractor is otherwise then entitled pursuant to the terms of this
Agreement are not paid by Owner to Contractor within thirty (30) calendar days
after written notice by Contractor (following the 30-calendar day period noted
above) that the same are past due, Contractor may terminate this Agreement upon
five (5) additional business days’ written notice to Owner.

 

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9.1.2 If Contractor terminates this Agreement with cause in accordance with this
Agreement, Contractor shall be entitled, as its exclusive remedy, to the
recovery of the amounts (if any) to which Contractor would have been entitled
had Owner, pursuant to Section 8.3 of this Agreement, terminated this Agreement
for convenience effective as of the date this Agreement is so terminated by
Contractor. Contractor, notwithstanding any provision of this Agreement or
otherwise, shall in no event be entitled to or seek recovery of any other
amounts (including, without limitation, consequential damages, lost profits,
lost opportunities, overhead, or similar amounts) in the event of any reduction
in the scope or scale of the Work or any suspension, delay, interruption or
termination thereof, including, but not limited to, under Sections 8.2, 8.3, 8.5
or this Section 9.1 of this Agreement.

 

  10.   INSURANCE.

 

10.1 Owner Controlled Insurance Program.

 

10.1.1 The Owner, at its expense, has implemented an Owner Controlled Insurance
Program (“OCIP”) to furnish certain insurance coverages with respect to
activities on the Property for the Project. The OCIP will be for the benefit of
Owner, Contractor, and Subcontractors of all tiers (unless specifically
excluded) who have employees at the Project. Such coverage applies only to Work
performed under the Contract Documents at the Property. The OCIP shall not
include, and Owner shall not be responsible for providing, any insurance
coverages other than those specifically identified in the OCIP Manual (defined
in Section 10.1.2 of this Agreement). In addition, the first $25,000 of each
loss or damage covered under the Builder’s Risk Insurance policy, or uninsured
losses, shall be paid for by the responsible Contractor or Subcontractor. The
Builder’s Risk insurance provided by Owner also does not cover loss of, or
damage to, any tools, implements, equipment, scaffolds, form work, machinery,
cranes, consumables, office trailers, tool sheds, temporary structures or
anything else which is not intended to become a permanent part of the finished
Project. Contractor and eligible Subcontractors must provide their own insurance
for activities off the Property and automobile liability pursuant to the OCIP
Manual, and the costs of such insurance for Contractor and Subcontractors shall
be solely Contractor’s and Subcontractor’s responsibility. To the extent
Contractor and or any Subcontractor becomes ineligible for the OCIP or is no
longer covered by the OCIP, Contractor and such Subcontractor shall provide all
required insurance under the OCIP Manual.

 

10.1.2 Details concerning the OCIP are provided in the “OCIP Manual” which is
attached hereto as Exhibit K and incorporated herein by this reference, and
which has been made available to Contractor and has been or will be made
available to its Subcontractors, for use in preparing their bids and estimates
and in planning the performance of their Work. Contractor and each Subcontractor
will participate in the OCIP established for the Project in accordance with the
OCIP Manual. Participation in the OCIP is mandatory but not automatic.
Contractor shall, and Contractor shall cause all Subcontractors to, complete all
forms, submit the information required and abide by the mandates established in
the OCIP Manual. Any exceptions to this requirement must be approved by Owner in
writing in advance.

 

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10.1.3 Within 60 days of the date of this Agreement, the Contractor shall
provide to the Owner the estimated total cost of insurance for the Project as
described in the OCIP Manual. The contract sum will be adjusted pursuant to
change order downward to reflect this estimated OCIP credit. At the end of the
Project, prior to Final Payment, a final audit will be conducted (the “OCIP
Audit”) to determine the exact amount of the credit based on the insurance
provided under the OCIP, and the Contract Sum will be adjusted pursuant to
Change Order downward (but not in any event upward) to reflect the exact amount
of the credit determined pursuant to the OCIP Audit. Contractor shall carefully
review all Subcontractor and pricing information to ensure that Owner is not
required to pay a second time, as part of the Contract Sum, insurance coverages
Owner has already purchased under the OCIP. Contractor also shall ensure that
the net cost, if any, of any Change Order entered into pursuant to this
Agreement excludes any costs for insurance coverages Owner is furnishing under
the OCIP, and Contractor shall expressly identify in any Change Order any
credits owing to Owner in connection with such Change Order for cost savings to
be realized in connection with the Change Order as a result of Owner’s
furnishing of the insurance coverages provided under the OCIP.

 

10.2 Evidence of Coverage.

 

10.2.1 Carriers Acceptable To Owner. All policies required of Contractor and
Subcontractors pursuant to this Agreement shall be maintained with insurance
carriers that are acceptable to Owner and licensed in the State of Nevada.

 

10.2.2 Failure to Comply. Neither the Contractor nor any of its Subcontractors
shall be entitled to receive payment for any Work performed, or to commence
operations or Work on the Property or elsewhere until such time as they provide
acceptable evidence of compliance with the requirements of this Article 10. Any
additional costs or delays caused by or arising out of any failures to comply
with this Article 10, including the failure to furnish acceptable certificates
of insurance prior to the Date of Commencement, shall be solely the
responsibility of Contractor and its Subcontractors.

 

10.3 Deductibles. If any policy required to be purchased pursuant to this
Agreement is subject to a deductible, self-insured retention or similar
self-insurance mechanism which limit or otherwise reduces coverage, the
deductible, self-insured retention or similar self-insurance mechanism shall be
the sole responsibility of Contractor in the event of any loss arising out of
the acts or omissions of Contractor, any Subcontractor or vendor or other person
performing Work on or at the Project.

 

10.4 Cooperation by the Parties. Owner and Contractor shall fully cooperate with
each other in connection with the collection of any insurance monies that may be
due in the event of a loss. Owner and Contractor shall promptly execute and
deliver such proofs of loss and other instruments which may be required for the
purpose of obtaining recovery of any such insurance monies.

 

10.5 Duration. All General Liability, Automobile Liability, Worker’s
Compensation and Employer’s Liability insurance required by Owner shall be kept
in force without interruption until Completion of the Work. Contractor and its
Subcontractors shall maintain completed operations insurance for a period of two
(2) years after Completion of

 

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the Work for non-OCIP covered scope. The Builder’s All-Risk Insurance shall
remain in force until Contractor has achieved Completion of the Work in its
entirety in accordance with this Agreement.

 

  11.   INDEMNIFICATION.

 

11.1 Indemnity. To the fullest extent permitted by law, Contractor hereby
indemnifies and agrees to protect, defend, and hold Owner, Wynn Resorts, LLC,
The Wynn Group, Wynn Design and Development LLC, Valvino Lamore, LLC, and
Owner’s Lenders and their respective subsidiaries, affiliates, and parent
companies, and their respective members, officers, directors, employees, agents,
shareholders, trustees, beneficiaries, heirs, administrators, personal
representatives, advisors, attorneys, and successors and assigns (collectively
“Indemnitees” and singularly an “Indemnitee”) harmless from and against any and
all claims, liabilities, obligations, losses, suits, actions, legal or
administrative proceedings, damages, costs, expenses, awards, or judgments,
including, without limitation, attorneys’ fees and costs (whether or not suit is
filed) (collectively “Claims” and singularly a “Claim”), any Indemnitee(s) may
suffer or incur or be threatened with, and whether based on statutory,
contractual, tort, common law or other theory, that are: (i) imposed by law;
(ii) arising, by reason of, or relating directly or indirectly to (a) the death
of or bodily injury to any person or persons, including, without limitation,
employees of Contractor, (b) injury to property (including loss of use and the
Work itself or the Casino Improvements, and including all costs for repair or
replacement of Work, materials, supplies or equipment (whether on or off the
Property or in transit) and including whether lost, stolen, damaged or
destroyed), equipment, or material, including, without limitation, any of the
same resulting or arising out of the performance of the Work performed by
Contractor or any Subcontractor or Vendor, or any other person performing Work
in connection with the Project for, on behalf of, or under the direction of
Contractor, (c) violation of or failure to comply with or abide by any
Governmental Requirements or variations from the Contract Documents in the
actual construction of the Work, (d) any infringement of the rights of any third
party, including, without limitation, copyright and patent rights (in connection
with which Contractor shall pay all royalties and license fees), (e) any stop
notices, mechanics’ liens or similar claims relating to any labor, services,
materials, goods or equipment, whether provided by Contractor, Subcontractor,
Vendor or any other person performing Work in connection with the Project, and
(f) any breach or alleged breach of Contractor’s warranties, representations,
obligations, covenants or agreements set forth in the Contract, and/or (iii)
relating to or arising out of or resulting from, directly or indirectly, the
performance of the Work, or from any act or omission of Contractor, or any
Subcontractor or Vendor, or any other person performing Work in connection with
the Project for, on behalf of, or under the direction of Contractor, or anyone
directly or indirectly employed by any of them, or anyone for whose acts any of
them may be liable or responsible at law, in equity, under the Contract
Documents or otherwise, regardless of whether or not such Claim is caused in
whole or in part by an Indemnitee; provided, however, that such indemnification
obligation, as to a respective Indemnitee, shall not extend to Claims to the
extent, but only to the extent, that such result from the gross negligence or
willful misconduct of such Indemnitee.

 

11.1.1 The indemnification obligations under this Article 11 or otherwise under
the Contract Documents shall apply to and include those Claims arising from the
negligent, tortuous, intentional or other acts of the indemnifying parties, and
such

 

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indemnification obligations are primary to any insurance in the names of the
Indemnitees. Such indemnification obligations shall not be limited in any way by
any limitation on the amount or type of insurance coverages carried whether
pursuant to the Contract Documents or otherwise, the amount of insurance
proceeds available or paid, or any limitation on the amount or type of damages,
compensation or benefits payable by or for Contractor or any Subcontractor or
other person or entity under workmen’s compensation acts, disability benefit
acts or other employee benefit acts.

 

11.1.2 The indemnification obligations under this Article 11 or otherwise under
the Contract Documents also shall not be construed to negate, abridge, or reduce
other rights or obligations of Contractor, including, but not limited to, any
obligation of indemnity which would otherwise exist at law, in equity, or
otherwise in favor of an Indemnitee.

 

11.1.3 The indemnification obligations under this Article 11 or otherwise under
the Contract Documents, including defense costs, shall include all attorneys’
fees, investigation costs, expert witness fees, court costs, and other costs and
expenses incurred by any Indemnitee. If any Claim occurs or is threatened,
Contractor shall promptly notify Owner and shall defend Owner and the other
Indemnitees with counsel reasonably acceptable to Owner, at Contractor’s
expense, unless Owner elects to defend itself, in which case Contractor shall
pay for Owner’s reasonable defense costs.

 

11.1.4 Contractor shall use all best efforts to cause all subcontracts, purchase
orders or other agreements with Subcontractors or Vendors, or any other person
performing Work in connection with the Project for, on behalf of, or under the
direction of Contractor, to include the same indemnity as that given by
Contractor in this Article 11 in favor of the Indemnitees.

 

11.2 Survival of Indemnification Provisions. The indemnification obligations set
forth in this Article 11 shall apply irrespective of whether or not any
Subcontractors or Vendors obtain or fail to obtain any required insurance
coverages, shall apply during the performance of the Work, and shall survive any
termination of the Contract or the Completion of the Work.

 

  12.   WARRANTY OBLIGATIONS.

 

12.1 Contractor’s Warranty. Contractor guarantees and warrants to Owner that (a)
the Work, whether performed by Contractor’s own personnel or by any
Subcontractors or Vendors, shall be first class in quality, free from all faults
and defects whatsoever (including, without limitation, patent, latent or
developed defects or inherent vice), and in strict conformance with the Contract
Documents and the highest standard for construction practices and quality
applicable to first class, championship golf course, and (b) all materials,
appliances, mechanical devices, supplies, and equipment incorporated into the
Work shall be new and first class in grade and quality and shall strictly meet
the specifications and requirements set forth in the Contract Documents. If
requested by Owner at any time and from time to time, Contractor will furnish
satisfactory evidence to Owner as to the kind and quality of materials,
appliances, mechanical devices, supplies and equipment incorporated or to be
incorporated into the Work. All Work not conforming to the

 

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requirements of this Section 12.1 (including, without limitation, substitutions
or deviations not properly approved and authorized by Owner in writing by Change
Order), shall be considered defective.

 

12.2 Contractor’s Warranty Period. While Contractor, Subcontractors and Vendors
shall be responsible for strict compliance with the requirements of Section 12.1
above throughout the course of the Work, the “Warranty Period” shall commence
upon Final Payment and shall extend for a period of twelve (12) months, from the
date of Final Payment or for such longer period as may be set forth in an
applicable manufacturer’s warranty or prescribed under Governmental Requirements
or otherwise (the “Warranty Period”). Nothing contained in this Article 12 shall
be construed to establish a period of limitation with respect to other
obligations which Contractor might have under the Contract Documents or under
applicable law, in equity or otherwise, or reduce the period of any other
similar warranty or guaranty that may apply at law or otherwise to the Work.
Establishment of the time periods as described in this Article 12 relates only
to the specific obligation of Contractor to correct the Work, and has no
relationship to the time within which the obligation to comply with the Contract
Documents may be sought to be enforced, nor to the time within which proceedings
may be commenced to establish Contractor’s liability with respect to
Contractor’s obligations other than specifically to correct the Work.

 

12.3 Compliance With Contract Documents. Upon receipt of Owner’s written notice
(whether during the course of the Work, during the Warranty Period, or during
any longer period of time as may be prescribed by Governmental Requirements or
otherwise), Contractor shall, at Contractor’s sole cost and expense and at no
cost to Owner, promptly perform all corrective services (including, without
limitation, furnishing all labor, materials, equipment and other services at the
Property and elsewhere) to Owner’s satisfaction as may be necessary to remedy
any defective workmanship or omissions in the Work, including, without
limitation, promptly correcting or replacing any Work rejected by Owner or which
is incomplete, defective or fails to conform strictly to the Contract Documents,
whether observed before or after Completion of the Work and whether or not
fabricated, installed, or completed. Without in any way limiting the foregoing,
if within twelve (12) months after Final Payment, or within such longer period
of time as may be applicable, any of the Work is found by Owner not to be in
accordance with the Contract Documents or Governmental Requirements or otherwise
defective or incomplete, Contractor shall correct and/or replace it promptly
after receipt of a written notice from Owner to do so. Contractor’s compliance
with its obligations as stated in this Article 12, and Owner’s acceptance of
such corrective services, shall at all times be determined by ascertaining
whether Contractor has achieved strict compliance to Owner’s satisfaction with
both the written and inferable requirements contained in the applicable Contract
Documents approved by Owner and Governmental Requirements.

 

12.4 Warranty Costs. All costs incurred by Contractor in fulfilling Contractor’s
remedial warranty obligations as set forth in this Article 12 shall be solely
Contractor’s responsibility, including, without limitation, costs for additional
testing and inspections and compensation for the services of other professionals
or consultants made necessary thereby. Contractor also shall, as part of
Contractor’s warranty and guarantee at Contractor’s own cost and expense, repair
or replace any other damaged components, material, finishes, vehicles and other
Work or portions of the Project or other property,

 

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including, without limitation, the Casino Improvements, damaged, affected or
otherwise made necessary by or resulting from such defective, non-conforming or
incomplete Work, to return the same to their original condition.

 

12.5 Timeliness of Corrective Services. To the extent possible, Contractor shall
fully perform all warranty and corrective services to Owner’s satisfaction
within five (5) calendar days of the receipt of Owner’s written notice of
defective workmanship. If the corrective services require more than five (5)
calendar days for completion, Contractor shall submit, within five (5) calendar
days of receipt of Owner’s written notice, a comprehensive written proposal
itemizing all corrective actions necessary which Contractor is prepared to and
shall immediately undertake and diligently pursue to enable the Work to achieve
strict compliance with the latest Contract Documents, including the latest Plans
and Specifications. In performing such corrective Work, Contractor shall perform
its Work so as to cause the least inconvenience and disruption to Owner’s
business which may require performance of Work at hours when Owner’s business is
least active. Contractor shall not be entitled to the extra costs, if any,
incurred in connection with performing corrective Work during non-business
hours. Additionally, the provisions of this Agreement relating to cooperation
with Owner, access, avoidance of disruption and related matters as set forth
therein also shall apply to the performance of any warranty-related work.

 

12.6 Warranty Survival. Contractor’s warranty and guarantee obligations set
forth in this Article 12 shall apply to Work done by Subcontractors or Vendors,
as well as to Work done by employees of Contractor, and such provisions shall
survive acceptance of the Work, any termination of the Contract, and Completion
of the Work. Contractor shall be responsible to fully indemnify and hold the
Indemnitees harmless from any and all liens, claims, lawsuits, costs and
expenses which may arise out of the failure of the Contractor (or any
Subcontractor or Vendor) to fulfill its warranty obligations pursuant to this
Contract and/or the Contractor’s failure to enforce the termination by Owner of
all or any portion of the Work being performed by Subcontractors and Vendors of
every tier.

 

12.7 Owner’s Right To Correct. In the event Contractor fails to timely correct
incomplete, nonconforming or defective Work following Owner’s written notice
described in Section 12.5 above, Owner shall have the right to correct or
arrange for the correction of any defects or omissions in the Work at
Contractor’s sole cost and expense and not as part of the Contract Sum.
Contractor shall bear all costs incurred by Owner in correcting such defective
Work, including, but not limited to, additional costs for redesigns, replacement
contractors, materials, equipment and all services provided by Owner’s
personnel. Owner shall be entitled to withhold and offset, subject to any notice
requirements, all costs incurred during any such corrective work against any
funds which are otherwise due or which may become payable to the Contractor. If
payments due Contractor are not sufficient to cover such amount, Contractor
shall immediately upon demand pay the difference to Owner and such difference
shall bear interest per annum at the prime rate (as then published by Bank of
America) plus two percent (2%) from the date of demand until paid.

 

12.8 Owner’s Right to Supplement Work of Contractor. If the Contractor violates
or breaches any of the terms, conditions or covenants of the Contract,

 

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then Owner may, without prejudice to any other remedy it may have, provide such
labor and materials as are reasonably necessary to remedy such deficiency
including the right to hire another contractor to supplement the Work of the
Contractor and deduct (after giving written notice to Contractor) all costs
thereof from any money due or thereafter becoming due to the Contractor by all
such amounts. If payments due Contractor under the Contract Sum are not
sufficient to cover such amount, Contractor shall immediately upon demand pay
the difference to Owner and such difference shall bear interest per annum at the
prime rate (as then published by Bank of America) plus two percent (2%) from the
date of demand until paid.

 

12.9 Acceptance of Non-Conforming Work. Owner may, in its sole and absolute
discretion, elect to accept a part of the Work which is not in accordance with
the requirements of the Contract Documents. In such case, the Contract Sum shall
be reduced as appropriate and equitable. Owner’s acceptance of any
non-conforming Work shall not waive or otherwise affect Owner’s right to demand
that Contractor correct any other defects or areas of non-conforming Work.

 

12.10 Warranty Exclusions. Contractor’s warranty obligations shall not apply to
defects caused by ordinary wear and tear.

 

12.11 Written Guaranty. All guarantees and warranties specified in the Contract,
including Contractor’s general warranty in this Article 12, shall be executed in
writing by Contractor and each Subcontractor and Vendor, as applicable, on their
respective letterhead, signed jointly by Contractor and Subcontractor or Vendor,
as applicable, and furnished to Owner upon commencement of the respective term
of each such guarantee and warranty and as a condition precedent to Final
Payment. Owner shall, in addition to the guarantee and warranty provided for in
this Article 12, also have the benefit of, and Contractor shall assign to Owner
in form and substance satisfactory to Owner, all warranties, service life
policies, indemnities and guarantees with respect to any and all materials,
appliances, mechanical devices, supplies and equipment incorporated into the
Work and given by the manufacturer, retailer, or other supplier, which shall be
supplied and assigned to Owner promptly after such is received by or becomes
available to Contractor and as a condition precedent to Final Payment. Further,
at Owner’s request, Contractor shall assist Owner in enforcing all such
warranties, guarantees, policies and indemnities.

 

  13.   DEFINITIONS. In this Agreement, the following terms shall have the
respective meanings set forth below.

 

13.1 “Change in the Work” means variations, modifications, additions,
reductions, deletions or changes to the Work from that indicated in the Contract
Documents as constituted from time to time which are not Material Changes in the
Work.

 

13.2 “Material Change in the Work” means any single variation, modification,
addition, reduction, deletion or Change to the Work from that indicated in the
Contract Documents as constituted from time to time valued at five percent (5%)
or more of the current Contract Sum.

 

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13.3 “Change Order” means a Change Proposal or Construction Change Directive
agreed to in writing by Owner and Contractor. Change Orders can modify the
Contract Sum and/or the Scheduled Completion Date, and each Change Order must
state whether, and by how much, the Contract Sum and/or the Scheduled Completion
Date will be modified as a result of the respective Change Order. Change Orders
will be effective only when in a writing executed by both Contractor and Owner.

 

13.4 “Change Proposal” means a written proposal prepared and signed by
Contractor setting forth (i) the Changes in the Work requested by Owner or
proposed by Contractor, (ii) the amount of adjustment, if any, in the Contract
Sum (using the formula in Section 3.1.2 of this Agreement), and (iii) the extent
of adjustment, if any, in the Scheduled Completion Date. A Change Proposal is
only a proposal unless and until signed in writing and accepted by Owner as a
Change Order.

 

13.5 “Construction Change Directive” means a written order, requested by Owner,
prepared by Owner, and signed by Owner, and given to Contractor, directing a
Change in the Work and stating a proposed basis for adjustments, if any, in the
Contract Sum and/or the Scheduled Completion Date, or any of them or any
combination of them. Owner may by Construction Change Directive, without
invalidating or breaching the Contract, order a Change in the Work.

 

13.6 “Cost of the Work” means costs actually and necessarily incurred by
Contractor in the proper performance of the Work, without markup or other
add-on. Such costs shall be at rates not higher than the standard then paid in
Las Vegas, Nevada except with Owner’s prior written consent. The Cost of the
Work shall include only the following items set forth in Sections 13.6.1 through
13.6.8 hereinbelow.

 

13.6.1 Labor Costs.

 

13.6.1.1 Wages and salaries, charged at Contractor’s normal and customary rates
which shall be no higher than the then-applicable market rates in Las Vegas,
Nevada, of construction workers directly employed by Contractor to perform the
construction of the Work at the Property or, with Owner’s prior written consent,
at off-site workshops.

 

13.6.1.2 A reasonable labor burden on wages and salaries included in the Cost of
the Work under Section 13.6.1.1 above, defined as a percentage of such actual
wages and salaries of Contractor’s construction workers described in Section
13.6.1.1 above, and which percentage shall differ on a trade-by-trade basis
(“Labor Burden”). Items within and covered by the percentage Labor Burden shall
not include any mark-up or fee of any kind and shall include vacation and
similar benefits and worker’s compensation customarily provided by Contractor to
its construction workers described in Section 13.6.1.1 above. Items covered by
or included within the Labor Burden shall not be separately or otherwise
included in the Cost of the Work.

 

13.6.2 Subcontract Costs. Payments made by Contractor to Subcontractors in
accordance with the terms of the Contract Documents and the requirements of
subcontracts approved in writing in advance by Owner.

 

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13.6.3 Costs of Materials and Equipment Incorporated in the Completed
Construction. Costs of materials and equipment incorporated or to be
incorporated in the completed construction, including costs of transportation
and costs of excess materials required to provide a reasonable allowance for
waste and for spoilage. Unused excess materials, if any, shall be handed over to
Owner at the Completion of the Work or, at Owner’s option, shall be sold by
Contractor and proceeds from such sales shall be credited to Owner as a
deduction from the Cost of the Work.

 

13.6.4 Costs of Other Materials and Equipment, Temporary Facilities and Related
Items.

 

13.6.4.1 Costs, including transportation, installation, maintenance, dismantling
and removal of materials, supplies, temporary facilities, machinery, equipment,
and hand tools not customarily owned by the construction workers, which are
provided by Contractor at the Property and fully consumed in the performance of
the Work; and cost less salvage value on such items if not fully consumed,
whether sold to others or retained by Contractor. Costs for items previously
used by Contractor shall mean fair market value.

 

13.6.4.2 Costs of removal of debris (created in the normal course of performance
of the Work) from the Property.

 

13.6.5 Other Costs. Other costs incurred in the performance of the Work if and
to the extent approved in advance in writing by Owner.

 

13.6.6 Emergencies. Reasonable out-of-pocket costs which are actually incurred
by Contractor in taking action to prevent threatened damage, injury or loss in
case of an emergency affecting the safety of persons and property.

 

13.6.7 Reimbursables and General Requirements Costs. Out-of-pocket costs
actually incurred by Contractor for the following, and without any mark up:

 

13.6.7.1 Reasonable telegrams, long-distance telephone calls, postage and parcel
delivery charges, telephone service at the Property and petty cash expenses of
the Property office, all as related to the Project.

 

13.6.7.2 Fees, taxes and assessments for the building permits for the Work and
for other permits, licenses and inspections of the Work for which Contractor is
required by the Contract Documents to pay, and third party expediting and
processing fees, if any, for obtaining the foregoing permits only if approved in
advance in writing by Owner.

 

13.6.7.3 Reasonable rental charges for temporary facilities (including trailers,
fences, dumpsters, storage facilities and portable toilets), machinery,
equipment, and hand tools not customarily owned by the construction workers,
which are provided by Contractor, including costs for transportation,
installation, minor repairs and replacements, emptying, dismantling and removal,
whether rented from Contractor or others.

 

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13.6.7.4 Reasonable costs for offsite storage of materials or equipment if
approved in writing by Owner.

 

13.6.7.5 Sales or use taxes to the extent approved in writing by Owner for
inclusion in the Cost of the Work.

 

13.6.7.6 Royalties and license fees paid for the use of a particular design,
process or product if expressly required by Owner under the Contract Documents.

 

13.6.8 Costs Not to be Reimbursed. Notwithstanding anything to the contrary in
the Contract Documents or otherwise, the Cost of the Work shall not include:

 

13.6.8.1 Salaries and other compensation of Contractor’s personnel stationed at
Contractor’s principal office or offices other than the Property office, except
for solely Steve Harrell as Project Manager but only to the extent of their time
devoted to Work at the Project performed by Contractor.

 

13.6.8.2 Expenses of Contractor’s principal office and offices other than the
Property office.

 

13.6.8.3 Overhead and general expenses.

 

13.6.8.4 Contractor’s capital expenses, including interest on Contractor’s
capital employed for the Work.

 

13.6.8.5 Rental costs of machinery and equipment, except as otherwise
specifically provided in this Agreement.

 

13.6.8.6 Costs due to the negligence or fault of, or failure to comply with the
terms and conditions of this Agreement or any of the other Contract Documents or
any subcontracts or purchase orders, by Contractor, any Subcontractor or Vendor,
including, without limitation, the cost of correction and/or replacement of any
damaged, defective or nonconforming Work, disposal of materials and equipment
incorrectly ordered or supplied, and replacement of materials and equipment
incorrectly ordered or supplied, or making good any damage to property
(including, without limitation, the Casino Improvements) not forming part of the
Work.

 

13.6.8.7 Cost of any insurance maintained (except as otherwise expressly
provided in this Agreement).

 

13.6.8.8 Costs of repairing Work or the Casino Improvements damaged by
Contractor, Subcontractors, and/or Vendors.

 

13.6.8.9 Costs of occupational or business licenses, fees or taxes required by
reason of Contractor’s general operations, and costs of trade associations with
which Contractor is associated.

 

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13.6.8.10 Costs incurred by Contractor in satisfying its indemnification
obligations pursuant to Article 11 of this Agreement or any other provision of
this Agreement or the other Contract Documents.

 

13.6.8.11 Costs associated with Work performed by Contractor pursuant to Article
12 of this Agreement.

 

13.6.8.12 Costs of labor and materials for any portion of the Work and/or
Project not performed by Contractor (or not performed or supplied pursuant to a
written agreement with Contractor or any of its Subcontractors or Vendors),
including, but not limited to, electronics, audio visual equipment, security
systems, and other similar items whether or not in the Plans and Specifications
and the other Contract Documents.

 

13.6.8.13 Payments on account of materials, supplies, and equipment until
delivered and suitably stored at the Property for subsequent incorporation or
consumption in the Work, except as may otherwise be expressly provided in this
Agreement.

 

13.6.8.14 Payments of any kind to Contractor or any other consultant, engineer
or contractor, other than as expressly provided in this Agreement.

 

13.6.8.15 Costs which would cause the Contract Sum (as may be adjusted from time
to time in strict accordance with this Agreement) to be exceeded.

 

13.6.8.16 Costs incurred by Contractor in preparing, modifying or amending
Change Proposals, or analyzing, responding to, or disputing Construction Change
Directives.

 

13.6.8.17 Any costs incurred by Contractor relating to a Change in the Work
without a Change Order or Construction Change Directive.

 

13.6.8.18 Additional costs incurred by Contractor in complying with an Owner
directive or notice under this Agreement, other than as expressly provided in
this Agreement.

 

13.6.8.19 Labor Costs (as defined in Section 13.5.1 of this Agreement) incurred
in obtaining permits, licenses or inspections.

 

13.6.8.20 Any costs not specifically and expressly described in Sections 13.5.1
through 13.5.8 of this Agreement.

 

13.6.8.21 Costs for materials which Owner ordered or for which Owner arranged
delivery pursuant to this Agreement.

 

13.6.9 No Duplication. Notwithstanding the breakdown or categorization of any
costs in this Section 13.6 or elsewhere in the Contract Documents, there shall
be no duplication of payment in the event any particular items for which payment
is requested can be characterized as falling into more than one of the types of
compensable or reimbursable categories.

 

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13.7 “Delays in the Work” means delays in the Work which, notwithstanding
Contractor’s best and most diligent efforts to re-deploy its forces or that of
Subcontractor, or re-schedule or re-sequence the Work, actually cause
Substantial Completion of the Work to occur after the Scheduled Completion Date.

 

13.8 “Excusable Delays” means (i) based on Contractor’s extensive experience in
constructing projects of similar scope and complexity, based on Contractor’s
representations and other terms contained in Section 5.10 of this Agreement, and
based on and taking into account the Technical Studies and Reports,
unforeseeable and/or unanticipatable Delays in the Work which are beyond
Contractor’s control and caused by unusually excessive rain or other
unforeseeable excessive inclement weather, unforeseeable material shortages,
fire, earthquake, riot, industry-wide labor disputes affecting the general Las
Vegas, Nevada area and not limited to the Project (and not a jurisdictional
dispute), national or state emergencies, acts of war or government moratorium,
or (ii) delays that are the fault solely of Owner, but only if such delays
affect critical path items and only after written notice from Contractor to
Owner of such delay and Owner’s failure to cure such delay within five (5)
business days after receipt of such written notice from Contractor, all in
accordance with and subject to Section 4.2.5 of this Agreement.

 

13.9 “Governmental Requirements” means all applicable laws, consents, approvals,
ordinances, codes, rules, directives, orders, statutes, permits (including,
without limitation, those listed on Permits and Entitlements attached hereto as
Exhibit D), regulations, entitlements, standards, mitigation measures, policies,
covenants, conditions and restrictions, whether federal, state or local, or
governmental, administrative or private. The term Governmental Requirements
shall also include, without limitation, the terms of the OCIP (as defined in
Section 10.1.1 of this Agreement) and any other insurance applicable to the
Work.

 

13.10 “Substantial Completion of the Work” means the stage in the progress of
the Work when the Work is complete and ready for reasonable commercial use in
the sole opinion of Owner with the exception of the final 90 days of scheduled
grow-in which is maintained by the Owner. The Work will not be considered
suitable for Substantial Completion review until all Project systems included in
the Work are operational as designed and scheduled; all designated or required
governmental inspections and certifications have been made and posted,
including, without limitation, the temporary certificate of occupancy and/or its
equivalent; the designated instruction of Owner in the operation of all systems
has been completed; and all final finishes within the Contract are in place. In
general, the only remaining Work shall be minor in nature, so that Owner could
utilize the facility comprising the Project on that date (in the manner
described above), and all elements and utilities in and under the Project are
fully functionable and operable as provided in the Contract, and the Completion
of the Work by Contractor would not materially interfere with or hamper Owner’s
intended use, occupancy or enjoyment of the Project. When Contractor considers
that the Work, or a portion of the Work which Owner agrees in writing to accept
separately, is substantially complete, Contractor shall so notify Owner in
writing. Upon receipt of Contractor’s notice, Owner will make an inspection to
determine whether the Work or designated portion of the Work is substantially
complete in accordance with the Contract Documents. If Owner’s inspection
discloses an item which is not in accordance with the requirements of the
Contract Documents, Contractor shall, before

 

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issuance of the Certificate of Substantial Completion (as defined below),
diligently and expeditiously complete or correct such item upon notification by
Owner. Contractor shall then submit a request for another inspection by Owner to
determine Substantial Completion of the Work. When the Work (or designated
portion of the Work, if applicable) is substantially complete as determined by
Owner and Owner’s Lenders, Owner will prepare a “Certificate of Substantial
Completion” which shall establish the date of Substantial Completion of the
Work.

 

13.11 “Subcontractor” means any person or entity who has a contract with or is
engaged or employed by Contractor, or with any other Subcontractor, or is
engaged or employed by Contractor or any other Subcontractor, at any tier to
construct or perform a portion of the Work and/or provide construction related
services at the Project, and includes, without limitation, each of their
respective employees, agents and representatives and any party any of them may
be responsible or liable for at law, in equity or under the Contract Documents.

 

13.12 “Vendor” means any person or entity which has a purchase order or other
agreement to provide materials, supplies, equipment and/or related services for
the Work and/or provide installation services at the Project, through a
contract, purchase order or other arrangement with Contractor or any
Subcontractor at any tier, and includes, without limitation, their respective
employees, agents, and representatives and any party any of them may be
responsible or liable for at law, in equity or under the Contract Documents.

 

13.13 “Work” means all skilled, unskilled and professional labor, services,
fabrication, materials, supplies, tools, equipment, fixtures, hardware,
materials, and other things which are appropriate, desirable or necessary for
Contractor to design, construct and complete the Project and otherwise fulfill
its obligations under and in strict compliance with the Contract Documents,
including, without limitation, all responsibilities and obligations of
Contractor relative to Punchlist Items.

 

  14.   OWNER’S LENDERS

 

14.1 Owner’s Lenders. Contractor acknowledges and agrees that Owner has provided
notice to Contractor, and Contractor shall before entering into any subcontract
or purchase contract provide notice to every Subcontractor and Vendor, that
Owner’s funds for construction of the Project, including payment of the Contract
Sum, shall be borrowed and or derived substantially from one or more lenders
providing financing for the Project from time to time (“Owner’s Lenders”), and
Owner’s ability to obtain such funds shall be subject to one or more loan
documents and conditions precedent to advances thereunder. The term “Owner’s
Lenders” shall also mean and include any and all trustees, intercreditor agents,
disbursement agents, administrative agents, consultants, architects, inspectors,
construction managers, auditors and engineers appointed or retained directly or
indirectly by or on behalf of any of Owner’s Lenders.

 

14.2 Payments. Owner’s Lenders shall have the right at any time and from time to
time to make payment directly to Contractor and/or by joint payee check to
Contractor and any Subcontractor or Vendor, for Work performed under the
Contract.

 

48

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14.3 Audit Rights. Owner’s Lenders shall have and be entitled to all of the same
audit and inspection rights as Owner has under this Agreement.

 

14.4 Access. Owner’s Lenders shall have and be entitled to all of the same
rights to access and inspect the Property, Project and Work, wherever located,
as Owner has under the Contract documents, at reasonable times and upon
reasonable notice and subject to reasonable safety precautions.

 

14.5 Material Changes. Contractor acknowledges and agrees that certain material
Changes in the Work, including those that increase the Contract Sum and/or
extend the Scheduled Completion Date, shall be subject to the prior approval of
Owner’s Lenders and shall not become effective without such approval.

 

14.6 General Cooperation. Contractor agrees to cooperate fully with all such
Owner’s Lenders. Contractor agrees to (a) provide written notice to Owner’s
Lenders of any Change in the Work, material change in the manner or amounts paid
to Contractor, extension or acceleration of the Scheduled Completion Date, or
material change in the Plans and Specifications, (b) authorize Subcontractors
and Vendors to communicate directly with Owner’s Lenders regarding the progress
of the Work, (c) provide Owner’s Lenders with reasonable working space and
access to telephone, copying and telecopying equipment, (d) communicate with
Owner’s Lenders and, on request to execute, provide and/or deliver as the case
may be, such documents, certificates, consents, invoices and instruments, and
other information, as Owner’s Lenders may reasonably request with respect to the
Work, the Project and/or payment of the cost thereof, (e) enter into such
amendments to the Contract as Owner’s Lenders may reasonably request, (f) make
adjustments and modifications of the payment procedures provided for in the
Contract as may be reasonably requested by Owner’s Lenders in connection with
permitting the disbursement of loan proceeds to pay for the Work, (g) otherwise
facilitate Owner’s Lenders’ review of the construction of the Project, and (h)
enter into a consent to assignment in favor of Owner’s Lenders consenting to the
collateral assignment of the Contract to Owner’s Lenders.

 

  15.   MISCELLANEOUS PROVISIONS.

 

15.1 Subordination. Notwithstanding any other provision of the Contract
Documents, and notwithstanding the provisions of Section 108.225 (and any
related Section) of the Nevada Revised Statutes, Contractor agrees for itself
and for every Subcontractor and Vendor and every other person performing any
services or providing any materials relating to the Work, that any and all liens
and lien rights and benefits (including enforcement rights) Contractor and or
any of the other foregoing parties may or do have under applicable law
(including, without limitation, Nevada Revised Statutes Sections 108.221 to
108.246), shall at all times be subordinate and junior to any and all liens,
security interests, mortgages, deeds of trust and other encumbrances of any kind
(on the Property and otherwise) in favor of any of Owner’s Lenders (“Lender
Liens”), notwithstanding that Work may be or is commenced or done on, and
materials may be or are furnished to, the Property prior to any Lender Liens
being imposed upon or recorded against the Property or any of Owner’s assets and
before expiration of the time fixed under applicable laws for the filing of
mechanics and materialmen’s liens. Contractor shall, and Contractor shall cause
every Subcontractor and Vendor at every tier, and any other person performing
services or providing materials

 

49

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relating to the Work to, sign and deliver to Owner and Owner’s Lenders from time
to time upon request by Owner or any of Owner’s Lenders: (a) written and
recordable acknowledgments and restatements of the provisions of this Section
15.1 and the subordination described herein, and (b) such affidavits,
certificates, releases, indemnities, waivers and instruments (and in form and
content) as Owner’s or Owners Lenders’ title insurers shall require to allow
such insurers to issue such title endorsements as Owner or Owner’s Lenders
require (including insuring first priority of Lender Liens). Contractor’s, or
any other party’s, failure to provide the items required in clauses (a) and (b)
hereinabove upon request, or Owner’s or Owner’s Lenders’ inability to obtain at
any time endorsements to Owner’s Lenders’ title policies (or issuance of initial
title policies) insuring first priority of Lender Liens, including, without
limitation, senior to any mechanics’ or materialmen’s lien or lien rights, shall
constitute a material default and breach of the Contract Documents and failure
of a condition precedent to any payment by Owner owed to Contractor under the
Contract or otherwise.

 

15.2 Time is of the Essence. Time is of the essence of this Agreement and each
of the terms and conditions of this Agreement, including, without limitation, in
the Completion of the Work in the manner set forth in the Contract. Whenever
action must be taken under this Agreement during a period of time that ends on a
Saturday, Sunday or federal or state holiday, then such period of time shall be
extended until the next day which is not a Saturday, Sunday or such holiday.

 

15.3 Entire Agreement; Modification; Waiver. This Agreement and the other
Contract Documents (including, without limitation, the Plans and Specifications
and any amendments, modifications and supplements thereto) constitute the entire
understanding and agreement of the parties to this Agreement concerning the
Project and the Work, and supersede all prior or contemporaneous written or oral
understandings or agreements of the parties, and there are no other agreements
or understandings between the parties, with respect the Project and the Work.
Each and all of the Exhibits A through and including L referenced in this
Agreement are hereby expressly incorporated herein by this reference. No
modifications of the Contract shall be binding unless executed in writing by the
parties to this Agreement. No waiver of any of the provisions of the Contract
shall be binding unless executed in writing by the waiving party, and any such
waiver shall not constitute a waiver of any other provision of the Contract, nor
shall any such waiver constitute a continuing waiver unless otherwise expressly
provided.

 

15.4 Headings. Section and other headings are not to be considered part of this
Agreement, have been included solely for the convenience of the parties, and are
not intended to be full or accurate descriptions of the contents.

 

15.5 Assignment; Successors to be Bound. Contractor shall not assign its rights
or delegate its duties under this Agreement or any other Contract Document,
unless Owner shall have given Owner’s written consent prior to any such
assignment or delegation. Owner shall have the right to assign Owner’s rights
and delegate Owner’s duties under this Agreement without Contractor’s consent
upon a sale, transfer or other disposition or hypothecation of the Property,
including, without limitation, to any Owner’s Lenders, and Contractor hereby
agrees to execute any necessary consents required to facilitate such assignment.
Owner may also, without Contractor’s consent but with notice to Contractor,

 

50

--------------------------------------------------------------------------------

change its name from time to time. Owner may designate new representatives from
time to time by giving Contractor written notice. All of the terms and
provisions of this Agreement shall be binding upon and shall inure to the
benefit of the parties to this Agreement, and their respective permitted
transferees, successors, assigns and legal representatives.

 

15.6 Intent of Parties. Contractor and Owner acknowledge that applicable Nevada
Revised Statutes in certain circumstances, among others (i) regulate the process
by which an owner can withhold payment(s) to a contractor or subcontractor,
including the amount(s) that can be withheld, and (ii) regulate when and how an
owner or a contractor can terminate a construction contract and the available
remedies upon such termination. It is the express intent of the parties to this
Agreement that Contractor completely and unconditionally waive to the fullest
extent allowable each and all of those Nevada Revised Statutes that are
inconsistent with the provisions of this Agreement, including those with regard
to the matters described in the foregoing clauses (i) and (ii). Provided,
however, Owner and Contractor acknowledge that some applicable provisions of the
Nevada Revised Statutes cannot be waived. Accordingly, to the extent the
foregoing waiver by Contractor is expressly prohibited by applicable Nevada
Revised Statutes as to certain provisions thereof, Contractor’s foregoing waiver
shall not be deemed to extend to those non-waivable provisions of the Nevada
Revised Statutes. In such circumstances, if any, where one or more provisions of
this Agreement are in conflict with provisions of the Nevada Revised Statutes
that cannot be waived, the offending portions of the provision in this Agreement
shall be interpreted so as to be consistent with the non-waivable sections of
the Nevada Revised Statutes. To the extent such interpretation renders any
portions of this Agreement ineffective, it is the intent of the parties that
only such offending portion shall be so deemed, and the remainder of the
provisions in this Agreement shall be of full force and effect.

 

15.7 Governing Law. This Agreement has been executed in, and shall be governed
by, and construed and enforced in accordance with, the laws of the State of
Nevada.

 

15.8 Survival. The provisions of this Agreement, including Contractor’s
covenants, representations, guaranties, releases, warranties and indemnities and
the benefit thereof, shall survive as valid and enforceable obligations
notwithstanding any termination, cancellation or expiration of the Contract,
acceptance of the Work, Completion of the Work or completion of the Project, or
any combination of them.

 

15.9 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

15.10 Unenforceability of this Agreement. If any term, provision, covenant or
condition of this Agreement or any application thereof should be held by a court
of competent jurisdiction to be invalid, void or unenforceable, such invalidity,
voidness or unenforceability shall not impair, diminish, void, invalidate or
affect in any way any other terms, provisions, covenants and conditions of this
Agreement or any application thereof, all of which shall continue in full force
and effect.

 

51

--------------------------------------------------------------------------------

 

15.11 Dispute Resolution. This Agreement and all other Contract Documents shall
be governed by the laws of the State of Nevada. Disputes between Owner and
Contractor and relating to the Contract and/or the Work shall be resolved as
follows: The parties shall first attempt to resolve disputes through direct
negotiations in good faith. If a dispute cannot be settled through direct
negotiations, then any party may submit the dispute for non-binding mediation
under the Construction Industry Mediation Rules of the American Arbitration
Association by filing demand for mediation with the other party and with the
American Arbitration Association, such mediation to occur in Las Vegas, Nevada
or in such other place as the parties may mutually agree upon. Except for
provisional remedies, no party may seek relief through any judicial or
non-judicial forum until direct good faith negotiations and mediation in
accordance with the Construction Industry Mediation Rules of the American
Arbitration Association currently in effect has been pursued and the mediation
was unsuccessful in resolving the dispute. Each party shall pay an equal, pro
rata share of the mediation service’s fees and costs and of the mediator’s fees
and costs. The mediation submission may be made concurrently with the filing of
a complaint or other appropriate action or proceeding for relief, but, in such
event, mediation shall proceed in advance of legal, equitable or other
proceedings (other than those associated with provisional remedies) which shall
be stayed pending mediation for a period not exceeding sixty (60) calendar days
from the date of filing and service of the complaint or other action for relief,
unless stayed for a longer period by mutual agreement of the parties or by court
order. In the event of a dispute arising out of or in connection with this
Agreement, the prevailing party shall be entitled to recover the actual
attorneys’ fees reasonably incurred in prosecuting such dispute. In the event a
dispute arises between Owner and Contractor, Contractor shall continue to
perform in accordance with the Contract, without interruption or delay (subject
to Owner’s rights under the Contract).

 

15.12 Notices. Any notice, request, demand, instruction or other communication
to be given under the Contract Documents, shall be in writing and shall be
hand-delivered or sent by Federal Express or a comparable overnight or mail
service, or sent by confirmed facsimile transmission or mailed by U.S.
registered or certified mail, return receipt requested, postage prepaid, to
Contractor or Owner, as the case may be at its address set forth below:

 

To Contractor:

 

Steve Harrell, President, CEO
Wadsworth Golf Construction Company
600 N. 195th Ave. Buckeye, Arizona 85326 (623)
853-9100 (623) 853-0217

To Owner:

 

Kenn Wynn, President
Wynn Design and Development LLC
3145 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Facsimile No.: (702) 733-4738
Telephone No. : (702) 733-4812

 

52

--------------------------------------------------------------------------------

 

and

 

   

Todd Nisbet, Executive Vice President –
Project Director
Wynn Design and Development LLC
3145 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Facsimile No.: (702) 733-4715
Telephone No.: (702) 733-4497

 

Contractor shall concurrently with delivery to Owner provide to Owner’s Lenders
copies of all notices at an address or addresses to be provided, with copies to:

 

   

Pamela B. Kelly
Latham & Watkins
633 West Fifth Street, Suite 4000
Los Angeles, California 90071
Telephone No.: (213) 891-8726
Facsimile No.: (213) 891-8763

 

Notice will be deemed to have been given upon the earlier of receipt or, if made
by Federal Express or confirmed facsimile, one business day after sending, or if
made by U.S. Mail, three calendar days after sending. The addressees and
addresses for the purpose of this paragraph may be changed by giving notice as
provided in this Agreement; provided, however, that unless and until such
written notice is actually received, the last addressee and address stated in
this Agreement will continue in effect for all purposes.

 

15.13 Confidentiality. Owner considers all information (regardless of form)
pertaining to the Project to be confidential and proprietary, including
information which is prepared or developed by or through Contractor, Owner or
Owner’s other contractors, unless otherwise stated to Contractor in writing.
Contractor shall not, and shall not allow, suffer or permit any Subcontractors
or Vendors to, disclose any such information without Owner’s prior written
consent. Contractor shall obtain similar written agreements from each and every
Subcontractor and Vendor as Owner may reasonably request. Contractor shall not
issue any news releases or any other advertising pertaining to the Work or the
Project, including advertising its participation in the Project, without
obtaining Owner’s prior written approval. Contractor hereby agrees not to use
the name of Owner’s Property or premises, or any variation thereof, or any logos
used by Owner, in connection with any of Contractor’s business promotion
activities or operations without Owner’s prior written approval. Contractor
shall require its Subcontractors and Vendors to comply with the requirements
imposed upon Contractor by this Section 15.13, including obtaining Owner’s prior
written consent to the form and content of any promotional or advertising
publications or materials which depict or refer to their respective roles in
providing Work for the Project. Neither Contractor nor any Subcontractor or
Vendor shall post, erect or place on the Property, the Work, Owner’s premises or
the Project any sign, banner, billboard or display for marketing, advertising,
promotional or other similar reasons, and no trade names or other identification
shall appear on any item of the Work or at any place on the

 

53

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Project where such name or identification will be seen by the general public,
except as approved in writing by Owner. The Contract Documents are the property
of Owner and are for use solely with respect to the Work and are not to be used
by Contractor or any Subcontractor on any other projects or for any other
purpose, and all copies of the foregoing shall be returned or suitably accounted
for to Owner upon Completion of the Work.

 

15.14 Legal Fees. The losing party shall promptly pay to the prevailing party
all costs and reasonable attorneys’ fees incurred in connection with any legal
action, including mediation, in whole or in part, based on a breach of the
Contract or other dispute arising out of or in connection with the Contract.

 

15.15 Third-Party Beneficiaries. Notwithstanding any provision of this Agreement
to the contrary, no Subcontractor or Vendor shall be, or be considered to be, a
third-party beneficiary of, or entitled to assert any rights under, this
Agreement.

 

15.16 Statute Of Limitations. Notwithstanding any provision of the Contract
Documents to the contrary, no applicable statute of limitations shall be deemed
to have commenced with respect to any portion of the Work which is not in
accordance with the requirements of the Contract Documents, which would not be
visible or apparent upon conducting a reasonable investigation, and which is not
discovered by Owner until after the date which, but for this Section, would be
the date of the commencement of the applicable statute of limitations; the
applicable statute of limitations instead shall be deemed to have commenced on
the date of such discovery by Owner.

 

[SIGNATURE PAGE FOLLOWS]

 

54

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IN WITNESS WHEREOF, the parties to this Agreement have executed and delivered
this Agreement as of the date and year hereinabove first set forth.

 

CONTRACTOR

     

OWNER

WADSWORTH GOLF CONSTRUCTION COMPANY

     

WYNN LAS VEGAS, LLC,

a Delaware corporation

     

a Nevada limited liability company,

as the Borrower

By:

 

/s/    Stephen Harrell        

--------------------------------------------------------------------------------

     

By:

 

/s/    W. Todd Nisbet        

--------------------------------------------------------------------------------

Name:

 

Stephen Harrell

--------------------------------------------------------------------------------

     

Name:

 

W. Todd Nisbet

--------------------------------------------------------------------------------

Title:

 

President

--------------------------------------------------------------------------------

     

Title:

 

Executive Vice President – Project Director

--------------------------------------------------------------------------------

 

55

--------------------------------------------------------------------------------

 

EXHIBITS

 

A

  

–

  

Property Description

B

  

–

  

Project Drawings and References

C

  

–

  

Project Construction Schedule

D

  

–

  

Permits and Entitlements

E

  

–

  

Technical Studies And Reports

F

  

–

  

Conditional Waiver And Release Upon Progress Payment

G

  

–

  

Unconditional Waiver And Release Upon Progress Payment

H

  

–

  

Golf Course Contractor’s Advance Certificate

I

  

–

  

Full and Unconditional Release of All Claims and Waiver of Lien

J

  

–

  

Project Construction Safety And Health Guidelines

K

  

–

  

OCIP Manual

L

  

–

  

Unit Prices

M

  

–

  

Golf Course Contractor’s Completion Certificate

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

EXHIBIT A

 

PROPERTY DESCRIPTION

 

August 5, 2002 M. Smith/P. Burn HS 311.004.02 This legal describes the parcel of
land for 

the Le Rêve Golf Course Property, generally located in the North Half (N1/2) of
Section 16,

Township 21 South, Range 61 East, M.D.M., Clark County, Nevada.

 

That Parcel Of Land Shown As Parcel A2 In File 122 At Page 45 Of Records Of
Survey, Being A Portion Of Lot 1 as Recorded In Book 100 Of Plats, At Page 20,
Official Records Of Clark County, Nevada, Lying Within The North Half (N1/2) Of
Section 16, Township 21 South, Range 61 East, M.D.M., Clark County, Nevada, More
Particularly Described As Follows:

 

Beginning At The Northeast Corner Of Lot 1 Of Book 100 Of Plats, At Page 20,
Official Records Of Clark County, Nevada; Thence Along The Boundary Lines Of
Said Lot 1 The Following Twelve (12) Courses;

 

  1.   South 00°51’51” West, 2010.71 Feet;

 

  2.   South 41°09’59” East, 192.03 Feet;

 

  3.   South 00°05’02” West, 172.90 Feet;

 

  4.   South 89°54’58” East, 5.00 Feet;

 

  5.   North 45°05’02” East, 21.21 Feet;

 

  6.   South 00°05’02” West, 70.00 Feet;

 

  7.   North 44°54’58” West, 21.21 Feet;

 

  8.   North 89°54’58” West, 25.00 Feet To The Beginning Of A Curve, Concave To
The North And Having A Radius Of 138.00 Feet;

 

  9.   Westerly Along Said Curve To The Right, Through A Central Angle Of
36°06’02”, An Arc Length Of 86.95 Feet To A Point Of Non-Tangency, To Which A
Radial Line Bears South 36°11’04” West;

 

  10.   South 36°11’04” West, 27.56 Feet;

 

  11.   North 01°49’10” East, 11.00 Feet;

 

  12.   North 88°10’59” West, 2475.94 Feet;

 

Thence Departing Boundary Lines Of Said Lot 1, North 01°49’06” East, 429.97
Feet; Thence North 16°49’06” East, 1916.22 Feet To The Northerly Line Of Said
Lot 1; Thence Along The Northerly Line Of Said Lot 1 The Following Three (3)
Courses;

 

  1.   South 89°06’35” East, 488.31 Feet;

 

  2.   North 73°09’06” East, 131.27 Feet;

 

EXHIBIT A-1

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

EXHIBIT A (cont’d.)

 

  3.   South 89°06’35” East, 1314.31 Feet To The Point Of Beginning.

 

Together With Lots 70-84 Of That Certain Final Map Entitled “Desert Inn Country
Club Estates Unit 2”, Recorded In Book 7 Of Plats, At Page 58, Official Records
Of Clark County, Nevada.

 

And

 

Together With Lots 7-18, 21,22,24,25, 28-31, 33-35, 41,42, 44-58 Of That Certain
Final Map Entitled “Desert Inn Country Club Estates”, Recorded In Book 3 Of
Plats, At Page 36a, Official Records Of Clark County, Nevada, Together With
Those Portions Of Land Described In A Deed Recorded December 22, 1957, As
Instrument Number 104199, Official Records Of Clark County, Nevada;

 

And

 

Together With That Portion Of The Northeast Quarter (Ne 1/4) Of Section 16,
Township 21 South, Range 61 East, M.D.M., Nevada, Described By Metes And Bounds
As Follows:

 

Beginning At A Point Distant North 89°06’35” West 380 Feet And South 00°53’56”
West 190 Feet From The Northeast Corner Of The Said Section 16; Thence East A
Distance Of 15 Feet To A Point; Thence South A Distance Of 30 Feet To A Point;
Thence West A Distance Of 15 Feet To A Point; Thence North A Distance Of 30 Feet
To The Point Of Beginning.

 

And

 

Together With That Portion Of The Northeast Quarter (Ne ¼) Of Section 16,
Township 21 South, Range 61 East, M.D.M., Nevada, Described By Metes And Bounds
As Follows:

 

Beginning At A Point Distant South 89°06’35” East 1535 Feet And South 00°53’56”
West 1220 Feet From The Northwest Corner Of The Said Ne ¼ Section 16; Thence
East A Distance Of 85 Feet To A Point; Thence South A Distance Of 85 Feet To A
Point; Thence West A Distance Of 85 Feet To A Point; Thence North A Distance Of
85 Feet To The Point Of Beginning.

 

And

 

EXHIBIT A-2

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

EXHIBIT A (cont’d.)

 

Together With An Easement For A Sewer Pressure Line Described As Follows:

 

That Portion Of The Northeast Quarter Of (Ne ¼) Of Section 16, Township 21
South, Range 61 East, M.D.M., Nevada Being Five (5) Feet On Each Side Of The
Following Described Center Line Beginning At A Point Distant North 89°06’04”
West 203 Feet And South 0°51’50” West 225 Feet From The Northeast Corner Of The
Said Ne ¼ Section 16; Thence A South 42°00’ West A Distance Of 1350 Feet  To The
Water Refining Plant.BASIS OF BEARINGS

 

South 88°45’06” East, Being The South Line Of The Southwest Quarter (Sw 1/4) Of
The Northeast Quarter (Ne 1/4) Of Section 16, Township 21 South, Range 61 East,
M.D.M., Clark County, Nevada, As Shown In Book 100 Of Plats, At Page 20,
Official Records Of Clark County, Nevada.

 

End Of Legal Description.

 

Paul Burn, Pls

Professional Land Surveyor

Nevada Certificate No. 11174

 

EXHIBIT A-3

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

EXHIBIT B

 

PROJECT DRAWINGS AND REFERENCES

 

1. Drawing List/Overview as prepared by Butler/Ashworth Architects, dated
October 10, 2002.

 

2. Letter of Intent as prepared by Wynn Design and Development dated January 31,
2003 and returned signed by Wadsworth Golf Construction February 1, 2003.

 

3. Le Rêve Golf Course Specifications CD as prepared by Butler/Ashworth
Architects dated September 20, 2002.

 

4. Scope of Work Clarifications (Divisions 1, 2, 3 and 10) dated February 18,
2003 as prepared by Wynn Design and Development.

 

5. Project Management Requirements as prepared by Wynn Design and Development
dated February 18, 2003.

 

6. Golf Course Maintenance Facility Drawings as listed on Drawing List/Overview
as prepared by Butler/Ashworth Architects, dated January 20, 2003.

 

7. Golf Course Technical Drainage Study Drawings as listed on Drawing
List/Overview as prepared by Lochsa Engineering, dated July 12, 2002.

 

EXHIBIT B-1

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

EXHIBIT C

 

PROJECT CONSTRUCTION SCHEDULE

 

1. Construction Schedule as provided by Wadsworth Golf Construction Company,
Inc., dated February 18, 2003.

 

2. Le Rêve Hotel Construction Schedule as provided by Marnell Corrao Associates
dated January 31, 2003.

 

EXHIBIT C-1

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

EXHIBIT D

 

PERMITS AND ENTITLEMENTS

 

1. Department of Air Quality Management Dust Permit # 200208069; issued to Wynn
Design and Development on August 9, 2002 by the Clark County Department of Air
Quality Management.

 

2. Clark County Building Department Grading Permit #02 34807 GD6, dated February
5, 2003.

 

3. Revised Le Rêve Golf Course Use Permit #0301-02 as approved by the Clark
County Department of Comprehensive Planning, dated May 16, 2002.

 

EXHIBIT D-1

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

EXHIBIT E

 

TECHNICAL STUDIES AND REPORTS

 

1. Technical Drainage Study for Wynn Resort A as prepared by Carter Burgess,
dated June 2001.

 

2. Update to Onsite Technical Drainage Study for Le Rêve formerly Wynn Resort A
as prepared by Carter Burgess, dated January 8, 2002.

 

3. Addendum #1 to the Update to Onsite Technical Drainage Study for Le Rêve
formerly Wynn Resort A as prepared by Carter Burgess, dated March 2002.

 

4. Department of Public Works Approval Letter for Update to the Technical
Drainage Study for Le Rêve, dated April 1, 2002.

 

5. Le Rêve Golf Course Geotechnical Report as prepared by Western Technologies,
Inc., dated August 22, 2002.

 

6. Soil Particle and Drainage Analysis as prepared by Hummel & Company, Inc.
Report dated May 16, 2002.

 

7. Irrigation Well Sample, Analysis and Report as prepared by Converse
Consultants dated June 9, 1999.

 

8. Technical Drainage Study for Le Rêve Golf Course as prepared by Lochsa
Engineering dated July 2002.

 

9. Addendum #1 to the Technical Drainage Study for Le Rêve Golf Course as
prepared by Lochsa Engineering dated September 6, 2002.

 

10. Supplement #1 to Addendum #1 of the Technical Drainage Study for Le Rêve
Golf Course as prepared by Lochsa Engineering dated September 12, 2002.

 

11. Department of Development Services Approval Letter for Technical Drainage
Study for Le Rêve Golf Course dated September 25, 2002.

 

12. Desert Inn Country Club & Spa Irrigation As Built Drawings as prepared by
Gordons Irrigation Consulting dated November 20, 1985.

 

13. Contamination Assessment as prepared by Terracon dated September 10, 2002.

 

EXHIBIT E-1

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

14. Pre-Demolition Asbestos Survey as prepared by Terracon dated September 17,
2002.

 

15. Addendum to the Geotechnical Evaluation as prepared by Western Technologies
dated September 6, 2002 (original dated August 23, 2002).

 

16. Grow-in Equipment List as prepared by Wynn Design and Development dated
February 18, 2003.

 

EXHIBIT E-2

--------------------------------------------------------------------------------

 

EXHIBIT F

 

[WYNN DESIGN AND DEVELOPMENT

GRAPHIC APPEARS HERE]

 

LE RÊVE

 

CONDITIONAL WAIVER AND RELEASE

UPON PROGRESS PAYMENT

 

Project Description:

 

 

--------------------------------------------------------------------------------

Period Ending:

 

 

--------------------------------------------------------------------------------

Work Performed:

 

 

--------------------------------------------------------------------------------

Work Performed by:

 

 

--------------------------------------------------------------------------------

Under Contract to:

 

 

--------------------------------------------------------------------------------

Contract Date:

 

 

--------------------------------------------------------------------------------

 

Original Contract Amount:

 

--------------------------------------------------------------------------------

Change Order Amounts (increases in Contract Price):

+

 

--------------------------------------------------------------------------------

Change Order Amounts (decreases in Contract Price):

-  

 

--------------------------------------------------------------------------------

Adjusted Contract Amount:

 

--------------------------------------------------------------------------------

Work Completed to Date:

 

--------------------------------------------------------------------------------

Less Retainage Not Yet Due:

-

 

--------------------------------------------------------------------------------

Net Amount Due to Date:

 

--------------------------------------------------------------------------------

Less Payments Received to Date:

-

 

--------------------------------------------------------------------------------

Total Payments Due:

 

--------------------------------------------------------------------------------

 

Upon receipt by the undersigned of a check from WYNN LAS VEGAS, LLC in the sum
of $                         payable to                                     ,
and when the check has been properly endorsed and has been paid by the bank upon
which it is drawn, this document shall become effective to release any
mechanic’s lien, stop notice, or bond right the undersigned has on the job of
WYNN LAS VEGAS, LLC; WYNN DESIGN & DEVELOPMENT, LLC; VALVINO LAMORE, LLC for
WYNN LAS VEGAS, LLC Project#                                  Description
                                , located at 3131 Las Vegas Blvd., South, Las
Vegas, Nevada to the following extent.

 

This release covers a progress payment for labor, services, equipment or
materials furnished to WYNN LAS VEGAS, LLC through
                                 only and does not cover any retentions retained
before or after the release date.

 

DATED this _____ day of __________, 200__

     

 

--------------------------------------------------------------------------------

           

By:

 

 

--------------------------------------------------------------------------------

           

Title:

 

 

--------------------------------------------------------------------------------

               

OWNER, OFFICER or PARTNER

 

EXHIBIT F-1

--------------------------------------------------------------------------------

 

STATE OF NEVADA          )

                                               ) ss.

COUNTY OF CLARK          )

 

On this          day of                  , 200      personally appeared before
me, a Notary Public,                                                      who
acknowledged to me that (s)he has read the foregoing, that the same is true and
correct and that (s)he is authorized to execute the same.

 

       

--------------------------------------------------------------------------------

NOTARY PUBLIC, in and for said County and State

 

EXHIBIT F-2

--------------------------------------------------------------------------------

 

EXHIBIT G

 

[WYNN DESIGN AND DEVELOPMENT

GRAPHIC APPEARS HERE]

 

LE RÊVE

 

UNCONDITIONAL WAIVER AND RELEASE

UPON PROGRESS PAYMENT

 

Project Description:

 

 

--------------------------------------------------------------------------------

Work Performed:

 

 

--------------------------------------------------------------------------------

Work Performed by:

 

 

--------------------------------------------------------------------------------

Under Contract to:

 

 

--------------------------------------------------------------------------------

Contract Date:

 

 

--------------------------------------------------------------------------------

 

Original Contract Amount:

 

--------------------------------------------------------------------------------

Change Order Amounts (increases in Contract Price):

+

 

--------------------------------------------------------------------------------

Change Order Amounts (decreases in Contract Price):

-  

 

--------------------------------------------------------------------------------

Adjusted Contract Amount:

 

--------------------------------------------------------------------------------

Work Completed to Date:

 

--------------------------------------------------------------------------------

Less Retainage Not Yet Due:

-

 

--------------------------------------------------------------------------------

Net Amount Due to Date:

 

--------------------------------------------------------------------------------

Less Payments Received to Date:

-

 

--------------------------------------------------------------------------------

Total Payments Due:

 

--------------------------------------------------------------------------------

 

The undersigned has been paid and has received progress payments totaling $
                     for labor and/or materials furnished to WYNN LAS VEGAS,
LLC; WYNN DESIGN & DEVELOPMENT, LLC; VALVINO LAMORE, LLC for the WYNN LAS VEGAS,
LLC

 

Project #                      Description                                 ,
located at 3131 Las Vegas Blvd., South, Las Vegas, Nevada, and does hereby
unconditionally release any mechanic’s lien or claim upon any bond and any
rights thereto that the undersigned has on the above referenced job for any and
all materials and work furnished pursuant to any change orders, on or before the
date of                    .

 

The undersigned does hereby represent and warrant that the undersigned has or
will fully pay for all labor and materials, any and all union, welfare, pension,
vacation or other contributions or benefits required to be made on account of
the employment of such laborers and mechanics so provided by the undersigned and
does hereby agree to indemnify and hold each of the foregoing, the Project, work
of improvement and real property, free and harmless from any and all claims or
liens arising or resulting from any non payment of any of the foregoing through
the date indicated herein.

 

THIS RELEASE COVERS A PROGRESS PAYMENT FOR LABOR, SERVICES, EQUIPMENT AND/OR
MATERIAL FURNISHED TO WYNN LAS VEGAS, LLC THROUGH THE ABOVE REFERENCED DATE ONLY
AND DOES NOT COVER ANY RETENTION OR ITEMS FURNISHED AFTER SAID DATE.

 

DATED this          day of                  ,

 

EXHIBIT G-1

--------------------------------------------------------------------------------

CONTRACT AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

EXHIBIT G (cont.)

 

200    

     

 

--------------------------------------------------------------------------------

           

By:

 

 

--------------------------------------------------------------------------------

           

Title:

 

 

--------------------------------------------------------------------------------

               

OWNER, OFFICER or PARTNER

 

STATE OF NEVADA

  

)

    

) ss.

COUNTY OF CLARK

  

)

 

On this          day of                 , 200      personally appeared before
me, a Notary Public,                                         
                         who acknowledged to me that (s)he has read the
foregoing, that the same is true and correct and that (s)he is authorized to
execute the same.

 

   

--------------------------------------------------------------------------------

NOTARY PUBLIC, in and for said County and State

 

EXHIBIT G-2

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

EXHIBIT H

 

[ADVANCES SHALL ONLY BE MADE IF THE GOLF COURSE CONTRACTOR’S

ADVANCE CERTIFICATE IS IDENTICAL TO THE FORM BELOW—NO

ALTERATIONS WILL BE ACCEPTED]

 

GOLF COURSE CONTRACTOR’S ADVANCE CERTIFICATE

 

[Letterhead of Golf Course Contractor]

 

Date: [                    ], 20[    ]

Advance Date: [                    ] , 20[    ]

 

Deutsche Bank Trust Company Americas,

  as Disbursement Agent

31 West 52nd Street

New York, New York 10019

Attn: Amy Sinensky

 

with a copy to:

 

Deutsche Bank Trust Company Americas

  as Bank Agent

c/o Deutsche Bank Securities Inc.

200 Crescent Court, Suite 550

Dallas, Texas 75201

Attn: Gerald Dupont

 

Wells Fargo Bank Nevada, National Association

  as FF&E Agent

Attn: Corporate Trust Services

MAC: U1228-120

299 South Main Street, 12th Floor

Salt Lake City, Utah 84111

 

Wells Fargo Bank, National Association,

  as Indenture Trustee

MAC: N9303-121

Corporate Trust Operations

6th & Marquette Avenue

Minneapolis, Minnesota 55479

Attn: Michael Slade

 

EXHIBIT H-1

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

EXHIBIT H (cont.)

 

  Re:   Advance Request No. [        ] under Master Disbursement Agreement dated
as of October 30, 2002 (the “Disbursement Agreement”) of Wynn Las Vegas, LLC, a
Nevada limited liability company (“Wynn Las Vegas”), Wynn Las Vegas Capital
Corp., a Nevada corporation (“Capital Corp.”), and Wynn Design & Development,
LLC, a Nevada limited liability company (“Wynn Design” and jointly and severally
with Wynn Las Vegas and Capital Corp., the “Company”).

 

Ladies and Gentlemen:

 

In connection with the development, construction and operation of the Le Rêve
Casino Resort project (the “Project”), [                    ] (the “Golf Course
Contractor”) hereby represents to its knowledge, information and belief as
follows:

 

1. Pursuant to our requisition dated [                ], 2002 (“Requisition
Request”) we have requested $                 .

 

2. That certain construction contract, dated as of [                 ], 20[    ]
between the Golf Course Contractor and Wynn Resorts Holdings, LLC and/or Wynn
Las Vegas together with all amendments, modifications and supplements entered
into in accordance with the Disbursement Agreement (the “Golf Course
Construction Contract”) is in full force and effect. The Golf Course Contractor
is not in default under any term of the Golf Course Construction Contract and,
to the Golf Course Contractor’s knowledge, the Company is not in default under
any term of the Golf Course Construction Contract.

 

3. The “Work” (as defined in the Golf Course Construction Contract) performed to
date has been performed in accordance with the Golf Course Construction Contract
and the “Project Schedule” (as defined in the Golf Course Construction Contract)
in effect on the date hereof. Invoices submitted, including the current
Requisition Request, are in accordance with Section [        ] of the Golf
Course Construction Contract.

 

4. After giving effect to the payments contemplated in the Requisition Request,
the Golf Course Contractor will have been paid all amounts due to it under the
Golf Course Construction Contract through the end of the period covered by the
Requisition Request (other than “Retainage” as defined in the Golf Course
Construction Contract) and all subcontractors, vendors or materialmen engaged or
employed by Golf Course Contractor will have been paid all amounts due to them
through the end of the period covered by the Requisition Request (other than
retainage amounts under the applicable subcontract) in each case, except to the
extent that such amounts or such payment (or a portion thereof) is subject to a
good faith contest which is being diligently pursued by the Golf Course
Contractor.

 

EXHIBIT H-2

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY.

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

 

EXHIBIT H (cont.)

 

5. There is no material adverse change in the condition of the Golf Course
Contractor which in the reasonable judgment of the Golf Course Contractor would
be likely to materially adversely affect the Golf Course Contractor’s ability to
perform its obligations under the Golf Course Construction Contract.

 

6. As of the date hereof, the “Contract Price” under and as defined in the Golf
Course Construction Contract is $                .

 

The foregoing representations are true and correct, are made for the benefit of
the Disbursement Agent, the Bank Agent, the FF&E Agent, the Indenture Trustee
and the lenders providing financing for the Project, and may be relied upon for
the purposes of making advances pursuant to the above referenced Disbursement
Agreement.

 

IN WITNESS WHEREOF, the undersigned has executed this Golf Course Contractor’s
Advance Certificate as of the [    ] of [                        ], 20[    ].

 

[GOLF COURSE CONTRACTOR]

a [                    ] [corporation/limited liability company]

 

By:

 

 

--------------------------------------------------------------------------------

Name:

 

 

--------------------------------------------------------------------------------

Title:

 

 

--------------------------------------------------------------------------------

 

EXHIBIT H-3

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

EXHIBIT H (cont.)

 

Schedule 1 to Golf Course Contractor’s Advance Certificate

 

List of Subcontractors/Vendors/Materialmen

 

EXHIBIT H-4

--------------------------------------------------------------------------------

 

EXHIBIT I

 

[WYNN DESIGN AND DEVELOPMENT

GRAPHIC APPEARS HERE]

 

LE RÊVE

 

FULL AND UNCONDITIONAL RELEASE OF

ALL CLAIMS AND WAIVER OF LIEN

 

Project Description:

 

 

--------------------------------------------------------------------------------

Work Performed:

 

 

--------------------------------------------------------------------------------

Work Performed by:

 

 

--------------------------------------------------------------------------------

Under Contract to:

 

 

--------------------------------------------------------------------------------

Contract Date:

 

 

--------------------------------------------------------------------------------

 

Original Contract Amount:

 

 

--------------------------------------------------------------------------------

Change Order Amounts (increases in Contract Price):

+

 

 

 

--------------------------------------------------------------------------------

Change Order Amounts (decreases in Contract
Price):                                -  

 

 

--------------------------------------------------------------------------------

Adjusted Contract Amount:

 

 

--------------------------------------------------------------------------------

Work Completed to Date:

 

 

--------------------------------------------------------------------------------

Less Retainage Not Yet Due:

-   

 

 

--------------------------------------------------------------------------------

Net Amount Due to Date:

 

 

--------------------------------------------------------------------------------

Less Payments Received to Date:                                       
                            -   

 

 

--------------------------------------------------------------------------------

Total Payments Due:

 

 

--------------------------------------------------------------------------------

 

The undersigned has been paid and has received final payment totaling
$                     for labor and/or materials furnished to WYNN LAS VEGAS,
LLC; WYNN DESIGN & DEVELOPMENT, LLC; VALVINO LAMORE, LLC, for the WYNN LAS
VEGAS, LLC Project #                         Description
                                     , located at 3131 Las Vegas Blvd., South,
Las Vegas, Nevada, and does hereby unconditionally release any mechanic’s lien
or claim upon any bond and any rights thereto that the undersigned has on the
above referenced job for any and all materials and work furnished pursuant to
the final contract sum of $                             .

 

The undersigned represents and warrants that all labor, services, equipment
and/or materials performed or furnished by or through the undersigned or
incorporated in the Project or Property are free from any claims, liens or
encumbrances. The undersigned represents and warrants that payment has been made
to all persons working on this Project or Property and entitled to compensation
on said Project or Property, including trust funds and to all undersigned’s
workmen, (sub) subcontractors, suppliers, laborers and materialmen who may have
delivered materials or rented equipment to or performed work at or on behalf of
the Project. The undersigned shall and does hereby indemnify, save and hold
Owner and Contractor harmless from any and all claims, damages, liens or losses,
expenses, including all costs, professional fees and attorneys fees, which Owner
and/or Contractor may suffer or incur by reason of the filing of any claims,
notices, liens, encumbrances, suits against Owner, Contractor or the Property,
or the failure of the undersigned to obtain cancellation and discharge thereof.

 

THIS RELEASE COVERS A FINAL PAYMENT FOR LABOR, SERVICES, EQUIPMENT AND/OR
MATERIAL FURNISHED TO WYNN LAS VEGAS, LLC.

 

DATED this _____ day of __________, 200__

     

--------------------------------------------------------------------------------

 

EXHIBIT I-1

--------------------------------------------------------------------------------

 

           

By:

 

 

--------------------------------------------------------------------------------

           

Title:

 

 

--------------------------------------------------------------------------------

               

OWNER, OFFICER or PARTNER

 

STATE OF NEVADA     )

                                           ) ss.

COUNTY OF CLARK    )

 

On this          day of              , 200          personally appeared before
me, a Notary Public,                                                   who
acknowledged to me that (s)he has read the foregoing, that the same is true and
correct and that (s)he is authorized to execute the same.

 

       

--------------------------------------------------------------------------------

NOTARY PUBLIC, in and for said County and State

 

 

EXHIBIT I-2

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

EXHIBIT J

 

PROJECT CONSTRUCTION SAFETY AND HEALTH GUIDELINES

 

[See Attached]

 

EXHIBIT J-1

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

EXHIBIT K

 

OCIP MANUAL

 

[See Attached]

 

EXHIBIT K-1

--------------------------------------------------------------------------------

LUMP SUM AGREEMENT

BY AND BETWEEN

WYNN LAS VEGAS, LLC

AND

WADSWORTH GOLF CONSTRUCTION COMPANY

FOR A GOLF COURSE

TO BE LOCATED AT

3131 LAS VEGAS BOULEVARD SOUTH

LAS VEGAS, NEVADA

 

EXHIBIT L

 

UNIT PRICES

 

[See Attached]

 

EXHIBIT L-1

--------------------------------------------------------------------------------

 

Page

 

EXHIBIT M

 

[THE CERTIFICATION DELIVERED BY THE GOLF COURSE CONTRACTOR MUST

BE IDENTICAL TO, AND HAVE NO CHANGES FROM WHAT IS DESCRIBED HEREIN,

AND NO ALTERATIONS WILL BE ACCEPTED]

 

GOLF COURSE CONTRACTOR’S COMPLETION CERTIFICATE

 

[Letterhead of Golf Course Contractor]

 

Date: [                ], 20[    ]

 

Deutsche Bank Trust Company Americas,

as Disbursement Agent

31 West 52nd Street

New York, New York 10019

Attn: Amy Sinensky

 

with a copy to:

 

Deutsche Bank Trust Company Americas,

as Bank Agent

c/o Deutsche Bank Securities Inc.

200 Crescent Court, Suite 550

Dallas, Texas 75201

Attn: Gerald Dupont

 

Wells Fargo Bank Nevada, National Association,

as FF&E Agent

MAC: U1228-120

299 South Main Street, 12th Floor

Salt Lake City, Utah 84111

Attn: Corporate Trust Services

 

Wells Fargo Bank, National Association,

as Indenture Trustee

MAC: N9303-121

Corporate Trust Operations

6th & Marquette Avenue

Minneapolis, Minnesota 55479

Attn: Michael Slade

 

EXHIBIT M-1

--------------------------------------------------------------------------------

 

Page

 

  Re:   Master Disbursement Agreement dated as of October 30, 2002 (the
“Disbursement Agreement”) of Wynn Las Vegas, LLC, a Nevada limited liability
company (“Wynn Las Vegas”), Wynn Las Vegas Capital Corp., a Nevada corporation
(“Capital Corp.”), and Wynn Design & Development, LLC, a Nevada limited
liability company (“Wynn Design” and jointly and severally with Wynn Las Vegas
and Capital Corp., the “Company”).

 

Ladies and Gentlemen:

 

In connection with the development, construction and operation of the Le Rêve
Casino Resort project (the “Project”), [                    ] (the “Golf Course
Contractor”) hereby represents to its knowledge, information and belief as
follows:

 

1. That certain construction contract, dated as of [            ], 20[    ]
between the Golf Course Contractor and Wynn Las Vegas (the “Golf Course
Construction Contract”) is in full force and effect. The Golf Course Contractor
is not in default under any term of the Golf Course Construction Contract and,
to the Golf Course Contractor’s knowledge, the Company is not in default under
any term of the Golf Course Construction Contract.

 

2. The construction of the Golf Course is substantially completed and has been
performed in accordance with the plans and specifications for the golf course
under the Golf Course Construction Contract.

 

3. Through the date hereof, the Golf Course Contractor has been paid
$             , consisting of all amounts due to it through the date hereof
under the Golf Course Construction Contract (other than (i) “Retainage” as
defined in the Golf Course Construction Contract in the amount of
$[            ] (ii) amounts of $[            ] incurred within the last thirty
(30) days and to be paid under the current invoice dated [            ],
20[    ] which has been submitted but not yet paid and (iii) amounts of
$[            ] being contested by the Company).

 

4. Attached hereto as Appendix I is a list of all remaining work on the Project
required to be completed pursuant to the Golf Course Construction Contract in
order to achieve “Final Completion” (as defined in the Golf Course Construction
Contract). The cost to complete such items is not more than $                .

 

5. Except for the amounts set forth above, the Golf Course Contractor has no
further claims under the Golf Course Construction Contract or otherwise against
Company, the Disbursement Agent, the Bank Agent, the FF&E Agent, the Indenture
Trustee or the lenders providing financing for the Project and no disputes have
arisen which are outstanding as of the date hereof. The Golf Course Contractor
has no knowledge of any facts or circumstances which may give rise to any claim
or dispute under the Golf Course Construction Contract or otherwise with the
Company.

 

EXHIBIT M-2

--------------------------------------------------------------------------------

 

Page

 

The foregoing representations are true and correct, are made for the benefit of
the Disbursement Agent, the Bank Agent, the FF&E Agent, the Indenture Trustee
and the lenders providing financing for the Project, and may be relied upon by
such parties

 

EXHIBIT M-3

--------------------------------------------------------------------------------

 

Page

 

IN WITNESS WHEREOF, the undersigned has executed this Golf Contractor’s
Completion Certificate as of the [    ] of [                ], 20[    ].

 

[GOLF COURSE CONTRACTOR]

a [                    ] [corporation/limited liability company]

 

By:

 

--------------------------------------------------------------------------------

           

Name:

 

--------------------------------------------------------------------------------

           

Title:

 

--------------------------------------------------------------------------------

       

 

EXHIBIT M-4

--------------------------------------------------------------------------------

 

Page

 

Appendix I

 

Remaining Work on the Project to be Completed

 

EXHIBIT M-5